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Thursday, 16 March, 2000, 16:56 GMT
Americans eye South Asian pie

The region is witnessing an economic boom
By Jeff Phillips in Washington

President Clinton arrives in South Asia at a time of important economic change in the region.

India, Pakistan and Bangladesh are opening up their once inward-looking economies and encouraging foreign investors to come in.


Highs and lows
Positives
High growth rates
Tariffs lowered
Large markets

Negatives
Health, education
Infrastructure
Administration
And while economic growth rates have declined in Pakistan in recent years, both India and Bangladesh have achieved high rates of output that hold out the prospect of greater integration into the globalising economy.

While the President's visit will be dominated by political issues, officials say he should also use his talks with Asian leaders to fashion a new set of bilateral relationships that give greater attention to economic interests and trade.

Poverty barrier

The World Bank says that over the past decade, South Asia has been second only to East Asia in world growth rates, with India seeing growth well above 6% last year.

At the same time, severe poverty remains the daily reality for millions of people in India, Pakistan and Bangladesh.



Pakistani brokers work the phone lines
Behind what the World Bank calls "respectable growth rates", lie the burdens of low health and educational standards, illiteracy, high levels of malnutrition and poor roads and transport amenities.

It says that these remain barriers to further progress.

The underlying problem, says the World Bank is poor governance and administration.

Corruption is widespread, while in Pakistan there are the additional constraints of a politicised judiciary, an unskilled civil service and a severe difficulty in implementing the rule of law.

Programmes

The World Bank says that it is optimistic that its programme for institution building, improvements in public health and education for girls will be effective in helping to eradicate poverty.



Children at an outdoor school
However, the bank says it will also require the continuing commitment of governments in these countries.

Analysts in Washington say that President Clinton will encourage political leaders in the region to stick with their reform programmes.

He will also use his visit to alert American companies to the size and value of the South Asia market, which is forecast to become one of the largest in the world in the next few years.

Reform success

World Bank officials said economic reform programmes were making a difference.

In India, it says that average tariffs have fallen by over 70% since the government began the liberalisation process in 1991.



Expectations are high
It says that since then many non-tariff barriers have also been removed.

Similar figures are found in Pakistan and Bangladesh.

The bank also says that despite the questions over the seizure of power by General Musharraf in Pakistan, it recognises the high quality of the new economic team and looks forward to working with it.

Bank officials single out the Indian state of Andhra Pradesh as initiating the boldest series of reforms.

They say its now succeeded in attracting large amounts of foreign investment which in turn has generated high growth rates.

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See also:

15 Mar 00 | Americas
Dhaka looks for dollars
13 Mar 00 | South Asia
Gas deals await US firms
15 Feb 00 | South Asia
Hi-tech rivals woo Clinton
11 Jan 00 | South Asia
US presses India on reforms
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