Development in South Asia
By John Gilbert and Nilanjan Banik
Although the overall economic performance of economies in South Asia
in recent years has been impressive, there is concern that an aging
and increasingly inadequate infrastructure may limit the potential for
further growth and economic development.
A critical infrastructure component is the transportation network, and
there are currently several transportation infrastructure projects in
the South Asia Subregional Economic Cooperation (SASEC) region,
connecting Nepal, eastern India, Bangladesh, and Bhutan.
This paper uses computable general equilibrium (CGE) methods to
address how these infrastructure developments might affect the broader
economy in SASEC, and in particular impact on income distribution and
The paper describes a new CGE model for South Asia, covering India,
Sri Lanka, Bangladesh, Nepal, and Pakistan, which incorporates
modifications to household structure in order to capture the
implications of reform for changes in intra-household income.
The scenarios that are considered reflect proposed investments in land
transport infrastructure in the SASEC region. These should result in
reductions in the land transport component of international transport
margins, which vary bilaterally by commodity.
We found that all SASEC economies would benefit from the reductions in
terms of aggregate welfare, with the largest gains accruing to India
in absolute terms, but the largest relative gains to Nepal, followed
by Bangladesh and Sri Lanka when the margin reduction is prorated to
intra-South Asian trade rather than just SASEC.
In terms of household level distribution, the picture was mixed, with
clearly pro-poor outcomes in some countries, such as Nepal, but more
ambiguous impacts in others. In terms of potential adjustment costs,
examination of the extent of predicted structural changes suggests
that these would be minor, although somewhat more significant for the
smaller economies in the region.
Download this Paper [ PDF 210.1KB| 26 pages ].
Truth resides in every human heart, and one has to search for it there, and to be guided by truth as one sees it. But no one has a right to coerce others to act according to his own view of truth. - Mohandas Gandhi
You received this message because you are subscribed to the Google
Groups "SAFE - Social Action Foundation for Equity" group.
To post to this group, send email to
To unsubscribe from this group, send email to
For more options, visit this group at
To unsubscribe, reply using "remove me" as the subject.