SOUTH ASIA SUB REGIONAL ECONOMIC COOPERATION (SASEC)

About the SASEC:

• The SASEC is a project-based partnership that is designed to promote regional prosperity by facilitating cross-border connectivity, boosting trade, and strengthening economic cooperation.
• Established: In 2001 in response to Bangladesh, Bhutan, India and Nepal's request from ADB.
• Key countries in the SASEC are Bangladesh, Bhutan, India, Maldives, Myanmar, Nepal, and Sri Lanka.
• The Asian Development Bank (ADB) serves as its Secretariat, lead financier, and development partner.
• It aims to increase intraregional trade and cooperation in South Asia and develop connections with Southeast Asia, China, and the global market.
• In India, SASEC will upgrade approximately 312.5 km of state highways and major district roads in Assam, including 6 road sections across the western, central, and southern region

Vision: 

• Boost intraregional trade and cooperation in South Asia, develop connectivity and trade with Southeast Asia through Myanmar, to the People's Republic of China, and the global market.

Focus areas of SASEC

• There are mainly four pillars of SASEC cooperation which include: -
  • Transport Sector
  • Energy Sector
  • Corridor Development
  • Trade
• SASEC Transport Sector Strategy: Create multimodal transport networks and logistics facilities to increase intraregional trade.
• SASEC Trade Facilitation: Implement SASEC Trade Facilitation Strategic Framework (2014-18) focusing on customs modernization, cross-border facilities improvement
• SASEC Energy Sector Strategy: Improve cross-border electricity transmission connectivity like Increase power trade, cooperation in energy efficiency and clean power development 
• Economic Corridor Development Strategy: In 2016, countries approved the SASEC Operational Plan 2016-2025, introducing Economic Corridor Development as a fourth sectoral area of focus.  

Significance of SASEC for India

• Road corridors in Myanmar provide India a link between South and South East Asia. 
• Additional gateways to the landlocked North Eastern region with development of the ports in Myanmar.
• Development of multi-modal connectivity between North Eastern region of India, Bangladesh and Myanmar has the potential of unleashing tremendous economic energy in the sub-region.
• It can also act as an alternative to One Belt One Road initiative of China in the region. 

Challenges of SASEC 

Lack of cross-border infrastructure

South Asia's transport infrastructure is primarily designed for national priorities, rather than for trade. This leads to a lack of cross-border connectivity, which limits trade potential. 

Outdated border procedures

Manual border procedures lead to higher costs and longer wait times for goods, vehicles, and people crossing borders. 

Underutilized intra-regional trade

South Asia's intra-regional trade is low compared to other regions. In 2010, trade between South Asian countries was only 4.3% of the region's total trade. 

Red tape

Lengthy administrative procedures, unnecessary documentation, and a lack of harmonized trade regulations create barriers to trade. 

Lack of energy interconnection

South Asia lacks cross-border energy interconnection infrastructure, such as national power grids. 

Industrial bases

South Asia's industrial bases are not connected to regional and global value chains. 

Low FDI

South Asia has low foreign direct investment (FDI) due to poor infrastructure connectivity and regulatory and institutional frameworks.