Analyzing the Asian Economies … Term Paper
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South Asian Economy
South Asia comprises of Afghanistan, India, Sri Lanka, Bangladesh, Nepal, Maldives, Pakistan, Bhutan and India. The region hosts about 600 million people who are currently undergoing a lot of socioeconomic changes. There are new forms of poverty and new forms of wealth that continue to emerge in the region. Conflicts over rights, power, social injustices and identity have become a common phenomenon among the people who live in this region. However, South Asia is a region of diversity and comprises of eleven countries that have different cultural traditions, history, political and economic systems, and resource bases, save for the geographic proximity and similar ecology and tropical environment. They share a few characteristics that link the entire region into a coherent whole (Brass, 2010).
Before the international community arrived in South Asia, the political economy had developed generalized influences, social patterns and experiences. They included religious penetration by Islam, Hindu, Buddhism and Christianity. Colonization and introduction of political ideas from the rest of the world has shaped South Asia. Also, the rise of nationalism, struggle for independence, cold war, the Japanese occupation trauma and regional economic transition, have also affected South Asia. The countries share social patterns, including a strong sense of village, traditional identity and agriculture-based economy, which has now been overtaken by the service and manufacturing economy. There is also the patron-client system that influences social and political interaction in the region. However, it is important to note that many of the political and economic problems that the leaders of this region face could be traced to colonialism (Chariton, 2014)
Imperial competition and colonial rule led to the formation of internationally recognized boundaries, which have replaced the non-integrated dynastic principalities that used to govern the rural populations and the minority groups in the uplands. There are a few areas in Asia which up to now are still relying on subsistence agriculture and village arrangements even though the socioeconomic picture is becoming more complex. The emergency of green revolution technologies, rising educational opportunities, commercial agribusiness and material gain have brought about a big change in the region. Most of the countries in the region have been able to liberate their economies, thanks to the pressure imposed on them by the IMF, western governments, and other advocates of globalization. The south Asian governments have liberalized their financial markets and have removed restrictions that used to regulate the flow of capital out and into the country. As a result, foreign financed businesses and joint ventures have expanded fast. They can be found in different sectors, including textiles, footwear, agribusiness electronics, cosmetics, automobile, petroleum refining, and manufacturing industries (Dayley & Neher, 2013).
Regionalism and intra-regional interaction has become an important part of international relations. The globalization and liberalization waves have made it necessary for the nations to strengthen their economic ties. The need to form the south Asian alliance was felt in the 80s. The seven South Asian countries Pakistan, Sri Lanka, India, Bhutan, Maldives and Nepal have agreed to form SAARC, which has brought tremendous achievements in the past decades (Rizwanulhassan, 2015). Their goal has been to promote cooperation in social, economic, cultural and scientific fields. The forums have opened many opportunities in the region. SAARC members are determined to improve the quality of life of the people living in the South Asian region. It uplifts them socially and economically while encouraging self --reliance. It also promotes mutual assistance, enhances collaboration with other countries, regions and organizations. The region occupies a critical geo- strategic position and borders the Indian Ocean, China, the Caspian basin and the Persian Gulf (Juhos, 2015).
The region is rich in energy resources and serves as an engine of the future world economic growth. Countries such as the U.S., Australia, Mauritius, China, Myanmar and Japan hold observer positions in SAARC.
The South Asia region benefits from external linkage and plays an important role in economic integration of the international community. Regionalism is a recent phenomenon that has impacted many other regions of the world. The establishment of SAARC is an important step in the South Asian regional cooperation. In the past 28 years, SAARC has been looking for means and ways to foster cooperation and development in the region. It has also agreed over trade liberalization, including the formation of the free Trade area (Ali, 2014).
The Bangladesh Economy
It leads in attracting foreign direct investment (FDI), which exceeds the augmentation of savings. It also boasts of entrepreneurship, market access, and technology which are missing in most of the developing countries. FDI can be financed by raising funds within the country. No wonder the policy makers in Bangladesh have focused more on attracting FDI. Even though, the success of the strategy has been limited. In the recent years, 2010, 2011, 2012 and 2013, the average FDI has increased by U.S.$1,089 million. This is about 0.9% of GDP (Khan, 2015).
The historical experience rejects the possibility that the poor country can be developed by FDI. Just like other investments, FDI is attracted by profitability. A country must create preconditions that attract investment. Physical infrastructure, skilled labor, business friendly administration, and reduced transaction costs are necessary. There should be an effort directed at attracting FDI. Recent experiences have demonstrated that FDI is actually not a prerequisite for rapid growth (Lewis, 2011).
The economy of India is the largest and constitutes about 80% of the services and the goods produced in the entire South Asian economies. The Indian economy is also the third largest economy in the world in as far as purchasing power parity is concerned. China embraced globalization earlier than India and its rate of growth has been consistent and bigger than that of India, even though the disparity in the growth rate is declining. The ratio of India's trade to GDP increased from 16.7% in 1991 to 54.5% in 2011. In the same period, China's GDP ratio shot to 72.8% while that of the U.S. was 31.7% (World Bank Group, 2012). The government of India is convinced that the growth surge is as a result of a combination of giving the investors freedom. It targets the domestic investors by opening the country to global economy. It has embraced globalization and constitutes a shift in the interest and its identity as a global economy (Brass, 2010).
Sri Lanka's Economy
As a country, Sri Lanka seems to have recovered from years of devastating civil war into a steady economic development as well as social enhancement. It has expanded because it has greatly invested in infrastructure after rebuilding the infrastructure that was damaged in the conflict. According to the World Bank report, the service sector additionally contributed to the quick growth and is contributing about 57% of the GDP. The government has focused on harnessing the local talent and is looking forward to boosting the exports, textiles, tea and other products. It also focuses on solidifying agriculture as well as the manufacturing sector.
So as to achieve its goal of sustainability and inclusive growth, the government has been committed to enhancing the locals as well as also enhancing the women's role within the workforce. It is also dealing with corruption and enhancing cooperative attempts amid the private sector and the public. It also focuses on tackling corruption, enhancing education and increasing technical skillsets of her people to ensure that the human resource and capital demands are being met as the economic products are becoming diversified (Biziouras, 2014)
Economy of Pakistan
The growth of the Pakistan economy in the last six decades shows the substantial shifts and transformation in the economic production and terms of the economic systems and structure. Pakistan economic fortunes are fluctuating because the state is investing more in defense at the expense of development projects. The state has also failed to extract resources from the society to enable it invest in both defense and development as desired. Over-investment in the defense is occasioned by the desire to protect Pakistan and bolster its national security and the dominance of the military in the economy of the country (Bhatnagar, 2015).
The South Asian's Economy in 2016
The Indian economy constitutes over 80% of the goods and services produced in all the South Asian economies. It is also the third largest economy in the world in terms of its purchasing power parity. Its GDP growth is expected to grow by 7.5% in the 2015 / 16 fiscal year. It is expected that the growth could reach 8.0% in 2017/18 fiscal year. Investment growth is expected to be accelerated to 12% during the 2017/18 fiscal year. The country is shifting its consumption to investment led growth at the time when China is undergoing a transition. In Pakistan, the economy is recovering gradually and will stand at 4.6% growth rate by 2016. It is helped by the low-level inflation along with fiscal consolidation.
Added development relies on taking care of the major development constraints such as regular power shortages, low tax revenue, cumbersome business environment. The Bangladesh… [END OF PREVIEW]
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