Foreign Trade and Economic Reforms in South Asia

Abstract

As the world economy has undergone through various changes so as the countries of South Asia (SA). After following growth retarding policies for a long period of time individual countries in the region have adopted various reform measures to encourage foreign trade. This paper examines various aspects of foreign trade in major South Asian countries namely Bangladesh, India, Pakistan and Sri Lanka. Basic trends of export and import in these countries are analyzed using recent data. A panel random effect estimation is conducted using a data set ranging from 1991 to 2012 to measure the impact of economic liberalization reforms on foreign trade of SA. The empirical results of this study suggest positive and significant association between various liberalization reforms and trade development for the countries. This study advances that most of the countries in SA need to broaden their export markets to reap maximum benefit from various reform initiatives.

Keywords: foreign trade, economic liberalization reforms, South Asia and panel random effect model