South Asia: A Macro Overview

  • Pravakar Sahoo
  • Geethanjali Nataraj
  • Ranjan Kumar Dash


Chapter 2 presents the economic reforms and performance of the five major South Asian countries and the region as a whole. The South Asian countries have performed well with respect to all macroeconomic indicators in the last two decades leading to increased economic growth and per capita income and an increase in trade and investment growth of the region. Growth performance of the five South Asian countries indicates that Bangladesh, Sri Lanka, and India had higher GDP growth rates during their post-reform period compared to the 1980s. In contrast, Pakistan and Nepal had higher growth during the 1980s compared to the 1990s or 2000s. In terms of per capita income growth, it improved in all countries except Pakistan during the reform period. Sectoral contribution of GDP indicates that the contribution of agriculture has declined; the industrial and services sectors have continued to drive the growth prospects. Other important macro indicators like gross domestic savings, gross domestic capital formation, trade, current account balance, capital account, and foreign exchange reserves improved in all these countries except Pakistan during the post-reform period.

In order to sustain their high growth rates, South Asian countries have tried to implement second- and third-generation reforms to the region that has also made an attempt to improve political instability, security, and intra-regional economic cooperation. Despite the many challenges faced by the region, there is enormous potential and the future prospects look bright. South Asia’s growth trajectory is all set to be one of the defining stories of the world economy in the near future, and this provides opportunities for foreign investors to explore the South Asian markets.


Economic Reform Tariff Rate South Asian Country Fiscal Deficit Foreign Exchange Reserve 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


  1. Acharya S (2009) India’s growth: past and future. In: Dinello N, Wang S (eds) China, India and beyond: development drivers and limitations. Edward Elgar, CheltenhamGoogle Scholar
  2. Ahluwalia MS (2002) Economic reforms in India since 1991: has gradualism worked? J Econ Perspect 16(3):67–88CrossRefGoogle Scholar
  3. Ahluwalia J, Little IMD (eds) (1998) India’s economic reforms and development essay for Manmohan Singh. Oxford University Press, DelhiGoogle Scholar
  4. Ahmed S (2002) The political economy of reforms in South Asia: Bangladesh and Pakistan, South Asia Region, Internal discussion paper No. 183. World Bank, Washington, DCGoogle Scholar
  5. Athukorala PC, Jayasuriya S (2004) Complementarity of trade and FDI liberalization in industrial growth: lessons from Sri Lanka, ASARC working papers 2004–10. Australian National University, Australia South Asia Research Centre, CanberraGoogle Scholar
  6. Bandara SJ, McGillivray M (1998) Trade policy reforms in South Asia. World Econ 21(7):881–896CrossRefGoogle Scholar
  7. Bhagwati J, Srinivasan TN (1975) Foreign trade regimes and economic development: India. Columbia University Press, New YorkGoogle Scholar
  8. Bosworth B, Collins S, Virmani A (2007) Sources of growth in the Indian economy. India Policy Forum 2006 3(1):1–69Google Scholar
  9. Central Intelligence Agency (2011) The world fact book-Nepal, Office of Public Affairs, Washington, DCGoogle Scholar
  10. Dornbusch R (1992) The case for trade liberalization in developing countries. J Econ Perspect 6(1):69–85CrossRefGoogle Scholar
  11. Faaland J, Parkinson JR (1976) Bangladesh: the test case of development. C. Hurst, LondonGoogle Scholar
  12. Francois JF, van Meijl H, van Tongeren F (2003) Trade Liberalisation and developing countries under Doha Round, CEPR discussion paper No. 4032, August. Available at SSRN:
  13. Goldman Sachs (2007) “BRICS and BEYOND” – Goldman Sachs study of BRIC and N11 nations, 23 November 2007. New York City, NY, USAGoogle Scholar
  14. Hussain I (2004) Financial sector reforms in Pakistan. Paper presented at Italy-Pakistan trade and investment conference, RomeGoogle Scholar
  15. Joshi V (1998) India's economic reforms: progress, problems, prospects. Oxford Dev Stud 26(3):333–350Google Scholar
  16. Kemal AR (2004) Pakistan’s economy: performances and future prospects. South Asian J Apr/June (4)Google Scholar
  17. Krueger AO (1974) The political economy of the rent-seeking society. Am Econ Rev 64:291–303Google Scholar
  18. Laird S, Fernandez de Cordoba SF, Vanzetti D (2003) Market access proposals for non-agricultural products. UNCTAD, GenevaGoogle Scholar
  19. Looney R (2012) Shifting development paradigms: sequencing Pakistan’s new growth framework. J South Asian Middle East Stud 35(2):1–47Google Scholar
  20. Mahmood Z (1999) Pakistan: the impact of economic liberalization on poverty. Sustainable Development Policy Institute, IslamabadGoogle Scholar
  21. Mahmood, T., Hafeez ur Rehman, & Rauf, S. A. (2008). Evaluation of macro economic policies of Pakistan (1950–2008). Journal of Political Studies, 14, 57–75.Google Scholar
  22. Nataraj G, Sahoo P (2006a) A decade of trade reforms in India (co-author: Nataraj G). Synergy, DelhiGoogle Scholar
  23. Nataraj G, Sahoo P (2006b) India’s external sector: performance and prospects. ICFAI J Appl Econ V(3):61–67Google Scholar
  24. Nataraj G, Sahoo P (2007) India and WTO: regionalism and multilateralism. South Asian J (15), 184–195Google Scholar
  25. Panagariya A (2004). India in the 1980s and 1990s: a triumph of reforms. Economic and Political Weekly, June 19, 29Google Scholar
  26. Rodrick D, Subramanian A (2004) From Hindu growth to productivity surge: the mystery of the Indian growth transition, NBER working paper, no w10376. National Bureau of Economic Research, Cambridge, MAGoogle Scholar
  27. Sahoo P (2006) FDI in South Asia: trends, policy, impact and determinants. Asian Development Bank Institute discussion paper series, No. 56. Asian Development Bank Institute, TokyoGoogle Scholar
  28. Sahoo P (2012) Foreign direct investment in India: unfinished agenda. In: Philippa D (ed) Economic reform processes in South Asia: toward policy efficiency. Routledge, New York, pp 109–136Google Scholar
  29. Srinivasan TN (2002) Foreign trade policies and India’s development. In: Kapila U (ed) Indian economy since independence. Academic Foundation, New DelhiGoogle Scholar
  30. Tendulkar SD, Bhavani TA (2007) Understanding reforms. Oxford University Press, New YorkGoogle Scholar
  31. Virmani A (2004) Foreign direct investment reforms, Occasional policy papers, Indian council for Research on International Economic Relations, New DelhiGoogle Scholar
  32. World Bank (2003) World development report 1991. Oxford University Press for the World Bank, New YorkGoogle Scholar
  33. World Bank (1997) World development report 1997: the state in a changing world. Oxford University Press for the World Bank, Washington, DCCrossRefGoogle Scholar
  34. World Bank (1999) Poverty reduction and the World Bank: progress in fiscal. World Bank, Washington, DCGoogle Scholar
  35. World Bank (2011) World development indicator, 2011. World Bank, Washington, DCGoogle Scholar
  36. World Economic Forum (2010) Global competitiveness report 2010–11Google Scholar
  37. World Trade Organization (2012) Tariff profiles. United Nations, Geneva, SwitzerlandGoogle Scholar
  38. Zaidi SA (1994) Structural adjustment program and Pakistan: external influences or internal acquiescence. Pak J Appl Econ 10(1 & 2):21–46Google Scholar

Copyright information

© Springer India 2014

Authors and Affiliations

  • Pravakar Sahoo
    • 1
  • Geethanjali Nataraj
    • 2
  • Ranjan Kumar Dash
    • 3
  1. 1.Institute of Economic Growth (IEG)Delhi University EnclaveDelhiIndia
  2. 2.Observer Research Foundation (ORF)DelhiIndia
  3. 3.Indian Council for Research on International Economic Relations (ICRIER)DelhiIndia

Personalised recommendations