In business, as in most walks of life, the need to reiterate or to reconfirm stems from creeping hesitancy or lingering doubt. We trust the Tata investment plan for Bangladesh is on track and remains so. In view of its scope and size, impediments will invariably crop up. The pace will often seem erratic and slow. However, the proposal must be made to succeed. It devolves on all sides to ensure that this happens. This will be good for Bangladesh and for the region.

The Tata proposal apart, we are encouraged by the growing interest in cross-border investments within South Asia as we are of growing investments from outside. The recent interest of a business team from Pakistan for joint-ventures with Bangladesh during a trip to the Beximco complex in Savar is to be welcomed. More must follow not only here but throughout the region.

Our lead story, Opportunity knocks: Promoting investment in South Asia, examines the FDI issue in depth. Enhancing investment cooperation and facilitating investment among the countries in the region is crucial for the development of the economies in the region. Regional investment cooperation can also help lower transport costs, generate more complementarities by expanding and diversifying the production base and trade structure, diversify comparative advantage, introduce appropriate technologies and encourage competition.

Of course, the enormous difference in size between the economies in the region, above all, the overwhelming size of the Indian economy in comparison to the other countries in the region is a psychological barrier. This needs to be overcome. In the spirit of SAARC and SAFTA and through more frequent dialogue, this can become possible. A common investment platform and investment strategy may also help.

Another area calling for cooperation and compromise is intra-regional trade. Informal trade is far more vigourous and sustained here. High tariffs and the presence of non-tariff barriers in the form of quantitative and other restrictions create a strong incentive to avoid formal channel of trade in the region. Close ethnic ties between trading markets also encourage informal trade across countries. The lack of education also contributes. Quest for a viable solution, a seminal analysis from Dr. Haripada Bhattacharjee addresses this important issue.