Regions and Countries

	Table of Contents
p. 15 of 20 BACK | NEXT I. Country Performance Assessment II. Country Operational Strategy III. Sector Strategies IV. Regional Cooperation V. Donor Activities and Aid Coordination VI. Cofinancing and Catalyzing External Resources VII. ADB’s Operational Program VIII. Economic and Sector Work Program IX. Local Cost Financing

Country Assistance Plans - Bhutan

---

IV. Regional Cooperation

82. The globalization has greatly intensified international competition and has, at the same time, given rise to a new wave of regionalism. Geographical proximity, economic complementarity, political commitment, policy coordination and infrastructure development are factors conducive to formation of such groupings. Subregional economic cooperation, as one form of coordination, could offer the South Asian countries significant potential benefits. In 1997, Bangladesh, Bhutan, India, and Nepal agreed to establish the South Asian Growth Quadrangle (SAGQ), which will operate within the South Asia Association for Cooperation (SAARC) framework. Given their development potential, focus was to be given to six sectors, including energy; multi-modal transport and communication; trade and investment facilitation and promotion; tourism; and natural resource utilization and environment. Another potential area for subregional cooperation is the road subsector. The proposed improvement of the road network will open up and enhance transit routes to India and Bangladesh, and provide Bhutan with access to seaports in these countries. It would also improve road connections to the Indian road system in West Bengal where a north-south corridor from the border to the port of Haldia is being developed. As a landlocked country, Bhutan's access to and from seaports in neighboring countries will be essential in breaking out of the limits imposed by a small domestic market. A feasibility study on establishing a dry port in Phuentsholing was completed under UNDP support. This may enhance the potential of further bilateral trade between eastern states of India and Bhutan but in the longer term also with Bangladesh and Nepal. ADB is currently assisting private sector-led initiatives to promote economic cooperation in this subregion.

Back F. Private Sector Development	Next V. Donor Activities and Aid Coordination