Nepal Resident Mission

Regional Cooperation in South Asia

With over 35 years of experience in supporting loan projects, sector studies, and technical assistance in Asia and the Pacific, ADB plays a constructive, often pivotal, role in promoting, developing, and supporting regional cooperation initiatives.

ADB has supported regional economic cooperation activities in its developing member countries (DMCs). It has been a mediator and an honest broker in policy dialogue, facilitating policy coordination among its member countries and supporting studies on related issues. This contribution has been effective in the thematic areas of governance and capacity building, and also in the education and finance sectors.

In 1994, ADB approved a policy that formalized its role as a catalyst for regional cooperation. ADB's Poverty Reduction Strategy and Long Term Strategic Framework for 2001-2015 identifies regional cooperation as a core component of ADB's overarching goal to reduce poverty.

In April 2004, ADB and the South Asia Association for Regional Cooperation (SAARC) signed a Memorandum of Understanding (MOU) that aims to strengthen cooperation between the two institutions. The MOU will help promote mutually interested regional programs/projects and help establish linkages with other regional initiatives.

Subregional Programs

ADB promotes and supports several subregional programs through its regional cooperation initiatives. Under its subregional programs, ADB has directly supported projects in several infrastructure sectors such as trade, energy, and cross-border transport. The ADB-assisted South Asia Subregional Economic Cooperation (SASEC) Program is helping transform challenges into opportunities in one of the world's poorest, most densely populated areas. ADB's efforts to support regional cooperation in eastern South Asia stems from the constitution of the South Asia Growth Quadrangle by the foreign ministers of Bangladesh, Bhutan, India, and Nepal (BBIN). ADB is currently working with the Government in preparing a Subregional Transport Facilitation Project for 2004.

ADB has adopted a three-phased approach in supporting regional cooperation.

First Phase: The emphasis is on increasing a DMC’s understanding and awareness of the potential for regional cooperation and on increasing ADB's understanding of the nature and extent of existing regional organizations and cooperation arrangements.

Second Phase: Projects with potential regional implications will be identified through studies in this regard.

Third Phase: ADB will finance or help mobilize financing for such regional projects that have a strong economic rationale.