Regional: Capacity Building for Implementing Private Sector-Led Integration in South Asia

Sovereign Project | 43341-012

Summary

The technical assistance (TA) aims to support capacity building for implementing integration in South Asia led by the private sector. The intended impact of the TA is strengthened private sector participation in the South Asian integration process. The envisaged outcome is enhanced institutional and human capacity to implement integration in South Asia led by the private sector. It will also provide opportunities for the private sector to discuss and share experiences at the regional level for more effective public private collaboration.

The TA will identify and address the direct constraints facing the private sector and recommend priority policies and activities to enable them to participate in cross-border trade and investment. Major assumptions include the adoption of market-friendly trade policies by South Asian governments, strong political commitment, cooperation of private sector groups, and sufficient staff resources. Political, economic, and social crises are some of the risks.

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Project Name Capacity Building for Implementing Private Sector-Led Integration in South Asia
Project Number 43341-012
Country Regional
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 7791-REG: Capacity Building for Implementing Private Sector-Led Integration in South Asia
Investment Climate Facilitation Fund under RCIFPF US$ 680,000.00
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Partnerships
Sector / Subsector Industry and trade - Industry and trade sector development
Gender Equity and Mainstreaming No gender elements
Description

The technical assistance (TA) aims to support capacity building for implementing integration in South Asia led by the private sector. The intended impact of the TA is strengthened private sector participation in the South Asian integration process. The envisaged outcome is enhanced institutional and human capacity to implement integration in South Asia led by the private sector. It will also provide opportunities for the private sector to discuss and share experiences at the regional level for more effective public private collaboration.

The TA will identify and address the direct constraints facing the private sector and recommend priority policies and activities to enable them to participate in cross-border trade and investment. Major assumptions include the adoption of market-friendly trade policies by South Asian governments, strong political commitment, cooperation of private sector groups, and sufficient staff resources. Political, economic, and social crises are some of the risks.

Project Rationale and Linkage to Country/Regional Strategy

The private sector plays a crucial role in globalization through the vertical integration of production networks across countries, particularly in East Asia. Furthermore, private sector participation has catalyzed integration and the formation of economic corridors (e.g., the Business Forum for the Greater Mekong Subregion program). In South Asia, the private sector has also begun to support the integration process within the South Asian Association for Regional Cooperation (SAARC) and other initiatives for institutional cooperation. In 1994, the SAARC Chamber of Commerce and Industry was established to promote private sector and regional trade and investment in the region by bringing together the national chambers of commerce and industry of SAARC countries under one umbrella organization. These chambers of commerce are involved in policy dialogues with their respective governments and at the regional level through the SAARC Chamber of Commerce and Industry. Chambers of commerce in South Asia (and particularly the FICCI) could play an important role in enhancing regional integration through, among other things, their ability to influence government policy making, particularly policies that will help improve the investment climate in the region.

While the FICCI in India and other bodies in Bangladesh and Sri Lanka are influencing policies, an initiative led by the private sector to promote South Asian integration is still at the nascent stage. Resource and capacity constraints affect business associations, particularly in smaller economies or LDCs such as Afghanistan and Bhutan. Businesses, particularly small and medium-sized enterprises, lack the knowledge and capacity to compete and benefit from regional integration. The private sector still faces numerous barriers to business expansion, including visa restrictions that impede business travel, nontariff measures that increase the cost to trade, and transport connectivity and infrastructure that make the cross-border transit of goods difficult the same barriers to intraregional trade and economic development in South Asia.

The TA forms part of ADB's regional cooperation and integration strategy (particularly pillar 2 on trade and investments. The TA and its components have been developed based on a series of consultations with several South Asian chambers of commerce and governments during 2008 2009. South Asian chambers of commerce have expressed the need for the Asian Development Bank (ADB) and other development partners to further support integration in South Asia led by the private sector.

Impact Strengthened private sector participation in the South Asian integration process.
Project Outcome
Description of Outcome Enhanced institutional and human capacity to implement integration led by the private sector
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

The major outputs of the TA are: (i) technical proposals to implement private sector-led integration in South Asia; (ii) technical workshops/conferences to present and discuss the technical proposals; (iii) a training program for South Asia private sector associations or chambers of commerce; (iv) SAARC-wide firm-level survey on residual impediments to private sector-led integration; and (v) technical and software infrastructure support.

1. Technical proposals addressing key issues and actionable measures to implement integration in South Asia led by the private sector

2. A technical workshop and a conference on the technical proposals

3. Training program for South Asia private sector associations or chambers of commerce

4. SAARC-wide firm-level survey on impediments to integration led by the private sector

5. Technical and software support

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services The TA will require about 4 person-months of international (individual, intermittent) consulting services (trade economists) and 40 person-months (individual, intermittent) of national consulting services (trade economist/research specialist and project coordinator). The TA will also require 3 person-months of international consulting services of a survey expert (firm).
Responsible ADB Officer Jayant Menon
Responsible ADB Department Economic Research and Regional Cooperation Department
Responsible ADB Division ERCI
Executing Agencies
Asian Development BankGaneshan Wignaraja6 ADB Avenue, Mandaluyong City 1550, Philippines
Timetable
Concept Clearance 02 Oct 2009
Fact Finding -
MRM -
Approval 16 Mar 2011
Last Review Mission -
Last PDS Update 12 Nov 2010

TA 7791-REG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
16 Mar 2011 - 16 Mar 2011 31 Mar 2014 30 Sep 2015 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 680,000.00 0.00 0.00 0.00 0.00 680,000.00 16 Mar 2011 234,731.53

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