The Economic Performance of SAARC Member Countries

Abstract

This paper attempts to examine the impact of trade liberalization over the macro economic structure of four SAARCmember countries –Pakistan, India, Bangladesh and Srilanka during1985 to 2006. The data set consists of a 21 years(1985-2006) time series data of trade variables of four countries of SAARC named as Pakistan, India, Bangladeshand Srilanka. The data provides the substantial evidence, which shows the benefits of intra regional trade expansion:larger markets and fuller utilization of production capabilities, transfer of suitable production technologies,comparative advantage and complementarities, economies of scale due to expanded markets and better utilization ofentrepreneurial capabilities, capital, manpower and natural resources. In addition to that such an arrangement is alsoexpected to foster closer economic ties among member countries and enhance their bargaining power with respect toother countries and economic blocs.

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