The political economy of regional cooperation in South Asia

Will economic interests drive the South Asian countries toward greater cooperation! Or will the continuing political tensions among South Asian countries and the low-intensity, informal war between India and Pakistan over Kashmir deprive the region of a historic opportunity to achieve cooperative development in the post-cold war era? This article explores these questions by examining (a) the domestic political and economic dynamics of South Asian countries in order to underline impediments and opportunities for expansion of regional cooperation, (b) the current level of these countries' economic interactions and potential for regional economic interdependence, and (c) international compulsions. The analysis suggests that to the extent that political tensions remain unresolved, any substantial growth of regional economic cooperation is unlikely. Rather, regional cooperation in South Asia will pass through a stop-and-go pattern of growth in which state-directed, limited, pragmatic cooperation on specific technoeconomic issues is possible over a period of time.