A Diversification Strategy for South Asia

By Weicheng Lian, Fei Liu, Katsiaryna Svirydzenka, Biying Zhu

July 30, 2021

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Weicheng Lian, Fei Liu, Katsiaryna Svirydzenka, and Biying Zhu. A Diversification Strategy for South Asia, (USA: International Monetary Fund, 2021) accessed December 22, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

While South Asia has gone a long way in diversifying their economies, there is substantial scope to do more. Some countries – India, Nepal, and Sri Lanka – can build on their existing production capabilities; others – Bangladesh, Bhutan, and the Maldives – would need to undertake a more concerted push. We identify key policies from a large set of potential determinants that explain the variation in export diversification and complexity across 189 countries from 1962 to 2018. Our analysis suggests that South Asia needs to invest in infrastructure, education, and R&D, facilitate bank credit to productive companies, and open to trade in order to diversify and move up the value chains. Given the COVID-19 pandemic, investing in digital technologies as part of the infrastructure push and improving education are of even greater importance to facilitate the ability to work remotely and assist resource reallocation away from the less viable sectors.

Subject: Export diversification, Exports, Income, Infrastructure, International trade, National accounts

Keywords: Diversification of export, Economics complexity, Export diversification, Exports, Income, Infrastructure, Outlook index, South Asia, South Asia's progress, Summary statistic

Publication Details

Pages:

49
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2021/202
Stock No:

WPIEA2021202
ISBN:

9781513584799
ISSN:

1018-5941

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