Chapter 9 Regional Trade Reform under SAFTA and Income Distribution in South Asia

Abstract

South Asia is one of the world's poorest regions. In this paper we use a representative household model of South Asia to explore the potential impacts of regional trade liberalization under the auspices of SAFTA on both the distribution of economic gains across the countries of South Asia, and across various groups within South Asia. We also discuss the underlying theory of a potential extension to our approach.

The economic impact of new regional trading developments in the ESCAP region

“…The total gains to the ASEAN economies are increased threefold, driven by improvements in economic efficiency in Indonesia and Malaysia. The gains to the economies 13 For more detailed scenarios of reform in SAFTA, see Gilbert and Oladi (2010).…”