Abstract

Countries in South Asia have made substantial progress in liberalizing trade and investment. While most adopted inward-looking policies from the 1950s through the early 1970s, the countries in the region began to pivot to liberal trade and economic policies from the late 1970s. The change was prompted by low growth rates, low levels of development, and subsequent economic crises in each country. The content of the new policies was consistent with neoliberal policies that international organizations such as the International Monetary Fund and the World Bank prescribed to countries facing economic crises. The resultant liberalization raised trade volumes, per capita incomes, and economic growth rate in all countries in the region. However, regional integration levels remain low, and poverty remains a challenge for the region. The COVID-19 pandemic has brought the fragility of economic growth into sharp focus and has indicated the need for further reforms and for enhanced efforts toward regional economic integration.