South Asia

Despite the serious obstacles of civil conflict, corruption, increased oil prices, and political transitions, South Asia continued to achieve impressive economic growth and poverty reduction in 2008, maintaining an annual growth rate of seven percent. Nonetheless, the region continues to attract less domestic and foreign investment than any region in the world except Sub-Saharan Africa. Improving governance and the investment climate are among South Asia's most fundamental challenges.

FIAS' approach to South Asia focuses on the investment climate in the region's poorest and most unstable countries and subnational areas. To accelerate or even sustain growth requires action on two fronts: addressing the region's vast urban and rural infrastructure deficits, and improving the climate for investment with measures to reduce the red tape required to start a business and the costs of hiring workers.

Examples of our work

In 2008, FIAS began working with the government of Bihar, India's poorest state, to enhance the competitiveness of the region's agribusiness value chain and design support for investment promotion and regulatory simplification. FIAS also launched a sub-national Doing Business in India study benchmarking critical areas of regulation such as starting a business, dealing with licenses, registering property, paying taxes, trading across borders, enforcing contracts, and closing a business.

In Bangladesh, FIAS has helped the government gain significant momentum towards investment climate improvement through the Bangladesh Investment Climate Fund (BICF), which became operational in January 2007. FIAS also provides active technical assistance to individual BICF projects. During this time, the primary focus has been to support public-private dialogue by establishing the Bangladesh Better Business Forum and the Regulatory Reform Commission. The Bangladesh Better Business Forum has identified and is now acting on more than 100 recommendations to improve the private sector. Examples of the recommendations include: streamlining visa and work permit procedures for foreign investors; appointing public information officers within ministries; and reducing the number of days for company notification and registration. At the end of FY08, more than 30 recommendations had been implemented. An additional 28 recommendations were under active implementation and 64 recommendations were slated for near-term further discussion and possible implementation.

The Regulatory Reform Commission is designed to complement the work of the Bangladesh Better Business Forum with systematic oversight of the country's regulatory reform process. Since its launch in November 2008, the Regulatory Reform Commission has identified 202 business-related laws and prioritized 30 of these for possible streamlining. Several types of procedures are targeted for simplification, including approval of foreign loans, issuance of critical business licenses and certificates, and forms and procedures used in calculating customs duties.

In Nepal, FIAS designed a comprehensive program on investment climate reform that includes a SEZ framework analysis, a market benchmarking study, development of a collateral registry, and an analysis of tax incentives.

In Bhutan, FIAS supported the government in conducting ongoing reform of business registration and licensing and began exploring the scope of a comprehensive country program on investment climate issues.

To contact us about FIAS activities in the region, please click here.