The global value chain is a new concept, covering all aspects of business and trade, and is specifically beneficial for developing economies. The importance of the regional value chain is at par with the global value chain and developing economies in various regions are working in coordination and cooperation with one another to achieve common goals. In a study by Commonwealth Secretariat in 2011, the South Asian countries were advised to develop a supply chain in textile sector to decrease cost of production and increase exports. However, the study also pointed out various hurdles in the development of the supply chain in the SAARC countries. Pakistan, Bangladesh, Sri Lanka and India are all developing nations and need a close cooperation with one another for their own benefits, but bitter colonial legacies have polluted the political environment to the extent that cultural similarities have lost their values. Instead of becoming part of a production cycle, the countries are undergoing the process of polarization.
If South Asian countries put aside their difference and take a united stand on trade, industry and business, no one can stop development in this region. The need for cooperation between regional countries is increasing day by day due to the use of modern technology in the production of value added goods. The process of production is also becoming complex and parts of the products are sourced out to lower the manufacturing cost. In Pakistan, the global value chain is still a distant dream and despite all promising economic indicators, the country is facing declining trends in exports.
The Pakistan, China Economic Corridor is the best option to enhance regional and international trade. The SAARC countries should also launch regional economic corridors to discourage political differences and encourage collaboration in the field of business and trade. The first thing to do is to narrow trust deficit, particularly between Pakistan and India and enhance cooperation. SAARC was an important forum to discuss political differences, but it has become hostage to the relations of two giant nations. The trust deficit is the main reason of slow trade activities because it is a bottleneck in the way of free trade. There is a need to enhance business to business contacts between the regional countries and improve connectivity through soft borders. India has recently stopped cross border trade with its small neighbor Nepal, increasing the problems of that landlocked country. India or any other country cannot achieve the cherished goal of development by ignoring regional trade. South Asia is the home of 1.5 billion people which can be exploited into a vibrant market.
