South Asia is the region that is made up of India, Bangladesh, Sri Lanka, Nepal, Bhutan, Afghanistan, Pakistan, and the Maldives. The South Asian Association for Regional Cooperation (SAARC) is the primary economic bloc covering the region that was established in 1985. All eight countries of the region are members. The economy of South Asia as a whole grew by 7% in 2017 and is expected to increase to 7.2% in 2018. According to global competitiveness report 2016-2017, most countries in South Asia have significantly improved their competitiveness in the last few years in the region and is now the fastest growing part in the world. Over the last few years, the region has aimed on improving the overall health and education levels besides upgrading their infrastructure.
Maldives has a mixed economy and the major economic activities in the country are fishing, tourism, and shipping. The country is one of the richest countries in South Asia and in 2017 had a GDP per capita of $9,550. The country had a nominal GDP of $3.578 billion in 2017. Tourism plays a significant role in the country and contributes to about 28% of the national GDP, earning the country slightly over 60% of the foreign exchange earned. More than 90% of the tax revenue is derived from import duties and other tourism-related levies. In recent years, the Maldives has aggressively promoted its tourism, and is underpinned by the unpolluted beautiful beaches. The small coral islands with blue waters on the sunset have been pulling tourists across the world and racking in approximately $325 million annually. In 2000 tourism in the country contributed about 33% to the country's GDP.
2. Sri Lanka
Sri Lanka is the second richest economy in South Asia with a GDP per capita of $3,930 in 2017. The country has had a healthy economic growth in the past few years and between 2003 and 2012, it registered an impressive growth rate of 6.4%. Although the country was in civil war for three decades, it has focused on long-term strategic development with some structural challenges as it aims to transition into an upper middle-income country. The most significant sectors in the country include tourism, textile and apparel, agricultural products, and rice production.Overseas employment has contributed significantly in foreign exchange earning, and 90% of Sri Lanka's expatriates reside in the Middle East. The country has one of the world’s lowest tax to GDP ratios.
Bhutan is one of the least developed and smallest countries in the world. However, the country is ranked among the richest in South Asia. In 2017, the country hard per capita GDP of $2,870. The country's economy is dependent on agriculture and forestry which supports approximately 60% of the population. Agriculture is made up of animal husbandry and subsistence farming. The country's topography is rugged and the construction of roads and other infrastructure is expensive and a challenging undertaking. The country's economy is closely tied to India's economy, which gives financial assistance. Cottage industries dominate the industrial sector in the country and development projects for general construction relies heavily on migrant labor from India.
Future Prospects Of South Asian Economy
The prospects of South Asia’s economy is robust given that the household consumption is expected to remain constant as exports are expected to rise. The growth in the region averaged 6.7% in 2017 and it is expected to sustain about 6.9% into the future. The forecast points to strengthening external demand as organizations and companies in developed economies recover. South Asia is strategically located with proximity to the Indian Ocean, having important choke points Strait of Hormuz and Strait of Malacca which sees the passage of more than 32.2 million barrels of oil and other petroleum every day.
The Richest Countries In South Asia
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