Economic Integration in South Asia: An Exploratory Study. By Ayubur Rahman Bhuyan. Dacca: The University of Dacca. 1979. Appendix; Bibliography; Index. xi + 224 pp.US S 12.00 or Bangladesh Taka 125.00.

Munawar Iqbal


In the book under review, Dr. Ayubur Rahman Bhuyan has made a
commendable effort to analyse some of the economic effects of a
"possible" customs union among the South Asian countries: India,
Pakistan, Bangladesh and Sri Lanka. While an attempt has been made to
quantify the static effects of integration, the rest of the analysis is
mostly qualitative. In spite of the limitations imposed by the paucity
of data, Dr. Bhuyan's scholarly discussion goes a long way to bring the
relevant issues to light. Before going into empirical estimation of the
gains and losses of a customs union among the South Asian countries, the
author provides a rationale for economic integration among developing
countries in terms of the theory of customs unions. He bases his case
for economic integration on the need for industrialization. In line with
the argument advanced by Johnson as well as by Cooper and Massell, he
considers industrial production to be a "public good" which yields to
the community satisfaction over and above that obtained through private
consumption of industrial products. Industrialization of an
underdeveloped country is believed to be virtually impossible in the
face of an open competition with developed countries. Hence the need for
protection. However, protection has a cost to the economy. Integration
is likely to reduce this cost by making available benefits of economies
of scale and external economies, thereby bringing about an improvement
in productive efficiency.

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