BANGLADESH

Regional connectivity is crucial for greater trade among SAARC countries and would help the region achieve its potential, prime minister Sheikh Hasina said on Monday.

"As leaders, we must ensure greater cooperation in enhancing regional connectivity," Hasina said at the inaugural ceremony of the fifth SAARC finance ministers' meeting at a city hotel.

Finance ministers of the eight SAARC countries and other senior officials are taking part in the meeting.

Hasina said regional connectivity would ensure all-round prosperity for people of the region.

FISCAL PRESSURE AMID GLOBAL RECESSION

Crises in Eurozone and the US have adversely affected South Asian countries, with fiscal space now becoming very limited, the prime minister said at the meeting.

"Expansionary economic policy is difficult to sustain for long and levels of public debt have also gone up," she noted.

According to Hasina, global inflationary pressure "is very strong" and instability in foreign exchange rates "is very risky". "In such a situation, there is a need for concerted action by SAARC," she said.

The prime minister also emphasised the need for faster dismantling of non-tariff and para-tariff barriers. "The progress on harmonisation of product standard must also be speeded up," she said.

About the 'sensitive list' among countries of the region, the prime minister said the process to reduce this list is slow and urged that it must include major goods of export interest.

DOWNSIDE RISK

Finance minister AMA Muhith, as chairman of the meeting, said there are some downside risk that can affect the SAARC countries.

Amid the current economic flux, he said, there may be problems in remittance inflow or slackness in export growth. "Oil export can increase the price of primary commodity."

"SAARC countries need to identify factors that destabilise economies and take necessary action," he added.

Finance secretary Mohammad Tareq said some countries in the region have already felt the pinch of the global crisis but added that Bangladesh was moving in a direction of higher growth.

Earlier, on Sunday, finance secretaries of the SAARC countries discussed regional cooperation and put forward their recommendations during the meeting of the ministers.