The inability of South Asian least-developed countries (LDCs) to effectively exploit the WTO market access opportunities and some unilateral non-reciprocal trade preferences is explained by a number of constrains. This discussion paper focuses on the analysis of three major binding constraints: road infrastructure, education and customs infrastructure and administration.

The paper identifies governance as a major problem for the under-provisioning of these public goods. Furthermore, it identifies the inefficient mobilisation and management of resources as another problem in this relevance.

The document finds that:

• increased attention is being paid towards the reduction of trade costs due mainly to “integration of trade” and “disintegration of production”
• however, targeted international support measures also have a significant role to play in helping South Asian LDCs in the provisioning of public goods that will ultimately result in the alleviation of trade constraints
• in terms of lack of access to credit, initiatives such as the proposed LDC Integration Fund, primarily aimed at overcoming the resource crunch problem faced by the region are of great importance
• nonetheless, given the fact that the initiative is the last hope for the LDCs, any failure on this front could severely jeopardise their efforts to better integrate themselves into the global economy and the multilateral trading system

In addition, the author concludes that the gains from reform in the area of trade facilitation measures would be enormous for the South Asian region as a whole. The author figures that this is particularly very true in terms of the services provided by customs.