South Asia is sitting on a rich potential source of growth: regional integration. Increasing integration within the least integrated region in the world could yield huge benefits for its people. Annual trade between India and Pakistan, currently estimated at $1 billion, could potentially reach $9 billion. Unfortunately, progress on trade integration within South Asia has been slow. While it continues to make the case for more open trade in goods and services within the subcontinent, especially with private sector entities such as national federations of chambers of commerce and industry, the World Bank is also focusing on regional cooperation in energy and water, where the win-win benefits are likely to be even higher.

The Independent Evaluation Group’s review of the Bank’s regional programs around the world found that they have the potential to deliver big development results, yet account for less than 1 percent of total lending and are not closely linked to country programs. The IEG noted that the Bank has been effective in fostering country interest in regional programs and in mobilizing resources, but has been less so in helping countries resolve conflicting interests and plan for the sustainability of programs after external support ends. A more strategic approach will help countries identify the regional approaches of greatest promise and will strengthen the international aid architecture in support of multicountry efforts. Greater support for these programs, coupled with the application of the lessons of experience, could have a strong development impact.