ISLAMABAD, Aug 18: South Asia has sustained an average growth rate of 5.5 percent per annum over the past two decades despite many external and domestic shocks.

Director-General Research and Information System for the Non- Aligned and Other Developing Countries (RIS), New Delhi, India, Dr Nagesh Kumar said this while commenting on the "South Asian Development and Cooperation Report 2004" launched at a seminar here on Wednesday.

The seminar was organized by the Pakistan Institute of Development Economics (PIDE). Former federal secretary Zafar Altaf chaired the seminar. Dr Kumar said with more than a decade of reforms behind them, the region's economies were more intensively integrated with the global economy, growth of income and exports display promising outlook and inflation rates are in check.

However, despite such achievements, the region continues to be home for more than two-fifths of the world's poor. The region also fares very poorly in terms of different indicators of human development.

Therefore, the region needs to further accelerate its growth process with an emphasis on human development and strengthened competitiveness to deal with the daunting challenges of poverty alleviation, hunger, illiteracy, and disease, he added.

Dr Kumar said according to the report, the region could face these challenges much more effectively as a group rather than individually. The regional economic integration can, by exploiting the synergies, expand the economic opportunities available and strengthen the growth prospects.

The recent experiences with economic integration in the region suggest that it leads to expansion of trade and development in a balanced and sustainable manner.

In the light of these experiences and against the backdrop of mushrooming regional trading blocs in different parts of the world, the report finds a compelling case for the region effecting its transition into an economic and monetary union by implementing SAFTA, forming a SAARC Customs Union and introducing a South Asian parallel currency, as an intermediate step to a single currency, in an expeditious manner.