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Diplomatist: Your assessment of SAARC as an economic organisation in the wake up to the 12th Summit?
Prof. Bhattacharya: The substantive part of SAARC has really focussed on the trade part not any other dimensions of economic linkages, for e.g., investments. Intra SAARC investment flows is pretty low and mostly have been bilateral in nature like India-Nepal, India-Sri Lanka, Pakistan, Sri Lanka agreements. Trade as a part of inter-governmental organisation efforts in the form of SAPTA, and SAPTA to SAFTA has made little progress than desired for.
The movement towards BIMSTEC again shows that SAPTA is not progressing at a pace desired by some countries. But given the hindrances for successful implementation and progress of regional organisations, like the very large differences of sizes and economic development different political institutions, trade perceptions of various countries, and such other limitations, I can say that SAARC has made some fair progress.
I personally believe that the first stage of trade liberalisation is always difficult. As an optimist I will say that going by the past performances, SAARC has achieved a threshold. The desire to open up trade in the region has been recognised. Its importance has been appreciated. Given, the multilateral arrangements under WTO are clouded, members are looking for regional trade and development strategies as a viable option. I think the countries of South Asia must necessarily focus upon how to make SAARC as a more viable economic organisation. There is no any alternative to it.
How to reconcile the different interests of the SAARC members as well as the reservations of LDC countries for preferential treatment in terms of tariff concessions or a compensatory mechanism?
Whether the SAARC countries have dissimilar economic characteristics and the expansion of ASEAN from the original six to ten, the problems are the same. If ASEAN could device effective policies for integrating their economies, as well as a strategy to deal with external economies like China, India or Japan, I do not see any reason why SAPTA or SAARC cannot do the same. Presumably, there are mechanisms like special or differential treatment within a regional economic grouping which ASEAN has effectively worked out; I suppose the SAARC leaders can do the same. It is not an insurmountable problem.
The political atmosphere of the region is much to be blamed for slow progress of SAARC ...
Political relations are always at the core of any regional integration process. Even within the developed countries, EU essentially was a political union and then an economic union, ASEAN was a political union against China. Yes, till now, SAARC suffers from historical and political blunders, which have cost any effort for regional cooperation dearly. But things are taking a new direction today.
The talk of South Asian Economic Union is being floated around in various circles…
The concept of such an union is too far fetched right now. We must have to make sure certain things happen. We have to really make substantive progress towards free trade, and that itself is a huge task.
Secondly, the actual benefit will have to come from trade related investments. Trade and investments are intrinsically linked and therefore, agreements on multilateral investments and investment protection within SAARC should be a priority. Another priority is to progress towards legalising the currently unrecorded trade. The logistics in the region are in a mess despite the countries are geographically close to each other. The possible links between the country’s North Eastern states and Bangladesh is worse. The focus has to be on improving trade related infrastructure to facilitate the growth of trade.
I think these are more practicable, pragmatic and achievable targets rather than dreaming of any Union, and this to my mind does not make any sense.
The move towards sub-regional economic cooperation like BIMSTEC or moving beyond the region for economic gains could nullify any move forward towards SAARC...
The idea or any proposal for sub-regional economic cooperation is not very enthusiastic. I think the SAARC itself is small enough. The total trade of SAARC in global trade stands at 1 percent. I think the options should be directed towards making SAARC a viable alternative.
One could say that India moving towards ASEAN is an attempt to sideline SAARC. But this is something not sounding logic. India-ASEAN economic cooperation should be taken on a different platter.
India going to ASEAN is not because of perceived failure of SAARC. It is a complimentary process, not a substitute. India’s geo-strategic location in South Asia is such that there are no major trading countries around. ASEAN was the only viable economic alternative for India. I definitely want to make SAARC as well as India-ASEAN relation equally successful. The progress of SAARC is in India’s interest.
India being the biggest member in the region should take up unilateral steps for SAARC’s interest…….
I think there are already few Indian steps in the unilateral way. I suppose India has not asked for any reciprocity. India granted MFN status to Pakistan without any reciprocity. Nepal and Bhutan have been given free trading partner status benefit. Sri Lanka has been given preferential market access under the bilateral Indo-Sri Lanka free trade agreement. India has given unilaterally LDC concession to Bangladesh. So there is no reciprocity.
You expect something concrete to come out from the 12th SAARC Summit in Islamabad…..
I understand from sources that the latest rounds of trade negotiations have gone well. Better understanding has prevailed upon the member countries to make some progress in SAARC. The desirability for free trade has already been there. Even Pakistan is showing greater degree of acceptance for that perception. On trade front there are possibilities of forward movement. One reason is trade and investments are pragmatic issues. Trade and industrial bodies in the region feel if trade is liberalised it would open the window of multiple trade and business. The overall feeling is of optimism, of greater intercourse, means greater trade. I think by now every government is sensitive to trade issues. The pressure is coming from the corporate sectors in the region, which cannot be ignored by the political establishments. If things move positively in the economic way, this would certainly help to move forward politically, and than set greater goals for accomplishment.
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