SAARC: A Unifying Factor in South Asia

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The 18th meeting of the South Asian Association for Regional Cooperation countries in November in Nepal must take a hard look at infusing vigour and vitality into economic diplomacy. The Kathmandu summit presents an opportunity to build on earlier initiatives that can potentially alter the current scenario of dismal economic cooperation, maintains Sukanya Natarajan

The effectiveness of regional governance arrangements has assumed great importance after World War II, and became dominant in the post-Cold War era. The global economy has witnessed rapid integration since the beginning of 1980s. Trade liberalisation and export-led growth have encouraged the South Asian countries to introduce wide ranging economic and institutional reforms.

Asia has striking similarities with the Europe of the 19th century: underdeveloped international institutions, mixed domestic orders, rising nationalism, high but differential growth rates, and bitter, emotional rivalries between insecure neighbours. South Asia, specifically, is a conflict prone region subject to continuous political tension. There is a lack of cooperation in South Asia, and almost perpetual preoccupation with intra-state conflicts and crisis. The region is plagued with extreme poverty, mega urbanisation, and immense disparities between rich and poor and fundamental problems in the areas of infrastructure, energy and environment.

Historically, countries in South Asia have had strong economic, cultural and trade ties. The three largest South Asian countries, India, Bangladesh and Pakistan formed a single political entity under the British rule for 200 years and had a common market with an integrated monetary and communication system, which was well ahead of the European common market in 1958. During the second half of the 20th century, these ties were disrupted. With the lingering legacies of colonial past, unsettled borders, ethnic and religious differences, South Asia has strategic significance. The seven independent countries of the region are India, Bangladesh, Pakistan, Nepal, Sri Lanka, Bhutan and Maldives. The establishment of South Asian Association for Regional Cooperation (SAARC) in 1985 was an attempt to reverse the conflicting tendencies of the post-independence era.

The first concrete proposal for establishing a framework for regional cooperation in South Asia was made by the late President of Bangladesh, Zia- ur- Rehman, during his visits to Nepal, India, Pakistan and Sri Lanka. Three distinct phases marked the subsequent emergence of SAARC. After consultations, the foreign secretaries of the seven founding countries met for the first time in Colombo in April 1981. The second phase began with the convening of the meeting of foreign ministers in New Delhi in August 1983, when the process was elevated to the political level and adopted the Declaration on South Asian Association for Regional Cooperation (SAARC) and formally launched the Integrated Program of Action (IPA) in the five agreed areas of co-operation: agriculture, rural development, telecommunication, meteorology, and health and population activities. Transport, postal services, scientific and technological cooperation and sports, arts and culture were the later additions to the IPA. In the third phase, the heads of state or government of seven founding members met at the first SAARC summit meeting, held in Dhaka in December 1985, and adopted the SAARC charter.

The SAARC secretariat is based in Kathmandu and its role is to coordinate and monitor the implementation of SAARC activities, service the meetings of the association and serve as the channel of communication between SAARC and other international organisation. At the 14th SAARC Summit held in New Delhi in April 2007, Afghanistan was welcomed as the eighth member. The objectives of SAARC include promoting the welfare of the people in South Asia, to accelerate economic growth, social and cultural progress and to promote active collaboration and mutual assistance in matters of common interest. From relatively modest beginnings, SAARC members have been gradually expanding their cooperation to cover new areas of common interest. Even though SAARC’s critics accuse it of achieving little when it comes to tangible results, it cannot be denied that the member states’ involvement in a tight network of committees, boards and organisations has proven to be the association’s major strong points. Despite ups and downs in political relations of countries in this region, civil society organisations have been continuously making efforts to improve relations and create space for the governments to develop agendas for the upcoming meetings. SAARC has tackled important issues of social charter, development agreements, fighting terrorism and has achieved some good results. Cooperation in core economic areas is the major focus of this bloc from the early 1990s when SAPTA (SAARC Preferential Trading Arrangement) was signed in 1993 to promote and sustain mutual trade and economic cooperation within the SAARC region through the exchange of concessions. Following on from this, SAFTA, the South Asian Free Trade Agreement was signed at the 2004 Summit of foreign ministers in Islamabad and entered into force on January 1, 2006.

There is potential for increased cooperation and liberalisation within the countries of South Asia. However, there is a need to better understand the benefits of a free single market. India, Pakistan and Bangladesh have the responsibility to develop mutual trust and agreements. Trade is passé and investment is the new buzzword. The neighbouring countries fear that liberalising trade with India will lead to swamping of their markets with goods from India. This fear can be mitigated only if Indian investment takes root in these countries and there is a reduction in barriers to investment in India. The trend towards deeper bilateral agreements and desire to join other multilateral organisations is paradoxically taking place at a time when interest in SAARC in Asia is growing. Since 2005, Australia, China, Japan, Iran, European Union, South Korea, Mauritius, Myanmar and the USA have all been granted observer status that gives them the opportunity to make proposals on the development of SAARC. SAARC has a long way ahead. It has to address obvious problems and celebrate the successes as well. The potential political, economic and strategic gains from SAARC for all member countries have increased significantly. The fragmentation of the region needs to be reversed. This is a necessary condition for the region and its member countries to fully exploit their potential and achieve their objectives of achieving rapid, sustainable and inclusive economic growth.

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