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SAARC at 20: will the future be different?

Amit Baruah

It is time for the grouping to move ahead with real economic integration.

IT SHOULD have been the 20th summit, but it is only the 13th. When leaders of the seven South Asian Association for Regional Cooperation (SAARC) nations meet for their "annual" summit in Dhaka on November 12 and 13, they will have an opportunity to reflect on the performance of the 20-year-old organisation.

Set up on December 8, 1985, SAARC has often found itself hostage to the India-Pakistan dynamic. Tensions between the two countries have meant several SAARC summits have not taken place.

Though the beginnings of a free trade area will be set in motion on January 1, 2006, as agreed to by SAARC leaders in Islamabad two years ago, there is little doubt that South Asia, given its size and potential, is still to be reckoned as a regional trading area of consequence.

India and Pakistan, having made steady progress in improving their relationship since a ceasefire took effect on November 26, 2003, can now take the lead in pushing ahead with trade facilitation measures and transport linkages that could serve as examples for the rest of the region.

In previous years, SAARC meetings had been occasions for India and Pakistan to spar over Kashmir. Now, with the active engagement of Islamabad and New Delhi, fresh energy can be infused into the region on the economic front.

Given the fact that India's northeastern States would benefit from trade and transport linkages with Bangladesh, New Delhi needs to take stock of its relationship with Dhaka. It should begin a process that will alter the negative environment that currently exists between the two countries.

In fact, Bangladesh had shown considerable resistance to moving ahead with the South Asian Free Trade Area (SAFTA) in Islamabad two years ago. It was persuaded to go along after being given certain concessions.

Since India's relationship with key SAARC countries is often linked to security questions, New Delhi needs to do some hard thinking on what it needs to do vis-à-vis Bangladesh. As is well known, Bangladesh suffers from a massive trade imbalance, with its exports to India standing at a paltry $100 million and imports from India close to $2 billion. As a beginning, India should unilaterally announce that it would allow duty-free access of Bangladeshi goods into the country as a gesture of goodwill. This would, at least, dent the perception that India is only interested in "exploiting" Bangladesh.

Equally, Bangladesh should move ahead in giving all the necessary clearances required to the Tata group to allow for its estimated investment of $2 billion in the country. The Tatas' proposal includes a two million tonne steel plant, a 1,000-megawatt power project, and a million tonne fertilizer plant to be set up in Bangladesh.

In a speech on November 9 that dealt with South Asia, Prime Minister Manmohan Singh said: "Given the strong trends towards economic integration which go far beyond tariff reductions to gradual economic convergence, any region can ignore the formation of its own scheme of regional integration only at its peril."

Clearly, there is a realisation at the highest levels of government that SAARC needs to move ahead with real economic integration, which would bring benefits to both people and business, especially in the border areas. India may be convinced of the benefits of regional integration, but its other neighbours, especially Bangladesh, need to be on board if a South Asian economic union is to become possible.

Little movement on promises

At summit after summit, in declaration after declaration, SAARC leaders have referred to goals such as poverty reduction, preferential and free trade, and the need to establish good neighbourly relations in general terms. Yet precious little forward movement has taken place compared to the Association of South-East Asian Nations (ASEAN) or even the Greater Mekong Subregion (GMS) grouping that comprises China, Myanmar, Thailand, Cambodia, Laos, and Vietnam.

Stepping away from formal declarations, South Asian leaders need to take note of the hunger and suffering of their citizens; the fact that benefits of economic development have reached some, but are yet to reach many others.

SAARC leaders should step away from the routine of issuing declarations and statements, many of which read the same, summit after summit; the variations being restricted to changes in the English language common to all the seven members. Issuing long-winded joint declarations should be dispensed with and, instead, leaders should spare no effort in getting on with the job of regional integration. At the last summit in Islamabad, SAARC leaders reiterated their commitment made in Kathmandu in 2002 to set up a South Asian Economic Union. It is time this commitment was translated into reality.

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