By Eduardo Faleiro
Mizzima News (www.mizzima.com)
July 18,2003

The summit meeting of the South Asian Association for Regional Cooperation (SAARC) is now scheduled to be held in Islamabad from January 4-6, 2004. These dates have been agreed by the Foreign Secretaries but need
to be endorsed by the Foreign Ministers of the seven countries. It is hoped that intervening bilateral irritants will not once again lead to a further postponement of this important summit.

People of South Asia constitute more than one fifth of mankind, are heirs to great civilizations and yet face momentous problems of poverty, illiteracy and deprivation. Though the governments of SAARC nations have made efforts since Independence to improve the condition of their people these attempts are often thwarted by multifarious religious, ethnic and linguistic problems. Discontentment and frustration among the masses faced with such tribulations emboldens subversive forces both within and outside to exploit national inadequacies.

The solution to our common predicament requires peace and an atmosphere
of dialogue and cooperation rather than of conflict and confrontation. Peace is essential for national as well as regional prosperity. How do we achieve prosperity in South Asia? Regional economic cooperation is a pivotal element. Economic synergy leads more often than not to the solution of disputes including political differences.

It is often claimed that unless economic cooperation between India and Pakistan is normalized, South Asian economic cooperation will not succeed. The normalization of trade relations between the two countries is indeed crucial for the success of SAARC. The late Dr. Mehboob-Ul-Haq, former Finance Minister of Pakistan and founder of the world renowned UNDP Human Development Reports has debunked what he called “Myths about Pakistan – India Trade”. Dr. Haq underscored the urgency of effective trade relations between the two countries and pointed out that “political expediency triumphs over economic rationality when it comes to bilateral trade between India and Pakistan. Denial of trade does no good to either of the two countries and lack of trade only weakens them.

Countries do not grow strong when cheap and quality products are denied to millions of consumers,, when profitable opportunities are refused to
thousands of producers and the scope for revenue generation is left
unavailed... India and Pakistan have a great deal to learn from the global
experience where trade is increasingly being used as a prelude to
political reconciliation”. Addressing the concern that trade liberalization
between India and Pakistan would weaken their domestic economies he
commented “this is a classic misunderstanding of free trade that benefits
all sides. Europe and America are the largest trading partners of both
India and Pakistan and if trade with them does not weaken them how can
bilateral trade be harmful. Interestingly Pakistani products that are
likely to face intense competition from India are the same that face
maximum competition in the global markets. In any case India and
Pakistan can maintain a negative import list of key items that they wish to
protect from each other for a definite period.” (HDC 1990, based on
speeches and statements of late Dr. Mahboob-Ul-Haq.) This reasoning is
valid for all countries of South Asia. The fears of any of the SAARC
countries that economic cooperation might destroy their own domestic
economy are unfounded and in any case, adverse effects can always be
prevented by using such devices as the negative list, the quota system or the
tariff mechanism.

It is through regional arrangements that the countries of Europe as well as those of South Asia obtained increased benefits and reduced and sometimes even eliminated the negative fallout of globalisation. The process of economic globalisation has so far gone mostly in favour of the developed countries and against the interests of the developing nations. Regional groupings are necessary to increase the bargaining power of countries in the WTO negotiations. The SAARC nations successfully coordinated their strategies at the Seattle and Doha rounds of negotiations. They should again present an unified approach at the round to be held in Cancun September next on such crucial issues as the Agreement on Agriculture, agricultural subsidies, market access, TRIPS etc.

Intra-regional trade among SAARC countries as a percentage of their world trade is negligible at 3.4%. Intra-regional trade as percentage of world trade is 38.4% in East Asia, 37.3% in North America and 63.4% in the European Union. The South Asian Preferential Trade Agreement (SAPTA) came into effect in 1995 and there has been some modest progress but we must now move towards the South Asian Free Trade Agreement (SAFTA).

SAFTA should come into force at the earliest and before we are overtaken by the obligations under WTO. Three rounds of meetings were held on SAFTA in October, November and December 2002. These meetings discussed the draft Treaty prepared by the SAARC Secretariat but so far the Framework Agreement has not been finalized. One hopes that the recent Indo-Pakistan peace initiative will achieve positive results and that it will create a favourable climate to operationalise SAFTA at the earliest and to achieve the ultimate objective of a South Asian Union on the lines of the European Union.

We must also strive towards sustainable consensus. Government decisions ought to be taken by involving all concerned including Opposition Parties but decisions once taken must hold notwithstanding changes in Government or other political vicissitudes.

Governments apart, the civil society, the intelligentsia, the business community, the NGOs must all emphatically promote awareness about the need and advantage of regional cooperation. There ought to be a much greater interaction between the civil society and the political class across the different countries of South Asia. Regrettably such an interaction is minimal. It would contribute significantly towards a quicker settlement of differences and a greater South Asian solidarity which is essential for the progress and prosperity of all our peoples.

(The writer is a Member of Parliament and a former Union Minister in
India)