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Saarc FinMins to meet in Kathmandu on Aug 19-20
Saarc finance ministers are set to hold talks on a range of issues, including establishing a Saarc Development Bank and reviewing progress towards opening economic and infrastructure windows of the Saarc Development Fund (SDF), at a meeting scheduled to be held on August 19-20 in Kathmandu.Saarc finance ministers are set to hold talks on a range of issues, including establishing a Saarc Development Bank and reviewing progress towards opening economic and infrastructure windows of the Saarc Development Fund (SDF), at a meeting scheduled to be held on August 19-20 in Kathmandu.
Other agendas of the meeting are reviewing progress achieved in the areas of regional double taxation agreement, Saarc economic union, currency swapping and getting technical assistance from G20 nations to develop infrastructure projects in the region, officials said.
It is the first time the meeting is taking place in Nepal.
During the eighth meeting of the South Asia Free Trade Area (Safta) Ministerial Council held in Thimphu, Bhutan, in July last year, India had proposed establishing such the Saarc Development Bank to finance infrastructure projects in the region whose growth potential has been hampered by poor infrastructure.
Instantly, the member states agreed to establish such a bank in principle whose details are yet to be worked out. At a time when Nepal has already become the founding member of the Chinese-led Asian Infrastructure Investment Bank (AIIB), India has proposed the Saarc Development Bank.
Sensing funding inadequacy from the West-dominated multilateral lenders such as the World Bank and Asian Development Bank, BRICS emerging economies, including Brazil, Russia, India, China and South Africa, have formed the New Development Bank, also known as the BRICS Bank.
According to a World Bank study, South Asia has infrastructure deficit of $2.5 trillion.
The meeting will also review the progress made by member countries towards the opening the SDF’s economic and infrastructure windows, according to Madhu Marasini, chief of Economic Cooperation Coordination Division at the Finance Ministry.
The Infrastructure window would cover projects in the areas of energy, power, transportation, telecommunications, environment, tourism and infrastructure. The economic window would primarily be devoted to non-infrastructural funding.
The member states, during the Saarc summit in November 2014, had agreed to open the two windows while strengthening the social window. The social window primarily focuses on poverty alleviation and social development projects.
As far as the double taxation avoidance agreement (DTAA) is concerned, the officials said there are no specific issues, but implementation of the regional agreement will be reviewed. “There will be review on whether the region has been able to get benefits from the agreement and whether any provision in the regional agreement should be revised to help increased investment within the region,” said Chudamani Sharma, director general of the Nepal Inland Revenue Department (IRD).
Although the agreement means double taxation is avoided for investment from one country to another in the region, Nepal has also signed separate bilateral DTAA with India, Pakistan and Sri Lanka. Marasini said there will also be discussion on reports of experts groups regarding trade integration in the region.
Regional trade in South Asia is just around 5 percent compared to their trade with other countries. There have been bilateral currency swap deals in the region based on the Framework on Currency Swap Arrangement in Saarc.