Substantial cooperation and investment in connectivity and other economic areas  are must to transform South Asia into a highly integrated region from current status of the least integrated one, said Prime Minister Sushil Koirala on Thursday.

During the inauguration ceremony of the 7th meeting of Saarc Finance Ministers, PM Koirala said that the connectivity in the forms of physical infrastructure, energy and knowledge connectivity can catalyse meaningful cooperation in trade, tourism, investment, finance and energy, among others.

“These are the key components of a deeper integration,” said the Prime Minister. Despite remaining in proximity, South Asian countries do less than 5 percent trade among them as lack of physical connectivity; political will and long list of products under sensitive list have remained stumbling block for enhanced trade and investment in the region.

Saarc Finance Ministers are discussing on matters such as cooperation in financial sector, flow of financial capital and intra-regional long-term investment, currency swap arrangement, Saarc Development Fund and Saarc Agreement on Promotion and Protection of Investment as a means to further integrate their economies.

 The 18th Saarc Summit held in Kathmandu last year had also called for greater integration within Saarc with the theme—Deeper Integration for Peace and Prosperity.

Saarc has envisioned creating South Asian Economic Union in the long term. According to Koirala the vision remains relevant and could be achieved in a phased manner within a reasonable period of time with an inbuilt provision for sharing benefits equitably among the participants.

On the occasion, Finance Minister Ram Sharan Mahat informed that the Finance Ministers’ meeting would focus on preparation of the proposals to allow for greater flow of financial capital and intra-regional long term investment. “We will discuss the draft of Saarc Agreement on Promotion and Protection of Investment and the matters related to Saarc Finance,” he said.

With the Saarc envisioning Saarc Economic Union, Mahat said nations of the region should first do hard work in the areas of harmonizing standards, reducing tariff and non tariff barriers, boosting connectivity and promoting intra-regional investment to attain the ultimate goal.