Regionalism at work
- The Pokhara meet should at least make our leaders realise how far behind Saarc remains
Mar 16, 2016-
The 37th meeting of the Council of Ministers (CoM) of the South Asian Association for Regional Cooperation (Saarc) is set to begin in Pokhara tomorrow. The foreign ministers of the member states are going to attend the CoM meeting, also known as ‘Mini Saarc Summit’, during which they will evaluate and discuss regional issues and assess past commitments and their implementation.
In the last summit held in Nepal in 2014, a 36-point declaration was signed which included regional cooperation, and commitment to a South Asian Economic Union, among others. As the current chair, Nepal may need to respond to some concerns on the lacklustre efforts in implementing the declaration by member states. If anything, it’s a collective failure, however.
Whosoever chairs the regional bloc, the fact remains that Saarc has so far failed to achieve its grand vision of greater economic cooperation and integration to work for the larger good of the peoples of South Asia since its inception in 1985.
Although the South Asia Free Trade Agreement (Safta) has been in place for a decade, the intra-regional trade accounts for a mere five percent of South Asia’s total trade. In contrast, the other regional grouping in the neighbourhood for example, the Association of Southeast Asian Nations (Asean), does 25 percent of its trade within member states, argues Ranil Wickremesinghe, prime minister of Sri Lanka in his latest article in Project Syndicate.
The failure to expand trade within Saarc is mainly because the Safta has been ineffective to bolster trade for three major reasons. First, while Safta allows a member state to maintain duties up to five percent, some other bilateral agreements between states have committed to bringing down their duties to zero, like the Pakistan-Sri Lanka Free Trade Agreement (FTA) or the India-Nepal FTA. So clearly it is more favourable and easier to trade under bilateral trade ties than the Safta. Second, the members’ sensitive list—products of special interest to individual member countries—comprises items which are traded the most, thus preferences are denied on the items that are actually traded. Third, the barrier to trade becuase of poor connectivity is another hurdle in integrating the South Asian markets. Although a Motor Vehicle Agreement, which would have allowed free cross-border movement of goods and transport among Saarc members, was proposed in the Kathmandu Summit, it did not materialise due to reservations from a member state. Instead, the Bangladesh-Bhutan-India-Nepal Motor Vehicle Agreement (BBIN MVA) was endorsed last year.
It is imperative for the member states to acknowledge that only with increased trade can integration be realised. Therefore, the task for the member states in the CoM meeting is cut out and Pokhara could be a small step forward.
There is no mistaking the fact that the Saarc regionalism is inevitably hit by the state of bilateral ties with the biggest member—India. Indian Prime Minister Narendra Modi made a strong statement about his commitment to regionalism by inviting all the heads of state/government from South Asia to New Delhi for his swearing-in. Nepal in fact hosted the BJP leader twice in 2014, once for the Saarc Summit. But Delhi’s ties subsequently with some of its neighbours, including Kathmandu, went for a big dip. The scenic lake city of Pokhara, we hope, allows the Saarc leaders—the Foreign Secretaries and Foreign Ministers—an opportunity for some timely introspection—where did we get wrong and how do we now get it right so that Saarc becomes more than a regional talking shop?
Published: 16-03-2016 07:35