Print Edition - 2018-03-16 | MONEY
Has time stood still for Saarc?
Mar 16, 2018-
South Asian entrepreneurs have called on the governments of Saarc member countries to stay away from political meddling and reconcile their visions to expedite the process of regional integration.
South Asian countries had formed the South Asian Association for Regional Cooperation (Saarc) in 1985 to promote economic development and deepen regional cooperation and integration. But this group of eight countries has not been able to collaborate effectively to solve various regional problems like other blocs.
The Saarc, for example, has not even held its biannual summit since 2014. The summit, which is attended by heads of state or government, was supposed to take place in Pakistan in 2016, but it was called off after India unilaterally decided to skip the event citing an attack at its army base in Uri of Jammu and Kashmir.
“The politics in the region is holding all of us back,” Suraj Vaidya, president of the Saarc Chamber of Commerce and Industry, told Growth, Innovation and Leadership (GIL) South Asia Summit organised by Frost & Sullivan in Kathmandu on Thursday.
Over the years, the Saarc has made various attempts to deepen regional integration. It has implemented free trade agreement and has formed various institutions and bodies like development fund, food bank and arbitration council. “But these institutions and bodies have not been empowered,” said Zubair Ahmed Malik, executive committee member of the Saarc Chamber of Commerce and Industry. “This is because of narrow nationalism and mutual distrust, which have prevented South Asia from moving towards full regional integration.”
The overarching goal of full regional integration is to create a common marketplace where people can live in peace and become prosperous. But no progress has been made on this front since the concept of deepening integration was floated in 1985.
For example, the volume of trade among Saarc member countries currently stands at 7 percent of the total trade in South Asia, up from 5.6 percent in 2006 when South Asian Free Trade Agreement was enforced.The slow growth of intra-regional trade is the result of high transportation cost, lack of proper physical infrastructure, cumbersome regulatory requirement, poor communication linkages and presence of non-tariff barriers, according to experts. These hurdles have made it easier for Sri Lanka to trade with Brazil today than with its regional partner, Nepal, studies have shown.
“It is time governments and the private sector of Saarc member countries put their heads together to sort these issues out,” said Dasho Ugen Tsechup Dorji, former president of the Saarc Chamber of Commerce and Industry. While it appears time has stood still for the Saarc in terms of deepening integration, there are those who are bullish about prospects of the region.
One of them is Nirvana Chaudhary, managing director of CG Corp Global. “Our businesses in South Asia have been growing by over 20 percent per year since 2000,” said one of the heirs of Nepal-based Chaudhary Group, which has a net worth of $2.5 billion and has interests in around 122 companies in over five continents.
One of the reasons for the growth, according to Chaudhary, is near uniformity in consumer behaviour. “That’s why we see South Asia as a larger country or territory,” he said. Yet Chaudhary acknowledged that risks are quite high in South Asia. “But so are returns,” he said, adding, “We are still gung-ho and optimistic about South Asia.”
Published: 16-03-2018 13:57