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35 Years of SAARC

17 June 2020

By Srimal Fernando

South Asian Association for Regional Cooperation (SAARC) has laid a firm foundation for South Asians to continue in effective integration to sustain the   mandate and improve member nation’s position in the international community. Over the decades, various success stories have been witnessed by SAARC.

The SAARC has taken a more neutral approach in its regional initiatives and the national interests and policies have influenced the external policies of the member states.

Therefore, the responsibility of SAARC regional grouping is to facilitate a conducive political environment among member nations to deepen trade ties with key economic partners. For example SAARC Food Security Reserve which was set up in 1988, SAARC Social Charter adopted in 2004 and the SAARC Regional Centers with specific mandates in order to fulfill its many functions on member nations are some of the notable accomplishments that helps improve the regional organisation‘s transformation story.

South Asia accounts to be one of the largest consumer markets with over 1.5 billion people living in eight nations covering a wide range of  products in the  eight member nation South Asian Association for Regional Cooperation (SAARC)   regional bloc. Normally, SAARC has also demonstrated the desire for integration in the region, but at a slower pace compared to the European Union, South East Asia and Asia Pacific. One of the major reasons for the ineffectiveness or slower implementation pace of regional initiatives is the lack of political commitment and about the disparities of various socio-economic and diplomatic benefits among member nations.

South Asia: Socio economic Progress

When compared with countries in other geopolitical regional groups, most of the South Asian countries lag well behind in socio economic development. The disparities in living standards among most of these countries can be seen from socio economic indicators such as GDP per capita, poverty, health and education indices and the Human Development Index (HDI). Some of the South Asian countries have survived on short term borrowing such as from the International Monetary Fund (IMF) to accelerate GDP growth to the 4%-5% range.

South Asia Trade and SAFTA

South Asia has lagged behind most other areas in the world in relation to intra-regional trade. In that context the intra-regional trade among the SAARC countries, namely India, Pakistan, Sri Lanka, Bangladesh, Afghanistan, Nepal, Bhutan and the Maldives is about 5 percent and is  far below its potential. For countries such as Sri Lanka, Nepal, Bhutan, and the Maldives entering into the South Asian Free Trade Area (SAFTA) agreement in 2004 may have helped overcome the economic disadvantages of being a small nation. The main aim of the SAFTA was to promote interregional trade to stimulate economic cooperation among member states and make these states more conducive to receive FDIs. However, South Asian countries have not benefited from this agreement due to non-tariff barriers imposed across borders hindering inter-regional trade. Additionally, another source for development is the Ultra High Net worth Individuals (UHNWI) in the region with India being the fastest growing country of UHNWI. The figures for Bangladesh, India and Pakistan are respectively 17.3%, 10.7% and 8.4% indicating that there is much scope to tap into these sources for regional economic development. The combined economic vision plan for South Asia’s eight nations will always be a new push with distinguished features.

South Asian Association for Regional Cooperation (SAARC) and COVID 19

Addressing the first ever video conference among the heads of governments of the South Asian Association for Regional Cooperation (SAARC) member nations, Indian Prime Minister Narendra Modi emphasized, “We can respond best by coming together not growing apart; Collaboration not Confusion ; Preparation not Panic. In this spirit of collaboration, let me share a few ideas on what India can offer to this joint effort. I propose we create a COVID-19 Emergency Fund".  As a follow-up to the video conference, India joined hands with other SAARC leaders and pledged $10 million for the SAARC fund to tackle the deadly respiratory illness outbreak. Other SAARC member nations welcomed India’s initial contribution. Notably among the other member countries, India’s southern neighbour Sri Lanka has pledged USD 5 million to the SAARC Corona Virus Fund.

The way forward

For this reason, SARRC has taken a more neutral approach in its regional initiatives and the national interests and policies have influenced the external policies of the member states. Therefore, the responsibility of SAARC regional grouping is to facilitate a conducive political environment among member nations to deepen trade ties with key economic partners. In the broader context the way forward towards regional integration is not easy, yet SAARC is credited for laying down groundwork for improved political ties, and for fostering closer socio economic cooperation among its member countries.

Srimal Fernando is a Doctoral Fellow at Jindal School of International Affairs (JSIA), India and Advisor / Global Editor of Diplomatic Society for South Africa. He is the winner of the 2018/2019 ‘Best Journalist of the Year’ award in South Africa, and has been the recipient of GCA Media Award for 2016.In the field of politics, and Policy affairs, Fernando is a specialist, with over ten years of first hand experience in Sri Lanka and the Maldives

 


 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
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February/March 2020

 
 
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