18th South Asian Association for Regional Cooperation (2014)

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International-Relations

18th South Asian Association for Regional Cooperation (2014)

Jan 06, 2015

What is SAARC?

South Asian Association for Regional Cooperation was established when its charter was adopted on 8th

December, 1985 by the heads of the states or Governments of Bangladesh, Bhutan, India, Maldives, Nepal,

Pakistan and Sri Lanka.

Afghanistan joined as the 8th member on November 13, 2005. SAARC provides for the people of South Asia

to come together and work in the spirit of trust, friendship and understanding. It aims to accelerate the

process of economic and social development in the member states.

At the inception of the association the integrated programme of action consisting of a number of technical

committees was identified as one of the operational areas. The current area of cooperation is under the

Reconstituted Regional Integrated Programme of Action which is pursued through technical committees:

Agriculture and rural development, health and population activities, women & youth and children,

environment & forestry, science & technology & meteorology, human resource development and transport.

Recently high level working groups have also been established to help cooperation in the areas of

information and communication technology, biotechnology, intellectual property rights, tourism & energy.

The Dhaka summit in 2005 witnessed the declaration to adopt Islamic Republic of Afghanistan as a member

and to accord observer status to People's Republic of China, Japan, South Korea and USA. The SAARC

secretariat was established in Kathmandu in 1987. It monitors the implementation of SAARC activities,

service the meetings of associations and serves as a channel between SAARC & other organizations.

What is SAPTA?

SAPTA stands for SAARC Preferential Trading Agreement which was established in 1995 approved by the

Inter Governmental Group (IGG) in the 6th summit in 1991. The agreement showed the desire of the

member nations to promote and sustain mutual trade and economic cooperation within the SAARC regionthrough the exchange of concessions.

Its major aims are:

(i) Gradual liberalization of trade among the SAARC members.

(ii) Elimination of trade barriers among SAARC nations (tariff reduction)

(iii)Promoting & sustaining trade and economic cooperation among the member nations of SAARC.

What is SAFTA?

SAPTA was envisaged primarily as the first step towards the transition to a South Asian Free Trade

Agreement (SAFTA) leading to a Customs Union, Common Market & Economic Union.



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In 1995 the need of SAFTA was realised by the nations and a committee was formed to draft a

comprehensive treaty framework for creating a free trade area within the region, taking into consideration the

asymmetries in development within the region & bearing in mind the need to fix realistic & achievable

targets.

The SAFTA agreement was signed on 6th January 2004 during XII SAARC Summit held in Pakistan. It came

into force from 1st January 2006. To support the agreement SAFTA Ministerial Council (SMC) consisting of

commerce ministers of the nation members & SAFTA committee of experts had been formed.

Objectives of SAFTA:

(i)Elimination of trade barriers & facilitating cross border movement of goods between territories of

contracting states.

(ii)Promotion of fair competition in the free trade area & ensuring equitable benefits to all contracting states.

Considering their respective economic developments.

(iii)Creation of effective mechanism for the implementation & application of the agreement, solving disputes

etc.

(iv)Establishing a framework for further regional cooperation to expand & enhance mutual benefits of the

agreement.

How is SAARC Important/Significant for India

(i) Peaceful Borders:- Good relations with neighbours is a priority for India, for which it has to promote

bilateral & regional partnership to economically integrate the subcontinent. The economical dependence of

countries on one another may ultimately lead to lesser attention on borders and more attention to the

population and their development. It can lead to attenuation of interstate conflicts & raise a threshold below

which bilateral relations will not fall. Thus increased interdependence would reduce regional tension.

(ii) Regional Location of India:- India is geographically 2/3rd of SAARCs area, 3 quarters of its population

and one fifth of its GDP. When SAARC was constituted years ago India did not have such resources for

financing partnership or investment. But now it can as it has realised that regional linkages can help in

improving the living conditions of people which is of utmost priority for all South Asian governments. India

being located in the middle of SAARC nations can benefit maximum.

(iii) Conversion of Borders to Bridges:- Considering the example of India & Bangladesh, it can be seen

that the absence of connectivity is an impediment between them. India & Bangladesh though share a land

boundary of 4000 km almost, yet conduct trade by sea. SAARC can be useful to solve such issues.Integration & connectivity can promote growth, social benefits and improve public health & environment

management. Also considering the Srilankan issue in which China is using it in its string of pearls policy, by

taking advantage of Indo-Srilankan bilateral differences, India can use SAARC as a medium to solve its

conflicts and promote cross border trade.

(iv) Alternative Markets for Trade:- Foreign trade experts opine that slowdown of trade with Europe is due

to weak economic conditions in the region. They say that SAARC countries are important for India's exports

and surface connectivity among the SAARC member countries could boost trade & economic growth in the

region significantly. Greater cooperation concerns among members may ward off the Chinese for sometime.

What are the Limitations of SAARC

(i) India constitutes 70% of SAARC yet it does not share peaceful relations with all the member nations.

India needs a role redefinition and to work towards improving its bilateral relations, since it acts as



geographical link between the member nations.

(ii) SAARC needs to develop into a conflict mediating institution and should aim to resolve conflicts both of

bilateral & multilateral importance. SAARC has evolved a framework for this but it lacks the capacity to

devise instruments for consultations on bilateral & multilateral political security problems. The reason for this

lag is the Article X(2) of the charter which excludes 'bilateral & contentious issues' from the ambit of SAARC

deliberations.

(iii) Unlike the European Union, SAARC members are not equally sized. Only India shares a commonborder with them and all others are separately located. There are differences in their life styles and

economies which again limits their interests in the organization.

Current Issues that SAARC is facing are

Firstly, it is a dead come alive organization which means it has been in an oblivious state/condition.

SAARC nations need to put it back on track again and not to permit international political changes

ahead of it.

Secondly, SAARC has been failing to set political differences aside and inculcating a harmonious

environment through healthy economic cooperation. It needs to resolve this issue and see if political

differences would be put aside to cater healthy economic benefits.

Thirdly, its only India who shares political boundary with all members and is 70% of total SAARC

nations alone but it has till date not been able to go an extra mile to make SAARC work.

Lastly, now that WTO enforces its disciplines on all nations, even SAARC would need a level playing

agreement based on general agreement on tariff & trade (GATT) with cross retaliatory powers and

also a regional organization of trade to implement them.

What can be done to overcome the Issues?

It's a high time the SAARC members realise their integral, cultural and historical linkages and

commonalities. They must use these to promote transparency in bilateral dealings, easy passage of

trade and people between the borders & linking of natural resources to succumb to environmental

threats.

South Asian joint ventures schemes should be promoted so that investment is boosted.

No SAARC nation should internationalise any bilateral issue beyond the SAARC and steps should be

taken to deter cross border terrorism, illegal migration, drugs or trade trafficking etc.

Steps should be taken to facilitate SAFTA immediately.

Happenings in the 18th SAARC Summit 2014 [Kathmandu Declaration]

Venue- Kathmandu, Nepal.

Theme- Deeper Integration for Peace & prosperity.

Date- Nov. 26-27, 2014.

The 18th SAARC summit adopted the Kathmandu Declaration that emphasised on enhancing

regional development projects to ensure peace, prosperity & stability in South Asia.

It was also decided that the SAARC members would meet every two years. The SAARC charter was



agreed to be amended to include changes like meeting of SAARC Council of Ministers once a year,

standing committee every year & programming committee twice a year.

The nations decided to engage with the SAARC observers for productive demand driven & objective

driven project based on cooperation in major areas.

The major focus was on increasing agricultural productivity, ensuring food & nutritional security,

training of youth of member nations etc.

On India's part, the Prime Minister Narendra Modi announced issuance of 3-5 years bussiness visa

and immediate medical visa for all the patients visiting India. Also 10 agreements were signed with

Nepal which included terms of a pact of 1 billion USD assistance to Nepal (This was a consideration

of PM's previous Nepal visit)

Why was SAARC 2014 a Disappointment

The 18th summit concluded with outcomes far below expectations. The major reason counted by the

world was the rivalry between India & Pakistan which was enough to overshadow the whole event.

Secondry topping the agenda were 3 connectivity agreements namely road, rail & energy, in which

only one ie; on energy has been signed. The remaining two are kicked to be discussed again in 3

months, as Pakistan was not ready for them.

Also it was expected that a major breakthrough could be noticed at the summit in regard of terrorism

which was presented as a major concern by SAARC leaders mainly India, Nepal & Afghanistan, but

went in vain.

No important decisions could be made evident on the flow of investments and financial arrangements

to push the economies towards 'deeper regional integration.'

The summit's target of forming a regional economic community in next 15 years did not sounded

realistic as no major steps were taken in the summit regarding other presented issues. Kathmandu

declarations, blue economy, cyber crimes regulation, cultural heritage have all set up high

expectations with little strife to be met with.

Although India considered SAARC 18th summit as a success due to agreement on power sharing yet

it could not help itself clinching the energy agreement.

It seemed that the Indian PM's efforts to link the neighbours since the time of his oath are not bearing

any controversial issues to avoid disagreement among nations.

By not signing agreements Pakistan in a way signalled its persisting resistance to India expanding its

economic engagement with Afghanistan. It does not want India to emerge as a trade competitor in

Afghanistan, Pakistan's plea to include China for a greater role in South Asia seemed to get a nod for

which India is unprepared. China's status from an observer to a full member was supported by

smaller nations too. This would be difficult for India as it is not ready for Chinese influence in its

strategic space. India has been resisting this pressure under the argument that SAARC has still to

achieve internal cohesion & consolidation. China's presence can raise blockheads in India's projects

in South Asian regions like it has been doing in oil exploration in Vietnam (South China Sea),

restraining Asian Development Bank & lately Japanese projects in India.

Lastly considering SAARCs activities to be sluggish & extremely slow it would require them to work

an extra mile to make it a success for all member nations.

Q1.SAARC is said to be a 'dead organization come alive'. In past 30 years, it failed to hold 11 annual



summits. With the current political & economic conditions around the globe, analyse the need of its

rejuvenation and its consequence.

Q2.Considering the current world economic status of South Asia, do you think SAARC could come to its aid?

Also highlight India's intentions to support the organization's existence.

Q3.India being the only SAARC nation showing political boundaries with all member nations needs to walk

an extra mile in its efforts. How can you justify the statement in regard to the recent SAARC summits.

Documents

18th South Asian Association for Regional Cooperation (2014)