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Origins of SAARC
South Asia is the home to around two billion out of the six billion people on the planet and has now taken centre stage in the eyes of global leaders. The World Bank and ADB estimate regional GDP to be worth over US$ 1,000 billion, while GDP growth for the last 20 years has been around 5%, which is double the global average.
Given that the US and EU are yet recovering from recessionary market conditions, it is important that one focuses on the South Asian region and how we as a region can give stability to each of our countries. But for this to happen, institutions like SAARC must play the role of catalyst and as we celebrated the 28th anniversary, there is no proper answer to this question even though Sri Lanka is working towards a hub status agenda.
Very low at 5.3%
The very challenge that SAARC is up against is the charter that it signed for external trade of the region is at low ebb of 0.8% of world’s exports, and 1.3% of world imports. Intraregional trade represents only a meagre 5.3% (exports) and 4.8% (imports) of the total, which explains the low integration that exists in South Asia.
In contrast, if we take the EU, 55% of total trade comes from within the EU. In the case of ASEAN, 35% of the total trade comes from within, which explains the strong integration that exists between countries in comparison to South Asia. If we take NAFTA, the integration is so strong that 60% of the trade comes from within the region. Given that Sri Lanka is well poised to be the hub of Asia we can play the role to drive trade, but the question is: does SAARC support such agendas?
SAARC issues
In my view SAARC is an institution that confines itself to paper. In fact, other than for the once-yearly photo opportunity that country leaders get, so far we have not seen any concrete progress on the ground. Let me share some actions that need to be fast tracked so that Sri Lanka can benefit from the challenging growth agenda that we are up against.
1) SAARC – Free Trade Secretariat
SAARC trade as a percentage of South Asia’s world trade has steadily recorded an upward trend from 2.42% in 1990 to 5.5% today, which is commendable even though the progress has been very slow. From the many conferences that I have attended on South Asian trade, the consensus for this poor performance on integration of trade in South Asia was attributed to the poor leadership that the whole of South Asian countries have had over time.
One of the key reasons for this cited was the political economy in play and the fact that changing policies of successive governments tend to hurt the consistency of the policies made. Incidentally this does not happen in East Asian countries. Whatever the reason be, the fact is that South Asia lags behind the world in integration and this needs to be carefully analysed with a key activity plan sketched.
One area that be agreed on can be dispute settlement. Disputes of SAARC countries are expected to be resolved within 330 days, whilst in the case of our counterparts it’s different and more efficient, with ASEAN countries resolving disputes within 290 days and NAFTA in 310 days.
2) SAARC – Development Fund
The idea of establishing a South Asian Development Fund was mooted as way back as 1991 and thereafter the SAARC Finance Ministers endorsed a road map for the creation of the SDF but is yet to be operationalised efficiently. This clearly does not augur well for SAARC.
One option is to drive this project is to bring in a condition that a project does not have to be regional but can be a project specific to a country, based on a specific need.
3) SAARC – Disaster Management Centre
I remember post the devastating tsunami in 2004, a special session was held among SAARC Environmental Minister in Maldives in 2005. This gave birth to the Malé Declaration, which includes areas like an early warning system, disaster management and disaster prevention systems that would come under the wing of the SAARC Disaster Management Centre.
But the challenge is that, has this centre brought out the results required so that lives lost due to disasters can be averted? This is especially important given that our part of the world it is continuously prone to natural calamities like foods, cyclones and earthquakes. Maybe SAARC can firstly review the benefits this centre has generated and maybe quantify in value. This can be actually a success story that can be marketed as the result of SAARC getting together and working in regional cooperation.
4) SAARC – Poverty fund
Poverty eradication has been a big ticket item discussed at many conferences. In fact it was on the SAARC agenda way back in 1991. However, the only concrete step that has been taken is the setting up of the Three Tier Committee that has been followed up with many recommendations that have not actually materialised on the ground. What is lacking is implementation.
Maybe SAARC should focus on one or two ‘key’ poverty alleviation projects for the region and drive it with passion and focus so that it can be a success story for the next SAARC summit. Even if it’s not possible to be implemented across the region, maybe the best is to drive a project at sub-regional level even though Sri Lanka is way ahead as against regional counterparts.
5) SAARC – Food Bank
The SAARC food security reserve was established as far back as 1988 to meet the emergencies of member countries. However, it has taken a full 14 years to make this operational like identifying institutions which will manage this and requirements for withdrawal from the reserve, which explains how slow the decision making has been.
If I go into the details, even as at today after a 20-year time horizon there has been a non-implementation of the SAARC food reserve initiative and now it has been revamped as SAARC Food Bank from 2007. This too remains notional today. To be honest, no one knows its location as I write this. It has never been even utilised despite pressing demand of member countries like the wheat crisis in Pakistan, cyclone in Orissa, floods in Bangladesh, the tsunami in Sri Lanka or the Maoist violence in some parts of Nepal.
I guess it’s important that SAARC addresses this key issue, given that the food crisis is hitting us not only regionally but globally. The hardline decisions that are required are to agree on location, storage facilities, quality control methods, formula on pricing when wanting stocks and periodic reviews which are required.
The board that sits on the Food Bank must also review the agricultural practices of member countries that can drive up the production of key agricultural products like rice and wheat. Maybe the donor partners need to be involved like the World Bank and the Asian Development Bank, which once again is a hard-line decision that the SAARC must make.
6) SAARC – Energy market
With over 72% of the South Asian region’s people living in rural areas without adequate access to electricity, it is time that South Asia develops an integrated strategy given the spiralling crude prices, making diesel-powered electricity generation financially nonviable. This will call for reforms that will not only include power infrastructure but include power grids and gas pipelines.
Given that the region is endowed with coal, gas and water resources, maybe we can develop a coherent strategy to reduce dependency on petroleum-based products. However, the challenge is for SAARC to have the teeth to make the hardline decisions that will include major structural reforms in each country. If it can be done, may be South Asia can insulate itself from an energy crunch in the years to come.
7) SAARC – Anti Narcotics and Drugs Task Force
Given the menace of drugs and narcotics, which has resulted in an abuse of public health, a convention was signed at the fifth SAARC summit way back in 1991. However, this convention has met with the same fate of the Convention on Suppression of Terrorism. It is fair to say that one can even go to the extent of justifying the existence of the SAARC process on this matter; even the exchange of primary information and documentation which were core elements in the convention has not happened. Maybe at least at the next SAARC summit the Standing Committee can pass a resolution to exchange these basic documents among member nation, which can become a big achievement.
8) SAARC – Anti-Terrorism Unit
The respected General B.P. Mallik, the former Chief of the Army Staff and Chairman Chief of Staff Committee India, made a very strong statement at the Anti-Terrorism Conference that was staged in Sri Lanka. He said that even with all the protocols and conventions signed by SAARC member countries, the deteriorating situation with regard to terrorism in South Asia is due to a lack of political consensus, a non-comprehensive strategy, and the absence of a will to implement and provide capacity building to counter terrorism in the region. Hence a key decision that SAARC must take is to develop a clear road map with specific implantation plans so that a SAARC anti-terrorism unit can independently champion a safer South Asian region.
A key point that needs to be emphasised is that SAARC nations must raise the level of trust and confidence and take voluntary actions against terrorist activities on their home soil, rather than waiting to respond to complaints from its neighbours, but the question is, has this come to play post the Mumbai bombings?
Next steps – Political will
It is often said that one can choose one’s friends but not ones neighbours. Whilst it might be not a palatable statement, the challenge is how we make our neighbours our friends in Sri Lanka’s drive towards a 20 billion dollar export base and a 100 billion dollar economy. The strategy of making Sri Lanka a hub for many areas of economic activity is commendable, but the challenge is whether there is political will in the region.
(The thoughts expressed are the author’s own and do not reflect on the offices he holds in the Government, private or international public sector.)
