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by Deshamanya Dr. Ponna Wignaraja

Chairman, South Asian Perspectives Network Association, Vice Chairman, Independent South Asian Commission on Poverty Alleviation (1992)

The Sri Lanka President's speech at the Hindustan Leadership Forum recently urged South Asian states to pursue South Asian regional co-operation more vigorously.

This exhortation can be a point of departure for seriously re-visioning the process of South Asian regional co-operation, to meet the new inter-related challenges of the globalization reality and that of rural mass poverty and youth employment.

SAARC Heads of State and Government at the 1998 Colombo Summit.

SAARC was established in 1984. The Prime Minister of India has himself stated unambiguously the need for India to use her asymmetrical position in the region to take positive value led steps to establish new perspectives towards stabilizing other countries in the region.

This includes finding a solution to the Kashmir problem with Pakistan, which has held back, deepening regional co-operation.

The Pakistan Prime Minister is doing the rounds of SAARC countries and will no doubt spell out the achievements of closer regional linkages during Pakistan's stewardship of SAARC.

The Bangladesh Foreign Minister, also doing the rounds has raised expectations that the Dhaka Summit in January 2005 can move SAARC into "Core Areas of Co-Operation" within a framework of "Unity in Diversity".

In view of rising expectations that this spate of statements can in effect deepen the effectiveness of South Asian regional co-operation to meet the real challenges facing the countries, it may be useful to recap some lessons that have been learned.

In 1984, the South Asian Association for Regional Co-operation (SAARC) started with a vision but moved cautiously through a series of purely inter-governmental activities, based on fragmented, ad hoc and sectoral issues, many of them already on the global inter-governmental agenda.

They were perceived as an Integrated Programme of Action (IPA). The IPA and the annual, mostly ceremonial, Heads of State Summits dominated much of the official SAARC attention in the first six years.

There was insufficient attention given to emerging national, regional or global changes and realities, with a view to evolving a rigorous and comprehensive strategic response to them. The intellectual underpinnings of vigorous South Asian regional co-operation were weak.

At their Male Summit in 1990, however, the Heads of State took two important decisions recognizing that SAARC, as it was evolving, was unprepared for the globalization scenario, to the new challenges posed by "Europe 1992" and other regional groupings and the emerging multifaceted crisis of governance and development in South Asia itself, which could not be ignored any longer.

The first decision was that SAARC should focus on Core Areas of economic co-operation. Secondly, it was also decided that scholars, professionals, NGOs and the media should help reinforce the official SAARC process in moving into these Core Areas.

The second decision, regarding the need for a new partnership between the official SAARC process and independent actors, reflected concern amongst the Heads of State that SAARC could not move forward purely as an official inter-governmental process.

Both these decisions reflected the political awareness that there was a potential for a South Asian Economic Community, but it required an intellectual stimulus, a real process of learning from the ground and translating the lessons into a coherent agenda for action had to be initiated to achieve this.

IGSAC

In 1991, a group of South Asian scholars, professionals and policy-makers in their personal capacity, under the auspices of South Asian Perspectives Network Association (SAPNA), was one of the first to respond systematically to this challenges of an innovative dialogue and partnership, which could help identify Core Areas of Co-operation within the framework of "Unity in Diversity".

An Independent Group on South Asian Co-operation (IGSAC) was established from among SAPNA members. It was composed of an interdisciplinary group of fifteen South Asians, who had in-depth familiarity with the region and the SAARC process.

There were economists, physical and social scientists and historians, as well as, those who were associated with the official SAARC process at the time.

In the latter category was a Foreign Minister, who was a member of the SAARC Council of Ministers, a Foreign Secretary who was a member of the SAARC Standing Committee and the then Secretary General of SAARC himself, who participated in their personal capacities.

The group did not undertake primary research, but synthesised the conclusions of a number of relevant inter-disciplinary studies completed by SAPNA and other South Asian scholars and action researchers. Reports of the SAARC Secretariat also provided background material for their analysis.

The process took one year to complete and was supported by the United Nations University and UNDP. It reflected a new partnership between the official SAARC process and civil society, which shared the initial SAARC vision.

The synthesis of these discussions was then incorporated into a report entitled "SAARC Moving Towards Core Areas of Co-operation", which prioritized coherent policy options and priorities. Though and independent initiatives, the report was submitted to the 1991 SAARC Summit in Colombo for consideration.

The priority Agenda for Action recommended was unanimously endorsed by the summit incorporated into the 1991 Colombo SAARC Summit Declaration.

The Independent Group on South Asian Co-operation (IGSAC) report of 1991 provided three powerful messages for the SAARC Heads of State, in addition to an agenda for immediate action

The messages

i. South Asia has a common history, common eco-system and shared fundamental values, which could provide a vision of a South Asian community based on Unity in diversity.

The unity came from an indivisible eco-system, common history and culture, subordination and fragmentation of the economies and the common ordeal of de-colonization. These could be the building blocs for a common future.

ii. Today, South Asia is facing a multifaceted crisis of poverty, slow economic growth, uneven development, population pressure, natural resource erosion, high defence expenditure and an internal arms race, social polarisation, religious fundamentalism, youth alienation, ethnic and other conflicts.

These conflicts and problems are becoming unmanageable.

Together with external trends, they are pushing South Asia further and further to the margins of both the world economy and the international political arena.

iii. A more complex sustainable politico development strategy, than hitherto adopted, which includes greater decentralization, social mobilization and empowerment of the poor, could provide a transitional response to the region's immediate need.

It could mediate the sharp contradictions that had arisen in the political economy of South Asia.

The recommendation

The IGSAC report stated that SAARC had come to stay, but the compulsions for closer economic and political co-operation were strong and left no choice for South Asia.

The report concluded that no South Asian country could solve the multifaceted crisis individually and collective regional co-operation must be vigorously pursued for the region's collective benefit, by creating a vibrant value led culturally rooted Economic Community of South Asia (ECSA).

The Agenda for Immediate Action recommended was:

* The establishment of a high level Independent Commission on Poverty Alleviation in South Asia.

* The establishment of a food security system, with the right to food for the poor in South Asia.

* The establishment of a South Asian Free Trade Area (SAFTA).

* The establishment of a South Asian Payments Union to be managed by the Central Banks of the region.

* The establishment of a South Asian Development Fund initiated by SAARC countries, initially with their own contributions.

The five core areas - poverty eradication, food security, trade co-operation, payments union and external resource mobilisation - are not only closely inter-related, but also necessary pre-requisites for achieving the vision of a South Asian Economic Community with sustainable human development, real democratic political formations, good governance and poverty eradication.

Without the eradication of the worst forms of poverty, however, SAARC could not establish the one-billion-strong South Asian mass market. Food security is the other side of the poverty coin in a region, which has a food surplus and further potential for food production and food for work programmes in the transition.

Poverty eradication and the right to food go hand-in-hand and could be combined with the right to work by the poor. For trade co-operation, payments arrangements are essential.

In Europe, the Payments Union preceded economic co-operation. The mobilization of external resources is necessary both for poverty eradication as well as for industrialisation and building South Asia's technological capabilities.

Trade co-operation was not supposed to end with the signing of a framework agreement. The recommendation was for SAFTA, not a bureaucratic and unworkable South Asian Preferential Trade Agreement (SAPTA).

The report urged that since the opening up of regional trade will help expand production and employment in all countries, bring down costs of living and help reap the benefits of a larger mass market, there should be reductions across the board of tariff and non-tariff barriers within five years.

An appropriate strategy of decentralised labour intensive industrialisation could then follow in all SAARC countries, leading to a real reduction in unemployment and improvement in the quality of life with a better balance between work, social responsibility and leisure.

The South Asian Development Fund would be for cutting edge policies, reflected by current convergence of IMF, World Bank strategies. This fund could then organize a major mobilization of global surpluses for South Asia's industrialization, the implementation of a poverty eradication strategy and for trade and balance of payments support.

Additionally, it will provide finance for multi-country development projects. Such a South Asian Development Fund would enhance the region's capacity to take full advantage of the surpluses generated in other regions of the world for development in the widest sense, poverty reduction and structural adjustment.

In 1994, a follow-up enquiry was initiated by SAPNA to look deeper into the monetary and financial aspects of trade co-operation, decentralized industrialization, food security and of moving towards a South Asian Economic Community.

The group was co-chaired by Muchkund Dubey, a former Foreign Secretary of India and the Chairman of SAPNA. Representatives of Central Banks of the region and some leading economists collaborated in this enquiry.

This complementary report to the IGSAC report entitled "Towards a Regional Monetary and Financial System in South Asia" urged that the SAARC look at a coherent vision for trade, payments, monetary and financial co-operation and then proceed to implement the strategy in a step-by-step well-researched manner.

This report made clear that financial co-operation and payments arrangements did not require anything like a common currency.

However, it required going much further than the pure book keeping arrangements of the Asian Clearing Union. This report too was widely disseminated to the official SAARC process.

As the contradiction in South Asian Societies sharpened, loud and clear warning signals were given.

The first warning came in the report of the 1992 SAARC Independent Poverty Commission, which stated:

The number of people living in poverty in the Region in 1991 based on conventional 'poverty line" estimates is of the order of 440 million - the reality is likely to be higher - the conclusion is inescapable that the magnitude and complexity of the problem of poverty in South Asian countries, not only puts democracy at risk, but also poses a threat to the very fabric of South Asian Societies".

In 1999, the Mahhub ul Haq Human Development Center in Pakistan stated in its Annual Report:

"South Asia has emerged as one of the most poorly governed region in the world, with exclusion of voiceless majorities, unstable political regimes and poor economic management....the South Asian Region has the largest number of people living in poverty."

In his Republic Day Address 2000 the President of India stated:

"Fifty years into the life of our Republic we find that Justice - social, economic and political - remains an unrealized dream for millions of our fellow citizens. The benefits of our economic growth are yet to reach them.

We have one of the world's largest reservoirs of technical personnel, but also the world's largest number of illiterates, the world's largest middle class, but also the largest number of people below the poverty line, and the largest number of children suffering from malnutrition. Our giant factories rise out of squalor, our satellites shoot up from the midst of the hovels of the poor.

Not surprisingly, there is sullen resentment among the masses against their condition erupting often in violent forms in several parts of the country.

Tragically, the growth in our economy has not been uniform. It has been accompanied by great regional and social inequalities.

Many a social upheaval can be traced to the neglect of the lowest of society, whose discontent moves towards the path of violence."

These stark warning have been ignored. The challenge to the next SAARC Summit of Heads of State/Governments, in Dhaka, Bangladesh in January 2005, is to eschew the ceremonial and rhetoric and immerse themselves, even at this late date, in an in-depth discussion of the South Asian reality, and see how to move coherently through a value led political process into Core Areas of Regional Co-operation, on the assumption that if they are serious, it can be done.

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