Reorientation of SAARC

by Shamshad Ahmad Khan.

WHAT has gone wrong with SAARC is a question that keeps agitating our minds at all levels attracting discourse and scrutiny both within and outside our region. From any account of what we have been doing and what we have not been able to do and why, we would find it difficult to disagree that within the framework of SAARC there is still a big gap between promise and performance and between aspiration and accomplishment.

The only consensus that we seem to have developed at the regional level is the acknowledgment of the grim reality that SAARC, during the two decades of its existence, has not lived upto the expectations of its member-states. It has neither improved the quality of life in our region, nor accelerated the economic growth, social progress and cultural development of its member-states.

SAARCs common vision upholding the high ideals of peace, stability, good-neighbourly relations and mutually beneficial cooperation in South Asia remains unfulfilled.

The problems besetting its member States and those hampering the implementation of plans and programmes remain unaddressed. South Asia remains one of the world's poorest regions with a closed economy, despite some progress towards trade liberalization in the 1990s. The vast majority of our people still live in grinding poverty and sub-human conditions. Economic growth indices, with rare exceptions, are static, if not going downward. The only upward growth is seen in inflation which keeps soaring. South Asia's imports and exports constitute a much smaller share of the GDP than in Latin America or East Asia, while the tariffs are among the highest in the world. Protectionism continues to limit mutual market access.

Intra-regional trade is non-consequential representing only four per cent of the total trade, as against 62 per cent in the European Union, 55 per cent in the NAFTA area and 35 per cent in ASEAN. The collective share of the SAARC region in world trade is just one per cent.

No comparisons, however, need be drawn between the various regional organizations as each one represents a different set of problems and priorities. In particular, one must guard against the temptation to cite the EU example as a model for South Asia.

The European Union has a long history that stands out in sharp contrast to other regions trying to integrate economically. It had qualitatively a more conducive political and economic environment with Western Europe building on the ashes of the war a new edifice of mutual cooperation. It did not rest on any laurels and carefully crafted its institutions and mechanisms to achieve its goals. This whole process had started in 1951 and took more than half a century to reach its present form.

Likewise, the history of ASEAN bears no parallel with the evolution of regional cooperation in South Asia. Like the EU, Asean was conceived in the context of Cold War compulsions as an attempt to forestall any extra-regional security threat and to link the non-communist economies of this region with global capitalism. ASEAN entered the global economic expressway when the going was fast and smooth.

Another advantage that ASEAN had over SAARC was the geo-political harmony of its member-states which were also smaller in size and had a comparatively more efficient and centralized system of decision-making. SAARC comes closest to the Economic Cooperation Organization (ECO), headquartered in Tehran, which after the break-up of the former Soviet Union, was transformed in November 1992 from a small trilateral entity including Iran, Pakistan and Turkey (originally called RCD or Regional Cooperation for Development) into a major regional organization of 10-member States with the inclusion of the six newly-independent former Soviet republics of Central Asia and the Caucasus as well as Afghanistan. Like SAARC, the ECO's real potential as a regional cooperation organization remains captive to the geopolitics of the region. With Afghanistan still in turmoil, there is no prospect of an early breakthrough towards meaningful economic integration in this part of Asia.

Despite many commonalities in the region, South Asia continues to suffer from endemic political instability and socio-economic malaise. With some notable exceptions, our countries also lag behind in developing genuine democratic norms, the rule of law and good governance through universally acclaimed principles.

At the last SAARC summit in Islamabad in 2004, our leaders were unanimous in observing that despite having some notable achievements to its credit, SAARC had been unable to forge a genuine regional cooperation with an integrated economic understanding among its member-states. Indeed, South Asia still remained afflicted with what the prime minister of India described as a 'complex and troubled colonial legacy.

There were even suggestions that South Asia, which is home to one-fifth of humanity was out of step with other regions of the world, which were able to transcend their differences and disputes and embark on a steady course to economic growth and development.

Their anxiety was reflected in last year's Islamabad declaration, which formally called for the strengthening of the SAARC secretariat and augmenting its capacity to promote regional cooperation in South Asia. In recent years, the debate on SAARC's performance has focused on the need for an enabling environment free of mistrust and hostility, without which no regional arrangement anywhere in the world has worked. There is a general sense of relief on the emerging India-Pakistan rapprochement, with everyone hoping that it will augur well for the stalemated process of regional cooperation.

But the India-Pakistan equation with all its ramifications is not the only factor that has adversely impacted on SAARC's performance. Its capacity to deliver on its ambitious agenda has also been conditioned by its systemic limitations and operational handicaps. There is a strong desire in the region now to see the association re-oriented both structurally and operationally, so that its effectiveness as a dynamic vehicle of regional cooperation is enhanced.

After two decades of SAARC's low-yield performance, it should be abundantly clear to us that ambitious ideas of establishing an economic union or a monetary union in South Asia will remain elusive unless we are able to address the political environment in our region through mutual trust, confidence-building and conflict resolution.

The major stakeholders in the political environment of our region perhaps now seem to realize the indispensability of durable peace and tranquillity in South Asia and are seeking to grapple with their bilateral issues. The India-Pakistan composite dialogue process, hopefully, will reach its logical conclusion.

At the regional level, we need to adopt an institutionalised approach by establishing a regional political forum, called South Asia Regional Forum not only to reinforce the process of confidence-building, preventive diplomacy and the peaceful settlement of disputes within our region but also to institute inter-regional cooperative and dialogue partnership relationships with relevant counterparts to promote regional and global peace and security.

No doubt, trade is an important element of regional cooperation. SAARC must pursue the free trade goal. The conclusion of the Framework Agreement on South Asia Free Trade Area (SAFTA) at the 12th SAARC summit in Islamabad was a welcome development. It is, however, seen only as the beginning of a long and arduous process. Our regions trade architecture has inherent 'speed breakers' if not road blocks in the form of restrictive trade barriers. The foremost challenge will, therefore, be in their removal and creation of an environment that allows the free and fair promotion of trade in the region.

A regional approach does offer a number of real advantages in terms of increased trade and investment, improved terms of trade, greater efficiency and competition, lower costs of production with free internal movement of labour and capital, a freer and larger market with expanded production and economies of scale, monetary stability, and bargaining strength in tariff negotiations with other parties.

The success of SAFTA will, however, depend on the fairness and equity with which this process is carried forward. Free trade tends to become a boon for the stronger trading partners, allowing them to dominate the marketplace. Special effort with proper safeguards and concrete practical steps, especially on the part of the region's sole predominant economy, would be needed to prevent any negative fallout of the free trade arrangement. Trade liberalization that does not ensure equitable benefits to all countries of the region with special deferential treatment for the small and LDC member-states might be difficult to sustain.

Needless to say, that our foremost priority should be to ensure that we have our regional perspective clearly before us, our goals and priorities pragmatically defined and our wherewithal appropriately geared towards the realisation of our declared objectives. This would require an attitudinal change both at the national and regional levels to move away from our declaratory stance to implementation mode.

We need to realise that the business as usual approach will not work. Besides political commitment and deeper engagement on the part of all member-states, a new result-oriented normative framework and operational culture consistent with our regional ground realities is needed to infuse new life within SAARC.

The real challenge, however, lies in moving from the realm of ideas to implementable plans of action. South Asia needs an exceptional impulse to keep pace with the changing times. This fresh regional impulse, must spring from within South Asia. Only then will our peoples be able to harness the full potential of the South Asian region and to join the worldwide quest for economic growth and development.

We also need a range of remedial measures, both conceptual as well as functional, to bring about the needed change in SAARC's culture. These measures could be broadly categorized as systemic re-orientation, enabling environment and structural reinforcement.

(The writer is a former Pakistani diplomat. This article has been published by arrangement with Dawn)