SAARC economic resurgence

The SAARC region is very much in the news these days, mainly as a result of their collective decision to finalise the South Asian Free Trade Agreement at its recently concluded summit in Dhaka. This is good news for the SAARC region, which continues to be mired in poverty. Home to one-fifth of the world's population, SAARC, which will soon be joined by Afghanistan, has a long way to go to reach developed status.

But SAARC is growing and is not looking back. Sri Lanka has targeted an 8 per cent growth rate. India is having 7 per cent while Pakistan too is gaining a growth rate of 8 per cent.

Intra-regional cooperation in the form of SAFTA, which will be fully operational in a decade, will help boost individual SAARC economies. Already, several countries including Sri Lanka are seeing the benefits of bilateral free trade agreements. One can only imagine the immense possibilities that would accompany a full-scale free trade deal across the eight countries.

Minister of Enterprise Development and Investment Promotion Rohitha Bogollagama has recently stressed the importance of SAARC countries working collectively to develop their economies. He has also pointed out that the Small and Medium Enterprises sector could play a major role in economic uplift.

In this context, the SAARC trade chambers could help form a network of Small and medium scale entrepreneurs in the region. They will thus be in a position to pool their resources and market their products effectively in international markets, including SAARC itself.

The sharing of know-how and technology will also be an added advantage.

As the Director of Centre for Development Research Wilbert Gooneratne has said, a major issue confronted by the SAARC countries is making the SME sector more dynamic and competitive to enable it to contribute effectively towards economic growth and social development.

It is indeed true that the SME sector's contribution to overall exports is still small in all SAARC countries. This is a state of affairs that must be looked into without delay. The SME sector has a huge export potential, given that the many novel products made by SMEs could find a ready market overseas.

Overcoming financial, organisational, technological and managerial weaknesses are also essential to re-organise the SME sector in the region.

SAARC must look within itself for winning products that are perhaps unique to the region (ex: Ayurvedic products) and thus appealing to Western tastes. A proper marketing strategy for such products can make a difference in the crowded world market.

Another 'product' that SAARC can promote is tourism. All the countries have unique attractions which can be promoted internationally. A region wide tourism promotion body should be set up to publicise the wonders of the region collectively.

A complete network of air links and ferry links (where applicable) within the region is also essential to realise this goal. SAARC countries should also ease travel formalities for their own citizens. A proper tourism strategy will help boost economic growth. That, along with the free trade deal, will spur SAARC to front ranks of regional blocs.