Outlines deficiencies of the region:

Bring services and investment under SAFTA - SAARC Chamber Chairman

Ravi LADDUWAHETTY

SAARC Chamber of Commerce and Industry Annis Ul Huq, called upon SAARC leaders to include services and investments as well in the South Asian Free Trade Agreement.

On recommendation of SAARC CCI, the Head of States of SAARC in the sixteenth SAARC Summit held on April 28 and 29, 2010 at Thimpu, Bhutan, have included Services (Tourism, Health and Education, Information Technology, Banking and Finance, Communication) in SAFTA, which has widened the sphere of economic cooperation. “We look forward the inclusion of Investment in SAFTA as well, he told Daily News Business in a telephone interview from Dhaka.

Presently, the SAARC CCI President is invited to Committee on Economic Cooperation (CEC) of SAARC to present the view point of the private sector of region, in the presence of Commerce Secretaries of South Asian countries.

“We understand that, there is need to widen the role of all stakeholders like NGOs, and Civil Society Organizations in process of formation of policies for regional economic cooperation,” he said.

He said the business community of South Asia was committed to promote agenda of economic liberalization in South Asia, provided amicable socio-political environment of the region is ensured by the respective Governments of the region, particularly India and Pakistan because volatility of relationship between two countries affects the region as a whole.

“We earnestly feel that without ensuring peace in the region, the economic relations can not be yielded into strong ties and commitment towards regional development,” he said.

He also said that in the current era of globalization, lobbying and economic diplomacy have been identified as effective tools to defuse political tension. We are committed to promote economic relations to the extent where political tension could not disturb the harmony of economic activities in the region. While we are firm to promote economic cooperation, the Governments of South Asian countries should reciprocate our efforts by de-linking political instability from economic activities, he said.

The proposals of SAARC CCI regarding economic liberalization under SAFTA, are considered in Committee of Economic Cooperation and number of recommendations are already on agenda of various committees of SAARC however, due to lack of political commitment particularly from India and Pakistan, these proposals could not see light of the day and still require earnest attention of the respective Governments, the SAARC Chamber Chief noted.

As far as the importance of the region of South Asia is concerned it was never denied since its medieval history. It was called golden Sparrow by the British. However, unfortunately due to misuse of resources and involvement in the non-productive issues such as political mayhem , the entire scenario has changed and now the share of whole South Asian region, today, accounts for only 2 percent of the Global GDP and share in Global Trade is merely 1.5 percent. 40 percent of the SAARC population lives below poverty line, 65 percent have no access to clean drinking water, In Human Development Index, only two Countries (Sri Lanka and Maldives) are placed in first 100 countries of the World, which also indicates that health and sanitation facilities are poor in the region.

Even in Asia, which contributes 60 percent of the World population, 33 percent to Global GDP and 50 percent to global trade, we the South Asians are even lagging far behind from so many Asian countries like China, Japan, Singapore. I often quote example of Singapore, which is insignificant in terms of its population and size, but with over $ 272 billion, it exports more than we all eight South Asian countries overall export to World.

Created in 1985, SAARC countries then had intra-regional trade of only 3.8 percent which after 23 years has increased to only 5.4 percent, which is negligible if compared with other trade blocs.

Intra-ASEAN Trade has increased from 12 percent to 26 percent from 1967 to 2010, intra-NAFTA trade has increased from 38 percent in 1994 to 58 percent in 2010, intra-EU trade increased from 35 percent in 1992 to 55 percent in 2010, COMESA- an African Trade bloc witnessed growth in intra-regional trade from 10 percent in 1994 to 23 percent in 2010. These statistics indicate that pace of intra-regional trade is extremely sluggish when compared with leading trade blocs of the World.

In view of the acute shortage of energy faced by some countries like Pakistan, Bangladesh and Nepal, there is an earnest need to promote energy cooperation to enhance energy production and transmission among SAARC member countries thereby reducing cost.

SAARC fifteenth Declaration has urged an effective exploration of the regional hydro-potential, grid connectivity and gas pipelines- SAARC members can synergize efforts to address the challenges of shortage of energy in the region.

SAPTA was upgraded into SAFTA (South Asian Free Trade Agreement) is 2004 and became operational in 2006. Since then an insignificant progress has been witnessed.

All Member countries have to bring tariff to zero-rated by 2016, which may help increase in current level of intra-regional trade in SAARC.