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1- THE REVIVAL OF NOORIABAD
2-
THE SUGAR CRISIS?
3- NFC: THE CORE ISSUES
4-
S. ASIAN ECONOMIC UNION BY 2010

 

SOUTH ASIAN ECONOMIC UNION BY 2010

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By DR. KHAWAJA AMJAD SAEED
M.Com.; L.LB (Pb); MBA (Beirut); 
Ph.D. (USA); FCA; FCMA
Email: puhcbf@brain.net.pk

Mar 01 - 07, 2004
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South Asian Association for Regional Cooperation (SAARC) was set up in 1985. Since then, productive meetings were held to develop ideas for forging ahead. This unique forum has been struggling to bring home several messages of goodwill, peace and tranquillity in the region. On several occasions, heads of states of all SAARC countries met and agreed on several issues of mutual interest. This platform has enabled sharing of thoughts, exchange of ideas and creation of awareness regarding innovative initiatives to be taken for achieving the objectives of SAARC in the light of founding principles laid down for SAARC. Hopefully these initiatives will continue in future so that efforts are solidly undertaken for alleviating poverty, accelerating socioe-conomic and scientific progress in SAARC region to pave the way for ushering in an era of prosperity on wider dimensions. The sincerity and commitment by the Governments and the people of SAARC region are the crying need of today. This piece presents some thoughts on the theme of a dream about SAARC Economic Union by 2010.

SAARC VISION 2010

Status quo is never a permanent feature. Change is an on-going process. South Asian Economic Union by year 2010 can be the result of a positive thinking approach. An excellent debate has been initiated in this respect. It is hoped that this subject of vital importance will be discussed and debated at various levels namely Government, Private, Public, NGOs institutional and even individual levels. Ideas need to be pooled. Experiences need to be shared. Dimensions of cooperation need to be identified and a framework needs to be evolved to serve as a basis for the proposed South Asian Economic Union by 2010.

Clear cut principles for SAARC were spelled out at the time of its establishment and these require firm commitment by all the SAARC countries. The cooperation among SAARC countries cannot be a substitute for bilateral and multi-lateral cooperation but shall complement them. Further, such cooperation shall not be inconsistent with bilateral and multi-lateral obligation.

Principles on which cooperation shall be based include respect to the following:

1) Sovereign Equality
2) Territorial Integrity
3) Political independence
4) Non-interference in internal affairs of other states and mutual benefit.

The foregoing principles represent strong conceptual logistics on the basis of which South Asian Economic Union can be strongly visualized by 2010. All the SAARC Countries must strictly adhere to the above principles as a mark of respect to each other and help realize the goals for which SAARC has been established.

SAARC OBJECTIVE: Objectives of SAARC include promotion of socio-economic developments within SAARC countries and also develop a productive relationship with regional and international organizations. Based on this, objectives can be categorized as under:

1) INTER-SAARC

a) To promote the welfare of the people of South-Asia and to improve their quality of life.
b) To accelerate economic growth.
c) To promote active collaboration and mutual assistance in the economic, social, cultural, technical and scientific fields.
d) To promote and strengthen collective self-reliance among the countries of South Asia.
e) To contribute to mutual trust, understanding and appreciation of one another's problems.

2) INTRA-SAARC

a) To strengthen cooperation among themselves in international forums and with other developing countries.
b) To strengthen cooperation with other developing countries.
c) To cooperate with international and regional organizations.

SAARC WORK PACKAGES: Ten areas of work within SAARC region were identified and assignment were given to various SAARC countries. Topics were allocated together with the countries responsible for the same. India was given four assignments namely, Business Information & Data Networking, Human Resource Development, Science & Technology and Social Dimension of Business Development. Pakistan had two topics i.e., Trade and Investment. Sri Lanka was given an interesting topic namely, women entrepreneurs. Bangladesh was expected to handle telecommunication. Travel and Tourism were to be handled by Nepal. Bhutan and Nepal had joint responsibility for energy. There is a need for an accelerated effort to push ahead in respect of above assignments.

SAARC BACKGROUND FOR SOUTH ASIAN ECONOMIC UNION BY 2010: Regional Cooperation has been a subject of great interest in several parts of the world. However, the idea of regional cooperation in South Asia was first evolved during 1977-80 and Bangladesh took the initiative to bring up the idea of setting up SAARC. In August 1983, Foreign Ministers met in New Delhi and Declaration on South Asian Regional Cooperation (SAARC) was made and formally Integrated Programme of Action (IPA) was launched.

In 1985, Charter of SAARC was adopted in Dhaka. IPA, consisting of eleven areas of cooperation, is the key component of the SAARC's functions. These include agriculture, communications, education, culture and sports, environment and meteorology, health and population activities, prevention of drug trafficking & drug abuse, rural development, science & technology, tourism, transport and women in development.

Initial steps taken for a long-term objectives of South Asian Economic Union by 2010 so far have included the following:

1. Agreement on SAPTA (South Asian Preferential Trading Arrangement) was signed during the Seventh SAARC Summit in Dhaka. This entered into force on December 07, 1995. This had the following two forward linkages:

a) Gradual reduction and eventual elimination of tariffs within SAARC.
b) A step on the road to creating a SAFTA (South Asian Free Trade Area). Accelerated efforts are needed to implement bilateral and multi-lateral initiatives to promote economic cooperation.

2. Bold initiatives have also been taken in respect of developing institutional framework. These institutions need to be strengthened for their vibrant functions so that positive steps are taken to crystallize the dream of South Asian Economic Union by 2010.

 

 

Some of the pertinent institutions include:

a) Promoting people-to-people contact.

b) SAARC Regional Institutions:

i) SAARC Agricultural Information Centre (SIAC), Dhaka, Bangladesh.
ii) SAARC Documentation Centre (SDC), New Delhi, India.

c) The Following SAARC Funds have been established so far:

i) SAARC Fund for Regional Projects (SFRP) (1991).
ii) SAARC Japan Special Fund (Sept. 27, 1993), Kathmandu, Nepal.
iii) South Asian Development Fund (SADF) (1995) New Delhi, India.

There is a need to consolidate gains from the above institutional framework and carry forward the same towards achieving the goal of South Asian Economic Union by 2010.

SAARC LOGISTICS FOR VISION 2010: SAARC is the largest geo-economic bloc of the world with 1.2 billion people. Its GDP, based on purchasing power parity is $ 3.57 trillion. Its combined average growth is over 7%. Its plan includes a common market i.e. SAPTA. This represents a hope for the largest pool of poor people of the world, with a consumer base of over 425 million people in the middle class bracket. It is larger than any economic block of the world. It has the potential of contributing a great deal to the ever evolving global economy.

SAARC region has the following unique features of the world:

1. It has one of the most ancient living civilizations in the world.
2. It is a sleeping giant and has started to move its arms.
3. All religions, faiths, and ideologies of the world live together.
4. It is maturing and is poised to become an important economic force forming a common market called SAPTA and later SAFTA. This is expected to usher in a new era which will change all traditionally known economic parameters.
5. It has the largest irrigated land areas in the world with over 67 million hectares.
6. It has the second largest railway network of the world after the US.
7. It offers one of the largest English speaking area.
8. It has labor force of 423 million people. This is the largest of any other economic bloc in the world.
9. It also is home to some of the poorest living people on the earth but has increased job opportunities and self-employment schemes in all SAARC Countries.
10. Having a combined average growth rate of more than 7% by year 2000, SAARC will have a combined population of 1.3 billion people and the total consumer base will surpass 750 million. This will be the largest number of consumers in a single economic bloc in the world.

SCCI: A STRONG LOGISTIC FOR SOUTH ASIAN ECONOMIC UNION BY 2010: SAARC Chamber of Commerce and Industry (SCCI) was set up in 1992 as the official recognition by all the regional governments and as the apex body of all the national federations of chambers of commerce and industry with its headquarters in Pakistani. It consists of seven component members representing each country. Its mission is to enhance economic cooperation with a view to improving SAARC's position in the world trade as well as within SAARC itself.

SCCI's philosophy is as under:

It will gradually endeavor to achieve SAARC Economic Union through:

1) Economic Cooperation, and
2) Bring about harmonious and healthy economic relations among the business communities of the region.

The general belief is that the above Union will serve as a step forward to globalization and will help to overcome the socio-political differences within the region.

SCCI's contributions towards establishment of South Asian Economic Union by 2010 are suggested to be in the following dimensions:

1) Serve as voice of business community of the region at national, regional and global fora.
2) Endeavor to bring about necessary economic cooperation in all spheres of the SAARC region.
3) Encourage investments and joint ventures within and outside the region to ensure that the benefits of economic cooperation are realized for the region.
4) Encourage private sector in the process of industrialization and also to act as the change agent while allowing the governments to develop the infrastructure jointly with them and setting in place policies which can minimize dislocations to economic growth and social development.

INTRA-REGIONAL INVESTMENT: The-business community of SAARC need to be encouraged to come forward with intra-regional investment proposals covering the following areas:

1) Investment promotion
2) Investment protection
3) Repatriation of profits
4) Avoidance of double taxation
5) Arrangements for settlement of trade disputes among SAARC member states.

Strategy needs to be developed to evolve common agreements for the region as a whole or sub-region on bilateral basis for the above aspects. The share of SAARC in World Trade, based on the World Development Report 2002, is 1.03%. This shows that the scope of intra regional trade is very big.

AGENDA FOR SOUTH ASIAN ECONOMIC UNION BY 2010: Year 2001 was set as target date to achieve SAFTA. This was expected to set pace of development in core trade and economic cooperation in the member countries. However, the dream has not yet been mate realized.

The Ninth SAARC Summit was held in Male, Maldives during May 12-14, 1997 and directed the establishment of Group of Eminent Persons (GEP). This group was asked to undertake the following tasks:

1. Develop a long range vision.
2. Formulate a perspective plan of action including a SAARC agenda for 2000 and beyond.
3. Spell out the targets that can and must be achieved by the year 2020.

The recommendations were presented in the two-days SAARC Summit held in January 5-6, 2002 in Kathmandu, Nepal. South Asian Economic Union by 2010 is expected to result as under:

1. With new enthusiasm in the markets and shifting economies on combined scale, dependence of their GNP will reduce in coming years.
2. An increased collaboration and harmonious relationship could help reduce the defense budgets to much lower points. On the assumption that these funds are allocated for developmental programs, the growth indicators will sharply move forward.
3. Marketing plans for these countries can be more or less unique and specially for consumer products and services like entertainment.

SAARC SUMMIT JANUARY 2002: Two days SAARC Summit was held in Kathmandu, Nepal during January 05-06, 2002. It visualized the establishment of South Asian Economic Union. Pre-requisites to this dream were identified as under:

1. Promote mutual trust and understanding, peace, stability and amity and accelerated socio-economic cooperation.
2. Foster good neighbourly relations, relieving tensions and building confidence.
3. Finalize a regionally agreed investment framework to meet investment needs of the member states.
4. Promote South Asia has a common tourist destination by upgrading infrastructure, air linkages, simplification and harmonization of administrative procedures and joint marketing.
5. Combat the problem of poverty with a new sense of urgency.
6. Focus on rural micro-credit programs for women and disadvantaged, widen opportunities for gainful employment and reconstitute the independent South Asian Commission on poverty alleviation.
7. Finalize the SAARC Social Charter including:

a) Poverty eradication.
b) Population stabilization.
c) Empowerment of women.
d) Youth mobilization.
e) Human resource development
f) Promotion of health and nutrition and projection of children.

CONCLUSION

It is high time that all the SAARC Countries must respect each other and strive for developing peace and tranquillity in the region and give genuine tribute to the principles of SAARC and implement a plan paving the way for institutionalizing South Asian Economic Union by 2010. This is needed to usher in an new era of prosperity for the teeming million of the above region.