A DREAM OF SOUTH ASIAN COMMON MARKET
THE REGION IS GRADUALLY MOVING TOWARDS ZERO TARIFF REGIME.
Mar 14 - 20, 2011
Sensing the enormous economic potential of the region, the south Asian economies have started realizing that their economic future, growth and prosperity demands focus on greater cooperation and coordination among themselves rather than looking far-off markets in the West.
Pakistan's exports target for the current financial year 2011 has been reset at $22 billion, which does not translate the actual worth of economic and human resource available as the policy makers have failed to capitalize these resources for one reason or the other. The cost of this failure however has to be paid by the masses looking expectantly towards the governments that one day their lot would be improved.
The Trade Development Authority of Pakistan (TDAP) is also pursuing the policy of looking at the East as the export destination which apparently has shown results in the current fiscal 2011; over 30 percent of the export transactions transpired within the region.
South Asia, the world's most populous region, has so far failed to enter into services sector and exchange of skilled workforce despite growing need primarily because of misconception and mistrust on political or religious grounds, however it has started gradually moving towards a 'zero tariff' regime that would lay the ground for a common market sooner or later.
The irony is that those having nothing to do with economic issues are always in the forefront to oppose good economic decisions and policies for personal gains through politicizing non-issues. The anti-nation forces have succeeded in making fragmentation of the society by unleashing political, sectarian, ethnic, and provincial biases. Consequently, not only the country left far behind in economic development when compared with other economies in the region but trapped in a mess of chronic issues of law and order, unemployment, unmanageable inflation, and energy crisis.
The people having positive approach however are of the opinion that it may take a long time to create a European Union-type environment in which people could move across borders without visas and other hassles. The region that hosts 1.6 billion ó or nearly a quarter of mankind ó has an average 5-6 per cent annual growth of gross domestic product, since 2000, reaching $900 billion.
It is unfortunate that despite having 8.5 per cent of the world's natural resources and intra-regional trade of $12 billion, or 5.8 per cent of South Asia's total trade, the lack of cooperation and coordination and frequent interaction has kept them away from reaping a rich harvest of the available resources as the vested interest never allowed them to go side by side while dealing with socioeconomic issues.
It is interesting to note that South Asia's seven neighbors created the South Asian Association for Regional Cooperation (Saarc) in Dhaka in 1985, which has been limping for 26 years with little progress. The group later added Afghanistan.
In 2006, it created the South Asian Free Trade Area (Safta) as part of a move to reduce barriers for the free flow of goods and services. Trade under Safta has been too slow ó to reach $682 million only, so far. Businesspersons say they are pushing the governments to reduce barriers to increase cross-border trading.
"Doing business with neighbors makes more economic sense that doing it with countries located far away," says Tariq Sayeed, vice-president of the Confederation of Asia Pacific Chambers of Commerce and Industry and immediate past president of the Saarc Chamber of Commerce and Industry (Saarc CCI).
"We are now moving towards a 'zero tariff' regime by 2016 that will pave the way for more movement of goods and services across the region."
SIMPLIFYING CUSTOMS PROCEDURES
The countries are now simplifying the customs procedures, paperwork and finalizing land transit, mostly through Indian territory. Saarc, like the GCC, is surrounded by a large country. Most Saarc members surround India, need access through it land to reach their neighbors. A framework is currently being worked on.
South Asia's two biggest neighbors, India and Pakistan, who have fought three wars in 60 years, are currently trying to overcome a number of issues including trying to move away from hostilities to cooperation.
"I believe it is in the interest of India to pursue good relations with Pakistan. They cannot maintain 600,000 soldiers across the border for too long. The Kashmir issue is also being solved," Tariq says.
For many of them, replacing cross-border terrorism with cross-border trade and tourism will need more courage and initiatives than just holding meetings. Sayeed said his colleagues at the Saarc Chamber are now trying to de-link trade and investment from other political issues.
"There is a growing feeling among business communities across India and Pakistan that there is no other way than to cooperate. Together we could accelerate our growth. For this we are now delinking political issues from trade and economic," he says.
A study shows that imports of goods and capital equipment from India could potentially help Pakistani importers save $1.5 billion annually.
It sounds positive that SAARC has managed to prioritize the economic agenda. "Pakistani members of Saarc CCI can now get an exemption to travel to India ó that has prompted a large number of Pakistani traders to become its members and they are now importing products from India without any problem.
Since there exists a strong and common socioeconomic past of the people in the region a free movement of people across the region could help the economic agenda move ahead at a much faster rate, feels Tariq.
Tariq is confident that with the growing economic interest the member countries would eliminate barriers and there will be a time when people will move across the borders freely ó a process that has already begun, he remarks.
"This will help Pakistan to secure a Most Favored Nation (MFN) status and that could change the trade dynamics in the region," he says. However, the anti-Indian and anti-Pakistani mentality must change first.