ECONOMIC PROFILE OF SAARC
INTERVIEW: AMEERALI JUMABHOY-VETERAN BUSINESS LEADER FROM SINGAPORE
Jan 31 - Feb 6, 2011
India, Pakistan and Bangladesh in the backdrop of their shared historical past have strong cultural linkages with each other with respect to customs, cuisine, religious beliefs, and languages. This places them in a unique position to form a sub-regional grouping that can greatly facilitate economic, social, and cultural interaction between them.
The three countries inhabit a large and contiguous landmass, having access to vast natural resources. The fact that since the late 1980s the three countries have embarked on a similar path of economic globalization should make the process of integration easier.
This was the gist of the thought provoking ideas on the untapped economic and social strength of SAARC by the veteran business leader Ameerali Jumabhoy, born in 1925, currently based in Singapore, who was on a short visit to Karachi recently.
Ameerali Jumabhoy was born in Singapore in 1925. He passed out of the Anglo Chinese School in 1942. During Japanese occupation of Singapore, he was evacuated by ship to Bombay University with a B.Sc in microbiology. During his years in India, he was active in the freedom struggle against British rule and was a member of the Bombay students Union. He returned to Singapore in 1946 where has since lived.
Jumabhoy is a member of various government boards and non-government organizations in Singapore. He has been associated with the shipping and real estate industries. He led 22 overseas missions to various countries including India, Pakistan, Bangladesh, Sri Lanka, Iran, South Africa, the USSR, ASEAN and Indian Ocean rim countries.
Jumabhoy, visibly moved over what he described the prevailing state of mistrust amongst the friends of the past, had a light of hope in his eye for restoration of friendly trust sooner or later. He said that the need to strive for good neighbourliness and friendship is reality that no country can escape from for too long. Being geographically contiguous states, India, Pakistan and Bangladesh have to have good relationship for the sake of economic stability, peace and prosperity of their people as you know boosting economic cooperation is a win-win situation for all.
The long years of non-cooperation have not served the interest of any country in South Asia. If France and Germany in Europe and closer home, India and China can overcome their political differences and opt for cooperation in economic matters, there seems no reason why India and Pakistan or to a lesser extent, India and Bangladesh cannot do the same, he pleaded.
Jumabhoy was of the view that engagement in the areas of trade, transport linkages and infrastructure development would help the individual countries for poverty alleviation as well as give a boost to the huge potential of tourism industry in the region. He warned that continued tension between India and Pakistan would only fuel extremist religious forces in both countries to the detriment of their economy and polity.
If India, Pakistan and Bangladesh are able to put their differences behind them, the whole of South Asia would be galvanized into action, ready to take its due place in the global order. For the first time in modern history, the global economy is undergoing a shift in its centre of gravity from the continents of Europe and North America to Asia. If present trends of GDP growth in China, the United States and India continue, in next two decades China will be the largest economy in the world, the US second largest and India the third largest. If south Asian countries develop an integrated economy the south Asia could become the second largest economy in the world after China, Jumabhoy said.
Rich in human and natural resources, South Asia nevertheless remains impoverished with limited social progress and economic underdevelopment. It is, according to the World Bank, "the least integrated region in the world, where integration is measured by intraregional trade in goods, capital and ideas", the region is also characterized by political strife, communal and ethnic violence and a legacy of mistrust between two of its largest countries India and Pakistan.
The eight member countries of SAARC-Pakistan, India, Bangladesh, Sri Lanka, Nepal, Bhutan and Maldives and the group of countries-accounts for only 5.92 per cent of the world's Gross Domestic Product (GDP) measured by purchasing power parity. If one considers GDP as measured in US Dollar term the proposition falls to an even lower 2.67 per cent.
Jumabhoy was a little bit critical over the persisting rift in the region especially at a time when globalization and liberalization of trade are the order of the day. South Asia can ill afford to remain immobilized by political discord. The cost of non-cooperation amongst the member countries is enormous, and stands to deprive its people of huge potential benefits.
"Regional cooperation should enable freer movement of people, of goods, of services and it should help people rediscover the shared heritage and build our common future." Although the world over regional integration is becoming increasingly common, in case of South Asia the reverse is true with divisions deepening dramatically over the decades. It may be recalled that in 1948 South Asia's intraregional trade as a share of its total trade with the world was 18 per cent, which dropped to five per cent in 2007.
Jumabhoy said that India is strengthening its economic relations with the wider Asian region through its "look east" policy and in particular with the Association of South East Asian Nations (Asean). India is also a member of the Indian Ocean Rim Association for Regional Cooperation (IORARC), The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) and the Asia-Pacific Trade Agreement (APTA) previously named the Bangkok Agreement.
Jumabhoy added that most of the other south Asian countries too are moving wards extra regional arrangements to strengthen their respective economic profile. While Pakistan earlier set its sights towards West Asia and joined the Economic Cooperation Organization, it has recently signed free trade agreements with China and Malaysia. Bangladesh, like India, is a member of the IORARC, BIMSTEC and APTA. It has also joined Developing 8 countries (D8) with Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey. Thus, a key issue that needs to be looked at, is whether efforts at South Asian regional cooperation are best served through SAFTA and SAARC or through the alternative linkages taking shape.
THE POOREST REGION
Despite having enormous economic and human resource, South Asia is one of the poorest regions in the world. Over one fifth of the world's population lives in the region. Five South Asian countries i.e. Afghanistan, Bhutan, Bangladesh, Maldives and Nepal-have been officially designated by the United Nations, as least developed countries. Even Sri Lanka, Pakistan and India, which have achieved greater levels of economic development, face problems of acute poverty. In Sri Lanka, 22.7 per cent of its population lives below the national poverty line, in India 28.6 per cent and in Pakistan 32.6 per cent.