SAARC

  • The South Asian Association for Regional Cooperation (SAARC) is the regional intergovernmental organization and geopolitical union of states in South Asia. Its member states are Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka. SAARC comprises 3% of the world’s area, 22% of the world’s population
  • SAARC was founded in Dhaka on 8 December 1985
    • Its secretariat is based in Kathmandu, Nepal.
    • The organization promotes development of economic and regional integration.
    • SAARC maintains permanent diplomatic relations at the United Nations as an observer and has developed links with multilateral entities, including the European Union.

Historical background

The idea of co-operation among South Asian Countries was discussed in three conferences:

  1. The Asian Relations Conference held in New Delhi on April 1947;
  2. The Baguio Conference in the Philippines on May 1950; and
  3. The Colombo Powers Conference held in Sri Lanka in April 1954.

In 1970s, the seven inner South Asian nations that included Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka agreed upon the creation of a trade bloc and to provide a platform for the people of South Asia to work together in a spirit of friendship, trust, and understanding.

  • In 1983, the international conference held in Dhaka by its Ministry of Foreign Affairs, the foreign ministers of the inner seven countries adopted the Declaration on South Asian Association Regional Cooperation (SAARC) and formally launched the Integrated Programme of Action (IPA) initially in five agreed areas of cooperation namely, Agriculture; Rural Development; Telecommunications; Meteorology; and Health and Population Activities.
  • Officially, first SAARC summit was held in Dhaka on 7–8 December 1985 and hosted by the President of Bangladesh Hussain Ershad.

Members and observers

  • SAARC was founded by seven states in 1985. Afghanistan joined SAARC as its eighth member state in April 2007.
  • It also has nine Observers, namely China, EU, Iran, Republic of Korea, Australia, Japan, Mauritius, Myanmar and USA.
  • Myanmar has expressed interest in upgrading its status from an observer to a full member of SAARC. Russia has applied for observer status membership of SAARC. Turkey applied for observer status membership of SAARC in 2012

Objectives and Principles

The objectives of the association as defined in the SAARC Charter are:

  • To promote and strengthen collective self-reliance among the countries of South Asia
  • To contribute to develop mutual trust, understanding and appreciation of one another’s problem;
  • To promote active collaboration and mutual assistance in the economic, social, cultural, technical and scientific fields;
  • To strengthen cooperation with other developing countries;
  • To strengthen cooperation among themselves in international forums on matters of common interest; and
  • To cooperate with international and regional organizations with similar aims and purposes.

Cooperation in the SAARC is based on respect for the principles of

  1. Sovereign equality,
  2. Territorial integrity,
  3. Political independence,
  4. Noninterference in internal affairs of the member states and
  5. Mutual benefit.

Regional cooperation is seen as a complement to the bilateral and multilateral relations of SAARC members. Decisions are taken on the basis of unanimity. Bilateral and contentious issues are excluded from the deliberations of SAARC.

Secretariat and Organization Structure

The SAARC Secretariat was established in Kathmandu on 16 January 1987

A) Specialized Bodies

  • The SAARC Member States have created the following Specialized Bodies of SAARC in the Member States which have special mandates and structures
  • These bodies are managed by their respective Governing Boards composed of representatives from all the Member States, the representative of H.E. Secretary-General of SAARC and the Ministry of Foreign/External Affairs of the Host Government.
  • The heads of these Bodies act as Member Secretary to the Governing Board which reports to the Programming Committee of SAARC.
  1. SAARC Arbitration Council (SARCO)
  2. SAARC Development Fund (SDF)
  3. South Asian University (SAU)
  4. South Asian Regional Standards Organization (SARSO)

B) Regional Centres

  • The SAARC Secretariat is supported by Regional Centers established in the Member States to promote regional co-operation. These Centers are managed by Governing Boards comprising representatives from all the Member States, SAARC Secretary-General and the Ministry of Foreign/External Affairs of the Host Government. The Director of the Centre acts as Member Secretary to the Governing Board which reports to the Programming Committee.
  • SAARC has six Apex Bodies, they are
  • SAARC Chamber of Commerce & Industry (SCCI),
  • South Asian Association for Regional Cooperation in Law(SAARCLAW),[43]
  • South Asian Federation of Accountants (SAFA),
  • South Asia Foundation (SAF),
  • South Asia Initiative to End Violence Against Children (SAIEVAC),
  • Foundation of SAARC Writers and Literature (FOSWAL)
  • Amjad Hussain Sial is the current Secretary General of SAARC.

Why India needs a strong SAARC

  • All eight members of SAARC (South Asian Association for Regional Cooperation), led by India, can draw up a common plan to eliminate poverty from the region and make South Asia a global power.
  • The interdependence of nations has been increased. SAARC is the world’s biggest organization in term of population.it has 22 percent of total population. SAARC members can help each other to tackle poverty and illiteracy
  • India’s trade with other SAARC nations and intra-South Asian trade can be increased by removing bottlenecks by improving and expanding connectivity in the region that would lead to better economic partnership.
  • Energy cooperation, on the lines of power generation and trade with Bhutan and Nepal can be better achieved via SAARC
  • SAARC, as a regional forum, has great potential to help increase the visibility of South Asian Countries on International Platforms and in turn help bring reforms to institutions like UNSC, IMF etc.
  • India is the only country, which shares borders with all the SAARC countries, barring Maldives and Afghanistan. The implication of this geographical reality is that India has to facilitate the establishment of strong economical linkages with the neighboring countries.
  • Indian businesses can source more from other SAARC countries and build better value chains. For this, India has to invest more in the region by taking advantage of the arbitrage in wage and electricity rates. From Maldives in the south of India to Bhutan in the north, several SAARC countries are keen to seek Indian investment and expertise. It is estimated that 55% of intra-regional trade potential in South Asia remains untapped.
  • Bhutan is keen to seek Indian investments in four to five sectors, including power, tourism, construction and industry. In the future, there will be openings for smaller power projects for private sector companies to consider. These projects will be of less than 500 MW capacities. The country is also inviting investment from India in the proposed education city project.
  • In Maldives, Indian investors can look at tourism, hotels, ports, airports and fisheries. It is for the Indian business community to explore the potential in the Maldives.

SAARC Initiatives

A) South Asian Free Trade Area

  • SAFTA was envisaged primarily as the first step towards the transition to a South Asian Free Trade Area (SAFTA) leading subsequently towards a Customs Union, Common Market and the Economic Union
  • The SAFTA Agreement was signed on 6 January 2004 during Twelfth SAARC Summit held in Islamabad, Pakistan.
  • The Agreement entered into force on 1 January 2006, and the Trade Liberalization Programme commenced from 1 July 2006.
  • Under this agreement, SAARC members were expected to bring their duties down to 20 percent by 2009.
  • SAFTA was envisaged to gradually move towards the South Asian Economic Union, but the current intra-regional trade and investment relation are not encouraging and it may be difficult to achieve this target.
  • The SAARC intra-regional trade stands at just five percent on the share of intra-regional trade in overall trade in South Asia. Similarly, foreign direct investment is also dismal.
  • Intra-SAARC trade amounts to just a little over 1% of SAARC’s GDP. In contrast to SAARC, in ASEAN (which is actually smaller than SAARC in terms of the size of the economy) the intra-bloc trade stands at 10% of its GDP.

B) SAARC Visa Exemption Scheme

  • The SAARC Visa Exemption Scheme was launched in 1992.
  • Realizing the importance of people-to-people contact among SAARC countries, decided that certain categories of dignitaries should be entitled to a Special Travel document. The document would exempt them from visas within the region.
  • Currently, the list included 24 categories of entitled persons, which include dignitaries, judges of higher courts, parliamentarians, senior officials, entrepreneurs, journalists, and athletes.

Awards

A) SAARC Award

The main aims of the SAARC Award are:

  • To encourage individuals and organizations based in South Asia to undertake programmes and activities that complement the efforts of SAARC
  • To encourage individuals and organizations in South Asia contributing to bettering the conditions of women and children
  • To honour outstanding contributions and achievements of individuals and organizations within the region in the fields of peace, development, poverty alleviation, environmental protection, and regional cooperation
  • To honour any other contributions and achievement not covered above of individuals and organizations in the region.

Since the institution of the SAARC Award in 2004, it has been awarded only once and the Award was posthumously conferred upon the late President Ziaur Rahman of Bangladesh.[56]

B) SAARC Literary Award

  • The SAARC Literary Award is an annual award conferred by the Foundation of SAARC Writers and Literature (FOSWAL) since 2001 which is an apex SAARC body.
  • Shamshur Rahman, Mahasweta Devi, Jayanta Mahapatra, Abhi Subedi, Mark Tully, Sitakant Mahapatra, Uday Prakash, Suman Pokhrel and Abhay K are some of the prominent recipients of this award

C) SAARC Youth Award

  • The SAARC Youth Award is awarded to outstanding individuals from the SAARC region.
  • The award is based on specific themes which apply to each year.
  • The award recognizes and promotes the commitment and talent of the youth who give back to the world at large through various initiatives such as Inventions, Protection of the Environment and Disaster relief.

D) SAARC Development Fund, Charter of Democracy and SAARC Decades

  • SAARC introduced Social Charter, Charter of Democracy, declarations of SAARC decades and years, various agreements and conventions, and it constituted SAARC Development Fund
  • It has its permanent premises in Bhutan
  • Two regional projects – on women’s empowerment and maternal and child health care – under SDF are currently being implemented with technical assistance from India.

E) South Asian University

  • Cooperation in the field of higher education has led to the establishment of the South Asian University (SAU) at New Delhi.
  • India will bear a major part of the cost of establishing the University, including 100% of the capital cost.

Achievements/Role of SAARC

  • SAARC has made tremendous improvement owing to the interaction and cooperative efforts being put in by the member states.
  • The major initiatives undertaken by SAARC are poverty alleviation, social development, people-to-people contact, health, education, human resource development and youth mobilisation, culture, population stabilization, promotion of the status of women, promotion of the rights and well-being of the child, drug de-addiction, rehabilitation and reintegration, etc.

A) Substantial Increase in Cooperation

  • Since the formation of SAARC in 1985, the level of cooperation among the member countries increased substantially.
  • SAARC was established with the objective of improving the living standards of the people, cultural and regional economic growth and increasing cooperation with other regions of the world.

B) Economic and Trade Discussions

  • For the success of SAARC, economic and trade cooperation is very much important and in fact the first thing to be focused on for the development of South Asia.
  • During the 1990s, SAARC discussed the Preferential Trading Area (SAPTA) among the member countries which was materialized in the shape of Free Trade Agreement which is now known as South Asian Free Trade Area (SAFTA).
  • The Meetings of the Finance Ministers of SAARC is an important feature of SAARC agenda.

C) Increase in External Support/Cooperation with Observers

  • One of the positive points in the recent years has been the interest of the other developed countries in SAARC who want to provide help in social and economic fields.
  • Japan has offered help in social infrastructure development and disaster management,
  • China offered donation to South Asian Development Fund and the recent support has also come from China to run the China-South Asia Business Forum.
  • SAARC has established institutionalized arrangements for cooperation with a number of other regional groupings and international and regional organizations. Organizations like United Nations Development Programme (UNDP), International Telecommunications Union (ITU),
  • This external support gives a boost to the aims and objective of SAARC to move forward for the better future in the social and economic fields and it is also a good opportunity for the members to develop inter-state cooperation within South Asia.

D) Social Cohesion among Member Countries/People to People Contacts

  • One of the most significant objectives of SAARC is to increase people to people contacts.
  • SAARC has tried to undertake a program of well-connected South Asia and that can be possible when people are closed together for which some initiatives have been taken like: -Visual Exchange Programme -Governmental Organizations C Chamber of Commerce and Industry

E) Cooperation on Security and Terrorism

  • The SAARC Convention on suppression of Terrorism was signed in 1987 and later the Additional Protocol on Terrorism was signed taking into account the terrorist financing structure. This was in accordance with UN Security Council Resolution 1373.
  • Cooperation has led to bilateral initiatives like SAARC Terrorist Offences Monitoring Desk (STOMD), SAARC Drug Offences Monitoring Desk (SDOMD), Colombo, Sri Lanka

F) Poverty Eradication

  • As one of the poorest regions of the world, it is one of the most important priorities of SAARC to give attention to this main objective of poverty alleviation.
  • The total population of SAARC eight members is over 1.6 billion and forty percent of this population is living below the poverty line. The illiteracy rate is about or even more than 50 percent
  • The seventeen SAARC Summit in 2011 accorded the highest priority to the alleviation of poverty in South Asia and decided to strengthen the Independent South Asian Commission on Poverty Alleviation (ISACPA) which was established in 1991consisting of eminent persons from member states to conduct an in-depth study of the diverse experiences of member states.

G) Integrated Programme of Action (IPA)

  • The IPA is an important programme of the SAARC process and includes 12 areas of cooperation, each being covered by a designated Technical Committee.
  • The Secretary-General reports to the Standing Committee on the progress in the enforcement of IPA.

Hurdles in the development of SAARC

A) Inter-state Disputes in South Asia

  • One of the major hurdles in the way of cooperation among the SAARC members is the mistrust, mutual security perceptions and hostility.
  • All the members of this organization feel in one way or another threat to their political, economic and territorial stability from the neighboring countries.
  • There are always high risks that any time the efforts for cooperation can suffer due to communal and terrorist threats.
  • SAARC is the most militarized place in world; its two countries Pakistan and India are spending 30 billion dollars on their defense expense. Afghanistan, its new member is facing war.

B) Fear of Indian Domination

  • Another most important cause of SAARC failure is that there is a fear of India’s hegemonic role in the region.
  • Indian desire to participate in the decision making process of the region as a leader has caused concerns among the neighboring countries particularly Pakistan, Sri Lanka and Bangladesh.
  • The political, diplomatic and security concerns felt by the member countries of SAARC in South Asia has obstructed any positive development among the member countries.

C) Civilizations Clash

  • Professor Samuel Huntington has mentioned in his book “The Clash of Civilizations” that SAARC has been a failure because according to him the countries belonging to organizations like EU etc belong to same culture but SAARC countries are those whose cultures are different
  • No country in the region is having any feeling of belongingness with the other state.

D) Unstable Financial Positions

  • The weak financial position of the member countries has also created an uncertain future for this organization.
  • This weak financial position is reflected in the trade imbalances among the member countries.
  • The SAARC members are financially and economically not very much developed. This thing is not conducive for the economic integration of South Asia. Most of the member countries export similar products
  • The member countries of SAARC are not complementing each other but they are competing in fact. Mutual trade is very low.
  • The lower level of intra-region trade in South Asia has made the objective of this organization a failure.

E) Asymmetry between India and Member Countries

  • There is economic, technological and demographic imbalance between India and other member countries of SAARC.
  • India being larger in size, economy and possessing high technological infrastructure dominates other members.
  • India accounts for more than three quarters of the regional GDP and technological infrastructure and two third of the global exports of the region.
  • The smaller countries in South Asia feel uncomfortable about their trade relations with India because under the current tariff structure. India runs a large trade surplus with her neighbors.

F) Lack of Trust among the Member Countries

  • There is also lack of trust among the member states of SAARC which does not auger well for future development of this regional organization.
  • They still live in the cobweb of history and mutual rivalries and mistrust has caused them enormous damage already.

G) Exclusion of Contentious Issues from SAARC Charter

  • The charter of SAARC itself has some self-imposed anomalies as its charter has the provision of not discussing the contentious and bilateral disputes.
  • On the one hand, it asks for increased cooperation and exchanges and on the other hand, avoids negotiations on bilateral disputes.

H) Different Political Systems

  • All the South Asian countries are having different kinds of political systems which is also the reason for the failure of SAARC.
  • South Asia has not been a strong democratic region.
  • Like in India there is democracy, in Pakistan there is transitional democracy, and presidential system in Sri Lanka.
  • Most of the countries have remained unstable.

I) Resource Crunch

  • SAARC suffers from an acute resource crunch.
  • Unless the organization is successful in mobilizing funds and technical know-how from outside sources, most of its projects cannot be implemented and, thus, its relevance will remain limited.

J) Underutilized Potential of SAFTA

  • SAFTA’s potential has remained largely underutilised, owing to several reasons like
  1. NTBs(Non-Tariff Barriers),
  2. sanitary-phytosanitary measure on agri-goods,
  3. lack of lab facilities, standardisation of goods and harmonisation of customs procedures,
  4. anti-dumping and countervailing duties,
  5. weak trade facilitation at the border,
  6. lack of connectivity,
  • On the other hand, competitive edge of SAARC exporters is undermined because of high cost of transport.

Way Forward

The main rational behind SAARC’s establishment is to develop a conducive environment where all nations may interact peacefully with each other, cultivate sustainable peace and promote mutual economic wellbeing by utilizing available resources in the region through the peaceful process of economic cooperation.

Following initiatives can be undertaken to improve the Utility of SAARC

  • The main reason for the slow progress of SAARC integration is the low level of trade between the two largest partners – India and Pakistan. The immediate concern for the success of SAARC should be to remove the irritants between the two by encouraging dialogue between the 2 nations.
  • This is going to be the Asian century and Asia is a dominating player of the global economy. Therefore, developing strong support for regional cooperation at state and non-state levels is essential. In such milieu, what is required is to have strong social policy by SAARC, amending SAARC Social Charter, and strengthening SAARC Secretariat.
  • SAARC countries need to put in place adequate physical infrastructure in place which hampers their global competitiveness even in those sectors where they have revealed comparative advantages.
  • SAARC needs to develop policy approaches that take into account the political and economic complexities of SAARC members.
  • The physical and soft connectivity among the SAARC countries needs to be developed and strengthened.
  • Trade integration needs to be expedited through faster implementation of SAFTA. Strategies should be thought of to go beyond FTA, into Comprehensive Economic Partnership Agreement (CEPA) and further down to set up SAARC customs union, common currency, towards economic union.
  • Also, South Asian countries should abolish non-tariff barriers (NTBs) so that free flow of trade happens unhindered. Cooperation in the area of customs procedures and other regulations would certainly help to achieve the objectives of expansion of regional trade, investment and supply chain development
  • Addressing NTB (Non trade Barriers) by taking advantage of South Asian Regional Standards Organisation (SARSO), through standardisation and harmonisation of customs procedures and by developing SAARC standards;
  • Putting Dispute Settlement Mechanism (DSM) in place to deal with NTBs related disputes
  • Improving trade facilitation at the border through proper infrastructure, accelerating seamless connectivity, digitisation, harmonised customs procedures, speeding up of customs clearance, electronic data exchange and establishment of single windows
  • Facilitating cooperation in banking, insurance and other services among member countries
  • Increasing intra-regional FDI by simplifying investment procedure
  • Facilitating the movement of people through intra-SAARC passenger transportation and easing visa procedure
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