SAARC: Fostering Regionalism in South Asia
Weekly Pulse
April 30-May 6, 2010
The 16th South Asian Association for Regional Cooperation (SAARC) summit at Bhutan’s capital Thimpu on April 28-29 has produced two important agreements: a Convention on Cooperation on Environment, which aims at promoting regional cooperation in preserving the environment and mitigating the impacts of the climate change; and an agreement on Trade in Services, that aims to increase trade cooperation among SAARC member-states and integrate the regional economy. The heads of state and government from eight South Asian countries—including India, Pakistan, Afghanistan, Bangladesh, Sri Lanka, Nepal, the Maldives and Bhutan, the host country —also adopted a Statement on Climate Change and a Summit Declaration, which emphasize the importance of reducing the region’s dependence on high-carbon technologies for economic growth and the urgent need for alleviating poverty for its 1.5 billion people constituting one-forth of the world’s population.

The occasion coincided with the 25th birthday of the regional forum. Unfortunately, since its creation in 1985, SAARC has not accomplished much, if its performance is compared with the Association of South East Asian Nations (ASEAN). Even Shanghai Cooperation Organization (SCO), which is a relatively recent regional body, can claimed greater success than SAARC in fostering meaningful economic and security cooperation among its member-states. Over 40 years ago, the countries constituting ASEAN today had also charted their path to regionalism due to the same reason SAARC did quarter of a century ago. Over a decade ago, the same factor led China, Russia and three Central Asian states to set up Shanghai Five, which was later renamed as SCO. Effective regionalism in South-East Asia and Central Asia has helped overcome lingering security problems, harmonize foreign policies of the member-states and promote cooperation among them in trade, business and culture.

South Asia, on the contrary, has moved at a snail’s pace in institutionalizing credible regional cooperation. This is despite the fact that the SAARC region—with a diverse population of over 1.5 billion and a geography that is resource-rich—is one of the world’s most backward and poverty-ridden areas. Unfortunately, each SAARC summit produces agreements, statements and declarations—but without any credible follow-up, implementation process. And, each time, we are left with the same old questions remaining unanswered.

Critical Questions

Will the leadership of South Asian region make a difference this time? Has it learned any lessons from past failures? Does the region have the resource potential—and the nations inhabiting it the political will—to make SAARC as impressive a global success story in regional cooperation as ASEAN is? What is it that prevents the South Asian regional grounding to move ahead and take concrete steps towards trade liberalization, environmentally-sustainable economic development and collective security?

To argue that SAARC has achieved nothing during its 25-year history will be unfair. It is the only regional forum where leaders and officials of the eight South Asian states regularly meet and exchange their viewpoints. India being the largest of all South Asian states has had serious security and political problems with its smaller neighbours, especially Pakistan. Yet SAARC provides the platform where these problems are discussed on the sidelines of its annual summits—as has been the case all along when it comes to India-Pakistan relationship.

Critics argue that SAARC has been a hostage to India-Pakistan rivalry since its inception. Under the SAARC Charter, bilateral problems are not to be on the agenda of the organization’s annual summits. Yet whenever a SAARC summit is held, all eyes are on a sideline meeting between the leaders of South Asia’s two arch-rivals—as was the case at this year’s SAARC summit in Bhutan. Prime Ministers Manmohan Singh and Yousaf Raza Gilani did meet this time. The two leaders reportedly mandated their foreign ministers to draw up a road map for future talks. “Foreign ministers and foreign secretaries of the two countries have been entrusted with the task of working out the modalities of the dialogue," said Indian Foreign Secretary Nirupama Rao. Pakistan’s Foreign Minister Shah Mehmood Qureshi said all unresolved issues, including Kashmir and terrorism, were discussed during the meeting, which emphasized the need to overcome trust deficit between the two countries.

India and Pakistan had begun a wide-ranging peace process called the ‘Composite Dialogue’ at the SAARC summit in Islamabad in January 2004. The Dialogue covered eight issues, including Kashmir, terrorism and other unresolved issues. Even though sharp differences between the two countries remained on these issues, they were able to adopt a host of confidence building measures. After the Bhutan meeting, it is unclear whether India and Pakistan will resume the same structured approach to resolve their differences as was the case under the Composite Dialogue. However, one thing is absolutely sure: the future success of SAARC significantly hinges on resolution of India-Pakistan disputes, especially Kashmir whose intractability is visible from the introduction of another potentially volatile issue of cross-border water sharing.

Climate Change

In this context, it was important to have the 16th SAARC summit focus on the theme of climate change, with a title “Towards a Green and Happy South Asia.” Like some other low-lying areas of the world, South Asia has countries such the Maldives which are said to be the first victim of global warming, to virtually disappear into the Indian Ocean because of the rise in sea level. At least on this issue, the SAARC member-states have to shed political rhetoric and mutual recriminations.

The UN Environment Programme's 2009 Outlook states, “Intense floods, droughts and cyclones have impacted on the economic performances of South Asian countries and the lives of millions of poor, it also puts at risk infrastructure, agriculture, human health, water resources and the environment.” At the last two SAARC summits, member-states agreed to take urgent measures to reverse harmful climate change—yet there is no serious follow-up. In the meantime, worries over the uneven distribution of monsoon rainfall in the region have grown, adding another irritant in the traditionally hostile relations between India and Pakistan. The dispute over sharing of water resources between the South Asian nuclear rivals may get worse as the climate change problem itself remains unaddressed.

As clear from last year's Climate Summit at Copenhagen, the issue of climate change is common to every nation and region. Further deterioration in South Asian climate will affect each SAARC member-states—the smaller ones and low-lying states like Bangladesh and the Maldives the most. Yet India, in order to sustain its growing economy, wants a global climate treaty that requires rich nations—and not rapidly developing countries—to take the lead in cutting carbon emissions. Whereas least developed countries in the region that are most vulnerable to climate change are lobbying for an international treaty irrespective of who has to reduce carbon emissions.

The Bhutan SAARC Summit may have produced a framework Convention on Cooperation on Environment, but the real issue is the implementation of the Convention in its letter and spirit. The summit’s Thimpu Statement on Climate Change does reflect a common SAARC position on climate change, but it does not include a formal text on legally binding emission cut targets for the region’s principal polluters such as India.

A more crucial framework agreement concluded at the summit pertains to the cooperation among SAARC member-states on trade in services. This agreement certainly opens up new vistas of economic cooperation in the region. To encourage regional trade, member countries had signed up to the South Asia Free Trade Agreement (SAFTA), which came into force in January 2006. Under SAFTA, SAARC member states have also agreed to reduce tariffs on 30 per cent of tariff lines outside the sensitive lists to zero. However, trade within the region has remained below potential at $529 million, rising from $16 million in 2006.

There are no two opinions about untapped trade potential within the grouping, which has remained restricted because of non-trade barriers. The main issues preventing free trade in the region are trade facilitation and labour mobility. Moreover, a hostile political environment has often restricted the free flow of goods and services within the region. India-Pakistan case is often pointed out as a key example in this regard. Billions of dollars of illegal cross-border trade has gone on between the two countries since the conclusion of SAFTA four years ago. Yet the continuing political disputes between India and Pakistan have prevented progress in institutionalizing free trade zone between them.

The Core Issue

Since the terrorist attacks in Mumbai in November 2008, India and Pakistan have not been able to resume the peace process. In July last year, prime ministers Singh and Gilani did agree to resume the peace process, de-linking it from the issue of cross-border terrorism—yet the Composite Dialogue remained on hold, except a meeting between the two countries’ foreign secretaries in February this year. The handing over of three dossiers by Pakistan to India in late April, and Pakistan’s request for access to interrogate the sole surviving Mumbai terror suspect Ajmal Kasab, officers investigating the Mumbai terror attacks, and the magistrate hearing the terror trials in Mumbai did set the ground for the Thimpu meeting between the prime ministers of the two countries.

Only time will tell us whether this ‘sideline’ meeting produces a substantive result in coming months, in terms of resuming the Composite Dialogue, enabling the two pivotal actors of South Asia to cooperate with each for a host of common causes ranging from the struggle for reversing the harmful effect of climate change to the joint fight against al-Qaeda-inspired terrorism in the region.

Now that the Indian court has indicted Kasab on numerous charges of conducting terrorist attacks in Mumbai, and also indirectly implicated the leaders of Pakistan-based Lashkar-e-Tayyiaba and Jamaat-u-Dawa in these attacks, the future of Indo-Pak peace process—whatever new hope the sideline meeting between Prime Ministers Singh and Gilani may have generated—will remain uncertain. So will be the future viability of SAARC as a regional forum, marred with continuing conflict between India and Pakistan.