SAARC: Prosperity thru economic ties

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    Thursday, December 12, 2013 –

    SaarcEXPERIENCING convincing economic growth by the Asian economies in last thirty years it can be rightly expected that 21st century will be an Asian century, although achieving this position by Asia will require that the economic growth is equally shared by its all sub-regions. Among various sub-regions of Asia, it is being appreciated that if economies of South Asian countries can overcome the current sluggishness in their growth rates and regain and sustain growth rates achieved during the decade from 1995 to 2005 (5 to 10 percent of GDP) this sub-region can certainly become the fastest growing area in Asia. In this context South Asian scholarly community perceives that South Asia can become a vibrant developing region in Asia if these countries can resolve their major political disputes and hasten economic growth through mutual economic cooperation.

    Mutual economic cooperation by the South Asian countries is necessary to enhance their economic growth rates by increasing intra regional trade and sharing their resources through mutual investments and joint ventures including trade in energy. So far South Asia is lagging behind other regions in intra regional trade and investments mainly because of lack of mutual trust due to their lingering political disputes. While other regions of the world have resolved and managed their political issues on give and take basis and keeping in view the cost and benefit analysis, South Asian countries are still working on the zero sum game theory. This mind set in South Asia has to change and SAARC countries have to get flexible in handling disputes through the spirit of mutual accommodation and keeping in focus the necessity of advancing their economic development through intra regional economic cooperation for alleviating poverty in South Asia and improving standard of living of South Asian people.

    This article examines how South Asian countries can make quick and sustainable progress in resolving political disputes and enhancing economic development by increasing intra regional economic cooperation. It is a common view of strategic community all over the world and particularly in South Asia that till the time trust is built between SAARC countries by creating a sustainable and result oriented dialogue mechanism which can create a definite hope that within a reasonable time frame the political issues will be resolved, it is difficult that the process of intra regional economic cooperation in South Asia can really take off.

    In the context of creating enabling environment for achieving mutual economic cooperation in South Asia by quickly creating a robust dispute resolving mechanism, hastening implementation of South Asian Free Trade Agreement (SAFTA) and initiating the process of mutual investments and joint ventures as confidence building measures (CBMs), very cogent recommendations emerged out of South Asian scholars’ deliberations done during a major international conference organized by Islamabad Policy Research Institute (IPRI) in collaboration with Hanns Seidel Foundation (HSF) Germany (Pakistan Office), on 20-21 November 2013 on a very relevant and timely theme titled “Towards an Asian Century: Future of Economic Cooperation in SAARC Countries”. These recommendations are worth consideration by the leaders of SAARC countries for implementation. Some of these recommendations are being referred to in this article. Dr. Pervaiz Iqbal Cheema, Dean Faculty of Contemporary Studies, National Defence University (NDU), Islamabad, suggested that for creating a sustainable and result oriented dispute resolving mechanism between Pakistan and India it was necessary that the leaders of both countries are willing to resolve the issues and they are also ready to give concessions to each other.

    He stressed that India being a major country in South Asia needed to become more flexible and accommodative towards its all smaller neighbours. The two Indian speakers, Prof. Dr. Savita Pande and Prof. Dr. S. K. Mohanty highlighted the significance of creating peaceful environment in South Asia and removing irritants to realizing the IPI and TAPI gas pipelines to address energy shortages in SAARC countries and also discussed benefits of undertaking intra regional investments. Dr. Salman Shah, a renowned economist and formal federal finance minister of Pakistan and Dr. Kamal Monoo, Member Board of Governors IPRI and Chairman Sumaira Fabrics, Lahore highlighted that to multiply volume of intra regional trade SAARC countries should make their products more competitive in the regional market rather than resorting to providing protection to their less competitive industries and products.

    Dr Barkat-e-Khuda of Bangladesh said that implementation of SAFTA should be hastened by acting upon all SAFTA related agreements and that India should immediately remove all non tariff trade barriers imposed on other SAARC countries. Dr. Akhtar Hussain Shah, an official from KPK government suggested that to increase intra regional trade volume, implementation of SAFTA should be preferred over bilateral and sub regional trade agreements. While Prof. Dr, Ahmed Rashid Khan, Dean Faculty of Social Sciences, Sargodha University recommended to remove the existing political constraints to make South Asian political environment conducive to intra regional economic cooperation, Amb (R) Nihal Rodrigo, former Foreign Secretary of Sri Lanka and former Secretary General of SAARC highlighted the ways of replacing conflict prone environment of South Asia with the concept of preferring peace in the region. Dr Janak Lal Karmacharya of Nepal suggested formation of common energy grids connecting all South Asian countries through India and Pakistan to share surplus electricity within SAARC countries. Whereas the Chinese Scholar Dr. Liu Zongyi emphasized on positive impact of China’s existing economic relations with South Asian countries on SAARC countries future economic integration, the German Scholar Dr. Wolfgang recommended that South Asian leaders should emulate the example of EU countries of resolving their deep seated World War II disputes and achieving success in realizing EU’s economic integration. The two Afghan speakers, Mohammad Saber, a member of Afghan Lower House and Nabi Saroosh, an official of Afghan Economic Ministry favoured an early peace in Afghanistan and recommended ultimate realization of the New Silk Road Initiative since it entailed many commercial advantages for Afghanistan and other SAARC countries.

    Arshi Saleem Hashmi, Assistant Professor in NDU suggested ways and means to improve communication infrastructure to connect SAARC countries to facilitate mutual trade and economic cooperation. Dr Pervez Tahir, former Chief Economist, Government of Pakistan and Sheikh Mohammad Ali, Vice President FPCCI suggested various ways of fast tracking economic cooperation in SAARC countries. The conference was inaugurated by Amb. (R) Riaz Mohammad Khan, former Foreign Secretary of Pakistan, and was concluded by Dr, Ishrat Husain, former Governor of State Bank of Pakistan. In their Inaugural and Concluding addresses both these dignitaries drew attention of South Asian leaders towards according priority to the resolution and management of mutual disputes and making an early breakthrough in achieving economic integration in SAARC countries.

    Source : Pakistan Observer

    —The writer works for IPRI, Islamabad.