Originally Published 2004-12-28 09:09:21 Published on Dec 28, 2004
As he packs his bags for the first foreign policy venture in the new year ¿ the annual summit of the South Asian nations in Dhaka ¿ Prime Minister Manmohan Singh has two options. The default one would be to let the foreign office bureaucracy work out an anodyne declaration of good intentions on future cooperation.
At SAARC, in charge
As he packs his bags for the first foreign policy venture in the new year - the annual summit of the South Asian nations in Dhaka - Prime Minister Manmohan Singh has two options. The default one would be to let the foreign office bureaucracy work out an anodyne declaration of good intentions on future cooperation. Such a statement would be full of rhetoric, bereft of substance. Or he can choose to inject some life into the feckless process of regionalism in the subcontinent, by putting forward some bold ideas on the future of the South Asian Association of Regional Cooperation (SAARC) on the twentieth anniversary of its founding. Singh might not be able to get many of his proposals translated into agreements in Dhaka, but he could lay down the agenda for the SAARC in the coming years. In defining a new direction and in demonstrating the commitment to walk down a different path, Singh would take charge of the SAARC process. 

The SAARC has been crying out for Indian leadership. While the political class in India has acknowledged the importance of South Asian regionalism since the mid 1990s, New Delhi has been reluctant to vigorously lead the organisation. There have been leaders, like Prime Minister Inder Kumar Gujral and Foreign Minister Yashwant Sinha, who thought boldly about the future of SAARC. Prime Minister Atal Bihari Vajpayee threw up some forward-looking ideas like open borders and a common currency for the region. Yet promoting regionalism never gained the prominence it deserved in India's diplomatic agenda during the last few years. The challenges of nuclear policy, the imperatives of engaging great powers and the roller-coaster ride in relations with Pakistan since the mid 1990s, meant there was little room for a purposeful strategy on regional integration. 

In fact, the annual SAARC summits could not even take place because of Indo-Pak tensions. Until a few weeks before the last summit in Islamabad, New Delhi would not even announce the participation by the Indian PM. And when summits did take place after considerable delays in Kathmandu in 2002 and in Islamabad in 2004, issues relating to Indo-Pak relations overshadowed the regional agenda of SAARC. At Kathmandu, Pakistani President Pervez Musharraf's antics of walking up to Vajpayee and shaking his hand, stole the thunder. In Islamabad, the formal talks between Musharraf and Vajpayee robbed the headlines. 

At Dhaka this time, Singh has the opportunity to conceive of a different script for the SAARC summit. For one, Musharraf will not be there to represent Pakistan. The low key prime minister, Shaukat Aziz, will be deputing for him. More importantly, there is a peace process, slow and frustrating as it might be, underway with Pakistan. This gives an opportunity for India to focus on the future of SAARC. Equally important is the fact that Dhaka takes pride in initiating the political effort to create SAARC and would like to see the 20th anniversary become a significant milestone. Used as they are to unproductive summitry, South Asian leaders proclaimed the 12th SAARC summit at Islamabad a big success, thanks to the signing of the framework deal for South Asian Free Trade Agreement. 

But that claim was rather deceptive. What the South Asian leaders did in Islamabad was to announce marriage but postpone the consummation. SAFTA is expected to kick off on January 1, 2006 and be fully implemented only by 2016. The 

Islamabad summit also left difficult issues under SAFTA like rules of origin, sensitive lists, dispute settlement and compensation for least developed countries unresolved. Negotiations on these will be contentious and protracted. No deadlines have been set. South Asian free trade is more of a dream and less of a reality at this moment. 

If Singh makes the determination that regional integration of the subcontinent is in India's economic and strategic interest, he should have little difficulty in agreeing with the notion that India must do everything politically to accelerate the process. Leaving it to the South Asian bureaucracies to achieve regional free trade is to invite further delays. Singh will also recognise that as the largest economy in the region, it is India that will have to take the lead. Two other geographic facts offer India the opportunity to unilaterally promote the economic integration of the subcontinent. Only India shares borders with all other countries of South Asia. And none of the others have common frontiers. 

If India has liberal bilateral trading arrangements with all other states in South Asia, a de facto free trade area will emerge in the region. India does not have to wait for the SAFTA to materialise over the next decade. India already has some sort of free trade with Bhutan, Nepal and Sri Lanka. Action, however, is needed on trade ties with Bangladesh and Pakistan. Both these countries complain bitterly about India's protected market and its tariff and non-tariff barriers. For all of India's rhetoric about protectionism in the developed world, its own market is the least open in the region. Despite enjoying massive trade surpluses with its neighbours, India has been niggardly in offering better market access to them. 

If Singh dusts up the files on previous prime ministerial visits to Bangladesh, he will find the promises on market access made by New Delhi, but not kept. At Dhaka, Singh has an opportunity to change this. A simple unilateral offer by India to grant duty free access to all goods from its neighbourhood which have a reasonable content, by value, of Indian material - say 30 or 40 per cent - will dramatically promote regional economic integration. Such a move should allow all round growth by opening the door for the movement of Indian capital to its neighbourhood, create market access for the smaller countries and generate regional interdependence. 

If the objective is to achieve free trade, the initiative is in India's hands to create a more liberal trading order and lift all boats in the subcontinent. The SAARC summit at Dhaka provides an unprecedented opportunity for Singh to leave a firm imprint on India's foreign policy towards the neighbourhood. He should be grabbing it with both hands to unveil a long-term vision for regional cooperation as well as unilateral steps to begin its realisation.

The author is Professor of South Asian Studies, Jawaharlal Nehru University, New Delhi, and Advisor, US Studies Programme, Observer Research Foundation.

Courtesy: Indian Express, New Delhi, December 28, 2004

* Views expressed in this article are those of the author and do not necessarily reflect those of Observer Research Foundation.
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