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SAARC: The Way Ahead

SAARC is nearly 30 years old yet is still weak. Today, South Asia is one of the world's least integrated regions. Members have weak economic ties, issues of national identity persist, and political tensions remain. What lies ahead for SAARC?

SAARC is nearly 30 years old yet is still weak. Today, South Asia is one of the world's least integrated regions. Members have weak economic ties, issues of national identity persist, and political tensions remain. What lies ahead for SAARC?

The South Asian Association for Regional Cooperation (SAARC)-comprising India, Bangladesh, Bhutan, Sri Lanka, Maldives, Nepal, Afghanistan and Pakistan-has been in Texistence as a regional grouping for almost 30 years (with Afghanistan joining in 2007). It has yet, however, to succeed in bringing about closer integration between the member countries. The idea behind SAARC-whose seed was sown by the late Bangladesh President Ziaur Rahman-was to promote regional cooperation and foster economic development and prosperity throughout the region.

While the objectives enunciated in the SAARC charter signed in Dhaka in 1985 were to accelerate
economic growth in the region and build mutual trust among member states, serious problems of cohesion remain and South Asia now stands as one of the least integrated regions in the world. After three decades of existence, intra-regional trade in South Asia is lower than that of other regional groupings. It is estimated that intra-regional trade as a share of South Asia’s total foreign trade was only 5 percent in 2014, against 25.8 percent for Association of Southeast Asian Nations (ASEAN) member countries.

The outcome of the 18th summit of SAARC, held in Kathmandu, Nepal, in November 2014, was not exceptional in any way. No concrete action was taken on the issues of terrorism, trade and foreign investment to validate the theme of the conference, ‘Deeper Integration for Peace and Prosperity.’ It was, as always, full of fanfare and rhetoric, and plenty of handshakes and promises were exchanged. On top of the agenda were three connectivity agreements on road, rail and energy. Only that on energy was signed.

The lack of political will among members to make SAARC a dynamic grouping has been evident since its inception and was again seen in Kathmandu. South Asia is one of the most backward regions in the world and urgently needs development and a higher rate of economic growth. It is home to 23.4 percent of the world’s population but accounts for only 6.66 percent of the world’s gross domestic product (GDP) using the purchasing power parity (PPP) method of calculation. According to a World Bank report, it is home to nearly 44 percent of the world’s poor (570 million) 2 who survive on less than $1.25 a day. Serious socioeconomic issues plague the region, including poverty, illiteracy, inequality, unemployment and malnutrition.

Since the formation of SAARC in December 1985, member states have not been able to strengthen their economic ties so that they could work together towards the development of the region. Their attempts at collaboration on developing their industrial and social sectors, better connectivity and encouraging higher levels of investments have remained lacklustre and weak. The region is also rife with issues of national identity and internal consolidation that have caused political tensions and mistrust among member countries.

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Author

Jayshree Sengupta

Jayshree Sengupta

Jayshree Sengupta was a Senior Fellow (Associate) with ORF's Economy and Growth Programme. Her work focuses on the Indian economy and development, regional cooperation related ...

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