SAARC: Toward Greater Cooperation

-Aabha Dixit, Research Associate, IDSA



Belying most pessimistic expectations, the South Asian Association for Regional Cooperation (SAARC) recently completed its first decade in existence and held its ninth summit meeting in Male in May 1997, where it reaffirmed its determination to hasten the pace of regional economic cooperation. Officially inaugurated in December 1985, SAARC which presently involves seven countries in the region, represents 1.2 billion people, a fifth of humanity.1 In its second decade in existence, the organisation has not only come to stay, but the mood among member countries is distinctly optimistic. There is a growing conviction among these countries that the benefits of weaving a closer economic community can be bolstered by the possibility of opening a second track of a harmonious regional relationship, which, in turn, would help overcome enormous political and security problems in the region. This optimism stems from the present role of SAARC in fulfilling an important task of allowing for the forum to provide a platform for formal contact between countries in the region.2

A major factor in the positive prognostication about SAARC has been the slow realisation of a close and mutually reinforcing relationship between new economic policies followed by South Asian governments and regional cooperation. This in turn is seen to be in harmony with the larger framework of global inter-dependence. Similarly, as economies in the region gradually open themselves to market forces, there is also a growing awareness that the costs of non-cooperation and political confrontation amongst themselves will rise exponentially in the coming decade.3 It is logical, therefore, that SAARC countries, which face similar problems of deep-seated poverty, rapid population increase, low per capita income growth rate, high unemployment and under-employment, unsatisfactory human development, inadequate supply of skilled human resources, environmental degradation, sluggish private sector, influential public sector, slow growth of the non-agricultural economy, high rate of energy deficiency and continued vulnerability to oil prices, terrorism and internal ethnic conflicts, emerging problems of trans-national character like drug trafficking, AIDS, terrorism, environmental degradation and conservation of bio-diversity, will start looking within the region to tackle these scourges sooner than later.

The focus of this essay is two-fold. First, it will seek to trace the evolution of the organisation itself, which has remarkably crossed major hurdles of misperception, suspicion and lack of trust in its first decade of existence. The essay would also seek to critically evaluate the first decade of SAARC. The second part of the essay will focus on the agenda that needs to be undertaken by SAARC in its second decade, if predictions of greater regional understanding and cooperation are to be achieved.

Brief History

The initiative for SAARC came from Bangladesh in 1979 when President Zia-ur-Rahman proposed a South Asian regional grouping. Coming in the backdrop of the success of the European Community (EC) and Association of South-East Asian Nations (ASEAN), it was logical that the idea of a regional community in South Asian would have surfaced sooner than later. But the timing of President Zia-ur-Rahman's suggestion appeared to have poured cold water over the proposal instantly. India, the largest country in the region, was initially indifferent and hesitant for two reasons.4 New Delhi apprehended that the Zia proposal probably had indirect Western sponsorship, as it was perceived to have been made in the context of the Soviet military intervention in Afghanistan. Traditionally, New Delhi had always tried to resist the incursion of external powers into the region, which it believed was being attempted through several methods.5 A few years before the Zia proposal, there had been Western suggestions that the complex river waters question in the subcontinent could be solved through multilateral cooperation. The second reason was strategic in nature. Mrs Indira Gandhi, who had returned to power after a gap of three years (1977-80), perceived that with the region being sucked into the vortex of superpower rivalry because of the Afghan question, a South Asian regional grouping could possibly become a cover for the building of an anti-Soviet and pro-US South Asian front, which her government felt was not compatible with India's regional and broader strategic interests.

Beneath these obvious fears perceived by New Delhi, there was the revival of another more basic fear. India believed that the proposed South Asian forum was being envisaged by the smaller neighbours to put collective pressure on India on issues affecting them individually in relation to India. Thus, the new forum would enable neighbours to "gang up" against India. Conceptually as well, New Delhi under the influence of its first Prime Minister, Jawaharlal Nehru, believed in a pan-Asian strategy for cooperation. Lowering these ambitions to South Asia would mean accepting a diminution of India's influence in Asia as a whole. As a result, these fears produced a muted reaction from New Delhi which clearly felt that it could not embrace the idea without reservations. Nor could it reject the concept for fear of being dubbed hegemonistic. In what seemed an attempt to develop a middle ground, India laid down two pre-conditions for its participation in the proposed regional forum. First, that the organisation would not discuss bilateral and contentious issues, and second, that decisions in the forum would be taken up only on the basis of unanimity. This policy was spelled out clearly by Mrs Indira Gandhi at the first ministerial meeting of South Asian countries in 1983. She said:

"We have had our political differences in the past and have even now but economic cooperation will give a strong impetus to closer friendship and greater stability in South Asia...we should avoid bilateral differences and aim at concentrating on what unites us and helps us in our common quest for peace and development. We are all equals. We are against exploitation and domination. We want to be friends with all on a footing of equality. We should ever be vigilant against the attempts of external powers to influence our functioning."

While India approached the concept of a regional organisation in South Asia with a deep-seated scepticism, the second largest country in the region--Pakistan--appeared to be seized with its own set of suspicions about the proposed organisation. Pakistan, which after 1947, consciously strove to develop economic linkages outside the region for fear of being economically swamped by the larger Indian economy, came to perceive SAARC as a body that would appear to benefit a diversified and resilient economy like India. Islamabad felt that such a move would be rejected by the Pakistani business community who, in turn, would put pressure on the military government.6 The second factor causing concern to General Zia-ul-Haq's military government in Pakistan was that it wanted the resolution of outstanding political disputes like Jammu and Kashmir before economic cooperation with India, bilaterally or in a regional framework, could be contemplated. This position was a natural derivative of Islamabad's long held political ideology that the truest test of New Delhi's acceptance of the Two Nation Theory could be found in what it regarded to be a satisfactory solution to the Jammu and Kashmir dispute. It is entirely conceivable that were the idea of SAARC to have originated from New Delhi, it would have received a very tepid response from Islamabad. The converse would also probably have been true.

Smaller countries in the region like Nepal, Sri Lanka and Bangladesh, during that period, often viewed India as a regional bully. This small nation psyche has often impelled these to evolve distinct identities and perceptions, despite being economically tied to India. A contributory factor for such moves in that period was the presence of non-democratic political leadership in these countries. Nepal and Bhutan had monarchies, without representative democracy, Bangladesh was ruled by President Zia-ur-Rahman, who had effected a coup to come into power and Maldives was notionally democratic. Sri Lanka was perhaps the only other country in the region to have developed a democratic culture, but the growing ethnic problem in the northern parts of the country had already started creating tensions in its relations with India. Expectedly, these countries often tried to take advantage of their economic dependence on India to use it as an instrument to assert their own political interests.7 When viewed within this spectrum, smaller countries were probably looking at SAARC as a forum which provided opportunities for the smaller states of the region to assert their independence and national identity, specially from India.

Between the time the idea of SAARC was proposed by President Zia-ur-Rahman in 1979 and the formal inauguration of the organisation at the Dhaka Summit meeting in December 1985, countries appeared to move cautiously, trying to look beyond the pile of mistrust and to gauge the reaction of other countries. In November 1980, Bangladesh circulated a paper, which conceptually outlined the regional organisation. The Bangladesh paper became the basis for meetings of countries in the region which were held in Colombo in 1981, Islamabad in 1982 and Dhaka in 1983. In August 1983, a South Asian Regional Cooperation (SARC) was formalised. Between August 1983 and December 1985, activity towards creating the SAARC structure appeared to have been stepped up with frequent meetings at Foreign Secretary and Ministerial levels. Member states were able to identify areas of common economic interest and the Integrated Programme of Action (IPA) got off the ground even before the first Dhaka Summit in December 1985.

Evaluation of SAARC's Decade Long Existence

The progress of SAARC in its first decade was slow and often tortuous. Though SAARC moved faster in institutionalising its working procedures—defining non-controversial issues of cooperation, hierarchy of meetings, setting up of the Secretariat, etc—progress in concrete fields was disappointing. Economic matters did not move in any meaningful way for the first five years. But, on the other hand, this slow learning curve also flagged an important point that howsoever haltingly, countries in South Asia had accepted the idea of regional cooperation.8 Ten years down the road, the concept is there to stay and grow. By foregoing speed for strong institutional foundations, which itself was not a deliberate stratagem but the result of differing political priorities of member states, SAARC has been able to weather political storms that have raged in the region during this period.

Wide-ranging activities and agreements among the seven South Asian countries have been signed in the first decade, but taken together, it has not helped to either build a more cohesive economic grouping of the South Asian countries or instill enough confidence among its leaders and people at large, to fully realise the benefits of cooperation. The long-term goal of building a single South Asian market and developing complementarities in, and creating synergies of, their respective economies was not attempted under SAARC auspices in this period.

The creation of a permanent Secretariat in Kathmandu may have brought an element of continuity, but its ability to steer an independent course of action was severely hampered by the impact of the political state of affairs between member states as well as the small size of the Secretariat. Presently it was 20 members drawn from the member countries, which is woefully inadequate to even handle the present set of activities. Holding of summit meetings of heads of government, mandated by the Dhaka Declaration of 1985, to be held every two years, has seen great uncertainty itself. On numerous occasions, countries have threatened not to attend the summit meetings and a characteristic of the summit meetings is the great suspense whether all leaders will be present.9 Fortunately, collective pressures have ensured the presence of all countries at these summit meetings.

At the summit meetings, politics seems to have dominated the informal agenda, with efforts to expand regional cooperation being agreed to at an incremental pace. The first summit identified issues relating to women in development, prevention of drug trafficking and drug abuse. Special attention was devoted to child health, education and shelter. An Integrated Programme of Action was also drawn up in Dhaka (1985). It included cooperation in the fields of agriculture, rural development, meteorology, telecommunications, scientific and technological cooperation, health and population activities, transport, postal services, sport, art and culture. In the intervening period between the first and second summit in Bangalore, the SAARC Secretariat was set up, headquartered in Kathmandu. The second summit (1986) saw new areas of radio broadcasting and television, tourism, SAARC documentation centre, SAARC scholarships, fellowships and university chairs and an Organised Volunteer Programme for youth in the fields of agriculture and forestry extension work being introduced. The third summit at Kathmandu (1987) underscored the problems dealing with environmental issues like deforestation and natural disasters. Two other important issues were agreed to in Kathmandu--the creation of a South Asian Food Security Reserve and the SAARC Regional Convention on Suppression of Terrorism which became operational by August 1988. The fourth summit at Islamabad in 1988 sought to further the aim of "people-to-people" contact and it was decided to exempt judges and national parliamentarians of member states from visa requirements and allow them to travel in the region under special SAARC travel documents. At this summit, implicit political difficulties surfaced, when India supported Afghanistan's entry into SAARC. Still ruled by a Communist government, it saw opposition from Pakistan, which was involved in the resistance effort. A compromise was effected, which was reflected in the summit declaration. Admission for another country into SAARC was to be governed by the principle of unanimity, which has stalled SAARC's expansion since then.

Between 1988 and 1995, the four summit meetings have tended to be lacklustre, with greater focus being generated on bilateral dialogues on the margins, principally between India and Pakistan, whose bilateral relations during this period had skidded to new lows. The first summit of the second decade is scheduled to take place in Male (Maldives) in May 1997. Between the last summit meeting in Dhaka and the next one in Male, SAARC passed its first decade milestone, which was commemorated during the 16th session of the Council of Ministers of SAARC countries in New Delhi in December 1995. The SAARC commemorative session held along with the regular meeting of the SAARC Foreign Ministers showed both that deep differences exist among member states about the functions of SAARC as well as in its future course of action.

The Council of Ministers which meets twice in between summit meetings10 and is composed of the Foreign Ministers of the seven member states, had assumed importance for a third fact. Exactly 10 years after the creation of SAARC itself, the first major tangible economic objective, the South Asian Preferential Trade Arrangement (SAPTA), became operational on December 7, 1995.11 The basic premise of SAPTA has been to make member states reduce tariffs on selected commodities offered in the intra-SAARC region. Critics consider that the 226 items12 put up for concessional tariff do not account for much. In fact, a recent study put this figure at 6 per cent of the total intra-SAARC trade, which itself is abysmally low as compared to a percentage of South Asia's trade with the rest of the world. There is also a feeling that most of the areas in which countries have offered duty reductions, are ones in which trading is very limited or virtually non-existent. But the fact that countries have granted tariff concessions has more important psychological connotations. In a region beset with mutual suspicion and hostility and in which countries like Pakistan had refused to talk to its neighbour India on outstanding issues, the presence of the then Pakistani Foreign Minister, Sardar Aseff Ahmed Ali Khan, in the SAARC forum was not to be ignored. Clearly Pakistan considers SAARC and its Charter to be important so as not to violate it by either missing the meeting or bringing up the Kashmir issue, which it does at other international meetings with routine regularity. In fact, the statement made by the Pakistani Foreign Minister in his commemorative session speech was remarkably free of undertones and harsh rhetoric, except for an ending passage in which he stated that a "durable peace would require the courage to address the basic issues and differences that impact on our relations. There is no reason why this common forum of ours should not be used for removing such impediments."

If SAPTA was naturally the focus of the New Delhi meeting in 1995, and understandably so, equally important in terms of perceptions was the feeling among the member states that SAPTA is not an end in itself but merely a half way point in reaching towards an eventual free trade area in South Asia (SAFTA). It is interesting that except for Pakistan, all other Foreign Ministers had unequivocally endorsed the concept of SAFTA in their speeches. Given Islamabad's policy of slowing down both people-to-people contact as well as normalisation of business and economic contacts with India, acceptance of SAFTA would have meant an erosion of its "no contact" stance with India pursued by the former Benazir Bhutto government. But the highlight of the debate on SAPTA in the New Delhi meeting was then External Affairs Minister Pranab Mukherjee's exhortation to other states to set a time target of 2000 AD to usher in SAFTA. This apparently evoked a responsive chord among other delegations, who, in many ways, had now been urging a more accelerated economic integration of the region. Bangladesh, for example, put forward specific proposals on a host of issues which included a sweeping agenda for SAARC in the second decade of its existence. Apart from stating decisively that SAPTA should "boldly" be converted into SAFTA, the then Bangladesh Foreign Minister, Mostafizur Rahman, outlined other proposals which included abolishing visas on a progressive scale, substantial increase in intra-regional student mobility, invigorating land and rail routes, prevention of environmental degradation and sharing of waters, which was an implicit reference to the Farakka dispute.13 The creation of SAFTA was reiterated with greater vigour during the last meeting of Foreign Ministers in December 1996.

The issue was successfully taken up by the Indian Prime Minister at the Male Summit, where the 12-page final declaration was able to agree on bringing forward the target date for SAFTA to 2001. This was yet another example of positive cooperation among regional leaders, which left Nawaz Sharif with no choice but to acquiesce.14

The most interesting aspect of the stock taking undertaken by the Foreign Ministers in their last two meetings (between the New Delhi and Male Summit meetings) has been their ability to demand radical steps in the field of regional cooperation, and economic and political integration. This theme was emphasised with greater vigour during the Male Summit meeting as well. In the years 1981-85, when the idea of a regional cooperation was mooted and till the time the Charter was adopted in Dhaka, most countries which held informal parleys at different locations within and outside the region, were hesitant to take leaps in the name of regional cooperation. At the time, it was their perception that political issues be kept out of the purview of regional cooperation because of the possibility of big brother India squeezing their hands. But ten years later, the situation has altered dramatically. It has been the smaller states, namely, Bangladesh, Maldives, Bhutan and Nepal that have sought a greater inter-active role for SAARC in conflict resolution and confidence building measures. Both issues have political overtones and these countries, mindful of the Charter, have suggested that these are ideas for SAARC to take up in its second decade. The Foreign Minister of tiny Maldives said at the Commemorative Session meeting in 1995 that there should be the creation of "a mechanism of exploratory nature to deal with acute problems in the region (which) may be an advantageous exercise in raising the regional cooperation in South Asia to a higher plane." Bangladesh went even further in suggesting the creation of "SAARC Conciliation Groups," whose mandate would be "to bring reconciliation between member states with disputes."

Apart from the political overtones of such suggestions which hardly bring smiles or endorsement to India and Pakistan, it was felt by the smaller countries that such matters need to be looked at from another angle as well. After abandoning the alarmist theory that the flooding of their markets by India could result from greater economic integration, the smaller states, have belatedly realised that they have a lot to gain from economic integration instead. In this pursuit of increasing their economic options, these states also realise that unless outstanding political problems in the region are solved, there would be heavily defined limits to economic integration.

The New Delhi Foreign Ministers meetings in 1995 and 1996 have stressed on rapid growth in the activities under SAARC, but there has been discordance manifested in the meetings also. Be it the issue of extending the visa exemption scheme, suggestions to have regional confidence-building measures (CBMs), increasing people-to-people contact, creating economic institutions or linking all capitals by cheap air fares, the differences stemmed from fundamental differences rather than finding faults in the schemes themselves. SAARC may not be a living and vibrant reality at the popular level or in public perception in its first decade of existence, but the creation of institutional links through numerous technical committees and other bodies, has ensured the creation of a SAARC steel frame, much in the same way as the European Community, that in turn has allowed the SAARC process to continue without break on account of bilateral tensions. It is this process on which the member states are banking today to build a bigger and more visible regional organisation.

Efforts to Broaden SAARC Agenda

Although SAARC was created with the idea of promoting cooperation among countries of the region, its scope and programme of action were devoid of political, military and bilateral issues, making it in a de facto manner, an attempt at inducing CBMs at a regional level through multilateral instruments. In a sense, SAARC has been a unique attempt in trying to create confidence among member states, without the organisation being held together either by a common security perception, eg, ASEAN or a military alliance, eg, North Atlantic Treaty Organisation (NATO) and Australia-New Zealand-United States (ANZUS). It has consciously sought to de-politicise the regional CBM route by refusing to allow any country to raise bilateral issues or other issues concerning security or internal developments of another country.

Nevertheless, efforts to create the link between political, security and economic issues have been attempted in the past by several countries in the region. India has been till now a notable exception. At the first summit itself, Pakistan's President Zia-ul-Haq sought regional arrangements for mutual confidence building by proposing a collective pledge by member states to renounce the threat or use of force against another. General Zia also referred to the issue of nuclear weapons and wanted SAARC to take steps to eliminate these weapons. Former Sri Lankan President Ranasinghe Premadasa at the same summit pushed his proposal for the possibility to hold an emergency SAARC summit to "deal with the issues of controversy" which could "avoid escalation of such events a safeguard against outside interference in South Asia." These ideas have been routinely re-visited by Pakistani and Sri Lankan leaders in subsequent summit meetings. But the principle of unanimity has stalled any further discussion on the matter, clearly revealing that the conferment of the veto power on every country tends to stall the pace of incorporation of new ideas. But, at the same time, it allows these ideas the necessary time to be considered by countries over a period of time, which ensures that the organisation itself is not undermined by newer ideas.

India has been the principal opponent of creating a linkage between political and economic issues. The late Prime Minister Rajiv Gandhi had stated at the first summit meeting itself that SAARC was evolved keeping in mind the realities of the region and was not a means of merging the bilateral relationships into a "common regional entity." But rather to fit South Asian cooperation into each state's foreign policy as "an additional dimension."

The Indian refusal to allow for a widening of the SAARC agenda was the result of a comprehensive strategy that it had thought out in the early 1980s. This strategy had five components:

(a) pursue regional cooperation in trade, manufacturing, finance, energy, planning, S&T, food and agriculture, environment;

(b) initiate and expand people-to-people contact to enhance cultural identities and civilisational consciousness through which it hoped to break mental barriers of division and divergence imposed and nursed by narrow political vested interests of the state structure;

(c) evolve regional consensus to the extent possible on important global strategic and economic issues like disarmament, non-interference, international trade, investment, development assistance, transfer of technology, sustainable development;

(d) keep bilateral conflicts out of the regional agenda; and

(e) keep regional affairs as far as possible from the undesirable and divisive extra-regional influence as possible.

Given their overwhelming presence within SAARC, these elements were not only incorporated into the SAARC Charter, but used to prevent the broadening of the agenda at subsequent summit meetings. India's fears of bilateral and controversial issues derailing the already hesitant and slow moving SAARC process are real. It is also true that no other regional forum has been able to resolve the bilateral problems of its member countries. All that has been possible is to moderate and soften such problems and that is being done informally in SAARC as well. From the Indian point of view, SAARC cannot substitute the bilateral CBM process for two reasons:

(i) SAARC cannot be equated on the lines of the East-West dialogue in Europe. There is no ideological divide and neither are two groups of countries present and opposed to each other; and

(ii) SAARC cannot handle many issues, specially military related ones, which are intrinsic to the CBM experience, without a substantial revision of the Charter, a process that might end up unhinging the organisation itself.

Undoubtedly, there are misgivings about India's policies vis-a-vis other South Asian countries and also about its due place in the international community.

In the second decade of its existence, issues relating to the agenda, the direction and pace of regional integration will become extremely important and it will be imperative for New Delhi to re-consider its earlier approach. If the Indian position in Male was any indication, such an evaluation is already taking place and the Prime Minister himself is leading the charge for providing a fresh impetus to New Delhi's existing positions. By keeping the SAARC agenda limited to non-controversial issues, India along with other countries was successful in ensuring that the organisation developed strong institutional structures. If pace and direction were sacrificed for consolidation, in the second decade, the emphasis must shift conversely, if the structure is not to become unwieldy and moribund because of the lack of new initiatives that are required to invigorate SAARC and allow it to further the process of economic integration of the region through SAFTA.

Ninth Summit in Male--May 1997

Although the ninth summit meeting in Male was dominated by the summit meeting between Prime Minister I.K. Gujral and his Pakistani counterpart, the summit was able to achieve several important milestones. First, the acceptance of advancing the target date for SAFTA from 2005 to 2001 was hailed as a major step forward. With the operationalisation of SAFTA, experts believe that the present low volume of intra-SAARC trade which hovers at 3 per cent could be dramatically boosted to over 10 per cent in the next five years.15 The second highlight was the acceptance of sub-regional cooperation. This had become a sticking point with Pakistan objecting to such a scheme claiming the ulterior motive was to "isolate Pakistan." But strong insistence from Nepal and Bangladesh, which see obvious benefits from adopting a fast track approach in fostering closer economic ties with India, stymied Islamabad's efforts, finally allowing for sub-regional cooperation to be accepted as a desirable goal within the overall framework of SAARC. Of immediate interest to Bhutan, Bangladesh and Nepal, which form along with India the "growth quadrangle," is cooperation in specific projects for water resources and energy, which they believe will serve as a "building block" for sub-regional cooperation.16 Other areas where SAARC countries have committed themselves to intensifying their efforts include fighting terrorism and drug trafficking, non-use of force and non-interference in each other's internal affairs.17 The summit also took a big step towards evaluating and improving SAARC's work charter by accepting the Pakistani suggestion for setting up an Eminent Persons Group (EPG) which would conduct a comprehensive evaluation of SAARC's performance with a view to "revitalising" it and "enhancing" mutual cooperation.18 A happy augury for the future of SAARC was also provided by Prime Minister Gujral's suggestion that SAARC should have a long-term "vision" with a target date of 2020. The Male Declaration also expressed its determination to speed up the economic and trade linkages, with greater focus on non-military threats to regional security which include desertification, poverty, environmental degradation and improving the status of women and children. The Male Summit also decided to hold its next meeting in Sri Lanka.

Like all vibrant organisations, the summit also witnessed the infusion of new ideas and significantly these came from the smaller countries. Sri Lanka's Prime Minister Chandrika Kumaratunga was categorical in stating that lack of progress in SAARC was because of "lack of sufficient political will." Kumaratunga suggested that to overcome this problem, SAARC leaders should meet frequently, informally and in confidential meetings to address all matters of common concern. Maldives and Bangladesh also reiterated the themes of informal political discussions, creating conflict resolution groups and allowing a second informal track amongst the summit leaders to discuss political and other issues that are not part of the SAARC Charter.

Agenda for the Second Decade

As SAARC enters its second decade of existence, there has been a general acceptance of the utility of the organisation amongst the smaller and larger states alike. As was evident in the 1995 and 1996 New Delhi meetings of Foreign Ministers, most members states are exploring the possibilities of rapid and major leaps that the organisation would need to take on a host of issues to accelerate the pace of integration. But having said that, there are a few countries which continue to remain a reservoir of scepticism about elements of this package, which would accelerate the integration process. Despite the economies of the region opening to the play of market forces, they continue to be guided by strong individual extra-regional economic ties and the presence of powerful domestic economic vested interests which fear that regional cooperation would disturb their existing business monopolies. Western multinationals have been exploring possibilities of shifting production bases into South Asia, but there has been resistance from countries in the region itself to accepting goods manufactured in another country. Similarly, while governments feel compelled to open their markets to foreign investment, latent nationalist opposition in most SAARC countries, fuelled by vested economic interests, has been instrumental in slowing down a lateral integrative process within the region. A good example is the case study of the Suzuki car production facilities. Similar cars are produced in India and Pakistan, but either will not accept the sale of the same car, made in the other country. Nationalism and a sense of pride prevent a business oriented decision which would not only allow for larger production facilities but which would bring down substantially the cost of the car to the consumer. Such attitudes, which are prevalent not just between India and Pakistan, but between other countries in the region, have prevented the most optimal utilisation of resources in South Asia. Difficulties such as these would dog SAARC's attempts to create SAFTA in its second decade, unless efforts are made to overcome these hurdles.

Therefore, there has to be a complete reorientation of the manner in which countries perceive other member states in the organisation. The sooner elites in all SAARC countries realise that the integration of their economies with the global and regional economies is meant to serve the ordinary citizen of South Asia, the better the chances for SAARC to fulfil its agenda in the coming decade. Reform in SAARC's agenda, therefore, must not be limited to the economic sphere alone. There must be a gradual widening of the agenda to include previously excluded issues as well. The small reservoir of trust on which SAARC continues to stand today can only be increased if the agenda gets widened and deepened.

Fortunately, there are several hopeful signs that would allow for such an expansion. There has been a sea change in South Asia since 1979. Although India-Pakistan tensions continue in an unremitting fashion, it has not led to SAARC institutions being mortally wounded as a result of this rivalry. Nevertheless, its effects on the working of these institutions has been noticeable because meetings have been held infrequently. But changes in the past 15 years have been dramatic. The most important has been the gradual democratisation of political systems in South Asia. Bangladesh, Pakistan and Nepal have democratically elected governments, which itself provides hope that public pressure on governments to work towards regional integration is possible. An interesting example of such pressures can be seen in the recent decision of Pakistan to buy sugar from India. In the present state of relations between the two countries, a decade ago, buying sugar from a traditional adversary would have invited immediate criticism. But in the recent case, criticism has been very muted because market forces eventually prevailed. Indian sugar was the cheapest available in the international market and despite the ousted Benazir Bhutto government's policy of having restrictive contacts with India, the $80 million deal was successfully concluded. People in the region are beginning to see direct benefits from the such trade. Another example was a ban that the Indian Film Artistes Association imposed on Nusrat Fateh Ali Khan, a renowned Pakistani singer for his critical comments about Indian artistes. But many prominent artists in India questioned the ban and have vowed to work with the Pakistani maestro, who in turn has been publicly asking his government to allow Indian artistes to perform in Pakistan.19

The second important change in the past decade has been the ability of information technology to cut across artificial barriers. Culture and entertainment is freely available through satellite technology and attempts by governments to insulate their populations have failed miserably. A clear manifestation of this can be found in surveys in India and Pakistan, where general acceptance of information put out by state run agencies is considered unreliable, specially when it is directed towards the other. The availability of options to view news programmes from other countries has contributed to this phenomenon. This has led to the breaking down of stereotypical images that were deliberately fostered by state elites. Satellite television channels dominate viewing in many homes in South Asia and, therefore, government controlled media has seen decreasing credibility amongst this section of population. Also, with private and international companies entering the fray, the access to propaganda free information within the region has increased greatly. Indian satellite companies have started focussing more on developments in the neighbourhood, using local correspondents.

The third change has been the relative de-ideologisation of relations between countries in South Asia. With the end of the Cold War and collapse of the Soviet Union, confrontational politics which was subsumed under the guise of ideology has crumbled. Correspondingly there has been a switch towards economic development and the unleashing of market forces to attract foreign investment. Governments in South Asia, irrespective of their ideological basis are pursuing private capital and foreign investment. A positive fall-out has been the attempts by multinational corporations to derive synergistic benefits from their presence in two or more South Asian countries.20

In the light of these changes, ground realities in South Asia can be expected to undergo substantial change in the coming decade. For SAARC to cope with these changes and remain relevant to the process of economic integration of the region, a multi-pronged approach would have to be adopted. Broad categorisation of the areas where change or renewed emphasis will be required include:


(a) This will perhaps be the most sensitive as well as the biggest change which can propel the SAARC agenda a long way forward. There will be resistance from all countries to allowing political issues, particularly outstanding bilateral issues, to be taken up in formal meetings. But in the second decade, SAARC must foster a change in the schedule of meetings of heads of government as well as Foreign Ministers. Like the EC or ASEAN, a greatly increased frequency of meetings allows leaders to build up trust and confidence, breaking down the barriers of formality. In these informal sessions, bilateral issues could be discussed, without prejudice to their existing national positions on issues.

(b) There must a gradual introduction of political issues into the SAARC agenda. In order to develop consensus amongst the member states, the SAARC Charter could be strengthened with an Optional Protocol, which would allow for the setting up of Conflict Conciliation Groups (CCG). These CCGs could be activated when all parties to a particular dispute agree to seek SAARC help, either to investigate the particular problem, or conduct a fact finding study or adjudicate on the issue. The composition of the CCG would include a representative each from the parties seeking help of the group as well as one or more representatives from other member states to ensure impartiality. Such a group would initially be useful to settle problems such as those relating to water disputes that affect more than two countries or refugee problems. Such groups could take up factual studies of problems relating to child labour, exploitation of women and children and other issues on which countries from within the region are signatories to international statutes.21

(c) The third innovation within the political sphere must be to allow for political discussions amongst the leaders on international issues, specially those relating to common problems of international peace and security, environment, trade and technology transfers, etc. Presently, the existing mechanism does not allow for such discussions, with the summit statements being crafted by bureaucrats well before the summit meeting begins. Such a move does not allow for these leaders to exchange views on matters of international interest which affect the region as a whole. These meetings must provide for a basis on which SAARC countries could eventually coordinate their positions in international fora on these issues. Take the example of the Comprehensive Test Ban Treaty (CTBT) negotiations in Geneva. India and Pakistan, notwithstanding their own mistrust over nuclear matters, had similar concerns about the proposed CTBT. Rather than work together, the two countries consciously fought shy of each other in Geneva, diluting collective strength that could have helped them.


(a) Structural changes in the Secretariat are needed to make it more responsive to existing needs as well as to act as a catalyst for new ideas and quicker implementation. Among the structural changes, the size of the Secretariat should be increased considerably from the present strength of 20 to over 200 to deal with the wide range of issues being undertaken by SAARC under the IPA. Although the IPA presently covers 11 areas, it would be more efficient to give special focus to two or three areas. These areas should receive additional funding, greater staff attention and creation of a graduated but quick progress chart. To fund the increased activities of the SAARC Secretariat, all countries should pay, in addition to their existing contributions, 1 per cent of their defence budgets as additional cess.

(b) The second important structural change would be for the Secretariat to schedule into its calendar at least three summit meetings of heads of government and Foreign Ministers every year, which would not necessarily result in declarations being issued. At the same time, there should be more frequent meetings of Ministers holding other portfolios.

(c) On the eve of important international meetings like the UN General Assembly or specialised conferences, the Secretariat should be allowed to take the initiative to organise meetings with a view to developing a common position on various issues affecting the SAARC countries.

(d) Greater freedom to the Secretariat to prepare position papers on issues of multilateral interest in the region itself. These could initially be limited to those issues on which countries concerned give the Secretariat the permission to undertake research activity. Subsequently, the Secretariat could be allowed some freedom to develop ideas on selected issues.

(e) In view of the endorsement of SAFTA by the year 2000 AD, the Secretariat should be given the task of developing position papers on crucial issues like impact of lowering of tariff barriers on national economies, steps to boost intra-SAARC trade, facilitating easier movement of goods and people across borders for economic activity. These issues are important to achieve practical results from the commitment to SAFTA.22

(f) There are already suggestions that SAARC's objectives could be met through the creation of a SAARC Parliament. While this could be a laudable objective for a well integrated economic community, the Secretariat could undertake a concept paper for discussion in member countries on evolving such an institution. As an achievable goal, setting up of a SAARC Assembly could be envisaged. This assembly to begin with may only have deliberative and not legislative functions.

(g) To make SAARC reach grassroot levels in the region, the Secretariat should involve itself with non-governmental organisations (NGOs) for coordinating and augmenting economic and infrastructural assistance. There would be a plethora of NGOs willing to associate themselves with the Secretariat, but care would have to be taken to coopt only those with impeccable credentials.

Confidence-Building Measures

(a) Countries in the region should agree to work on several pilot projects that would seek to integrate the economies of the countries. These could be taken up in areas of socio-economic development like:

(i) Harnessing river waters for irrigation. There are several rivers in the subcontinent that flow through three countries. The least contentious of these rivers could be taken up either for building dams, or for generating hydro-electric power, which could be shared by the countries in the region on an agreed basis. The effort should not merely be towards building the dams or hydro-electricity project, but in consciously trying to use manpower, material and technology available within the region. This conditionality might make the project slightly expensive, but in the long run would provide for useful enhancing of trust and confidence among the countries. Similarly, the maintenance and management of the projects should be multilateral in character.

(ii) Creating anti-flooding structures to prevent deluges that are a regular occurrence on trans-national river systems in the region. The Indus and Brahmaputra river systems inundate large tracts of land in Pakistan, India, Bangladesh, Nepal and Bhutan, causing considerable loss of life and damage to property. With all these countries relying on agriculture, the spiral effect on the economies is massive. A single flood in Pakistan by the Indus wiped out an entire cotton croup which wreaked havoc on the economy. Better information about flooding patterns, utilisation of technologies developed inside the SAARC region to prevent flooding could be shared in the region as well. All countries could be linked through emergency lines of communication to take coordinated measures in times of natural disasters.

(iii) Create centres for conducting research in providing cheap housing for the poor, solving the drinking water problem, containing the population explosion in the subcontinent, improving productivity in agriculture, rural developmental schemes, etc. Greater use of bio-technology in science based agriculture--new techniques of plant breeding involving genetic engineering, protoplast fusion, tissue culture, developing high yielding varieties of food crops and fruit trees and fast growing and stress resistant agricultural and silvicultural plants for easier and rapid growth. Integrated programmes for evaluation, validation and production of biological fertilisers, in addition to improving yield, productivity and disease resistance of the major food crops using newer technologies. Bio-tech for animal husbandry to improve livestock. Fish production and prawn aquaculture through bio-technology innovations. Health care, bio-medical research, AIDS, etc, renewable energy and rural industrialisation. Information technology. Water resource management for effective utilisation of water for irrigation and drinking, drought management, etc.

(iv) There must sub-regional cooperation amongst SAARC members--integrated development of sub-regions comprising eastern India, Nepal, Bhutan and Bangladesh; development strategy for hilly areas in the Himalayan and Hindukush regions, coastal management by maritime states, ecological management by semi-arid and arid regions of Pakistan23 India and Bangladesh. In fact, Bangladesh has been suggesting a "fast track" to improve communications among India, Bangladesh and Nepal. A recent study conducted by a Bangladesh research institute indicated that easier and more efficient movement of cargo among these three countries could result in Bangladesh gaining between $50 million to $100 million in its trade from Nepal alone. On the reverse side, Nepal could use Bangladesh ports to export.24 It is interesting that smaller countries like Bangladesh are seeing the potential benefits from greater integration in the region. A recent report indicated that by the year 2000, intra-SAARC trade would reach $3 billion and by 2015 it should touch the $9 billion mark. But the Bangladesh study points out that were better transport systems, communication network and transit facilities developed in South Asia, linking it to South-East Asia and China, intra-regional trade could reach a figure of $17 billion.

(v) Another measure with potential is to set up a SAARC Joint Commission composed of eminent historians from member countries to historically document the region, helping to remove the distortion of historical reality in South Asia.

(vi) Several wars in the region and a constant stream of allegations from most countries about illegal cross-border violations have seen hundreds of nationals being held in captivity. This has caused anguish and suspicion in all countries. A SAARC fact finding team could be constituted, which could, in association with the International Red Cross, be able to visit jails and other detention centres to investigate claims.

Unilateral Measures by India

As the largest country in the region, with a dominant economy, the Indian government should now become the engine for economic development of the region. Greater Indian participation in SAARC activities is recommended because two major suspicions of the first decade have been washed away viz. that smaller countries want to use SAARC to gang up against India. The second fallacy harboured by the smaller powers was that their own economies would be swamped by the Indian juggernaut. This has not proven true and curiously, the smaller states, with the exception of Pakistan, have become enthusiastic about the possibilities of profiting from interaction with the larger Indian economy.

In such a scenario, it would be useful for India to consider several unilateral measures that would propel the concept of SAARC into a more realistic mould. Some of these measures could include:

(a) Give special preference to private companies from SAARC countries to tie up with Indian companies. There was a suggestion from a former SAARC Secretary General that India could convene a South Asian Economic Cooperation Conference bringing together businessmen, academics and government officials from the seven countries. This was convened in November 1996 in New Delhi. Further, New Delhi could take unilateral steps in duty free and quota free entry into India of goods from least developed countries in South Asia. The United Front government in a dramatic shift from existing policy has taken unilateral steps in this regard, by agreeing to unilaterally increase the number of items which other SAARC countries could export to India. While these steps need to be welcomed, a stronger signal, in an institutional manner needs to be sent to other SAARC countries by allowing other SAARC countries to import to India industrial items and ancillaries. This industrial and trade institutional nexus would create a sizeable constituency in every SAARC country, arguing for closer economic cooperation.

(b) India must work to strengthen the IPA.25 While providing extra economic resources and manpower in all 11 sectors would be inadvisable, New Delhi could concentrate on two or three areas, in which there would be greater potential for developing cross-border structures for the common benefit of the region.

(c) The fledgling SAARC Documentation Centre (SDC) could also serve as a SAARC Information Centre (get a website) accessed by all people from the region for information about SAARC. The Indian government could undertake to fund the centre which is presently located in New Delhi. The importance of funding the SDC would mean that the concept of SAARC could touch the lives of ordinary people as well.

(d) In 1992, India unilaterally hosted a South Asian festival, which was acclaimed by SAARC leaders who expressed hope that such festivals would become a regular feature. This idea could be promoted on a yearly basis, allowing as many delegations from SAARC countries to participate in India during the festival. Like the festival, New Delhi could organise SAARC Trade Fairs in India, which would allow other countries to exhibit their products in India and facilitate business exchanges. A SAARC Trade Fair held in Delhi to commemorate the first decade of SAARC was well received by the Indian public.26

(e) India could diplomatically benefit by dropping its opposition to informal discussions of contentious issues at the summit level during the leaders' retreat or at least at the level of the Foreign Ministers. There are many bilateral problems in the region that do not involve India and the countries affected by such problems may themselves resist the temptation to raise bilateral problems in multilateral fora--the question of Bhutanese refugees in Nepal, the problem of Bihari Muslims.

It is time that India must actively work for a region-wide acceptance of the vision of a South Asian community based on peaceful coexistence, economic cooperation, religious tolerance and cultural understanding. Liberalisation of economies in South Asia has energised the private sector to pursue the goal of regional cooperation irrespective of the attitudes and initiatives of the respective governments. Even the most conservative government has started facing subaltern pressure from below to improve economic exchanges. In Pakistan, two recent instances of grassroots pressure saw Islamabad rescinding its visa refusal to Indian officials coming into Pakistan for SAARC related work. The Lahore Chamber of Commerce and Industry had protested against this move. Given the growing feeling that Pakistani businessmen can benefit from tapping the Indian economy, there would pressure on any government in Islamabad to grant most favoured nation status to India as required under the World Trade Organisation (WTO). There is a growing desire in the neighbouring countries to get as much access to the huge Indian market as possible, not only to reduce their respective trade deficits with India but also to give impetus to their production.

There is a slow but distinct realisation in South Asia that the concept of SAARC has come to stay, not because smaller countries have accepted any hegemonistic designs of a larger country or because the larger country wants to dominate the region economically and politically. The change in perception has come because there is a growing realisation of what Jean Monnet, the Father of the European Community, had perceptively observed two decades ago. Monnet had written, "People only accept change when they are faced with necessity and only recognise necessity when a crisis is upon them...We are uniting people and not coalescing the states."



1. There have been suggestions to include Myanmar and Afghanistan in the organisation.

2. According to this theory, India and Pakistan, which had stopped all official level bilateral contacts since January 1994, have been able to keep informal contacts through the SAARC channel. In fact, some of the decisions of cooperating with India, that normally would have attracted strong criticism in Pakistan, are rationalised because of the SAARC spirit.

3. At a recent meeting of the SAARC Economic Cooperation Conference in New Delhi on November 19, 1996, the Indian Prime Minister (then External Minister) I.K. Gujral referred to this perception. He said, "We, in South Asia, cannot afford to be left behind in the process, in our vital collective self-interest...We must speak with one voice, the voice of the 1.2 billion people of South Asia."

4. On the eve of the formal inauguration of SAARC in 1985, according to the World Development Report 1984, India constituted 78 per cent of the total area of the proposed region, 73 per cent of the population and 77 per cent of the GDP.

5. Among such methods included providing military assistance to South Asian countries and using economic aid as a tool to lure them into pro-Western orientation.

6. Ten years after the creation of SAARC, these fears continue to be expressed by Pakistan. In a recent interview, the Pakistan High Commissioner to India, Riaz Khokhar, said, "If you look at the trading regimes in the region, India literally dominates. You don't allow 99 per cent consumer items. We make only consumer goods which we can sell to India." "Cannot Put a Time-frame on MFN", The Observer of Business and Politics, August 11, 1996.

7. A good example of such a policy was Nepal's differences with India in the mid-1980s over the review of a 1950 bilateral treaty. India had sought to remove the unilateral concessions that were present in the 1950 treaty.

8. Unlike many other regional organisations, which seemed to have their early years under binding external pressure, SAARC was remarkably free of such influences.

9. In the first decade, eight summit meetings have taken place, with the last being held in New Delhi in 1995.

10. Its latest meeting was in New Delhi in December 1996, some six months before the next SAARC summit at Male (Maldives) in May 1997.

11. SAARC adopted in April 1993 a programme of trade preference among the member countries in the form of SAPTA. In February 1994, a SAARC Chamber of Commerce was formally inaugurated in Dhaka. Recently, a South Asian Business Leaders Forum was also set up.

12. Of which India offered 106 items and Pakistan offered 11 items.

13. This is a long standing water sharing dispute between India and Bangladesh which originated with India's decision to build the Farakka Barrage on the river Ganges.

14. "Free Trade in SAARC by 2001," The Asian Age, May 15, 1997.

15. "CII Scheme to Boost Trade Among SAARC Nations," The Observer of Business and Politics, May 13, 1997.

16. "Triumph for India on Summit Eve," The Asian Age, May 12, 1997.

17. Ibid.

18. "Accord on Revitalising SAARC," The Hindu, May 12, 1997.

19. Permission for Indian artistes to perform has consistently been refused by Islamabad.

20. A recent example was the negotiations that Hong Kong based investor Gordon Wu held with Indian and Pakistani governments for power projects, which could have cross-border grid links. Quick changes of governments in India and Pakistan have shelved the project.

21. At the 17th Foreign Ministers meeting in New Delhi, attention was drawn to the report prepared by the Third Ministerial Conference on Children of South Asia.

22. At the second round of trade negotiations under SAPTA, member countries have agreed to cover 2,000 items under preferential tariff.

23. Pakistan, however, opposes this concept, while the new government in Bangladesh appears enthusiastic about developing the eastern flanks of SAARC--quoted in Frontier Post (Peshawar), January 24, 1997. In fact, there has been criticism that such attempts would work against the SAARC spirit despite it being allowed under the SAARC Charter. Many Pakistanis believe that the move has been sponsored by India and the new government of Hasina Wajed in Bangladesh. Others believe that leaving out Sri Lanka, Maldives and Pakistan, would force some countries to look east towards South-East Asia and others towards the West, specially Central and West Asia. This, they fear, would effectively undermine SAARC. This is a good example of how political suspicion of one-upmanship by one or a group of countries shakes the foundation of SAARC.

24. Presently, intra-regional trade accounts for slightly more than 3 per cent of the global trade of SAARC countries.

25. In fact, the IPA pre-dates SAARC, when five subjects were identified in the meeting of Foreign Secretaries in April 1981 in Colombo. It now covers 11 major areas of agriculture, communications, education and culture, environment and meteorology, health and population activities, prevention of drug trafficking and drug abuse, rural development, S&T, tourism, transport and women in development.

26. A second trade fair is to be held in Pakistan.