Connectivity key to SAARC progress

Discussions and recommendations were brought to the fore on why the SAARC Summit is only about signing agreements with no action taking place thereafter.

By Sunimalee Dias

The blame game had a difficult time though all present at the meeting in Colombo at the Roundup of the 16th SAARC Summit were clearly seen to point fingers at the politicians for not moving the process forward while the business community was invited to take stock and begin the work for implementation.

The business community is expected to push for the implementation of some of the agreements within SAARC that are left to idle and lag behind.

During the discussion held in Colombo on the theme ‘Deepening Economic Integration: Strengthening Role of Private Sector in Regional Initiatives,’ three separate sessions were conducted to understand and attempt to address issues at the core.

The first session commenced with ‘Evaluating Decisions and Implementation – Historical Perspective of SAARC’.  In a lecture delivered by the former Nepal Finance Minister Madhukar Rana he observed that “not only do we lack the political will but also the bureaucracy” noting that the regional cooperation should be based on science and technology.

He pointed the need to adopt a new mindset among the regional countries within the grouping in a bid to ensure that they “think regional and act local”.

Considered to be a “half empty journey” by Indian Prime Minister Manmohan Singh and like “travelling in a slow motion train” as described by Sri Lankan President Mahinda Rajapaksa, SAARC is yet to gain its full worth for which most delegates highlighted the need to ensure increased connectivity between the countries.

In order to ensure progress was made, Rana observed there was a need for more trade between the nations within the group. He said, “This can be through the mobilisation of trade and resources.”

Regional Research Organisation Executive Director Prof. Rohan Samarajiva making his observations noted that some of the decisions taken during the meetings in the past were not binding or did not have a time frame, due to which they were never implemented.

In this respect, respondent delegates observed that a bold decision must be taken on matters pertaining to security concerns within the region while an institutional mechanism was imperative under the current system.

As answers to questions raised on the reasons for spending large sums of money by governments to achieve nothing, it was pointed out that on the other hand these summits also served the purpose of meeting up without any intrusion.

Core issues

While the SAARC was held in a bid to carry forward regional cooperation between the countries, it was analysed that the reasons for the success of other groupings was because they had come together for a good reason.

In the case of the EU, after the war the nations teamed up together to better coordinate efforts in a bid to seek peace within their respective states and regions. Moreover, ASEAN had joined in a bid to fight against the rising and growing presence of communism within its boundaries that could affect these nation states.

On the other hand SAARC nations conducted these high level meetings with much suspicion and insecurity as each country was trying to compete with each other and were less likely to work together also due to the historical reasons that caused each party to have reservations against the other.

But today with the business community working together with the rest of nations in the grouping and the summit now seen to be moving from “declaration to implementation” it had “given us a good reason to get involved,” FCCISL Secretary General Dr. Thusitha Tennakoon said during the second session.

In the wake of intra regional trade that remained insignificant compared to its counterparts in other groupings, it was observed by Dr. Nawal Pasan of the Jawaharlal Nehru University, New Delhi.

The slow pace of tariff liberalisation is another reason for the tedious process involved in conducting trading between the nations in the region. Another reason highlighted was the hostility between India and Pakistan.

It is necessary to “increase our intra regional trade by at least 10%,” Dr. Pasan said.

Economic Development Director General Dr. Saj Mendis said the regional states could together become an “economic powerhouse” should there be connectivity and intra regional investments.

Meanwhile, the existing level of connectivity, it was pointed out, within ASEAN was more advanced than within the SAARC region. This was stated by Abdur Rob Khan of the North South University, Bangladesh who noted that though South Asia was a connected region, independence in these states led to much separation between them.

Identifying reasons for lagging behind is due to the political differences and scarcity of resources that had created much of a hindrance.

Each of the eight countries has 11-12% of GDP for infrastructure upgrading for regional connectivity and this was not possible for any of these governments to whip out this from their national budgets, it was stated.

Another reason for not conducting effective amount of trading within the region is also because most of the tradable items within SAFTA are in the negative list.

Implementation strategy

With regional trade agreements generally slower to process than bilateral, there is a possibility that SAFTA might not be in favour of the states that agreed to meet under the said grouping, Industry and Commerce Ministry Secretary Tilak Collure said.

Another disadvantage pointed out is the requirement of “unanimity” while the question was raised as to whether entrepreneurs were ready to face challenges and forego revenue implications of other countries.

Collure observed that although Sri Lanka managed only US$660, 000 since the beginning, India and Bangladesh made better use of it.

He pointed out that the onus on all governments was to initiate mechanisms and scrutinise tariff barriers and address them at the highest level as regional cooperation is expected to encourage all to remove hidden barriers to growth and progress.

It was emphasised that the countries should carry out improvements at the required levels in a bid to ensure they become competitive and increase trade facilitation and connectivity among themselves as consumers today were becoming more sophisticated.

In this respect, there is a need to map out the implementation strategy, he explained.

There is a large proportion of trade in the regional that does not receive tariff preferences since they fall under negative lists. Recommendations have been made to review these lists in a bid to reduce their size.

A fast tracking of tariff liberalisation in goods is required for key tariff lines of trade interest in the region.

Another recommendation is in establishing a binding commitment for the removal of NTBs; while another was for a ceiling of 20% of tariff lines that should be cut annually.

It was also noted that they needed to identify a few key trade facilitating measures and implement these with binding commitments.

The establishment of a common sub-sector approach to encourage commitments in trade in services was another recommendation made.