Re-considering SAARC trade

WHEN the South Asian region formed the South Asian Association for Regional Cooperation or SAARC hopes were high that it would be the first step in integrating the political, economic and social synergies of the region for overall growth and development. Decades later this dream has largely failed but the SAARC Chamber of Commerce and Industry (SCCI) insists that economic interests are now pushing member countries to work together as never before.

Everyone has heard time and again the endless potential of the region. Home to more than 5 per cent of the world’s population it has endless human and natural resource potential together with a rich culture, values and languages but this diversity has also prevented member countries from trusting each other, particularly when it came to dealing with regional super power India. However, India seems to be keen to dispel this image with its premier stating in a recent speech that the sub-continent’s development would be incomplete if it did not take its South Asian brothers with it.

With such positive hopes bolstering previously dust-gathered dreams the SCCI is working to increase basic business accessibility in the region. Its President Vikramjit Singh Sahney during a visit to Colombo last week called on local policy makers to allow businessmen to have a SAARC visa so that they can travel freely and promote business opportunities in the region. The SAARC Chamber is also pushing for cross-border banking and financial access as well as twining destinations together to promote tourism.

Sahney rightly pointed out that despite the picturesque richness and diversity of the region the total growth of tourism in the South Asian region did not match the growth of countries like Malaysia. He also urged for policy makers to enable joint ventures between different companies of member countries so that they could make use of trade agreements to export products and services to the world as SAARC companies.

These are small steps but are nonetheless important as Association of South East Asian Nations (ASEAN) is fast outstripping South Asia in its goal to become an integrated region and follow in the footsteps of the European Union (EU). ASEAN has been smart enough decide that they do not wish for a common currency but nonetheless are pursuing a very ambitious 2015 deadline that will see them at least get close to becoming a strong global trade partner. The genuine need ASEAN member countries have for each other together with their desire to make the most of China’s presence to push for a greater share of world trade has shown up the inadequacies of SAARC.

Sahney believes that at long last trade has superseded political squabbling and that all South Asian countries are willing to work together to promote economic interests. This is indeed the trend elsewhere in the world and therefore Sri Lanka needs to scramble on the bandwagon as soon as possible. Many stakeholders believe that Sri Lanka has failed to fully tap into its post-war potential and this is one way to attract investment, particularly to the north and east parts of the country.

Recently, it was reported that Sri Lanka was considering a trade agreement with China. Given that Sri Lanka does less than one percent of its trade with China but has hit 5 billion U.S. dollars with India it would make sense to re-visit the Comprehensive Economic Partnership Agreement (CEPA) before trying to take on China. Riding on the existing trade agreements is another reason for Sri Lanka to take another look at SAARC.