10-item agenda proposed for better SAARC regional connectivity

By Roshenka de Mel

The need for greater regional cooperation and ability to better implement resolutions emerged as key issues at the SAARC CCI and FCCISL conference held on Thursday. The seminar was based on the concept of regional connectivity in South Asia, with a focus on prospects for cooperation in transport and communication.

Keynote speaker, SAARC CCI President Annisul Huq delivered a proposed agenda of 10 points, which he believed needed to be addressed in order to ensure increased regional connectivity in South Asia. The Chief Guest, Minister of External Affairs Professor G.L. Peiris, stressed the need for greater synergy between public and private sectors in achieving the sought-after connectivity for the region.

The proceedings were moderated by SAARC CCI Secretary General Muhammed Iqbal Tabish who stressed that due to poor connectivity, the South Asian countries failed to tap into 72% of the trade potential of US$ 65 billion available in 2011.

He emphasised that issues of connectivity in the region should not be confined to the spaces of trade, but need to reach the realms of connectivity through not only railway and road corridors but also through inland waterway transport and aviation, which would not only enhance physical, economic and people to people connectivity, but will also create greater prospects for better regional transport connectivity.

Importance of implementing policy

FCCISL Acting President Kumar Mallimaratchi drew on the importance of implementing policy in his welcome address and stated: “The problem of connectivity is such that Sri Lanka doesn’t have connectivity to many destinations in SAARC; the sooner we do it, trade and interaction will grow. We as businessmen have a responsibility to ensure we trade more within SAARC – that is key. On a part of officials, it’s a matter of facilitation. SAARC and Asia I believe will be economic drivers in the future, what the EU is doing, we can double and do better.”

SAARC CCI Vice President Iftikhar Ali Malik brought to attention the important roles that various governments and stakeholders must play across various SAARC regions. Explaining the importance of infrastructure, he stated: “This conference has been organised when various economies of the world are passing through a reformation phase and are gaining economic momentum. Regional connectivity is one of the fundamental aspects of development. Infrastructure is a critical factor for better connectivity.”

Citing the Investment Climate Assessment Survey (2008), Malik explained that 40% firms in India, 45% in Pakistan, 60% in Bangladesh and 75% in Nepal reported that inadequate-infrastructure was a major obstacle to their business expansion efforts. Malik also stressed that intraregional trade remains largely unrealised.

Although Nepal, India, Afghanistan, Bangladesh and Bhutan share common borders and have rail and road access, high trade barriers along with insufficient connectivity and a lack of measures to encourage trade have held back progress towards the overall connectivity of the region.

Lack of connectivity

Keynote speaker, SAARC CCI President Annisul Huq expressed that a lack of connectivity had prevented South Asia from coming closer together as a region. Quoting Muchkund Dubey, Huq stated: “Despite being an ideal grouping for economic integration, South Asia remains untouched by the first wave of regionalism in the international arena and remains marred by mutual doubts and suspicion.”

He stressed that the dream of one economy, one agreement, one pride, one voice and one region is what South Asian needs at the present moment. He reflected on the success of ASEAN nations, which through the ASEAN Transport Action Plan 2005-2010 and massive intraregional trade, had seen a regional upgrade of road and railway networks whilst simultaneously weeding out trade barriers across the region.

Huq said that South Asia and SAARC provided a sharp contrast to the ASEAN region: “Although South Asian countries are making concerted efforts to improve regional connectivity through infrastructure building, the infrastructure gap in terms of index has been widening in South Asia since 1990.”

Proposed targets for 2010-2020

Proposing a 10-item agenda to the Minister of External Affairs, policy makers and business leaders from South Asia, Huq outlined his proposed targets for the 2010-2020 decade of regional connectivity:

(1) The implementation of transit trade on a reciprocal basis under GATT Article V and SAFTA provisions along with the finalisation of agreements regarding motor vehicles, railways and inland water transport and shipping.

(2) Strengthening of cross border infrastructure, money, finance, trade and investment. Huq stressed that the gradation of the Petropol-Benepole corridor, the development of Bagdogra Airport, the improvement of Wagha-Lahore rail links and the Colombo Port Expansion are key areas to benefit considerably from further infrastructure development.

(3) The standardisation of customs documents and procedures across the region.

(4) The provision of a green fast-track multi-modal transport channels and corridors to facilitate efficient regional supply chains.

(5) The improvement of sub-regional land and inland water connectivity to and from the north eastern part of the subcontinent.

(6) The implementation of transit trade agreements between Bangladesh and India, as well as Afghanistan, India and Pakistan.

(7) Jointly promoting the development of Afghanistan, Pakistan, India, Bangladesh and Myanmar (APIBM) transport corridor through the Asian highway and Trans-Asian railway.

(8) One open sky policy regime to be implemented.

(9) In addition to the suggested use of one SIM for all phones in South Asia

(10) One energy bank for South Asia.

Huq stressed that within the next seven years, the people of South Asia would need to connect on different points of connectivity, be it social, economic, cultural or spiritual. Huq further called on the commitment of both governments and business communities to take a big leap in facilitating further connectivity in the SAARC region.

Focusing on concrete issues

Highlighting the importance of focusing on concrete issues, Minister of External Affairs G.L. Peiris stated: “We should not resolve by turning to generalisation; we have to focus on concrete issues to move ahead. There is great potential here. Many of the countries in the SAARC region have economies that have grown.”

Peiris urged closer collaboration between the Chamber of Commerce and Industry (CCI) and the private sector, urging that putting in place a viable strategy for improving commercial progress was vital.

Commenting on the importance of developing trade within the region, he said: “If we are serious about developing trade in the SAARC region, connectivity is the most important factor. Sri Lanka is in a pivotal position. The degree of confidence we are attracting can be seen published in the current issue of the Economist, which stated that in 2010, Sri Lankan entrepreneurs (of Sri Lankan origin) who are working abroad last year have sent into Sri Lanka US$ 4 billion, which they could have invested into the countries they are working in. Rather than investing the money in those countries, they have chosen to send it back to Sri Lanka. A 25% increase on the quantum of previous remittances in 2009. Our economy is growing at more than 8%; the Government is taking care to ensure the benefits of which spread throughout Sri Lanka.”

Sri Lanka and India

Stressing the important relationship and bilateral trade opportunities Sri Lanka has with South Asian neighbours especially that of India, Peiris said: “Our close mutual relationships with each other, our geography and economies link the destinies of India and Sri Lanka. The expansion of the Sri Lankan economy requires the strengthening of bonds between our two countries.”

Peiris also touched on the firm economic relationships Sri Lanka shares with the Maldives, Pakistan Nepal and other South Asian nations. He further said that the public and the private sector need to create synergies in areas of mutual interest and their shared vision on food security, energy security and counter terrorism mechanism was required on regional level.

He termed terrorism and security issues as the serious impediments to regional connectivity. Peiris declared that Sri Lanka is not only to develop further as a hub for aviation and technology, but also as a hub for knowledge.

Voice for women

The vote of thanks was delivered by SAARC CCI Vice President Kosala Wickramanyake and was followed by a working session which was chaired by Secretary Ministry of Aviation Ranjeet Silva and was addressed by Ex-MNA and President Women CCI Sindh (Pakistan) Begum Salma Ahmed, who urged women to voice themselves and play a key role in accelerating the development process of connectivity in South Asia.

LIRNEasia Chief Executive Officer Professor Rohan Samarajiva stressed that SAARC needed to work on passing resolutions, highlighting that in the last few years six years worth of market reform delivered the same results as 25 years of resolution making would have.

EFU Insurance CEO and SAARC CCI Council on Financial Services and Insurance Chairman Saifuddin Zookawala stated that good relations with neighbouring SAARC countries were essential in doing business. He outlined the scope of financial, SME, banking, insurance and agricultural banking in the region and stressed that open minds are needed to create trust amongst South Asian nations. He further urged SAARC nations to look to each other rather than lose foreign currency to the West by investing in services that could easily be delivered within the SAARC region.

Infrastructure impetus

Professor at University of Aurangabad, India, Dr. Farah Naaz Ghauri stressed that the availability of transport infrastructure was crucial in providing an impetus for economic activities. The transport infrastructure has immensely helped the EU to grow fast. Over the years a number of initiatives have been taken by South Asian countries at a bilateral sub regional and regional level. There is however still a need to strengthen trade and make better use of geographical locations.

She stressed that India is expected to achieve a quantum leap in external trade in tandem with a sustained growth of over seven per cent. India envisages an investment of US$ 14 billion, 276 projects in ports and is planning to augment capacity from 229 MT to 574 MT in 2010.

Professor of the Department of International Relations, Dhaka University, (Bangladesh) Dr. Imtiaz Ahmed used the controversial example of cow exports in India to demonstrate how religion has become closely intertwined with politics and economics.

Even though cows valued at US$ 62 million were smuggled out of the country in 2008, the refusal to consider the legalisation of the trade remains strongly influenced by the religious stand of the country. He also warned that political business interests lead to corruption and can make regional connectivity suffer. He drew on the example of India and Bangladesh trade where he stated that India had placed top Bangladeshi exports on a negative list in fear that Bangladesh could hurt Indian production.

Open sky policy

Addressing the issues of an open sky policy in South Asia, SriLankan Airlines International Relations Manager Sri Senanayake stated: “Sri Lanka is being viewed as low yielding market, which makes big careers think twice before commencing operations here. Is it in the country’s overall interest to enhance the overall attraction of South Asian destinations to woo the big carriers. Aviation and tourism sectors in the region need to jointly identify markets with potential. High level policy gets chocked in our part of the world and implementation falters; Government needs to help enforce policy and decisions taken at a high level, as a lack of implementation erodes investor confidence.”

Senanayake further explained that the lack of open skies could not be justified as a main factor in hindering regional connectivity: “We need to make Sri Lanka a destination of choice by catering to diverse visitor needs without over reliance on traditional attractions, by ensuring adequate rooms in all areas, by concentrated and sustained tourism campaigns in key markets. It is a combination of these factors to help these industries to grow exponentially.”

Policy suggestions worked out during the session will be drawn up and circulated across key facilitators across SAARC CCI and other entities for approval before the official presentation of final policy suggestions is circulated. The importance of improved transportation and communication between all SAARC nations remains crucial to bridging the connectivity gap on all fronts between these nations.

The lack of infrastructure, slow implementation of policy and protectionism remain key hindrances that still serve only to fragment the region. With a regional effort to improve connectivity between South Asian countries, the entire SAARC region can tap into greater benefits on all social, cultural and economic fronts.

Pix by Chaminda Kumara