South Asia free trade agreement has to be a reality
By Ashok B Sharma
If South Asia plans to consolidate and further integrate itself, it needs to learn much from the experiences of South-East Asian countries that are moving towards an ASEAN Economic Community hopefully by 2015. About 80 per cent of the spadework have been done for the process of integration, only 20 per cent of the efforts are needed. The ASEAN group was of course formed much earlier on August 8, 1967, while the South Asian group, SAARC, was formed on December 8, 1985. The European nations after years of efforts finally came together in the form of European Union on November 1, 1993.
Regional blocs have become necessary in a globalised economy. The most spectacular thing about ASEAN is surviving the 1997 Asian Financial Crisis and also maintaining a steady growth following a dip on account of 2008 Global Financial Crisis, while the European Union is still struggling to bail itself out of the crisis generated in 2008 and subsequently its own Sovereign Debt Crisis.
Like ASEAN there is a need to ensure the centrality of SAARC as this region with its common civilisation linkages and heritage and ancient trade links stands unique to the rest of the world. Eight countries in the region form SAARC like Afghanistan Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. Myanmar is a deserving candidate for SAARC membership. Iran has some close ancient cultural links with South Asia. But China does not have the same civilisation ethos and heritage of South Asia nor it is geographically linked South Asia. Therefore, China’s intention to be a SAARC member has no loco standii. It can remain as an Observer to SAARC Summit like Australia, European Union, Iran, Japan, South Korea, Mauritius, Myanmar and US.
The lessons of ASEAN integration are before South Asians. It is a pity that SAARC, despite its much cultural and civilizational similarity, is not yet integrated as an economic union. Over the years it remained much as a talk-shop, though some progress has been made. Much of the irritants coming in the way of integration of South Asia are political in nature, particularly the stand-off between two major countries – India and Pakistan.
It is not that the region does not have the potentials for an eventful integration. Intra-SAARC trade today is to the tune $22 billion. The critics say it is mere 5 per cent. But they should know that if trade through unofficial channels are included, the figure would be much more than $22 billion, may be even $60 billion – this is not a meagre achievement despite SAARC not being an economic union.
The political irritants towards formation of an economic union can be largely overcome by going to the basics of our cultural and civilizational unity. Each country in the region needs to take pride in its ancient civilisation and heritage. This would finally result in integration in the region. The people in Pakistan are eager to visit Ajmer Sharif – Khawaja Gharibnawaz Dargah and other Muslim holy sites. The Sikhs in India are equally eager to visit Nankana Sahib in Pakistan. Hindus and Sikhs of Pakistan like to visit holy sites in India. The Buddhists in Sri Lanka, Bhutan and Nepal are desirous of visiting Buddhists sites in India. These underlying links of unity need to be explored. Besides coming to more modern times, the countries in the region were ruled by the British and, therefore, have similar administrative structure and laws. People from across the borders visit their relatives.
It is an encouraging endeavour by the civil society in the region to hold Peoples’ SAARC in the same venue of the official SAARC Summit. Peoples’ SAARC should do much more to emphasise on the ancient civilizational and cultural links of the region.
Trade and intra-region economic activity follows old links much better. People from across the borders come to avail of medical treatment and education in India. The Indian Prime Minister Narendra Modi should take up the issue of greater trade facilitation in the region and see more commodities come in the list of trade in the 18th SAARC Summit in Kathmandu (November 22-27) so as to make South Asia Free Trade Agreement (SAFTA) a vibrant reality. Pakistan has lately realised the need for trade with India and is willing to give non-discriminative market (NDMA) access to Indian exports in lieu of Most Favoured Nation (MFN) status the coinage of which is not liked by the Pakistani establishment. It has already switched over to negative list regime to facilitate SAFTA trade. But the problem remains in Pakistan to allow Indian goods to pass through land route to Afghanistan.
Connectivity is an issue that needs to be addressed in the region. The Bangladesh Prime Minister had in 2011 proposed connectivity between India, Bangladesh, Bhutan, Nepal and even Myanmar. Apart from Attari-Wagah on India-Pakistan border, India has proposed 13 integrated check posts (ICPs) at its borders like Petrapole in West Bengal, Moreh in Manipur, Raxaul in Bihar, Dawki in Meghalaya, Agartala in Tripura, Jogbani in Bihar, Hili and Changrabandha in West Bengal, Sutarkhandi in Assam, Kawarpuchiah in Mizoram, Sunauli and Rupaidiha in Uttar Pradesh. India should speed up works on setting up of these ICPs.
It is laudable that the 18th SAARC Summit in Kathmandu is gearing up to sign agreements on motor vehicle movements and railway connectivity. There is also a need to ensure coastal and maritime linkages.
Least developed countries in the region need not have apprehensions over free trade. They already enjoy concessions. Intra-SAARC investments can balance their trade deficits. Sincere efforts should be made to set up value chains in the region where raw materials can be sourced from one country for manufacturing in another country and value addition in another country. There should be energy trade in the region. Tajikistan-Afghanistan-Pakistan-India gas pipeline is a good initiative. Similarly Iran-Pakistan-India and Myanmar-Bangladesh-India gas pipeline should become a reality. There is need for an energy grid in the region and food security should be strengthened.
Apart from ensuring connectivity, trade and value chain investments and ultimately moving towards a South Asia Economic Union, it is essential that the centrality of SAARC should be ensured at any cost. (IPA Service)