`SAARC has not succeeded in exploiting the immense potential of the region.'

Our Bureau

New Delhi, Nov 18

THE Prime Minister, Dr Manmohan Singh, has said that the volume of trade within the SAARC region would rise from $ 6 billion to $ 14 billion annually within two years of the agreement on South Asian Free Trade Area (SAFTA) coming into force. The Prime Minister was speaking at the inaugural session of the SAARC Business Leader's Conclave.

SAFTA was signed on January 6, 2004, during the Twelfth SAARC Summit in Islamabad. The aim was to establish a common market and customs and economic unity in the region. It comes into force on January 1, 2006.

The Prime Minister also said that all SAARC members are committed to an early resolution of outstanding issues under SAFTA. "We now need to expand the ambit of SAFTA to include trade in services in addition to widening the scope of trade in goods,'' he added.

Despite some success on certain fronts, he said SAARC has not succeeded in exploiting the immense economic potential of the region. Even after two decades, intra-SAARC exports are a mere five per cent of the total exports of the region, he added.

In support of the free trade agreements (FTA), he said empirical evidence and experience within our own region points to the overall benefit derived by both sides of the agreement. Taking the example of the India-Sri Lanka FTA, he said exports of both countries to the other have grown over 100 per cent post-FTA.

In taking South Asia to the next level of intra-regional connectivity, he said considerable investments would be required. "As a first step, India has on a reciprocal basis announced measures to move towards an Open Skies regime in our region. We are looking for greater liberalisation of visa regimes to benefit all areas of co-operative interaction. I am happy that we have decided to increase the number of SAARC visas issued to leading businessmen of our member states. We have also urged our partners in SAARC to reciprocally provide to each other transit facilities to third countries."

Emphasising on the need to fight terrorism for greater economic development in the region, the Prime Minister said, "No one can assume that when a neighbour is hurt by terrorism one can somehow remain insulated from the consequences." He added, "Peace in the region will benefit all. Terrorism anywhere will hurt us all."

Earlier, the SAARC Chamber of Commerce and Industry President, Mr Macky Hashim, said that the vision of SAARC Business Leaders Conclave is to create a South Asian network for economic growth and poverty alleviation. "The launch of SAFTA in South Asia will be a landmark on the path to South Asian economic union as envisaged by SAARC leaders and confirmed at the recently concluded SAARC summit in Dhaka," he said.

(This article was published in the Business Line print edition dated November 19, 2005)
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