A meet that could raise SAARC hopes

“Have you seen the reference paper on telecom?” the Brazilian diplomat at the WTO asked his Indian counterpart.

“No,” was the prompt reply, because in 1995-96 landlines were predominant, and the Indian Government's instructions were to first “protect landlines” and only then think of making commitments on mobile telephony.

However, the Indian delegate got his hands on the reference paper. He then put it through to the Indian Government to decide on the country's stance on mobile telephony. The rest, as they say, is history.

SOUTH ASIA FORUM

Now, the Governments and billions of people of the eight SAARC (South Asian Association for Regional Cooperation) countries are hoping for more such out-of-the-box ideas, as the first meeting of the South Asia Forum (SAF) takes off in Delhi this week. SAF is an initiative that emanated from the Silver Jubilee Declaration of the SAARC Summit held in Thimphu, in April last year.

Billed as a meeting of business, think-tanks, academia, media and civil society, the main thrust of the three-day meeting will be to generate ideas, which could eventually lead to greater integration of the regional grouping, and help the region in moving towards an economic union. The regional grouping includes India, Sri Lanka, Pakistan, Nepal, Maldives, Afghanistan, Bhutan and Bangladesh. SAF is also being seen as a unique concept, because even though Track-II processes and people-to-people contacts are underway in the region, this is a first-of-its-kind forum, to be formally endorsed by the SAARC Summit.

It is not as though the SAARC regional grouping has not achieved much in its 25 years of existence. For example, starting from an intra-regional business of approximately $150 million, the last five years have seen the business go up to $5 billion.

Now, many hopes are being pinned on the SAF meeting, because even though the need for intra-regional economic integration is greater than ever before in the present competitive environment, a 2006 World Bank report shows that South Asia is the least integrated region on the globe.

FIVE-PRONGED STRATEGY

The figures speak for themselves. During 2009, with a total trade volume of $628.9 billion, intra-regional trade in South Asia was a mere 5 per cent. In comparison, East Asia's regional trade constituted 32 per cent of its total trade in 2006. To make matters even worse, a Ministry of External Affairs concept paper points out that as much as 55 per cent of the intra-regional trade potential remains largely untapped.

The Governments in the region have now realised that the SAF initiative will be largely driven by the industry or business. This is perhaps one of the reasons why the industry organisation, the Federation of Indian Chambers of Commerce and Industry (FICCI), has been roped in for the Delhi event.

There is also a realisation that in the changing environment, it is services that will play a greater role in integrating the economies of the region, instead of manufacturing. Hence, intra-regional trade in services, which was absent under South Asian Free Trade Area (SAFTA), is now being considered.

To take this path of cooperation forward, the Indian industry body has suggested a five-pronged strategy — providing freedom to trade without barriers, freedom to invest across borders, freedom of seamless travel, connectivity across the borders and creation of South-Asian brand equity.

ECONOMIC INTEGRATION

While cynics point out that given the precarious state of relations between India and Pakistan, the two largest economies in the region, the SAF will be a non-starter, the region has a lot more to offer this public-private partnership. Take Bangladesh, for example. It has leveraged the international system and now has access to all international markets. So much so that ‘Made in Bangladesh' labels are common everywhere in Europe or America.

The Indian business community is also enthused by the business prospects that it sees in many of the SAARC countries. At the top of the list is Sri Lanka, which not only provides a lot of business potential, but also has a Government that is keen to work with Indian companies. These are small but significant steps. However, the best thing for the SAF initiative is that it is now recognised all across the globe that economic integration in this region will be an important factor for global stability.

What the Forum now needs to do is to generate ideas which could be taken up by the Governments, so that the future of the people of the region can be changed, much in the manner that a chance meeting between Indian and Brazilian diplomats changed the lives of the people in India more than two decades ago.

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