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Saarc": Its Impact and Future

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Saarc MEMBERS' REFERENCE SERVICE LARRDIS LOK SABHA SECRETARIAT, NEW DELHI REFERENCE NOTE No.30/RN/Ref./July/2017 1 For the use of Members of Parliament NOT FOR PUBLICATION "SAARC": ITS IMPACT AND FUTURE Prepared by Smt. Neelam Sethi, Additional Director and Shri Abhishek Thakur, SLA of Lok Sabha Secretariat under the supervision of Shri Atul Kaushik, Additional Secretary, Smt. Kalpana Sharma, Joint Secretary and Shri C.N. Sathyanathan, Director.- The Reference Note is for personal use of the Members in the discharge of their Parliamentary duties, and is not for publication. This Service is not to be quoted as the source of information as it is based on the sources indicated at the end/in the text. "SAARC" : ITS IMPACT AND FUTURE Introduction The South Asian Association for Regional Co-operation (SAARC) was founded in 1985 as an expression of the region's collective decision to evolve a regional cooperative framework. Its seven founding members are Bangladesh, Bhutan, India, Maldives, Nepal and Sri Lanka. Afghanistan joined the organization in 2007. Australia, China, European Union, Iran, Japan, Mauritius, Myanmar, Republic of Korea and United States of America have joined SAARC as Observers. The first SAARC summit was held in Dhaka, Bangladesh in 1985 and the 18th Summit was held in Kathmandu, Nepal in 2014. The 19th Summit to be held in Islamabad, Pakistan in November, 2016 was cancelled. SAARC Geographic Facts SAARC region is a landmass of 3.3 per cent of the world. SAARC countries has one-fifth of the world population. Two land-locked countries of this region are- Bhutan & Nepal. Two island countries of SAARC region are-Sri Lanka & Maldives. India, Pakistan & Bangladesh touches Indian ocean in South and south-west. Majority of the people in SAARC countries depend on agriculture. www.sodhganga.inflibnet.ac.in Objectives of SAARC1 The objectives as mentioned in the SAARC Charter are: Promote the welfare of the peoples of South Asia and improve their quality of life; Accelerate economic growth, social progress and cultural development in the region by providing all individuals the opportunity to live in dignity and to realize their full potentials; Promote and strengthen collective self-reliance among the countries of South Asia; Contribute to mutual trust, understanding and appreciation of one another's problems; Promote active collaboration and mutual assistance in the economic, social, cultural, technical and scientific fields; Strengthen cooperation with other developing countries and also among themselves in international forums on matters of common interests; and Cooperate with international and regional organizations with similar aims and purposes. Principles of SAARC2 Cooperation within the framework of the Association is based on respect for the principles of sovereign equality, territorial integrity, political independence, non-interference in the internal affairs of other states and mutual benefit. Such cooperation is to complement and not to substitute bilateral or multilateral cooperation. 1 www.sodhganga.inflibnet.ac.in 2 Ibid Such cooperation should be consistent with bilateral and multilateral obligations of the member states. Decisions at all levels in SAARC are taken on the basis of unanimity. Bilateral and contentious issues are excluded from its deliberations. The areas of cooperation among the SAARC countries include: Agriculture and Rural Development, Biotechnology, Education and Culture, Economic and Trade, Energy, Environment, Finance and Funding Mechanism, Information, Communication and Media, People-to-people contacts, Poverty Alleviation, Science and Technology, Security aspects, Social Development and Tourism. These areas are being looked after by a number of Technical Committees, comprising representatives of Member States who are responsible for the implementation, coordination and monitoring of the programmes in their respective areas of cooperation. Achievements of SAARC3 Over the last 30 years, despite extremely difficult political circumstances, SAARC has managed to create situations, institutions and forums where Heads of State have met for talks. It provides a platform to work together for the people of South Asia to work together in a spirit of friendship, trust and understanding.5 SAARC has tackled important topics for the region such as a social charter, development agreements and even the sensitive subject of fighting terrorismq-19. 3 Ibid The food and development banks, Agreement on Transportation, Energy are important steps in the right direction. Exchanges in the areas of civil society and science have become one of the pillars of South Asian integration efforts. After a decade of establishment of SAARC, a regional economic cooperation agreement called South Asian Preferential Trade Agreement (SAPTA) came into existence in 1995 that led to higher level of intra‐regional trade liberalization and economic cooperation among the member countries. SAPTA sought to ensure preferential treatment through reduction of import tariffs on eligible items while ensuring special and the most favorable treatment to the least developed countries in the region. South Asian Free Trade Agreement (SAFTA) was envisaged primarily as the first step towards the transition to a Customs Union, Common Market and Economic Union. The SAFTA Agreement was signed on 6 January 2004 during Twelfth SAARC Summit held in Islamabad, Pakistan. The Agreement entered into force on 1 January 2006, and the Trade Liberalisation Programme commenced from 1 July 2006. Under this agreement, SAARC members were to bring their duties down to 20 per cent by 2009. Following the Agreement coming into force the SAFTA Ministerial Council (SMC) has been established comprising the Commerce Ministers of the Member States. In 2012 the SAARC exports increased substantially to US$354.6 billion from US$206.7 billion in 2009. Imports too increased from US$330 billion to US$602 billion over the same period. But the intra-SAARC trade amounts to just a little over 1% of SAARC's GDP. In contrast, in ASEAN (which is actually smaller than SAARC in terms of size of economy) the intra-bloc trade stands at 10% of its GDP. The SAARC Visa Exemption Scheme was launched in 1992. The leaders at the Fourth Summit (Islamabad, 29–31 December 1988), while realising the importance of having people to people contacts, among the peoples of SAARC countries, decided that certain categories of dignitaries should be entitled to a Special Travel document, which would exempt them from visas within the region. As directed by the Summit, the Council of Ministers regularly kept under review the list of entitled categories. Currently the list included 24 categories of entitled persons, which include Dignitaries, Judges of higher courts, Parliamentarians, Senior Officials, Businessmen, Journalists, Sportsmen etc. The Visa Stickers are issued by the respective Member States to the entitled categories of that particular country. The validity of the Visa Sticker is generally for one year. The implementation is reviewed regularly by the Immigration Authorities of SAARC Member States. The SAARC Framework Agreement on Energy Cooperation (Electricity) was signed at the 18th SAARC Summit in Kathmandu. This Agreement enables cross-border trade of electricity on voluntary basis subject to the laws, rules and regulations of the respective members. It, inter alia, enables Member states to negotiate the terms, conditions, payment security mechanism and tenure of electricity trade. The Agreement was ratified on 30 July 2015 by India. Other Member States are in the process of ratifying it. Implementation of the agreement should contribute to mitigating electricity shortages, including in our North East. The SAARC Agreement on Rapid response to Natural Disasters was signed during the 17th SAARC Summit in November 2011 with the aim of institutionalizing the regional cooperation on disaster response among SAARC countries. India has also organized a number of workshops/seminar/ training programmes on disaster management for the SAARC member states. India very rapidly rendered assistance and expertise to Nepal last year during the severe earth quakes there. On initiative of India, a Concept Paper for SAU was submitted to the SAARC Governments to elicit their views. The idea of a South Asian University found favour in all SAARC Member States and an inter- ministerial Agreement for Establishment of South Asian University was signed on 04 April 2007, during the 14th SAARC Summit in New Delhi. SAARC Secretariat approved the concept of establishing SAU in the 16th SAARC Summit held in Thimpu in 2010. Accordingly, the South Asian University opened its door to students in August 2010. The university is likely to shift soon to its permanent campus in Delhi. Issues and concerns4 In its 30 years of existence, SAARC failed to hold 11 annual summits for political reasons, both at the bilateral and internal levels. The Kathmandu Summit in 2014 was held after a gap of three years. SAFTA accounts for only around 10% of the total regional trade even after 30 years of the establishment of SAARC and despite the existence of logistical advantages. The cumulative figure of intra-SAARC trade flows under SAFTA was around US$ 3 billion during 2013-2014. India’s trade with South Asia accounts for about 5 % of its global trade. This is in contrast to the Intra-regional trade of roughly 65 per cent of European Union's total trade; 51 per cent in the North American Free Trade Agreement (NAFTA)
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