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SAARC Countries I Ii Seminar Book Munich Personal RePEc Archive Future-of-Eco-Coop-in-SARRC- Countries Shah, Syed Akhter Hussain Pakistan Institute of Development Economics Islamabad 2014 Online at https://mpra.ub.uni-muenchen.de/59275/ MPRA Paper No. 59275, posted 30 Dec 2014 23:42 UTC Future of Economic Cooperation in SAARC Countries i ii Seminar Book Future of Economic Cooperation in SAARC Countries iii CONTENTS Acknowledgements Acronyms Introduction 1 Welcome Address 12 Ambassador (R) Sohail Amin Opening Remarks 15 Kristof W. Duwaerts Inaugural Address 18 Riaz Mohammad Khan Concluding Address 24 Dr. Ishrat Hussain Concluding Remarks 26 Kristof W. Duwaerts Vote of Thanks 27 Ambassador (R) Sohail Amin Recommendations 29 CHAPTER 1 Regional Trade — Driver for Economic Growth 37 Dr. Kamal Monnoo CHAPTER 2 Meeting Energy Requirement: Potential for Intra-regional Energy Trade 61 Dr. Janak Lal Karmacharya CHAPTER 3 Building Regional Transport and Communication Infrastructure 81 Ms. Arshi Saleem Hashmi iv Seminar Book CHAPTER 4 Developing Energy Corridor from Central and West Asia to South Asia 101 Prof. Savita Pande CHAPTER 5 The New Silk Road Initiative: Economic Dividends 119 Mr. Nabi Sroosh and Mr.Yosuf Sabir CHAPTER 6 China‟s Growing Economic Relations with South Asia 127 Dr. Liu Zongyi CHAPTER 7 Fast Tracking Economic Collaboration in SAARC Countries 146 Dr. Pervez Tahir CHAPTER 8 Towards an Asian Century: Future of Economic Cooperation in SAARC Countries: A View from FPCCI 159 Mr. Muhammad Ali CHAPTER 9 Economic Cooperation among SAARC Countries: Political Constraints 163 Dr. Rashid Ahmad Khan CHAPTER 10 Implications of Bilateral and Sub-regional Trade Agreements on Economic Cooperation: A Case Study of SAARC in South Asia 177 Dr. Syed Akhter Hussain Shah CHAPTER 11 Implementation of SAFTA: Bottlenecks 192 Dr. Barkat-e-Khuda & Dr. Selim Raihan CHAPTER 12 Economic Cooperation among SAARC Countries: An EU Perspective 209 Dr. Wolfgang-Peter Zingel Future of Economic Cooperation in SAARC Countries v CHAPTER 13 Implementing SAFTA and Role of Competitiveness 233 Dr. Salman Shah CHAPTER 14 Replacing Conflict with Peace in South Asia 240 Ambassador (R) Nihal Rodrigo CHAPTER 15 Sustainable and Result-oriented Dispute Resolution Mechanism between Pakistan and India 257 Dr. Pervaiz Iqbal Cheema Contributors 271 Index 275 IPRI Publications 286 vi Seminar Book Acknowledgements This volume is based on papers presented at the two-day international conference ―Towards an Asian Century: Future of Economic Cooperation in SAARC Countries‖ held on November 20-21, 2013 at Islamabad Hotel, Islamabad. The Conference was jointly organized by the Islamabad Policy Research Institute (IPRI) and the Hanns Seidel Foundation, (HSF) Islamabad. The organisers of the Conference are especially thankful to Mr. Kristof Duwaerts, Resident Representative, HSF, Islamabad, for his co- operation and sharing the financial expense of the Conference. For the papers presented in this volume, we are grateful to all participants from Pakistan and abroad, as well as the chief guests and chairpersons of the different sessions. We are also thankful to the scholars, students and professionals, who accepted our invitation to participate in the Conference. The successful completion of the Conference owes much to the efforts and logistical support provided by the staff of the IPRI and the HSF. Finally, our thanks are due to all those whom it would not be possible to thank individually for their help in making the Conference a success. Future of Economic Cooperation in SAARC Countries vii Acronyms ADB Asian Development Bank ASEAN Agreement of South East Asian Nations EDB Engineering Development Board EU European Union FDI Foreign Direct Investment FTAs Free Trade Agreements FTT Free Trade Talks GCC Gulf Cooperation Council GDP Gross Domestic Product GVC Global Value Chain HSF Hanns Seidel Foundation IMF International Monetary Fund IT Information Technology MFN Most Favoured Nation MNCs Multinational Corporations NTBs Non-Tariff Barriers NTC National Tariff Commission PPMA Pakistan Pharmaceutical Manufacturers Association PTAs Preferential Trade Agreements R&D Research and Development RECP Regional Comprehensive Economic Partnership RIC Regional Investment Cooperation viii Seminar Book ROK Republic of Korea RTA Regional Trade Agreement SAARC South Asian Association for Regional Cooperation SAFTA South Asia Free Trade Agreement SCCI SAARC Chamber of Commerce & Industry SCOE SAFTA Committee of Experts SPS Sanitary and Phytosanitary SRO Statutory Rules and Orders TBT Technical Barriers to Trade TTP Trans-Pacific Partnership UNCTAD United Nations Conference on Trade and Development WTO World Trade Organization Future of Economic Cooperation in SAARC Countries 1 Introduction Ambassador (R) Sohail Amin Col. (R) Muhammad Hanif and Muhammad Nawaz Khan his volume is based on the papers and presentations made at the two- day International Conference on ―Towards an Asian Century: Future T of Economic Cooperation in SAARC Countries jointly organised by ‖ Islamabad Policy Research Institute (IPRI) and Hanns Seidel Foundation (HSF), Germany at the Islamabad Hotel, Islamabad on November 20-21, 2013. Prominent scholars, academicians and policy-makers from Afghanistan, Bangladesh, China, India, Nepal, Pakistan, Sri Lanka and European Union (Germany) participated in the conference and shared their views on different aspects of future of economic cooperation in SAARC countries. The discussions focused on political and economic developments in the SAARC countries in the last 30 years and the future outlook with regard to peace and progress towards closer economic integration in South Asia. The emergence of China as a rising economic power and dynamism of the East Asian economies as engines of growth of the global economy together with the oil wealth of West Asian countries, the twenty-first century is being termed as the Asian century. This economic progress has helped millions of people of the Asian continent to come out of their abject poverty. Asia‘s economy is expected to expand at robust rates and it is likely to account for more than half of global output by the year 2050. A 2011 study by the Asian Development Bank found that an additional three billion Asians could enjoy living standards similar to those in Europe today. If this projected position is realized by Asia, its average per capita income could rise above US$ 40,000 (in constant purchasing power parity terms). The Asian century will, however, be realized if the continent‘s growth is broad-based and its prosperity extends across the continent to South Asia, Central Asia and the Pacific Islands. South Asia‘s growth rate in the recent past makes the subcontinent currently the fastest growing region in the world. It has experienced six per cent average economic growth annually over the past twenty years which has resulted in impressive improvement in human development indicators. The present decline in growth rates in South Asia appears to be a temporary phase. Some analysts predict that South Asia‘s growth rate will rise again and progress at six to eight per cent until 2030. Comparing this to the 2 Seminar Book declining growth of the global economy, analysts believe that South Asia will play a major role in future development of the continent. South Asian leaders are of the view that high and sustained growth rate can be speedily achieved by pooling regional resources through mutual economic cooperation. The Addu Declaration issued at the end of the SAARC Summit at Addu, Maldives in November 2011, firmly resolves to realize the objective of regional economic cooperation. So far South Asia has lagged behind other regions of the world, despite the fact that SAARC leaders have taken various concrete steps, such as signing of South Asian Free Trade Agreement (SAFTA) in 2004. The slow progress in achieving regional cooperation has been due to various reasons like underdeveloped infrastructure, poor connectivity, bureaucratic hurdles in decision making, preoccupation with security issues and political instability. Pakistan as a SAARC member is convinced that regional economic collaboration will benefit all South Asian countries in their economic development and in alleviating poverty in the region. To pave the way for this objective, Pakistan wants that mutual political differences and disputes impeding the process of economic cooperation should be resolved as a priority with sincerity and mutual accommodation through result oriented dialogue. This is the only way out unless South Asia wants to remain stuck with old disputes that have done no good to people of the subcontinent who certainly deserve better. Pakistan also considers that to achieve the objective of regional economic cooperation, SAARC countries can benefit from China‘s close and expanding economic relations with South Asian countries and also learn from EU‘s experience of achieving economic integration. This calls for pragmatism and taking practical measures. The international conference titled ―Towards an Asian Century: Future of Economic Cooperation in SAARC Countries‖ organised by IPRI on 20-21 November 2013 was an effort in that very direction. The proceedings of that conference are now being published in the form of a book. The book has two parts. The first includes the Welcome Address by Ambassador (R) Sohail Amin, President IPRI, Opening Remarks by Mr. Kristof W. Duwaerts, Resident Representative, Hanns Seidel Foundation, Islamabad, Inaugural Address by the Chief Guest, Ambassador Riaz Mohammad
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