Contemporary South Asia ISSN: 0958-4935 (Print) 1469-364X (Online) Journal homepage: https://www.tandfonline.com/loi/ccsa20 SAARC and subregional co‐operation: Domestic politics and foreign policies in South Asia Md Nuruzzaman To cite this article: Md Nuruzzaman (1999) SAARC and subregional co‐operation: Domestic politics and foreign policies in South Asia, Contemporary South Asia, 8:3, 311-322, DOI: 10.1080/09584939908719871 To link to this article: https://doi.org/10.1080/09584939908719871 Published online: 11 Apr 2007. Submit your article to this journal Article views: 309 View related articles Citing articles: 3 View citing articles Full Terms & Conditions of access and use can be found at https://www.tandfonline.com/action/journalInformation?journalCode=ccsa20 Contemporary South Asia (1999) 8(3), 311-322 SAARC and subregional co-operation: domestic politics and foreign policies in South Asia MD NURUZZAMAN ABSTRACT In 1997, intense debate engulfed Bangladesh domestic politics over the question of subregional co-operation with India, Bhutan and Nepal within the South Asian Association for Regional Co-operation (SAARC). Whilst the political opposition depicted the proposed subregional co-operation scheme as an Indian ploy to undermine the national sovereignty and independence of Bangladesh, the ruling Awami League viewed it as essential for national economic development. This paper examines the scheme's rationale, maps out the nature of its political opposition, analyses India's position, and highlights Pakistani and Sri Lankan concerns as to the nature of subregional co-operation in South Asia. It concludes that minimum value consensus between the political parties on fundamental national issues in all SAARC countries, particularly in Bangladesh, and better political understandings between the governments of the region are the prerequisites to make the scheme for subregional co-operation a success. In 1997, domestic politics in Bangladesh witnessed a fierce debate over the issue of subregional co-operation within the South Asian Association for Regional Co-operation (SAARC) framework. The debate started after Bangladesh and Nepal had proposed at the 17th meeting of the SAARC Council of Ministers (New Delhi, 19-20 December 1996) that subregional co-operation be initiated among Bangladesh, Bhutan, Nepal and the northeastern states of India on mutually agreed areas. The proposal immediately led to an unprecedented polarization of political forces in Bangladesh. The political opposition, specifically the Bangladesh Nationalist Party (BNP), the largest opposition in the Jatiya Sangsad (National Assembly), expressed vehement opposition to the proposed subregional grouping. BNP politicians and pro-BNP intellectuals painted the new venture as a grave threat to the national sovereignty and independence of Bangladesh.1 The grouping was actually designed, they con- tended, to materialize India's interest and superpower aspirations in South Asia.2 Correspondence: Md Nuruzzaman, Department of Political Science, University of Alberta, Canada. 0958-4935/99/030311-12 © 1999 Taylor & Francis Ltd MD NURUZZAMAN The Awami League, the ruling party in Dhaka, on the contrary argued that subregional co-operation was essential for the country's economic progress. The debate was very intense in nature and the civil society, as a whole, became sharply divided over the proposed subregional co-operation scheme. Against the backdrop of high political controversy over sub-regional cooper- ation, this paper seeks to address what factors led the Awami League govern- ment, in consonance with its Nepalese counterpart, to propose a sub-regional grouping within SAARC and why the political opposition in Bangladesh opposed the new grouping. It also will attempt to analyse the position of India vis-a-vis the proposed sub-regional scheme. Finally, it will try to highlight the future possibilities of a sub-regional cooperative in South Asia. Why subregional co-operation? The need for increased economic co-operation among geographically contiguous countries has been a dominant feature of the global political economy ever since the emergence of the European Economic Community (EEC) in the late 1940s and the Association of South East Asian Nations (ASEAN) in the 1960s. The rationale for such co-operation has been strengthened further in the 1990s by the emergence of regional trading blocs like the European Union (EU) and the North American Free Trade Area (NAFTA). The Asian response to trading blocs has not resulted in any concrete achieve- ments, yet efforts to gear up the tempo of cooperation are there. Co-operation on a subregional basis, or forming what is popularly known as a 'growth triangle', is the latest Asian response to emerging trends in the world economy. Growth triangles are all about the intensification of economic co-operation on a limited geographical scale to attract foreign investments and thus boost export pro- motion. They are based on localized economic zones where geographically contiguous countries with different economic sizes, socio-cultural patterns and political systems seek to integrate parts of their territories for mutual gains. A set of complex key factors—the most prominent being foreign direct investment, complementarities in production systems, export-oriented development strategies and differences in factor costs—facilitates the emergence of growth triangles.3 East and Southeast Asian countries, which have recently achieved unpre- cedented rates of economic growth, were the first Asian states to experiment with such co-operative designs. Two of the most successful growth triangles are the Southern China growth triangle (Hong Kong, Taiwan and contiguous coastal economic zones in South China), and the Johor (Malaysia)-Singapore-Riau (Indonesia) growth triangle. The clear logic of comparative advantage, a dy- namic relationship between the central governments and regional authorities, and successful policy co-ordination between the concerned governments in the region have led to the astonishing success of these two growth triangles.4 Some of the more recently created growth triangles include the Lower Mekong subregion (Cambodia, Laos, Thailand and Vietnam), Tumen River 312 SAARC AND SUBREGIONAL CO-OPERATION subregion (China, North Korea, Mongolia and Russia), and the Indonesia- Malaysia-Thailand (IMT) growth triangle. The growth dynamism in East and Southeast Asia based on effective subre- gional co-operation provides the necessary impetus for such co-operation in other parts of the world. In its fifteenth session held in May 1995, the SAARC Council of Ministers recommended that effective measures were required for a fast-track approach to SAARC, including subregional co-operation with well- defined objectives. The objectives for subregional co-operation in South Asia, as set out by the Concept Paper on Subregional Co-operation prepared by the Bangladesh delegation5 are defined as the exploitation of complementarities in resource endowment and comparative advantages through cross-border trade and investment flows in a contiguous zone of geographic unity. The utilization of natural resources, including the harnessing of the immense water resources, development of hydropower and energy, promotion of trade and investment, expansion of telecommunication network, improvement of infrastructure of sustained economic development, and development of tourism industry have been identified as possible areas of subregional co-operation. The fast-track approach to SAARC through subregional co-operation involves three basic components: development of the private sector, development of regional communication infrastructure, and equity in development co-operation.6 The private sector undeniably occupies a dominant position in South Asia's trade and investment. The importance of the private sector, in line with general post-Cold War trends, is becoming a fact of economic life in each of the SAARC countries. Although governments in the region are liberalizing their respective economies, cross-border interactions and the operation of the private sector are still not very encouraging. The domestic economic liberalization programmes of the SAARC countries are not being matched by a regionally formulated cross-border liberalization programme. Private sector actors need to be moti- vated to co-operate and integrate through time-bound, business-friendly action plans. The identification of techno-economically sound projects for joint ven- tures can open up real avenues for the successful integration between the private sectors of the participating countries. The process may better get off the ground with subregional efforts that may lead the regional tempo at a later stage. Closely related to the expansion and integration of the private sector is the development of regional communication infrastructure, the second-most import- ant component of the fast-track approach. Quick expansion of trade and investment requires quick expansion of transport infrastructure, including cross- border linkages in road and rail communications, and navigation lines. Infra- structure development also includes telecommunications, large-scale land development, water and power supply, and extensive air links between the growth areas and the rest of the country to facilitate backward and forward linkages. Efforts towards regional integration otherwise can be neither significant nor sustainable. Prior to the partition of British India in 1947, the different parts of northeast