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Sunday, 31 July 2011

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Consensus vital for South Asian business

If SAARC members failed to implement agreed policies and resolutions passed, it will become a talk shop said President of SAARC Chamber of Commerce and Industries (CCI) Annisul Huq.

He was delivering the keynote speech at the SAARC CCI organised seminar on ‘Regional connectivity in South Asia for enhanced cooperation in transportation and communication’ in Colombo last week.

Huq said that SAARC has been unable to implement its own resolutions due to lack of commitment and strong political will which has prevented the region from making any significant progress.

The Business community in the region dreams of one economy, one agreement, one pride, one voice and one region. This is what South Asia needs now, he said.

Strong connectivity in countries in the ASEAN region led them to success. Thailand-Malaysia and Singapore are connected by the North south expressway that extends from the Thai-Malaysia border to Johor Baru and then to Singapore. The Myanmar-Thailand-Cambodia link road starts from the Myanmar-Thailand border passing through Thailand to terminate at Pnom Penh.

Similarly, all major airports in the region operate direct flights between most of the capitals.

One of the reasons as to why Asian has succeeded in connecting itself is due to its massive intra regional trade, which has forced the countries to soothen out their trade barriers as displayed by the zero tariff regimes already in place between the original five members of the organisation and Brunei.

Asian Transport Action Plan 2005-2010 encouraged the countries to upgrade or establish new roads and air networks. The group has realised that their trade potential will remain under exploited in the absence of proper connectivity and will put their ambition of forming an economic union by 2015 in jeopardy.

Huq said that SAARC has grossly inefficient cross border infrastructure and it takes 35 days to move a container from New Delhi to Dhaka and vice versa. It channels through maritime route via Bombay Singapore/Colombo ‘Chittagong port and then by rail to Dhaka. But the same container could have reached Dhaka within five days if there was direct rail connectivity between New Delhi and Dhaka.

Similarly for moving a container from Dhaka to Lahore it is now required to travel 7,162 km by sea instead of 2,300 km across India by rail or road because overland movement across India is not allowed. He pointed out the importance of transport cooperation among Bangladesh, India and Pakistan.

In the SAARC Regional Multi-model Transport Study it has identified ten road corridors, five rail corridors, two water corridors, ten maritime gateways and sixteen aviation gateways. Regrettably not much follow up work has been done he said.

The infrastructure gap in the region in terms of index has been widening since 1990. Sri Lanka is the only country which witnessed some improvement in global infrastructure ranking from 62 to 52 in 2006. India slipped from 50 to 53, Pakistan from 64 to 66, Bangladesh from 73 to 74 during the last 25 years.

Intra regional connectivity in the South Asia region is important not only for transport and trade but also for culture,

communication, education, science, technology and other areas.

Lack of connectivity in the region caused a huge economic cost. South Asian enterprises have to pay 35 percent additional cost due to trading through a third country and wait 10 times more for consignments than those who do direct trade. Due to trade restrictions between the two countries bilateral trade between Pakistan and India is low as $2.5 billion today compared to the potential $10 billion. Lack of capital, institutional and human resource related constraints are the other factors that hinder the implementation of the inter connectivity infrastructure projects.

SARC The Chief Guest External Affairs Minister Prof. G.L. Peris said that better regional connectivity can boost trade and economic activities in all member countries. Sri Lanka has trade and investment ties with members. “We invited Pakistan to invest in Sri Lanka in cement and sugar production during my recent visit there.

 

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