President moots idea of common currency for SAARC

by Deepal Warnakulasuriya

The 14th SAARC Summit (South Asian Association for Regional Cooperation) was held on April 3rd and 4th in New Delhi, India with the participation of leaders of India, Pakistan, Nepal, Bangladesh, Sri Lanka, Bhutan, the Maldives and newly joined Afghanistan ended calling for deeper cooperation between the regional countries with a pledge to move away from `rhetoric statements' to meaningful actions.

During the two-day Summit, the leaders had taken a number of important decisions including an effort to strengthen region's security. The reason being LTTE's air attack on Sri Lanka' Air Force Base at Katunayake. President Mahinda Rajapaksa advocated a joint anti-terrorist strategy and was endorsed by Pakistan Prime Minister Shaukat Aziz pointing out that South Asia needed a road map to overcome its challenges and an environment of genuine peace and security.

India's Prime Minister and SAARC Chairperson Dr. Manmohan Singh said that the time had come to move the Association from a declaratory phase to action and implementation.

At the Summit was observed by the representatives of the US, Japan, China, South Korea and European Union for the first time. The most important demand for intensified regional cooperation came from our President Mahinda Rajapaksa who participated at the Summit for the first time.

He said that it was high time for the South Asian region to think about a common currency and explained that it would enhance the productivity of the region and improve trade without barriers.

The President said that the SAARC had not realised its enormous potential yet and at the same time, he sought `a sincere commitment and a strict time table to implement the South Asia Free Trade Agreement' (SAFTA) with the wish of making South Asia `one massive region for enhancement of trade.'

Free trade facilities in the region were discussed for a long time and foundation was laid in 1993 signing an agreement. The SAFTA was put into action on July 1, 2006 after a long lapse after initial discussion and the foundation laying. Even after implementing the SAFTA, it was difficult to see the positive signs for the development of the region's economic cooperation. Many reasons have been shown for this and the Kashmir issue was weighty.

President Rajapaksa's suggestion of introducing a common currency for the region came at this juncture to overcome the existing barriers. Anyhow, the Opposition (UNP) is not moved by the President's suggestion and says it affects the sovereignty of the nation.

According to Opposition Leader Ranil Wickremesinghe, he accepts and supports the free flow of goods, services and finance in the region, but says the idea of a common currency for the region cannot be accepted.

If the suggestion was a reality, there should be a steady economic unity between the SAARC countries.

One independent central bank for the region with sole authority to set monetary policies will be monitoring the economy of the region. To come to that level, a strong economic cooperation between the regional countries is a must and printing currency notes by separate countries has to be stopped.