SAARC and its challenges in changing world

15th Summit begins today in Colombo:

By Indeewara Thilakarathne

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As the 15th SAARC Summit is around the corner, it is opportune for its member states and their people to realize both the potentials that the regional body holds and challenges it has to face in a changing world.

Although SAARC is a large regional body with one - fourth of world’s population in its member states, it has, on many occasions, been pointed out that the effectiveness of the organisation especial in the realms of economic and political activities is less compared to other regional bodies such as AU (African Union) and ASEAN.

However, in the areas of cultural cooperation and, to a certain extent, in intra-regional trade, SAARC has made a considerable progress.

Future cooperation in the areas of trade and finance is perhaps the key to bring about prosperity to far corners of poverty in the region especially in the light of India and China becoming economic powerhouses claiming considerable footholds in the world trade.

China’s Interest

Though China is not a member state of SAARC, it has already become an observer and has an abiding interest in SAARC member states as they offer a market for Chinese goods and potential sources of energy for China’s growing energy requirements.

In fact, one of the areas of focus at the forth coming 15th SAARC Summit will be on the meeting of growing demand for energy. Next to food security which will also discuss at the Summit, the surge for alternative energy sources against rising cost of fossil fuel is an important area where regional cooperation is vital in order to ensure sustainable supply of energy.

Regional Cooperation and region-wise action plan will, in the long run, help curb present totally dependency on fossil fuel for generation of power.

Food Security

Following the devastating floods in Burma, the ‘Rice bowl of Asia’ and precipitating of climatic changes in other countries of the region, a scarcity of rice, the main staple of the region, was created, reaching the price of rice unaffordable for most of the citizens and compelling some rice exporting countries to restrict export only to Basmati varieties of rice.

Perhaps the daunting challenges before the regional body are combating growing threat of cross border terrorism, drug trafficking, ensuing food security in the region and meeting the growing need for energy by harnessing alternative sources of power.

15th SAARC Summit will focus on greater partnership, Food security and meeting the growing demand for energy in a sustainable manner. Seven countries will participate for the 15th SAARC conference, as ‘observers; Japan, United States, European Union, China, Mauritius, Iraq and South Korea; while Australia and Myanmar have also requested to participate in the same capacity. However, final decision in this regard has not been taken.

The Objectives

To promote the welfare of the peoples of South Asia and to improve their quality of life; -

* to accelerate economic growth, social progress and cultural development in the region and to –

* provide all individuals the opportunity to live in dignity and to realize their full potential; -

* to promote and strengthen collective self-reliance among the countries of South Asia; -

* to contribute to mutual trust, understand and appreciation of one another’s problem; - to promote active collaboration and mutual assistance in the economic, social, cultural, technical and scientific fields; - to strengthen cooperation with other developing countries; - to strengthen cooperation among themselves in international forums on matters of common interest; and - to cooperate with international and regional organisations with similar aims and purposes.

South Asian Free Trade Agreement (SAFTA) and South Asian Preferential Trading Agreement (SAPTA)

The initial discussion on the South Asian Free Trade Agreement was held among member States at the 12th SAARC Summit held in Pakistani capital Islamabad on 6th January 2004. At the Summit agreement was reached on the South Asian Free Trade area, creating a framework for setting up of a free trade zone in the region.

Foreign Ministers of the member states signed framework agreement on SAFTA with zero customs duty on the trade almost all products in the region by end of 2016.

The SAARC Preferential Trading Arrangement (SAPTA), with concessional duty on sub-continent trade, came into operation on 7 December 1995. The new agreement i.e. SAFTA, came into being on 1 January 2006 and will be operational following the ratification of the agreement by the seven governments.

SAFTA necessitates India, Pakistan and Sri Lanka, to bring their duties down to 20 percent in the first phase of the two year period ending in 2007. In the final five year phase ending 2012, the 20 percent duty will be reduced to zero in a series of annual cuts.

The least developed nations in South Asia consisting of Nepal, Bhutan, Bangladesh and Maldives have an additional three years to reduce tariffs to zero.