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The need for a regional perspective

1. On December 8, 1985, the leaders of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka signed the Charter of the South Asian Association for Regional Co-operation in Dhaka. The Charter clearly recognised that the SAARC should focus on what unites the member countries. It specifically excluded any bilateral or contentious issues being raised or discussed in forums of the Association. It recognised that increased exchanges and cooperation between the countries of South Asia would lead to the promotion of understanding and friendship between its peoples.

Have the expectations raised about the role of SAARC been fulfilled? What are India's options when a neighbour like Pakistan adamantly refuses to have even normal trade and economic relations with us?

2. Ten summit-level meetings of the SAARC have been held since the Association was established. A wide-ranging programme for co-operation in areas like agriculture and rural development, social development, environment, meteorology and forestry, science and technology, human resource development, transport and communications and energy, has been developed. SAARC members have also cooperated extensively in forums like the WTO and on environment related issues. NGOs, cultural organisations, human rights groups, journalists and academic institutions in the member countries have come closer together, leading to the evolution of a distinctly South Asian identity and fostering a feeling of togetherness.

3. While regional economic co-operation has grown in "soft" areas in SAARC, the countries of South Asia have to vastly expand their co-operation in 'core' areas like trade, industry and investment, if the organisation is to make a meaningful contribution towards enhancing regional progress and prosperity. The Ninth SAARC summit in Maldives set up a 'Group of Eminent Persons' to identify measures to enhance the effectiveness of the Association. The group that included former foreign secretary Muchkund Dubey and Dr V A Pai Panandiker from India, came out with a report entitled SAARC Vision Beyond the Year 2000.

The core recommendation of this group was that negotiations should be concluded by 2001 for South Asia to become a Free Trade Area by 2008, with Least Developed Countries joining in by 2010. Investments are to be promoted by finalising a Regional Investment Agreement and customs procedures, customs infrastructure and standards simultaneously harmonised. The ultimate aim is to make SAARC a Customs Union by 2015 and an Economic Community by 2020. If implemented, the committee's recommendations could well lead to South Asia becoming a region where there would be virtually free movement of people, goods, services and investments across national boundaries.

4. Our economic relations with our neighbours in South Asia are poised to expand rapidly. Exports from Nepal and Bhutan already enjoy duty free access to our markets. We have recently concluded a Free Trade Agreement with Sri Lanka. Indian companies are increasing their investments and collaboration there. We have removed all quantitative restrictions for SAARC countries in 1998 during the course of negotiations for a South Asian Preferential Trading Arrangement.

We have granted wide ranging and non-reciprocal tariff concessions covering 1,758 tariff lines to Bangladesh. We do, however, need to impart greater dynamism to our economic relations with Bangladesh, understand its concerns and compulsions and finalise a free trade agreement with that country. Our economic cooperation with Maldives is also expanding satisfactorily.

5. Where we have run up against a wall is in the development of economic ties with Pakistan. While we grant 'Most Favoured Nation Treatment' to Pakistan, our exports to our western neighbour are subjected to severe restrictions, in gross violation of its WTO commitments and obligations. Indian companies can neither invest nor participate in joint ventures in Pakistan. Further, during the course of SAPTA negotiations, Pakistan chose to confine its interaction with India to only 18 tariff lines.

More importantly, General Musharraf has made it clear that there can be no progress on issues of trade and economic co-operation with India till the Kashmir issue is addressed on Pakistan's terms. Pakistan is thus seeking to make the entire process of South Asian economic co-operation hostage to its ambitions on Kashmir.

6. India cannot allow its regional diplomacy to be stymied by such Pakistani intransigence. In recent years we have actively participated in a multiplicity of fora to expand co-operation in our neighbourhood, whether in the Bay of Bengal, South East Asia, the Indian Ocean or the Gulf and Central Asian regions.

A sub-regional 'Growth Quadrangle' comprising Nepal, Bhutan, Bangladesh and India was set up in 1996. This grouping needs to be activated for the development and optimum utilisation of river water and other resources and to tackle issues like flood control -- all areas where functional co-operation can be of immense benefit. The BIMSTEC grouping, bringing together the littoral States of the Bay of Bengal -- Bangladesh, India, Myanmar, Sri Lanka and Thailand -- has immense potential.

Set up in 1997, BIMSTEC focuses on enhancing co-operation in crucial areas like transportation links, trade, investment, tourism, fisheries and agriculture. It is committed to consultations on developing the Asian Highway Network. It should bring India and other participating SAARC members, together with Myanmar and Thailand -- both members of ASEAN -- in a Free Trade Agreement. Such cooperation will give a boost to prosperity in our northeastern states.

7. Our co-operation with the countries of the economically dynamic South East Asian region is now reinforced by our interaction with them in groupings like the ASEAN Regional Forum and BIMSTEC. The initiative on the 'Ganga-Mekong Swarna Bhoomi Project' taken at the recent ARF meeting will develop our transportation and communications links and economic co-operation not only with Myanmar and Thailand, but also with Vietnam, Laos and Cambodia. It would also enhance our participation in the development of the Mekong Basin.

The recently set up Indian Ocean Rim Association for Regional Co-operation needs to be activated with measures for expansion of trade, investment and communications ties in the Indian Ocean region. With our economy poised for a growth rate of over seven per cent and a growing demand for energy, we need to explore every avenue to expand trade, energy and investment links in our neighbourhood. Our participation in the initiative taken by Kazakhstan for evolving a framework for co-operation across Asia holds the promise of linking us with countries in the Gulf and Central Asian regions on crucial issues like energy security.

8. It would be ideal if Pakistan chooses to constructively participate in promoting trade, investment and economic co-operation in South Asia. There are a number of official level meetings envisaged to implement the recommendations of the Eminent Persons Group. We should wait and see whether Pakistan participates constructively in such meetings. If Pakistan drags its feet, or returns to its usual habit of India baiting in such fora, no purpose will be served by contemplating higher level SAARC meetings. We have to go ahead with strengthening ties of regional economic co-operation including Pakistan if possible, but without Pakistan if necessary.

We should also recognise that granting MFN treatment to Pakistan and allowing it access to our markets in crucial areas like agricultural products and textiles, when it continues to discriminate against our exports and deny us collaboration and investment access, does not serve our interests. The time has come to deal with Pakistan with a policy of benign neglect on issues of regional co-operation, if it persists in its present approach to trade and economic co-operation with us. This will also relieve us from having to listen to constant homilies about 'Indian hegemony' and 'Indian insincerity' -- now a part of the daily diet of the ruling establishment in Pakistan.

Our neighbour should decide whether it wishes to be a constructive partner in economic co-operation in South Asia. It could concentrate its energies in fora like the ECO and OIC, where India is not a member, if it chooses otherwise.

G Parthasarathy