SAARC

Published on 06 Dec 2024

The South Asian Association for Regional Cooperation (SAARC) was founded on December 8, 1985, with its Secretariat established in Kathmandu, Nepal, on January 17, 1987.SAARC has eight member countries (Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka).

Significance of SAARC

• Neighbourhood First Policy: SAARC provides a valuable platform for India to prioritize its "Neighbourhood First" policy by fostering stronger ties and cooperation with immediate neighbors.

• Geostrategic Significance: Engagement in SAARC allows India to strategically counter China's One Belt One Road (OBOR) initiative by actively involving nations like Nepal, Bhutan, the Maldives, and Sri Lanka in joint development projects and economic collaborations.

• Regional Stability: SAARC plays a crucial role in building mutual trust and fostering peace within the region, contributing to overall stability.

• Global Leadership Role: Active engagement in SAARC offers India a prominent platform to showcase its leadership by taking on additional responsibilities and initiatives within the region.

Challenges in SAARC

• Poor functioning: SAARC has faced significant challenges in holding annual summits, with several postponements due to political reasons.

• Example: The 2016 SAARC Summit in Pakistan was suspended indefinitely due to political tensions, leading to a boycott by India, Bangladesh, and Afghanistan.

• Economic Inefficiencies: Despite 30 years of existence, SAFTA accounts for only around 10% of total regional trade, and intra-SAARC trade flows remain comparatively low.

• Example: Intra-regional trade within SAARC is less than 5% of total trade, contrasting with the higher levels of integration in regions like East Asia (35%) and Europe (60%).

• FDI Disparities: While FDI received by SAARC countries has improved, there is a significant disparity, with over 84% going to India in 2012, leaving other member countries with limited investment.

• Example: In 2012, India received more than 84% of the total FDI in the SAARC region, highlighting the uneven distribution of foreign investment.

• Geopolitical Mistrust: The asymmetry between India and other member countries in terms of geography, economy, and military strength has led to apprehension.

• Example: Smaller SAARC nations have been reluctant to fully implement various agreements, fearing India's dominance in the region.

• Lack of Conflict Resolution Mechanisms: SAARC lacks mechanisms for resolving disputes or mediating conflicts among member countries, hindering progress on contentious bilateral issues.

• Example: The SAARC Charter's unanimity clause has led to the vetoing of proposals, such as the SAARC–Motor Vehicle Agreement, creating roadblocks to regional cooperation.

• Regional Disputes: Ongoing border and water-sharing issues persist among SAARC member countries.

• Example: The India-Pakistan border dispute and the Teesta River conundrum 

• Domestic Political Turmoil: Domestic political instability in various SAARC countries has hampered effective multilateralism.

• Example: The 2022–2023 Pakistan political unrest in Pakistan, rising terrorism in Sri Lanka.

• China's Influence: The imperious role played by China in South Asia has led member countries to prioritize deep bilateral relations with China over regional multilateralism.

• Example: China's Trade Integration with South Asia is stronger than South Asia's within itself.

Why should India revive SAARC?

• BIMSTEC's Limited Credibility: BIMSTEC is not seen as a credible alternative to SAARC.

• Example: BIMSTEC’s focus is on the Bay of Bengal region, thus making it an inappropriate forum to engage all South Asian nations.

• Pakistan factor: India can use SAARC to increase cooperation with Pakistan.

• Example:  India's participation in the Shanghai Cooperation Organisation (SCO) alongside Pakistan raises questions about the consistency of avoiding regional cooperation with Pakistan.

• China's Growing Influence: With SAARC facing operational challenges and BIMSTEC falling short, China is likely to become a significant economic partner, potentially diminishing India's prevailing role.

• Example: All South Asian countries, except Bhutan, have embraced China's Belt and Road Initiative (BRI), leading to numerous Chinese infrastructure projects in the region.

• Firm Stand Against Terrorism: The revival of SAARC could serve as an additional constraint on Pakistan's use of terrorism as a state policy.

• Trade: India, as a regional leader, can take the initiative to slash tariff and non-tariff barriers, fostering greater economic collaboration within SAARC.

• Example: The World Bank notes that South Asian trade stands at $23 billion, a fraction of its estimated value of $67 billion, emphasizing the untapped growth potential.

Way Forward

• Countering Chinese Influence: SAARC can unite to seek sustainable development alternatives, jointly oppose trade tariffs, and advocate for improved terms for South Asian labor globally amidst increasing Chinese investment.

• Build Trust and Partnership: Genuine interest from all member states in building mutual trust, understanding, and partnership is crucial for the healthy growth of SAARC.

• Respect Sovereignty and Non-Interference: Member states should fully recognize each other's sovereignty, territorial integrity, and independence, practicing the principles of Panchsheel and non-interference as outlined in the SAARC Charter.

• Resolve Bilateral Issues: Timely resolution of bilateral and contentious issues between member states is essential to pave the way for smoother regional cooperation. 

• Regional Focus and Priority: Prioritize regional cooperation in areas like trade, investment, and tourism before looking beyond the region. 

• Tangible Outcomes: SAARC should focus on producing tangible outcomes and be viewed as an effective organization delivering results, not just engaged in meetings and ceremonials.

• Enhance SAARC Development Fund: Increase resources for the SAARC Development Fund to implement significant regional projects in connectivity, power generation, scientific development, healthcare, and education.

• Charting Course to SAEU: Progress beyond the Free Trade Agreement (FTA) towards the South Asian Economic Union (SAEU), with measures to genuinely expand regional trade.

• Revision of Decision-Making Process: Reevaluate SAARC's decision-making process based on the unanimity principle to ensure smoother functioning and avoid occasional obstructions.

• Triennial SAARC Summit: Consider shifting to a triennial SAARC summit, offering an extended timeframe for implementing past decisions before making new ones, ensuring a more economical and practical approach.

The need of the hour is to get multilateral energy behind the idea of holding a SAARC summit soon. South Asian countries must realize it soon that they face very similar economic and security challenges. In this context, regional cooperation is necessary, and SAARC alone provides a stage for that.

Tags:
Polity

Keywords:
SAARC south asia South Asian Association for Regional Cooperation SAFTA SAARC–Motor Vehicle Agreement South Asian Economic Union Afghanistan Bangladesh Bhutan India Maldives Nepal Pakistan Sri Lanka international organisation

Syllabus:
General Studies Paper 2