Connectivity crucial to ensuring prosperity in Saarc region

At the Saarc summit held in Colombo, Sri Lanka last week, Prime Minister Manmohan Singh said: ?Economic cooperation, connectivity and integration will be the cornerstone of Saarc in the years ahead. We have already agreed to move towards a South Asian Customs Union and a South Asian Economic Union in a planned and phased manner.? He also mentioned that, ?India has granted zero duty access to our markets to LDC members from January 1, 2008, one year ahead of the target and also pruned our sensitive list for these countries. India?s FTA with Sri Lanka is working satisfactorily bringing benefits to both our economies.?

The South Asian Development and Cooperation Report 2008 that was released recently at Ficci in the Capital by the external affairs minister, Pranab Mukherjee mentions that although South Asia has emerged as one of the world?s fastest growing regions, it faces several challenges. It was brought out by the think-tank Research and Information System (RIS) for Developing Countries located in the Capital. One of the problems that the region has suffered from is the lack of free-flowing trade amongst the countries of the region.

The report, therefore, makes a strong case for the implementation of the South Asia Free Trade Agreement (Safta). ?South-South cooperation and broader regional economic integration bringing together different sub-regions of Asia assume a new relevance and urgency besides deepening the sub-regional cooperation.? Safta, if effectively implemented can scale up intra-regional trade from $ 6 billion to $ 14 billion. As the chair of Saarc, India has stepped up connectivity projects within the South Asian region.

Mukherjee said: ?We have upgraded our railway linkages up to the border points of Raxaul-Birganj and Jogbani-Biratnagar, as identified by the Saarc transport ministers Meeting last year.

We also propose to accelerate the upgradation of the road at Akhaura-Agartala border point shortly. The member states have also commented favourably on our draft regional motor vehicles and railway agreement.?

The external affairs minister called upon the Saarc governments to collectively ensure that growth and development in the region takes place in a crime-free atmosphere where people feel secure. ?The recent bomb blast in Kabul that targeted our embassy emphasises how vulnerable South Asia continues to be to terrorism.?

Mukherjee pointed out that with the negotiations on the Saarc Development Fund (SDF) having been finalised and its interim Cell has been set up at the Saarc Secretariat in Kathmandu, projects have been launched for benefiting the most needy in South Asia. India, he said, has transferred the first tranche of $19.2 million out of its assessed contribution. In addition, to its assessed contribution of nearly $100 million, ?We also propose to transfer the entire amount of $100 million of our voluntary contribution within this financial year,? he said.

Although plagued by violence, instability and infrastructural constraints, connectivity is crucial to move forward. Says Nagesh Kumar, director-general, RIS, ?The Saarc summit (that is currently on in Sri Lanka) is part of a process that continues throughout the year to provide for a deeper integration of the region. The aim is to move forward. The summit is expect to give it direction,? while adding, ?although violence and terrorism threats is on the minds of the leaders of the region, they will take steps to control these acts. As far as the economic agenda is concerned, it will be given further impetus as economic interdependence will result in shared prosperity.? Commenting on violence in the region, Manmohan Singh said: ?Terrrorism continues to rear its ugly head in our region. It remains the single biggest threat to our stability. We cannot afford to lose the battle against the ideologies of hatred, fanaticism and against all those who seek to destroy our social fabric.?

According to a statement issued by the commonwealth business council and the Saarc chamber of commerce and industry, from Sri Lanka where the 15th Saarc summit is on from July 27, South Asian governments have been asked to enhance intra-regional trade and remove significant barriers: improve mobility of people in order to facilitate business development and access to skills.

Mohan Kaul, director general and CEO, commonwealth business council, says, ?South Asia?s growth remains resilient amidst a mood of lowering expectations in almost all developed economies. This provides an opportunity for governments and business in the region to advance the agenda on intra-regional trade if a common commitment can be built on.?

The RIS report emphasises the need to revive an Afghanistan-Pakistan-India- Bangladesh-Myanmar (APIBM) international corridor so as to make South Asia a hub for pan-Asian trade. In addition to the initiatives involving India and Pakistan with South Asian countries and beyond, Sri Lanka-Bangladesh and Bangladesh-Pakistan FTAs are also under considered, according to the report.