All that is about to change. India can collect a handsome dividend from the successful Saarc summit, in the form of a much more profitable relationship with the 15-nation European Union (EU).
The Saarc dividend will be evident in the paper setting out a more effective strategy for EU-India relations which the EUs executive arm, the European Commission, will be sending to the 15 EU governments and the European Parliament.
There is a dividend awaiting Pakistan also. The European Parliament can be expected to end its opposition to the economic cooperation agreement between the European Union and Pakistan, which has yet to come into force, although it was concluded some years ago. And Saarc itself will benefit from the Saarc dividend.
The long-forgotten memorandum of understanding between the European Commission and the Saarc Secretariat in Kathmandu will be dusted off, paving the way for closer regional cooperation.
A striking outcome of the breakthrough in Islamabad was the presence of all the Saarc ambassadors to the EU at a meeting organised by a Brussels-based think tank to analyse the summits outcome.
The unity displayed by the ambassadors of India, Pakistan, Bangladesh, Sri Lanka and Nepal was welcomed by the members of the European Parliament present at the meeting.
The ambassadors can drive forward relations between their countries and the EU, at both the bilateral and regional level, if they remain united.
They could speak to the EUs chief trade negotiator, Pascal Lamy, with far greater effect if they were to meet him collectively rather than individually.
Take the EUs generalised system of preferences (GSP). The European Commission is currently reviewing its GSP scheme, and more particularly the rules of origin under which exports from developing countries qualify for GSP treatment.
It clearly will not be easy for Saarc countries to agree on a common position on the GSP. Bangladesh, Nepal and Bhutan enjoy both duty-and-quota-free entry as least developed countries, although none can take full advantage of their additional benefits because of their inability to comply with the rules of origin.
EUs decision to grant Pakistan additional GSP benefits under the schemes provisions for combating drug trafficking was successfully challenged by India in WTO. Even the success of the Saarc summit is unlikely to undo entirely the hostility generated by Indias action.
It is very important, however, that Saarc countries translate their success at the political level into effective economic cooperation.
One of the instruments available to them for this purpose is the regional cumulation of origin, which makes it easier for Saarc countries to comply with the EUs rules of origin.
At present only a limited quantity of Bangladeshs garment exports to the EU actually benefits from the GSP scheme. By using Indian or Pakistani fabrics Bangladesh garment manufacturers would ensure that a much higher proportion of their exports enjoyed duty-free entry. But this solution is hardly to the liking of the countrys burgeoning textile industry.
This example illustrates the difficulties facing the Saarc countries as they seek to present a united front in their negotiations with the EU. Will the successful implementation of the Framework Agreement on South Asian Free Trade Agreement (Safta) make it easier for them to present a united front
The Islamabad Summit Declaration contains detailed provisions for poverty alleviation. They include approval of the Plan of Action on Poverty Alleviation. Now poverty alleviation is a key feature of many of the EUs development projects in individual Saarc countries. Might it be possible for the Saarc countries and the EU develop a regional approach to poverty alleviation, as a complement to the bilateral approach
The Islamabad Declaration covers numerous areas for regional cooperation. They include tourism, science and technology, social issues, environmental protection and combating terrorism. Many of these subjects are being discussed between the EU and individual Saarc countries.
The challenge facing these countries is to see how far cooperation in the Saarc framework can be extended to cooperation with the EU. Given the necessary political will, it is clear that the Saarc diplomatic missions to the EU can help lay the foundations for more effective cooperation between the two regions over a wide range of subjects.
As Ambassador PK Singh pointed out at the meeting held here earlier this week, the Saarc countries are somewhat jealous of the successes achieved by other regional groupings.
The Sri Lankan Ambassador, CR Jayasinghe, pointed to the concern in South Asia that the region runs the risk of being marginalized. Hence the need to build on the success of the Saarc Summit in relations with the EU. The South Asian leaders will have the full support of EU leaders, who have welcomed the outcome of the Saarc summit.
The EU Presidency, currently held by Ireland, declared the joint statement by India and Pakistan on their composite dialogue as "particularly welcome." This "constructive dialogue would promote progress towards their common objective of peace, security and economic development," the Presidency pointed out.
The EUs high representative for foreign and security policy, Javier Solana, congratulated the Indian and Pakistan foreign ministers by telephone, and conveyed to them the EUs readiness to help them achieve their common objectives of peace, security and economic development."
The European Commission President, Romano Prodi, "warmly welcomed the successful outcome of the Saarc Summit," and saw in the process of composite dialogue launched by India and Pakistan "proof of their commitment to further strengthen the process of confidence building and to resolve outstanding bilateral issues."
It is up to the Saarc countries to take advantage of the support offered them by the EU, at both the bilateral and regional levels.