21-27 October 2016 #830


Boycotting summits is not the answer, South Asian countries need to set aside politics and be more flexible to foster trade and connectivity
Pradumna B Rana
Subhas Rai

India and four other countries pulled out of the 19th summit of the South Asia Association for Regional Cooperation (SAARC) which was to be held in Islamabad in November. This was a fallout of the deadly attack on the Indian Army base in Kashmir on 18 September. Afghanistan, Bangladesh, Bhutan, and Sri Lanka followed suit and this led to the cancellation, and the pronouncement by several commentators that ‘SAARC is dead’.

However, this is not the first time for a SAARC Summit to be cancelled. They have either not been held or postponed in roughly half the times. In all the cases, the main reason has been tension between India and Pakistan, the club’s two nuclear-capable members. The death of SAARC, however, may be exaggerated.

Even so, boycotting the summit will weaken further a weak institution. Member states should instead work to strengthen SAARC mechanisms to address regional concerns. Decision-making is often stymied because SAARC needs a full consensus of all its members. ASEAN is more flexible because it has the ‘ASEAN Minus X’ scheme under which members that are not ready to commit to an initiative can opt out so that progress will not be held up. SAARC Minus X could be a helpful mechanism.

South Asian countries should also venture out of the SAARC framework through bilateralism and sub-regionalism. Indian Prime Minister Narendra Modi supported this approach at the 18th Summit in Kathmandu in 2014, where he remarked that regional integration in South Asia should go ahead “through SAARC or outside it, among all of us or some of us”.

Bilateralism was a key pillar of Prime Minister Modi’s ‘Neighbours First Policy’ and his first day in office in May 2014 was dedicated exclusively to bilateral meetings with the leaders of SAARC countries. His first state visit was to Bhutan and then Nepal. Unfortunately, the outcomes of this grand vision have been disappointing and limited to a number of connectivity projects with three countries, Afghanistan, Bangladesh, and Sri Lanka.

Sub-regionalism could also be less sensitive for SAARC members. These include the ADB-led South Asia Sub-Regional Economic Cooperation (SASEC) whose members are India, Bangladesh, Bhutan, Maldives, Nepal, and Sri Lanka. The ADB has approved 40 infrastructure and IT projects worth $7.7 billion for this grouping.

The Bangladesh-India-Bhutan-Nepal (BIBN) is another sub-regional grouping that shows promise after the signing in June 2015 of the BIBN Motor Vehicle Agreement. This Agreement enables vehicles to enter any of the four countries without the need for trans-shipment thereby reducing costs. Plans for energy cooperation are also under consideration.

South Asian countries should also enhance their inter-regional linkages with ASEAN, their largest market. Historically, commercial and religious links between South and Southeast Asia were strong and led to a prosperous and integrated Asia.

More recently, economic relations between South Asia and Southeast Asia have surged but their full potential has yet to be realised. South Asian countries need to implement policies to link themselves to production networks in ASEAN and to develop production networks within their own countries. Such policies will lead to a win-win situation for all countries, and help to jump-start economic integration in South Asia.

The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is the appropriate institutional framework to promote inter-regional cooperation because it connects South Asian countries (except Pakistan and Afghanistan) with some East Asian countries (Myanmar and Thailand). In a survey of Asian opinion leaders four out of five leaders felt that BIMSTEC should play a more active role in promoting regional connectivity and integration in Asia.

India hosted the BIMSTEC Summit in Goa lastr week on the sidelines of the BRICS Summit where issues related to transport as well as electricity and broadband connectivity were discussed. Another inter-regional grouping is the Indian Ocean Rim Association (IORA) in which the recently held India-led Indian Ocean Conference 2016 is a step in the right direction.

Before the partition of India and Pakistan in 1947, South Asia was one of the most integrated regions of the world. At that time more than one-half of Pakistan’s imports and nearly two-thirds of its exports were from India. It is estimated that the volume of intra-regional trade in South Asia then stood at about 20 per cent of its total trade. This has fallen to a dismal 5 per cent due to political conflict and mistrust.

Boycotting the SAARC is not the answer. South Asian countries should adopt SAARC Minus X with bilateralism, sub-regionalism, and inter-regionalism outside of the SAARC framework.

Pradumna B Rana is Associate Professor at the S Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore.

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