Economy, development to top SAARC summit

Economic and development agenda will figure prominently during the 15th SAARC summit scheduled for August 2-3, in the Sri Lankan capital, Colombo.
South Asia — home to over 1.4 billion people from India, Pakistan, Nepal, Sri Lanka, Bangladesh, Bhutan, the Maldives and latest entrant Afghanistan — has created SAARC for a joint effort to raise the living standards of the people of this region.
The heads of the eight South Asian states will take up issues including Implementation of SAARC Regional Multimodal Transport Study (SRMTS), Operationalisation of SAARC Development Fund, Implementation of SAFTA, Trade facilitation Agreements/Measures, Poverty Alleviation, food crisis and Energy. These issues could have a long term impact on the economic and development integration of the region if they are implemented.
SAFTA, a major issue in the economic integration of South Asia — home to 24 per cent of the world's population and 40 per cent of the world's poor — came into effect from 2006 January 1.
The SAFTA agreement was reached at the 12th SAARC summit in Islamabad, the capital of Pakistan, on 2004 January 6. Seven foreign ministers of the region signed a framework agreement on SAFTA with zero customs duty on the trade of practically all products in the region by end 2016. After some changes in SAARC Preferential Trading Arrangement (SAPTA), the modified and more efficient mechanism of regional trade agreement — SAFTA — came into being on 2006 January 1.
Trade liberalisation programme under SAFTA through reduction of tariff rates by member countries is also taking place as scheduled or even earlier (seven years for non-Least Developed Countries and 10 years for LDCs) to bring down tariff.
"However, Nepal has not seen trade under SAFTA, even after two-and-a-half years," said commerce secretary Purushottam Ojha. It might be weakness on Nepal's part or a sign of SAFTA's failure;
the summit will also be a ground for introspection. Introspection is needed also because the total intra-regional trade among the member countries in SAARC is less than six per cent of the total international trade of the region.
The difference between India and Pakistan in the administration and management of SAFTA needs to be resolved for a full-fledged implementation of provisions under the SAFTA agreement.
Member countries' bid to get sensitive items excluded from their import lists also has not allowed SAFTA to move ahead as desired.
This summit will also discuss a number of trade facilitation agreements and measures like SAARC Mutual Administrative Assistance in Customs Matters, SAARC Multilateral Agreement on Avoidance of Double Taxation and the Agreement on Promotion and Protection of Investment (draft).
The period 2006-2015 has been declared the SAARC Decade of Poverty Alleviation in keeping with the commitments of the Millenium Development Goals (MDGs) and SAARC Development Goals (SDGs). The summit will also discuss operationalising the Social window of the SAARC Development Fund (SDF) that is going to open up important avenues in regional implementation of many poverty alleviation projects.
The 15th summit will also find out ways of tackling the energy crisis. Development of renewal and alternative sources of energy available in the region is the need of the hour. The rising energy crisis has called for a concept of SAARC Energy Ring and regional energy trade that is in the process of being developed by experts in such a way that they encompass all energy resources and allow all SAARC countries equitably share in energy resources as well as easier and efficient access to commercial energy resources such as oil and gas through the trans-South Asian pipeline.
The 11th summit held in Kathmandu (4-6 January 2002) provided some impetus to the shared aspirations for a more prosperous South Asia, especially the creation of an Economic Union for regional integration. At the summit, SAARC leaders agreed to accelerate cooperation in core areas like trade, finance and investment to realise the goal of an integrated South Asian economy in a step-by-step manner. They also agreed to the vision of a phased and planned process eventually leading to a South Asian Economic Union (SAEU).
At the 12th SAARC summit held in Islamabad (4-6 January 2004) the SAARCFINANCE was given the responsibility of studying and making recommendations for early and eventual realisation of a SAEU. It was also tasked with examining the concept of a South Asian Development Bank.
However, the process is moving at snail's pace. Work is still in the stage of setting up of Preferential Trade Agreement and reducing customs. It will be followed by setting up a Free Trade Area, a united Customs Union and a Free Market where labour and capital can freely move and the process finally leads to a SAEU.