The South Asian Association for Regional Cooperation (SAARC) was established when its Charter was formally adopted on 8 December 1985 by the Heads of State or Government of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. The idea of regional cooperation in South Asia was first mooted in May 1980. The Foreign Secretaries of the seven countries met for the first time in Colombo in April 1981. The Committee of the Whole, which met in Colombo in August 1981, identified five broad areas for regional cooperation. The Foreign Ministers adopted the Declaration on South Asian Regional Cooperation in 1983 in New Delhi.
During the meeting, the Ministers also launched the Integrated Programme of Action (IPA) in nine agreed areas, namely, Agriculture; Rural Development; Telecommunications; Meteorology; Health and Population Activities; Transport; Postal Services; Science and Technology; and Sports, Arts and Culture. The Association provides a platform for the peoples of South Asia to work together in a spirit of friendship, trust and understanding. It aims to promote the welfare of the peoples of South Asia and to improve their quality of life through accelerated economic growth, social progress and cultural development in the region.
The Objectives of the Association as defined in the Charter are:
•To promote the welfare of the peoples of South Asia and to improve their quality of life
•To accelerate economic growth, social progress and cultural development in the region and to provide all individuals the opportunity to live in dignity and to realize their full potential
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•To promote and strengthen collective self-reliance among the countries of South Asia
•To contribute to mutual trust, understand and appreciation of one another’s problem
•To promote active collaboration and mutual assistance in the economic, social, cultural, technical and scientific fields
•To strengthen cooperation with other developing countries
•To strengthen cooperation among themselves in international forums on matters of common interest
•To co-operate with the international and regional organizations that have the similar aims and purposes.
Principles:
•Cooperation within the framework of the Association is based on respect for the principles of sovereign equality, territorial integrity, political independence, noninterference in the internal affairs of other States and mutual benefit;
•Such cooperation is to complement and not to substitute bilateral or multilateral cooperation; and such cooperation should be consistent with bilateral and multilateral obligations of Member States.
General Provisions:
•Decisions at all levels in SAARC are to be taken on the basis of unanimity; and
•Bilateral and contentious issues are to be excluded from the deliberations of the Association.
Areas of Co-operation:
At the inception of the Association, the Integrated Programme of Action (IPA) consisting of a number of Technical Committees (TCs) was identified as the core areas of cooperation. Over the period of years, the number of TCs was changed as per the requirement. The current areas of cooperation under the reconstituted Regional Integrated Programme of Action which is pursued through the Technical Committees cover:
1.Agriculture and Rural Development;
2.Health and Population Activities;
3.Women, Youth and Children;
4.Environment and Forestry;
5.Science and Technology and Meteorology;
6.Human Resources Development; and
7.Transport.
Recently, high-level Working Groups have also been established to strengthen cooperation in the areas of Information and Communications Technology, Biotechnology, Intellectual Property Rights, Tourism, and Energy. The emphasis laid down at successive Summits on the need to expand the areas of cooperation and strengthen regional cooperation, has led to inclusion of other fields in the SAARC agenda. Several Ministerial level meetings have taken place to give due emphasis in various fields.
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SAARC SUMMITS HELD SINCE 1985
1st SAARC Summit7 – 8 December 1985Dhaka
2nd SAARC Summit16 – 17 November 1986Bangalore
3rd SAARC Summit2 – 4 November 1987Katmandu
4th SAARC Summit29 – 31 December 1988Islamabad
5th SAARC Summit21 – 23 November 1990Male’
6th SAARC Summit21 December 1991Colombo
7th SAARC Summit10 – 11 April 1993Dhaka
8th SAARC Summit2 – 4 May 1995New Delhi
9th SAARC Summit12 – 14 May 1997Male’
10th SAARC Summit29 – 31 July 1998Colombo
11th SAARC Summit4 – 6 January 2002Katmandu
12th SAARC Summit2 – 6 January 2004Islamabad
DESIGNATED SAARC YEARS
1989SAARC Year of Combating Drug Abuse and Drug Trafficking
1990SAARC Year of Girl Child
1991SAARC Year of Shelter
1992SAARC Year of Environment
1993SAARC Year of Disabled Persons
1994SAARC Year of the Youth
1995SAARC Year of Poverty Eradication
1996SAARC Year of Literacy
1997SAARC Year of Participatory Governance
1999SAARC Year of Biodiversity
2002-2003SAARC Year of Contribution of Youth to Environment
2004SAARC Awareness Year for TB and HIV/AIDS
2005South Asia Tourism Year
INTEGRATED PROGRAMME OF ACTION (IPA)
The IPA is a key component of the SAARC process and includes twelve agreed areas of cooperation, each being covered by a designated Technical Committee. In response to the emphasis given by successive Summits on the need to further consolidate and streamline IPA and to make it more result oriented, a comprehensive set of guidelines and procedures was adopted in 1992 for the rationalization of SAARC activities. As a result, there is now a greater focus on activities that would bring tangible benefits to the people of South Asia.
The Secretary-General reports on the progress in the implementation of IPA to the Standing Committee, both at its inter-Summit and pre-Summit Sessions. The Standing Committee has also taken the initiative to review the institutional mechanisms and activities of the Association, including, the evaluation of the functioning of the Technical Committees, amalgamation/alteration of their mandate and also a review of the role of the Secretariat.
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With 1.3 billion inhabitants in 1999, these countries represent almost 22% of the world population, but only 1.97% of world GNP (575 billion US$ in 1999).
Average per capita income is $441. Indeed, poverty is one fundamental element characterizing the situation in South Asia. SAARC is an organization with strong ambitions, but restricted powers. From the start the scope of SAARC was reduced by the rule of unanimity, by the slowness and consultative nature of the procedures, by the decision to exclude areas of disagreement, and finally by the absence from the beginning of a free trade treaty or a preferential agreement.
By excluding a multilateral approach to bilateral problems, a condition set by India in 1985 for its membership, SAARC’s intra-regional exchanges remained dependent on political decision concerning the opening or closing of frontiers and transport corridors, according to the seriousness of local crises in the frontier regions. Unlike other regional organizations, commercial discrimination was directly aimed against the closest neighbour. It is then no surprise that the total external trade of the region amounts to 0.8% of world exports and 1.3% of world imports. Intra-regional exchanges represent only 5.3% (exports) and 4.8% (imports) of the total.
Lastly, there is a syndrome of asymmetry between India (76% of the total population and 77% of the regional GNP) and its neighbours. This is intensified by the fact that India is situated geographically at the center of states, which have no common frontiers. In addition, geopolitical tension between Pakistan and India has further complicated regional co-operation.
Technical committee:
1. Agriculture (TC01):
Agriculture was among the original five areas identified for fostering regional cooperation. Subsequently, Forestry was also included in the work of the Technical Committee. Two important project proposals namely
(i) Promotion of the “Bio-Villages, and
(ii) Reaching the Million – Training of Farmers and Farm Women by 2000 A.D. have recently been completed and future course of action on these proposals is underway.
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2. Communications (TC02);
TC on Telecommunications and TC on Postal Services both established in 1983, which had hitherto functioned separately were amalgamated into a single TC on Communications with effect from 1993. This was done with a view to bring about an over-all improvement in the postal services in the region.
3. Education, Culture and Sports (TC03):
TC on Education (established in 1989) and TC on Sports, Arts and Culture (established in 1983) were amalgamated into a single TC on Education and Culture with effect from 1993. TC03 was renamed in 1995 as TC on Education, Culture and Sports. The priority themes identified for cooperation in the field of Education are Women and Education; Universal Primary Education; Literacy, Post Literacy and Continuing Education; Educational Research; Science and Technical Education, Education for the Underserved Areas and Distance Education.
4. Environment (TC04):
The Third SAARC Summit (Kathmandu, 1987) decided to commission a study on “Causes and Consequences of Natural Disasters and the Protection and Preservation of the Environment”. National Studies were undertaken and subsequently consolidated into a Regional Study, which was approved by the Sixth SAARC Summit (Colombo, 1991).
5. Health and Population Activities (TC05):
Health and Population Activities was one of the original five areas of cooperation identified by member states. The First Meeting of TC05 was held in 1984. The primary focus of TC05 has been on children, population welfare and policy, maternal and child health, primary health care, disabled and handicapped persons, control and eradication of major diseases in the region such as malaria, leprosy, tuberculosis, diarrhea diseases, rabies, AIDS, and iodine deficiency disorder.
6. Meteorology (TC06):
Meteorology was also one of the five areas of cooperation initially identified by member states. State-of-the-art Reports on Western Disturbances, Tropical Cyclones including Prediction of Recurvature, Thunder Storms, Long Range Forecasting of Monsoon Rain, Short Range Prediction of Monsoon and Norwesters, Tornadoes and Water Sprouts, have been completed. Expert panels have been convened on specialized fields such as Agro-meteorology; Climatology and Data Exchange; and Instrumentation.
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7. Prevention of Drug Trafficking and Drug Abuse (TC07):
Since its establishment in 1987, TC07 has implemented a number of programmes in law enforcement, prevention, treatment and rehabilitation as essential elements of a coordinated regional strategy in combating drug trafficking and drug abuse. It contributed significantly towards the finalization of the SAARC Convention on Narcotic Drugs and Psychotropic Substances in November 1990, which came into force in September 1993 upon its ratification by all member states.
8. Rural Development (TC08):
Rural Development is one of the five original areas identified for cooperation under the IPA. The first meeting of the Committee was held in 1984. Specific activities taken up by the Technical Committee include, exchange of information and literature among member states on issues relating to rural development, preparation of research studies on selected topics, compilation of lists of experts, training institutes, and institutions involved in transfer of appropriate technology in member states, with a view to exchanging expertise and sharing training facilities within the region.
9. Science and Technology (TC09):
Since its establishment in 1983, TC09 has undertaken a wide variety of programmes which include short-term activities such as Seminars / Workshops, Training Programmes, Joint Research Projects, preparation of State-of-the-art Reports and compilation of Directories.
10. Tourism (TC10):
TC10 was established in 1991 to promote cooperation in the field of tourism in the region. At its first meeting held in Colombo in October 1991, the Committee decided on an Action Plan on Tourism to promote cooperation in the areas such as training programmes, exchange of information, joint promotion, joint-venture investment, intraregional tourism etc.
11. Transport (TC11):
In recognition of the importance of the transport sector, TC11 was set up in 1983. The work of the Technical Committee covers three major segments of transport, i.e. land transport, divided into roadways and railways; sea transport sub-divided into inland waterways and shipping; and air transport. The activities of TC11 cover exchange of data and information, preparation of status papers, compilation of database and directories of consultancy centers for transport sector. Seminars and Workshops have covered areas such as Material and Cost of Road Construction, Maintenance of Roads, Rural Roads, Road transportation and safety; Containerization for Railways, Urban transportation, Inland Water Transport, Maritime Transport etc.
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12. Women in Development (TC12):
Women in Development were included as an area of cooperation under the IPA in 1986. Specific issues taken up by TC12 include, preparation of a Regional Plan of Action for Women, effective dissemination of technical information relating to women in development generated by member states, preparation of Guide Books on Women in Development by member states etc. SAARC Women’s Journals on specific themes relating to women in development have been published to coincide with important events like SAARC Summits.
SAARCLAW:
South Asian Association For Regional Co-operation in Law, SAARCLAW, is an association of the legal communities of the SAARC countries comprising judges, lawyers, academicians, law teachers, public officers and a host of other law-related persons, duly registered with the SAARC Secretariat at Kathmandu and has been given the status of a Regional Apex Body Of SAARC. It owes its origin to the desire of the members of the legal community to establish an association within the SAARC region to disseminate information and to promote an understanding of the concerns and developments of the region.
SAARCLAW was established in Colombo on 24th October 1991. In the ensuing twelve years, affiliate Country Chapters have been established in Bangladesh, Bhutan, India, Nepal, Pakistan and Sri Lanka and activities of the Organization have also taken place in the Republic of Maldives.
Objectives:
•To bring together the legal communities within the region for closer co-operation, developing understanding, promoting exchange of ideas and dissemination of information.
•To use and develop law as a source and an instrument towards social change for development as well as for building co-operation among the peoples of the region
TRADE AND ECONOMIC COOPERATION
SAARC has taken important steps to expand cooperation among member countries in the core economic areas. In 1991, a Regional Study on Trade, Manufactures and Services (TMS) was completed outlining a number of recommendations for promoting regional cooperation in the core economic areas. At the Colombo Summit in December 1991, the Heads of State or Government approved the establishment of an Inter-Governmental Group (IGG) to seek agreement on an institutional framework under which specific measures for trade liberalization among SAARC member states could be furthered.
IGG evolved a draft Agreement on SAARC Preferential Trading Arrangement (SAPTA) during its first two Meetings. Subsequently, the Council of Ministers, upon the recommendation of CEC signed the framework Agreement on SAPTA in Dhaka on 11 April 1993 during the Seventh SAARC Summit. In the subsequent four Meetings of IGG, the member states conducted their bilateral/multilateral trade negotiations in which they exchanged concessions to be offered/sought.
The Consolidated National Schedules of Concessions were finalized in the Sixth Meeting of the IGG held at the SAARC Secretariat, Kathmandu on 20-21 April 1995 and subsequently approved by the Council of Ministers in May 1995. All SAARC member countries have ratified the SAPTA Agreement and as per Article 22 of the Agreement, SAPTA will enter into force on 7th December 1995 – two years ahead of the time schedule envisaged initially. The Council of Ministers at its Fifteenth Session agreed that the full and timely realization of the benefits of regional economic cooperation required.
•The implementation of other related measures such as the removal of para-tariff, non-tariff and other trade control barriers within the specific timeframes;
•Eventual progression to the creation of a free-trade area in the region.
Economic:
The acceleration of economic growth is a Charter objective of SAARC. Cooperation in the core economic areas among SAARC Member Countries was initiated following the Study on Trade, Manufactures and Services (TMS), which were completed in June 1991. The Study considered economic cooperation among the countries of the SAARC region as an imperative for promoting all-round development of the region. The Council of Ministers at its Ninth Session in Male in July 1991 endorsed the Study and established the Committee on Economic Cooperation (CEC) comprising Commerce/Trade Secretaries of Member States.
Committee on Economic Cooperation (CEC):
The CEC is mandated to formulate and oversee implementation of specific measures, policies and programmes to strengthen and enhance intra-regional cooperation in the fields of trade and economic relations. Over the years, the CEC has emerged as the central group within SAARC addressing economic and trade-related issues. It has provided recommendations and guidance in identifying new areas of cooperation as well as considering reports of specially constituted groups.
Its specific functions include analyzing inter-regional and global developments which impact on intra-regional cooperation; evolving joint strategies and common approaches at international forums; and recommending policies and measures for promoting intra-regional trade, joint ventures, industrial complementarity’s and investments.
At the Colombo Summit in December 1991, the Heads of State or Government approved the establishment of an Intergovernmental Group (IGG) to seek agreement on an institutional framework under which specific measures for trade liberalization among SAARC member states could be furthered. IGG evolved a draft Agreement on SAARC Preferential Trading Arrangement (SAPTA) during its first two Meetings. Subsequently, the Council of Ministers, upon the recommendation of CEC signed the framework Agreement on SAPTA in Dhaka on 11 April 1993 during the Seventh SAARC Summit.
Trade Facilitation Measures:
SAARC has also initiated action on a series of practical measures to facilitate the process of economic integration. In 1996, a Group on Customs Cooperation was set up and entrusted with a mandate, inter-alia, to harmonize customs rules and regulations; to simplify documentation and procedural requirements; to upgrade infrastructure facilities; and to provide training facilities has also been drawn up. Four meetings of the Group have been held. A Customs Action Plan has been agreed upon.
The Fourth Meeting of the Group on Customs Cooperation (Faridabad – India, 12-13 August 2004) considered the Report of the Customs Consultant engaged to study and make recommendations on measures to be taken for simplification of procedures and standardization of customs documents and declarations. A Standing Group on Standards, Quality Control and Measurements was also established by the SAARC Commerce Ministers in May 1998. The Group has met thrice so far.
The key elements of the Regional Action Plan on Standards, Quality Control and Measurements have been agreed upon. The Standing Group considered a proposal for collaborative arrangement with the German national metrology institute, Physikalisch-Technische Bundesanstalt (PTB).
A Memorandum of Understanding has been signed between SAARC and PTB.
With a view to facilitating intra-regional trade, particularly with the scheduled entry into force of the South Asian Free Trade Area (SAFTA) from January 2006, the Standing Group, at its Third Meeting (New Delhi, 18-19 May 2004) made important recommendations in the area of harmonization of standards, conformity assessment procedures, testing and metrology as well as accreditation.
A draft Regional Agreement on Promotion and Protection of Investment within the SAARC Region is under the consideration of Member States and is meant to create conditions favourable for promoting and protecting investments in Member States by investors from other Member States. In order to speed up the process of negotiations the Twelfth Summit (Islamabad, 4-6 January 2004) decided that an Inter-Governmental Expert Group (IGEG) be constituted to consider the following:
•Agreement on Promotion and Protection of Investment;
•Establishment of a SAARC Arbitration Council; and
•Multilateral Tax Treaty with a limited scope with regard to Avoidance of Double Taxation
International Co-operation In Trade:
South Asian foreign ministers signed a framework pact on a free-trade area on Tuesday, the final day of a summit that saw the first talks between India and Pakistan since 2001 and raised hopes for regional cooperation.
The agreement to reduce or eliminate tariffs by the seven nations of the South Asian Association for Regional Cooperation is to come into force from the start of 2006, but its success hinges on peace moves by India and Pakistan, its biggest members.
SAARC’s developing states — Pakistan, India and Sri Lanka — will cut tariffs to between zero and five percent within seven years of the start of the agreement.
Its least developed states — Bangladesh, Nepal, Bhutan and the Maldives — have ten years to complete the process, though all members can maintain a list of sensitive products on which tariffs will not be reduced.
Trade Fairs:
The holding of SAARC Trade Fairs has become a regular feature since 1996 when the first Trade Fair was held in India. The Trade Fairs are one of the important vehicles for promoting intra-SAARC trade. The following are the details of the SAARC Trade Fairs held so far:
First1996New Delhi
Second1998Colombo
Third2001Karachi
Fourth2002Kathmandu
Fifth2003Dhaka
The Sixth SAARC Trade Fair is scheduled on 6-10 January 2005.
Agreement on SAARC Preferential Trading Arrangement (SAPTA):
The Ministers of Member States signed the Agreement on SAPTA on 11 April 1993 during the Seventh SAARC Summit in Dhaka. The initiative towards establishing SAPTA was taken during the Sixth SAARC Summit in Colombo in December 1991. This Agreement is an umbrella framework of rules providing for step-by-step liberalization of intra-regional trade. It envisages periodic rounds of trade negotiations for exchange of trade concessions on tariff, Para-tariff and non-tariff measures.
SAPTA contains provisions giving Special and Favorable Treatment to the Least Developed Countries (LDCs) in SAARC region. Additional measures in favor of LDCs are incorporated in Annex-I of the Agreement. Provisions for safeguard action and balance of payments measures are also incorporated in the Agreement to protect the interest of Member States during critical economic circumstances. It has accelerated the process of trade and economic cooperation in the region.
CEC at its Sixth Meeting (New Delhi, November 1995) recommended that with the operationalisation of SAARC Preferential Trading Arrangement (SAPTA), it is now desirable to work towards removal of para-tariff and non-tariff barriers, widening and deepening the tariff cuts and expanding the list of products to be included for intra-SAARC preferential trade under SAPTA. It reiterated that the South Asian Free Trade Area (SAFTA) is a clear eventual goal, at the same time it noted that the progress towards it may have to be in gradual stages.
To push the SAPTA process forward, it recommended that the Inter-Governmental Group on Trade Liberalization be reconvened to conduct the Second Round of Trade Negotiations under SAPTA and proposed that the first meeting of the second round may take place in early 1996 and appreciated the offer of Sri Lanka to host the same. The Committee also recommended that the first Meeting of the Committee of Participants of SAPTA may be held in the third quarter of 1996 to review the progress in the implementation of the Agreement.
Each member country will notify the SAARC Secretariat and the SAARC Chamber of Commerce and Industry about their overseas bulk purchases. A Group of Experts from Research Institutions of Member States have been requested to commission a tripartite study involving governments, business and academic sectors to accelerate the process of eventual progression to the creation of a free-trade area in the region.
•Cooperation in the field of Handicrafts and Cottage Industries
•Study on Transport Infrastructure and Transit Facilities
Principles:
SAPTA shall be governed in accordance with the following principles
•SAPTA shall be based and applied on the principles of overall reciprocity and mutuality of advantages in such a way as to benefit equitably all Contracting States, taking into account their respective levels of economic and industrial development, the pattern of their external trade, trade and tariff policies and systems;
•SAPTA shall be negotiated step by step, improved and extended in successive stages with periodic reviews;
•The special needs of the Least Developed Contracting States shall be clearly recognized and concrete preferential measures in their favor should be agreed upon;
•SAPTA shall include all products, manufactures and commodities in their raw, semi-processed and processed forms.
Components:
SAPTA may, inter-alia, consist of arrangements relating to:
(a) Tariffs;
(b) Para-tariffs;
(c) Non-tariff measures;
(d) direct trade measures.
South Asian Free Trade Area (SAFTA):
SAPTA was envisaged primarily as the first step towards the transition to a South Asian Free Trade Area (SAFTA) leading subsequently towards a Customs Union, Common Market and Economic Union. In 1995, the Sixteenth session of the Council of Ministers (New Delhi, 18-19 December) agreed on the need to strive for the realization of SAFTA and to this end an Inter-Governmental Expert Group (IGEG) was set up in 1996 to identify the necessary steps for progressing to a free trade area. The Tenth SAARC Summit (Colombo, 29-31 July 1998) decided to set up a Committee of Experts (COE) to draft a comprehensive treaty framework for creating a free trade area within the region, taking into consideration the asymmetries in development within the region and bearing in mind the need to fix realistic and achievable targets.
The Agreement on South Asian Free Trade Area (SAFTA), drafted by the COE, was signed on 6 January 2004 during the Twelfth SAARC Summit in Islamabad. The Agreement is to enter into force on 1 January 2006. Currently, the Sensitive Lists of products, Rules of Origin, Technical Assistance as well as a Mechanism for Compensation of Revenue Loss for Least Developed Member States are under negotiation.
Under the Trade Liberalization Programme scheduled for completion in ten years by 2016, the customs duties on products from the region will be progressively reduced. However, under an early harvest programme for the Least Developed Member States, India, Pakistan and Sri Lanka are to bring down their customs duties to 0-5 % by 1 January 2009 for the products from such Member States. The Least Developed Member States are expected to benefit from additional measures under the special and differential treatment accorded to them under the Agreement.
THE GLOBAL COMPETITIVENESS OF THE SAARC INDUSTRIES:
Due to increased global integration and the upcoming phase-out of the WTO’s Agreement on Textiles and Clothing (ATC), a major theme that deserves attention is the global competitiveness of the SAARC economies. This is especially important in view of the fact that the South Asian economies are dependent on exporting merchandise goods, which are heavily biased towards textiles and apparel (T&A).
Exports for the five largest SAARC economies are depicted in Figure 1. For most, share of world exports has almost doubled barring Pakistan. Similarly, for most countries, the largest increase has been in merchandise exports (except India).
A significant share of merchandise exports is in T&A (Bangladesh 76%, Pakistan 71%, Sri Lanka 54%, Nepal 43%, India 25%).
In the post-ATC regime, better technology-orientation may play an important role in SAARC countries’ level of global competitiveness by reducing a country’s dependence on T&A exports and moving it towards exporting more high-tech goods. For example, over the period 1980-2000, several East Asian began reducing their T&A production and increasing their machinery equipment production (as % of total manufacturing).
In Table 2, we observe that those SAARC countries, which are more technology-oriented, are also the countries, which tend to be less dependent on T&A exports.
Table 2: Technology-orientation
CountryHigh-tech
exports as %
of totalScientists and
engineers in
R&D per million
peopleR&D
expenditure
as % GDP
Bangladesh-51-
India51571.23
Nepal—
Pakistan169-
Sri Lanka11910.18
South Asia avg.4158-
East Asia & Pacific325841.09
Low Income Countries9
India and Sri Lanka rank the highest in technology measures, and also tend to be less dependent on T&A exports. While these two countries are close to the South Asian average in technology parameters, Bangladesh, Nepal and Pakistan fall far behind the South Asian average. However, compared to the East Asian average, even the SAARC ‘stars’ (India and Sri Lanka) have much further to go.
It is clear that as the pace of trade liberalization increases, SAARC economies will need to improve their competitiveness by moving away from traditional low-value exports and emulate the East Asian countries’ structural shift towards high-tech products. Attainment of this will require a concerted effort to improve investment in human capital and research and development.
Tourism
The seven SAARC countries are undoubtedly one of the richest in the world in terms of tourist attractions but unfortunately remained poorest so far, in respect of arrivals. One of the fastest growing industries in the world today is tourism. The year 2004 will surpass 700 million international tourist arrivals. Despite minor setbacks to the flow of international tourist arrivals, receipts from tourism have been in excess of US$ 500 billion. In other words, international tourists spend US$ 1.5 billion every single day. 2004 will go into history as a very strong year for tourism. According to an initial projection, the number of international tourist arrivals is heading for a new all-time record, as growth for the entire year is estimated to reach around 10 per cent.
All regions will share in this increase, although not to the same extent. Almost half of all new arrivals will be recorded in Asia and the Pacific, which already took a share of 27 million of the 58 million new arrivals up to August.
Tourism has been declared as the major force for socio-economic development and has a very positive impact in foreign exchange earnings and employment generation, particularly in developing countries of the world. The SAARC region has not succeeded to the extent that it should to expand their tourism base. With only 4.7 million international visitors, the current share of tourists visiting the SAARC region is very insignificant–less than one per cent of world arrivals. Situation concerning share of tourism receipts is also similar. The reasons cited are as follows:
No Cooperation: The efforts to develop tourism in the region have been taken by some countries but all are in isolation. There exists hardly any cooperation exist among SAARC countries. The countries of SAARC have this far remained isolated in this respect. There have been a lot of talks about cooperation in tourism development, but nothing positive has so far emerged.
Options & Best Approach: In addition to specific product diversification opportunities, within each country, the South Asia region generally would seem to have potential for further development of conference and convention tourism and the incentive tourist markets. Convention facilities exist in some countries and there are meeting facilities in all the countries. South Asia particularly offers excellent opportunities of pre and post conference tours. However, conference and convention tourism is also highly competitive internationally and its feasibility must be carefully studied before proceeding with development.
On paper only: The question of establishing air links between the capitals of seven SAARC countries and develop tourism in the region, is not getting the attention it deserved. This has remained dormant for years and there is no sign of any change of the situation due to lack of sincere political will and failure to find out a common ground. The question of improving air services within the region in general and linking the SAARC capitals in particular has been on SAARC agenda for quite some time. During these years, except some futile exercises, nothing positive in this regard happened.
No progress about tourism: The establishment of direct air link between capitals of SAARC countries is no doubt complex, but promotion of tourism in the SAARC countries and markets it as a region, seems to be not that so. Yet, no significant progress has been made in this regard. The tourism potentials of the SAARC region are enormous. The region can cater to every aspect; a holidaymaker is looking for. Yet, the tiny city-state of Singapore is drawing twice as high a number of tourists than the seven member countries of SAARC put together.
Absence of adequate air link: Among the causes for sorry situation in respect of tourism, inadequate air transport links is believed to be a leading one. There is no doubt, linking of SAARC capitals is an important positive thought in the area of promoting tourism. At a time when long haul traffic is severely affected on account of several factors beyond our control, the seven-countries of the region stand to gain by joint marketing. So, they should look at developing intra-region tourism, since we have common characteristics such as: Culture; Climate; Food and Language.
Conclusion
Interdependence of economies, a process, supported equally by cooperation and competition, has taken an interesting turn, with emergence of regionalism as an important driving force. In this, South Asia, however, has been slow, with minimal integration of its heterogeneous economies. A measure of limited economic integration within south Asia is that intra-south Asia trade accounts for only about 5% of total trade of the region in spite of bilateral FTAs between some of the south Asian nations.
Some of the recent trends are encouraging. For instance, and it often goes unnoticed, intra-saarc trade is growing is growing at a faster rate compared o growth in its overall trade, which by itself has been moderately high. During 1994-2001, while total exports and imports of big five (B-5) South Asian countries (India, Bangladesh, Nepal, Sri Lanka, & Pakistan) had been growing at an average annual rates of 8.2% and 9.4% respectively, intra-B5 exports and imports were seen to be growing at 11.7% and 12.4% respectively.
What then is holding the pace of integration? There are 2 main factors:
•The heterogeneity factor, especially heterogeneity in development levels within the region. This has its own challenge. The challenge in its extreme is that of integrating the odd pair’s e.g. Indian economy with its sub-continental size with that of a tiny single sector economy of Maldives.
•Heterogeneity breeds apprehension that tends to make integration a slow process. Often the apprehensions are so deep-rooted that they tend to blur the vision and make us overlook potential benefits of economic integration.
Thus for South Asia the prescribed solution formula would be (3+4), where by 3 large economies i.e. India, Pakistan and Srilanka could proportionately share the lead responsibilities. This will help build confidence among the 4 LDC members of the members.
There are, however, certain pre-conditions to be met for accelerating this pace, in which India has to play a major role. There is need for accelerated co-operation in capacity building within the region, focusing on development of human capital, including manpower training and entrepreneurship development. Also, there is need for technological co-operation, with focus on greater use of technological capabilities available within the region. A beginning can be made by institutionalizing of the South Asian technology mission, besides establishing a technological bank for South Asia. A South Asian intellectual property organization can be set up to encourage R&D initiatives within the region.
If there are investments there will be more trade surplus, and larger the trade-able surplus, larger is the scope for trade. In this context, certain basic initiatives may be called for:
•The South Asian nations should get into an investment agreement, which should ensure protection of investments.
•The capital flows within the region should be liberalized to facilitate free movement of capital.
•A need for developing an integrated capital market.
•Investment rules and regulation need to be harmonized.
•Extensive co-operation is required in developing infrastructural connectivity and facilitating transit of goods within the region.
