Absence of ‘Region-ness’ in South Asia: A hurdle to Regional Economic Integration

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Regional economic integration is considered to be one of the important components for the development of any region as it brings the unification of economic policies between different states of one region. To achieve regional economic integration, tariff and non-tariff barriers taking place between these states are reduced or abolished. Economic integration helps states increase their political weight in the world. It has been successful in bringing historically hostile countries at one platform. Both political and economic factors are responsible for bringing nations together, but economic factors have always been highlighted more than the political factors since the formation of nation states. Here the South East Asian and European Union states can be taken as a classic example to show how economic dimension brought rival countries together in the same table to negotiate with each other. Kanhiya Lal Chawla, Economic Cooperation among developing countries (Jaipur, RSBA Publishers, 1991), p.2.

Many attempts have been made to bring peace through economic integration in South Asia. However, the colonial heritage of these countries has always been a hindrance to an arduous search of economic integration as the economic links of these countries always remained tied to the metropolitan world. Sometimes countries failed to create lateral connections with immediate neighbors, or sometimes they decayed throughout years. Akmal Hussain, “A New Perspective on Regional Cooperation in South Asia,” in Envisioning South Asia, South Asian Journal Conference, Islamabad: SAPANA, 2006, p. 47.

When it comes to the patterns of development between these countries, it can be argued that their competitive nature limited the contemporaneous prospect for trade among them. Rehman Sobhan, ‘Regional Economic Cooperation in South Asia’ in Pradeep K. Ghosh, ed.,

Developing South Asia: A Modernisation Perspective (Westport, Connecticut, London, GreenwoodPress), p.268.

The establishment of SAARC (8 December 1985) was a historic initiative taken by the leaders of the South Asian countries. When it comes to the main rationale behind its formation, it was to build up a friendly surrounding via summit diplomacy where all South Asian could peacefully hold dialogue formally. It aimed to build up a harmonious environment conducive to peace and harmony where SAARC countries could interact with each other for their common economic well-being by bridling available resources through economic integration in the region. Since the formation of SAARC, neither the organization has been able to advance harmony and peace by preventing conflicts nor have South Asian countries ever tried to play an effective role in the process of economic integration. Mansfield E and Bronson R., The Political Economy of Major Power Trade Flows,(Columbia: Columbia University Press, 1997), p. 100

In the recent years, South Asia has paradoxically been under international attention. On the eve of two rising antagonistic atomic forces, South Asia got portrayed as the most dangerous place on earth by Former president Bill Clinton. Monica Bhanot, ‘Challenges to Regional Cooperation in South Asia: A New Perspective’ Online Journal of Peace and Conflict at http://www.trinstitute.org/ojpcr/toc2 3.htm; (Issue 2.3, August 1999), p. 38

This is escorted by a vivaciously refreshed enthusiasm for studies relating to patterns of strife and cooperation among the significant Countries in the South Asia. Ibid., p.39

It can be argued that south Asian is still going through the process of evolving as a ‘region’ because of two fundamental factors. Sufficient level of complementarity of interests has not yet been accomplished among the South Asian countries and never-ending obsession with intra-state strife and upheavals that leaves individual countries with insufficient assets and time to progress in the direction of regional solutions. In this manner, it is helpful to demarcate the wide range of variables of this study. A region can be characterized on the premise of definite particular through which its presence is affirmed. The region can be categorized as a set of countries that are close to each other geographically. They have common national interests to some extent. These interests could help consolidate an entire range of socio-political, cultural, economic, historical as well as other factors. Secondly, it is critically important for countries to be adequately enlightened to comprehend the noteworthiness of cooperation above conflict concerning inter-state relations.

Srinivasan et al. (1995) p. 36 cited in South Asian Economic Development: Trade and EconomicDevelopment, p. 152

This ought to likewise be supported by a mutual yearning to come together on one platform to make some enduring procedure to achieve regional cooperation. These factors to tie people together through cultural and social exchanges due to their mutual interests make the above-stated argument strong as it ultimately led to the extension of the same spirit at the state level. Ibid, p. 152

However, suppositions mentioned above are pretty much missing between the South Asian countries. Such an absence of ‘region-ness’ in South Asia can likewise be comprehended concerning another phenomenon, that is, the tenacity of a bunch of economic and socio-political problems prevailing in every country of the South Asia. All these widespread problems are usually the reason or the result of inter-state conflicts and misperceptions as well. In this way, an inseparable association is emerged among the internal and external relations of countries in South Asia with patterns that are further complicated by what is compactly clarified being the quest for order, well being also, authenticity.  In this way, the South Asia countries have been failed to achieve pace for integration among them properly since the establishment of SAARC due to the presence of religious and political tensions that prevail in the region. Ibid., p. 173

A study is conducted by The World Bank’s South Asian Region Unit on the subject according to whom four conditions are critically important to bring integration among the states of one region, especially to be FTAs.  As per The World Bank South Asia Regional Unit, Pre-FTA tariffs should be high enough; it is important for the countries to be important partners in a trade before entering into an arrangement; complementarity in demand should be there; the true competitiveness of the countries involved should be the basis for the difference in economic structure. Ibid., p. 180

When it comes to South Asia, it does not satisfy any above-mentioned conditions except the first to form a possible Free Trade Area for South Asia. The trade of South Asian countries with each other is not so much, whereas their trade with other world countries such as Europe, North America, and Group of Eight Countries (G8) is high. Monica Bhanot; ‘Challenges to Regional Cooperation in South Asia: A New Perspective’ Online Journal of Peace and Conflict at http://www.trinstitute.org/ojpcr/toc2 3.htm; (Issue 2.3, August 1999) p. 10.

The nature of trade within the South Asian countries is competitive rather than complementary. For instance, the trade of India in 1994 with NAFTA and EU was 42% of the total, while its trade with South Asian countries occupied only 10% of the total. Ibid, p. 10

In this way, maximum profit out of South Asian PTAs cannot be expected to get. It should be recalled that with no coordinated economy none of the South Asian nations can ever hope to end up as significant global players.

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 [1] Kanhiya Lal Chawla, Economic Cooperation among developing countries (Jaipur, RSBA Publishers, 1991), p.2.

[1] Akmal Hussain, “A New Perspective on Regional Cooperation in South Asia”, in Envisioning South Asia, South Asian Journal Conference, Islamabad: SAPANA, 2006, p. 47.

[1] Rehman Sobhan, ‘Regional Economic Cooperation in South Asia’ in Pradeep K. Ghosh, ed.,

Developing South Asia: A Modernisation Perspective (Westport, Connecticut, London, Greenwood

Press), p.268.

[1] Mansfield E and Bronson R., The Political Economy of Major Power Trade Flows,(Columbia: Columbia University Press, 1997), p. 100

[1] Monica Bhanot, ‘Challenges to Regional Cooperation in South Asia: A New Perspective’ Online Journal of Peace and Conflict at http://www.trinstitute.org/ojpcr/toc2 3.htm; (Issue 2.3, August, 1999), p. 38

[1] Ibid., p.39

[1] Srinivasan et al. (1995) p. 36 cited in South Asian Economic Development: Trade and Economic

Development, p. 152

[1] Ibid, p. 152

[1] Ibid., p. 173

[1] Ibid., p. 180

 

[1] Monica Bhanot; ‘Challenges to Regional Cooperation in South Asia: A New Perspective’ Online Journal of Peace and Conflict at http://www.trinstitute.org/ojpcr/toc2 3.htm; (Issue 2.3, August, 1999) p. 10.

[1] Ibid, p. 10

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