Problems and Prospects of SAARC

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by by Santhosh Mathew    5 August 2023

Last month the former Chief Minister of Kashmir, Mehbooba Mufti, criticized the Central Government’s inability to hold the SAARC summit in light of the scheduled G20 Working Group’s meeting in Srinagar. She emphasized the importance of the regional organization in addressing the security situation in Kashmir. She commented, “ …Road for India becoming ‘Vishwaguru’ is through SAARC, not G20.”

There are so many such Sub-regional issues that India can address through the South Asian Association for Regional Co-operation (SAARC).  The stall caused by the takeover of the Talibani government or Terror attacks in Uri and Pulwama could be discussed over the table rather than silent treatment on platforms especially designed to air such issues. Or could they?

SAARC has been dysfunctional since, 2014 when its last Biennial summit was held in Kathmandu, Nepal. Multilateral cooperation has been becoming increasingly challenging in the South Asian Region pertaining to diverse groups of interests of member states. Adding upon that, India’s policy of isolation of the countries that support terrorism is being seen as a nail in the coffin of SAARC.

Well, Geopolitical and Ideological agreements were not the only topics of discussion that were up for cooperation when the ambitious Charter of the Organization was designed in 1985. Keeping at utmost priority, Article 1, subclause (a) reads, ‘to promote the welfare of the peoples of SOUTH ASIA and to improve their quality of life.’ Among other objectives is the acceleration of economic growth, social cooperation, cultural development, etc. In this row, even after failed attempts at holding a summit, the COVID-19 Emergency fund with $21.6 million was established in 2020 to fight the global pandemic. But, the proceedings of this too, are out of the knowledge of SAARC’s secretariat.

Is there a way to revive this organization? More importantly, Does SAARC need revival or are there better alternatives?

South Asian Association for Regional Cooperation (SAARC) was established on 08 December 1985. Adopting its charter,  SAARC has eight member states namely India, Afghanistan, Bangladesh, Bhutan, Myanmar, Nepal, Pakistan, and Sri Lanka. The association works towards economic and Socio-cultural integration in the region. The secretariat is located in Kathmandu, Nepal with various specialized Bodies headquartered in different member states.

The Structure of SAARC includes:

1. Summit: The highest decision-making body of SAARC is the Summit, which is held biennially and attended by the heads of state or government of the member countries. The Summit provides a platform for leaders to discuss and address regional issues.
2. Council of Ministers: The Council of Ministers consists of foreign ministers or other ministers designated by member countries. They meet at least once a year to review and coordinate policies, approve programs and projects, and provide overall guidance to the organization.
3. Standing Committee: The Standing Committee comprises the foreign secretaries or senior officials designated by member countries. They meet regularly to monitor the progress of SAARC activities, review budgetary matters, and prepare agendas for the Council of Ministers.
4. Regional Centers: SAARC has established several specialized centers to promote cooperation in specific areas. These centers focus on agriculture, meteorology, health, human resource development, poverty alleviation, and more. They function as autonomous bodies and collaborate with member countries on relevant issues.
5. Secretaries General: Secretary-General presides over all meetings and holds the position ideally for 2 years. Recently, Golam Sarwar, a career diplomat from Bangladesh has been appointed as the new Secretary-General of the Association.

Functions of SAARC:

1. Enhancing Cooperation: SAARC aims to promote cooperation among member countries in various fields such as agriculture, trade, investment, energy, tourism, culture, and connectivity. The organization facilitates dialogues and negotiations to develop regional cooperation frameworks and agreements.
2. Economic Integration: SAARC strives to enhance economic integration among member countries through the promotion of intra-regional trade, investment, and the removal of trade barriers. It encourages the development of transport infrastructure and the facilitation of trade and investment through various initiatives.
3. Social and Cultural Cooperation: SAARC works towards fostering social and cultural ties among member countries. It encourages exchanges and cooperation in areas such as education, science and technology, health, culture, sports, and people-to-people contacts.
4. Poverty Alleviation: SAARC places emphasis on poverty alleviation and improving the standard of living in the region. It promotes cooperation in sectors like agriculture, fisheries, rural development, healthcare, and human resource development to address socio-economic challenges.
5. Regional Security: SAARC recognizes the importance of regional security and stability. It facilitates dialogue and cooperation among member countries on issues related to terrorism, organized crime, drug trafficking, and other security concerns. SAARC also promotes confidence-building measures to strengthen regional security.
6. Collective Disaster Management: addressing Natural and Man-Made disasters in the region collectively as it affects humanity. The SAARC Centre for disaster management is located in New Delhi, India.

Procedure

Cooperation within SAARC is based on the five principles of sovereign equality, territorial integrity, political independence, non-interference in the internal affairs of the Member States, and mutual benefit. These principles serve as the foundation for promoting trust and understanding among member countries.

The country hosting the SAARC Summit assumes the Chair of the Association for that year. The Summit provides an opportunity for leaders of member countries to meet and discuss regional issues, set priorities, and provide strategic guidance to the organization.

Decisions within SAARC are made based on unanimity, meaning that all member countries must agree for a decision to be adopted. This approach ensures that the interests and concerns of all member countries are taken into account and consensus is reached.

SAARC focuses on regional cooperation and does not address bilateral or contentious issues between member countries during its deliberations. SAARC’s mandate is to promote collaboration and mutual understanding rather than resolving specific bilateral disputes.

In addition to the eight member states, SAARC Summits also invite nine Observer States to participate. These Observer States include China, the United States, Myanmar, Iran, Japan, South Korea, Australia, Mauritius, and the European Union. Observer States contribute to the discussions and provide perspectives on regional issues during the Summits.

SAARC’s Achievements

1. Over its 38 years of history, SAARC has been able to achieve a copious amount of improvement in its objectives. Especially in the area of Poverty elevation– South Asia has made significant progress in reducing poverty over the last decade. The implementation of the Millennium Development Goals (MDGs) has played a role in this achievement. In India, the percentage of the population living below the poverty line decreased from 38.2 %to 24.5 %. Similarly, Bangladesh witnessed a reduction in poverty at a rate of 30.3 %. Nepal, Pakistan, Sri Lanka, Bhutan, and Maldives also experienced lower poverty rates.
2. Size of the SAARC region as compared to global GDP in PPP has increased to around 7 percent which has more than doubled since 1980. The average growth rate in developing Asia has been 7 to 8 percent in the last 30 years, twice the global average and three times or more of that in the EU economies. But when compared to China it has been slow (8.5-10.3%).
3. South Asian Free Trade Area (SAFTA) was established in 2006 and aimed to gradually reduce and eliminate tariffs and other trade barriers among member countries. The tariff reduction plan you mentioned was indeed part of the SAFTA agreement. It involved two phases of tariff reductions to be implemented over specific timeframes.

In the first phase, India and Pakistan committed to reducing their tariffs on all goods to 20% within two years, while the other SAARC countries would reduce their tariffs to 30% within three years. In the second phase, India and Pakistan planned to further lower their tariff rates to 5% within five years, while the other SAARC countries would reach that level within seven years.

4. SAARC member countries have recognized the importance of addressing climate change and promoting environmental protection. Climate change poses significant challenges for the South Asian region, including increased vulnerability to natural disasters, water scarcity, and adverse impacts on agriculture and ecosystems. SAARC has provided a platform for member countries to discuss and coordinate efforts to mitigate and adapt to the effects of climate change.
5. Bhutan’s concept of “Gross National Happiness” (GNH), has been highly regarded within SAARC and beyond. GNH is a development philosophy that emphasizes holistic well-being, sustainable development, cultural preservation, and good governance. SAARC member countries have acknowledged the unique value of this concept in promoting social progress, preserving traditional values, protecting the natural environment, and advancing good governance. It is important to note that while SAARC member countries have acknowledged the value of GNH, its implementation and impact vary across different contexts. However, the philosophy of GNH continues to inspire conversations and discussions on alternative models of development that prioritize the well-being of people and the planet.

Challenges for SAARC

South Asian region, represented by SAARC, faces in terms of economic cooperation, bilateral relations, and addressing issues such as terrorism.

1. Economic Challenges: While the average growth rate in developing Asia has been relatively high, South Asian countries still face economic difficulties. The World Bank set a target of reducing global extreme poverty to less than 3 percent by 2030 but half of the SAARC states still have poverty rates higher than that, namely, India, Pakistan, Nepal, and Afghanistan. Also, note that the rest are small nations with less than a million population.

Pakistan, Afghanistan, and Sri Lanka have been subject to Heavy external debts, pressure on foreign exchange reserves, and limited development funds making it challenging for countries to foster economic cooperation. This Situation has been exploited by China to spread its debt trap.

Low infrastructural growth has also posed a challenge to addressing other underlying issues.

The implementation of SAFTA faced challenges and encountered difficulties over the years. These challenges included non-tariff barriers, lack of infrastructure, administrative complexities, and political tensions between member countries. However, the efforts made toward regional economic integration and the reduction of trade barriers through SAFTA should be acknowledged and appreciated.

2. Bilateral Relations: Bilateral disputes and historical geopolitical factors significantly constrain cooperation within SAARC. The SAARC Charter explicitly states that bilateral and contentious issues are not discussed in SAARC meetings.
3. Terrorism: South Asia has faced significant challenges regarding terrorism, making it a hot spot for such activities. Eradicating terrorism, countering threats, and reducing the harm caused by terrorism remain serious challenges for SAARC. These challenges have broader implications for regional stability.

What is the Solution?

Smaller countries such as Bhutan and Maldives have benefited from proximity to India. Bhutan Supplies Hydropower electricity to India and Maldives’ tourism industry heavily feeds on the growing middle-income Youth of India. If multilateral consensus is an issue,  Nepal, India, Bangladesh, and Bhutan could have separate mini-lateral collaborative institutions/committees on hydroelectricity cooperation.

The marginal 5% intra-regional trade as compared to 26% of ASEAN nations should be increased. India’s “Big Brother” Image in the region depends on this.

Calling out terrorism is right now a burning agenda among leading world organizations. SAARC should continue to follow on that line but hampering SAARC Summits will only delay the existing matters on the table regarding agriculture, fisheries, trade, and ofcourse, security issues. India’s participation is crucial for keeping the forum alive and India’s policy of “Neighbors First”.

BIMSTEC (The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) and BBIN (Bangladesh, Bhutan, India, Nepal network) has emerged as an alternative to the increasingly dysfunctional SAARC. BJP’s 2019 manifesto had an agenda for cooperation among BIMSTEC nations over SAARC.

Bi-Lateral and Tri-Lateral cooperations are better implemented and easy to co-ordinate as compared to Multilateral cooperation. For Time being India should focus on those till it solves its problems with the adjoining states.

In the long term, if an opportunity arises for collaboration on a greater agenda, a larger membership forum will organically develop such as the development of SCO and ASEAN due to global economic pole shift to the east or EU rising through coordinating of Coal and Steel trade.

Dr.Santhosh Mathew ,Associate Professor,Centre For South Asian Studies,School of International Studies&Social Sciences,Pondicherry Central University.