The establishment of SAARC Development Fund, Food Bank, The Arbitration Council, and the Regional Standards Organizations are the right moves.


Formation
SAARC came into being in December 1985, with the adoption of its charter in Dhaka. The objectives were to promote the welfare and improve the quality of life of the people of South Asia by accelerating economic growth in the region and building up mutual trust among the member states.

Objectives
The objectives of the Association as defined in the Charter are:
• To promote the welfare of the people 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;
• To promote and strengthen collective self-reliance among the countries of South Asia;
• To contribute to mutual trust, understanding and appreciation of one another’s problems;
• 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; and
• To cooperate with international and regional organizations with similar aims and purposes.
The South Asian Association for Regional Cooperation (SAARC) is an economic and political organization of eight countries in Southern Asia. In terms of population, its sphere of influence is the largest of any regional organization: almost 1.5 billion people, the combined population of its member state.

Membership
1. Afghanistan
2. Bangladesh
3. Bhutan
4. India
5. Maldives
6. Nepal
7. Pakistan
8. Sri Lanka
In April 2007, at the Association’s 14th summit, Afghanistan became its eighth member.

Observers
1. Australia
2. China
3. Europe Union
4. Iran
5. Japan
6. Mauritius
7. Myanmar (Burma)
8. South Korea
9. United States

Secretariat
The SAARC Secretariat was established in Kathmandu on 16 January 1987 and was inaugurated by Late King Birendra Bir Bikram Shah of Nepal.

It is headed by a Secretary General appointed by the Council of Ministers from Member Countries in alphabetical order for a three-year term. He is assisted by the Professional and the General Services Staff, and also an appropriate number of functional units called Divisions assigned to Directors on deputation from Member States.

The Secretariat coordinates and monitors implementation of activities, prepares for and services meetings, and serves as a channel of communication between the Association and its Member States as well as other regional organization.

The Memorandum of Understanding on the establishment of the Secretariat which was signed by Foreign Ministers of member countries on 17 November 1986 at Bangalore, India contains various clauses concerning the role, structure and administration of the SAARC Secretariat as well as the powers of the Secretary-General.


Political Issues
SAARC has intentionally laid more stress on “core issues” mentioned above rather than more decisive political issues like the Kashmir dispute and the Sri Lankan civil war. However, political dialogue is often conducted on the margins of SAARC meetings. SAARC has also refrained itself from interfering in the internal matter states. During the 12th and 13th SAARC summits, extreme emphasis was laid upon greater cooperation between the SAARC members to fight terrorism.

It was established on December 8, 1985 by Bangladesh, Bhutan, Maldives, Nepal, Pakistan, India and Sri Lanka.

Political Economy of South Asia
South Asia accounts for nearly 23 per cent of the total world population. However, its share in the global GDP is less than 3 per cent. The region is home to the world’s 400 million poor, which means nearly 30 per cent of the region’s population lives below the poverty line.

All SAARC countries have a rather low ranking on the human development index (HDI), which according to the Human Development Report 2007-08 is: Sri Lanka (99), the Maldives (100), India (128), Bhutan (133), Pakistan (136), Bangladesh (140), and Nepal (142). The HDI ranking is based on achievements in terms of life expectancy, education and real income. The low HDI ranking reflects poorly on these vital indicators in the region.

The major reason for meager intra- SAARC trade is low volume of trade between Pakistan and India, the largest economies and trading nations in the region.
SAFTA
In order to achieve the objectives of SAARC and increase regional integration, the member countries created South Asian Free Trade Agreement (Safta) in 2004 at the twelfth SAARC summit. The agreement, which came into force on January 1, 2006, provides that members will reduce their tariffs to 0-5 per cent by December 31, 2015.

The success of Safta, however, largely depends on normalization of Pakistan-India relations. In case the relations between the two countries do not normalize, Safta’s fate will not be different from that of its predecessor, South Asian Preferential Trade Agreement (Sapta).

Reasons for Low Trade
The major reason for meager intra- SAARC trade is low volume of trade between Pakistan and India, the largest economies and trading nations in the region. Though formal Pak-India trade (the two countries have informal trade of more than $3 billion a year) has increased from $236 million in 2001-2002 to $1.95 billion in 2007-08, it still constitutes less than 1 per cent of the global trade of the two countries!

Pakistan has not even granted MFN status, a basic requirement under the WTO, to India and continues to conduct its imports from India on the basis of a positive list. On its part, India maintains high tariffs and non-tariff barriers on products of export interest to Pakistan.

SAARC vs ASEAN
The poor trade performance of SAARC stands in marked contrast with that of the neighboring regional alliance-Association of South East Asian Nations (ASEAN). The ASEAN countries account for merely 8.4 per cent of the total world population.



However, their share in total world trade is nearly 7 per cent. ASEAN’s contribution to Asia’s total trade is 23 per cent. Intra- ASEAN trade accounts for nearly 30 per cent of the global trade of the 10-member countries. ASEAN countries have remained embroiled in territorial disputes but that has not hampered their trade relations.

Thimpu Summit and Causes of Failure
The two-day 16th summit of South Asian Association for Regional Cooperation (SAARC) held in Bhutanese capital of Thimpu on April 28-29 concluded with a joint declaration expressing the resolve of their leaders to wage common struggle for economic development, improve their inter-connectivity, promote people to people contacts and evolve a joint strategy to tackle the issues of climate change, water and food shortages.

The South Asia Preferential Trading Agreement (SAPTA) was signed in the 7th summit at Dhaka in April 93, but it has not yet been operationalized. The proposal to establish South Asian Food Reserve and South Asian Development Fund have also met the same fate.

Similarly declarations on enhancing political cooperation and promotion of mutual trust and understanding reiterated in each summit have registered limited success. The two major and modest projects agreed upon were US$300 million fund to reduce poverty in the region and also on trade and environmental protection.

The establishment of SAARC Development Fund, Food Bank, The Arbitration Council, and the Regional Standards Organizations are the right moves. SAARC should also seek free and preferential trading arrangements with other regional bodies notably EU and the ASEAN.

Criticism:
Not enough is being done to for rapid economic integration of the region. Apart from the fact that the recently approved University and the creation of new rail lines linking the region, people to people contacts and connectivity of region needs to be strengthened.

Abdul Rasheed