Saarc Project Mldc

SUBMITTED TO:

UNIVERSITY OF MUMBAI

PROJECT ON:

SOUTH ASIAN ASSOCIATION FOR REGIONAL COOPERATION

SUBMITTED BY:

ROHIT MILIND TAMBE

ROLL NO: 74

MASTER OF COMMERCE (M.COM)

UNDER THE GUIDANCE OF:

PROF. R. A. JOSHI

P.T.V.A.’S

M.L.DAHANUKAR COLLEGE OF COMMERCE

VILE PARLE (EAST), MUMBAI

2014-2015

1

CERTIFICATE

I, PROF. R. A. JOSHI BY CERTIFY THAT

ROHIT MILIND TAMBE OF M.L.DAHANUKAR COLLEGE OF

COMMERCE OF M.COM (SEMESTER I) HAS COMPLETED PROJECT

ON SOUTH ASIAN ASSOCIATION FOR REGIONAL

COOPERATION IN THE ACADEMIC YEAR 2014-2015. THE

INFORMATION SUBMITTED IS TRUE AND ORIGINAL TO THE BEST

OF MY KNOWLEDGE.

SIGNATURE OF SIGNATURE OF

PROJECT GUIDE THE PRINCIPAL

2

DECLARATION

I, ROHIT MILIND TAMBE OF M.L.DAHANUKAR COLLEGE OF

COMMERCE OF M.COM (SEMESTER I) HERE BY DECLARE THAT I

HAVE COMPLETED PROJECT ON SOUTH ASIAN ASSOCIATION

FOR REGIONAL COOPERATION IN THE ACADEMIC YEAR 2014-

2015, AS PER THE REQUIREMENTS OF THE UNIVERSITY OF

MUMBAI AS A PART IN MASTER OF COMMERCE (M.COM). THE

INFORMATION SUBMITTED IS TRUE AND TO THE BEST OF MY

KNOWLEDGE.

Student signature

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ACKNOWLEDGEMENT

Any accomplishment requires the effort of many people and this is no different. I

would first and foremost like to thank the University of Mumbai for designing such

a precise and practical course and giving me an opportunity to present this project on

South Asian Association for Regional Cooperation which is a result of co-

operation and good wishes of many people.

This project would just not have been complete without the valuable contribution

from various people whom I have interacted with in the course of completion, whose

name if not mentioned would be inappropriate on my part.

It is with great affection and administration that I acknowledge my indebtedness to

my Project Guide, Prof. R. A. Joshi for assisting me in my project. Without her this

project would have remained just an idea, without form or consent. It was indeed

been a great experience working under their guidance during the entire course of this

project.

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SAARCSouth Asian Association for Regional

Cooperation  

5

INDEX

SR. NO. PARTICULAR

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1 INTRODUCTION

2 MEMBERS OF SAARC

3 OBSERVERS

4 Secretaries-General of SAARC

5 SAARC summits

6 Objectives of SAARC

7 Agreement for Establishment of SAARC Arbitration Council

8 South Asian Free Trade Area

9 Article-I TO ARTICLE VIII

10 Reducing barriers for export to SAARC countries

11 Political issues

12 SAARC Charter

13 SAARC Visa Exemption Scheme

14 Customs Cooperation

15 Standing Committee

16 Council of Ministers

17 The Seventh Meeting of the Sub-Group on Customs Cooperation

18 Secretariat

19 SAARC Summit

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INTRODUCTION

South Asian Association for Regional Cooperation

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The South Asian Association for Regional Cooperation (SAARC) is an organization of South

Asian nations, which was established on 8 December 1985 when the government

of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka formally adopted its

charter providing for the promotion of economic and social progress, cultural development

within the South Asia region and also for friendship and co-operation with other developing

countries. It is dedicated to economic, technological, social, and cultural development

emphasizing collective self-reliance. Its seven founding members are Sri Lanka,

Bhutan, India, Maldives, Nepal, Pakistan, and Bangladesh. Afghanistan joined the organization

in 2007. Meetings of heads of state are usually scheduled annually; meetings of foreign

secretaries, twice annually. It is headquartered in Kathmandu, Nepal.

Members of SAARC

Current members

 Afghanistan

 Bangladesh

 Bhutan

 India

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 Maldives

   Nepal

 Pakistan

 Sri Lanka

Observers

 Australia

 China

 European Union

 Japan

 Iran

 Mauritius

 Myanmar

 South Korea

 United States

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Potential future members

  China has expressed interest in upgrading its status from an observer to a full member of

SAARC. Supported by Pakistan, Bangladesh, Nepal, Maldives, Sri Lanka.

  Burma has expressed interest in upgrading its status from an observer to a full member

of SAARC.

  Russia has expressed interest in becoming an observer of SAARC. Supported By India.

Others

  South Africa has participated in meetings.

Secretaries-General of SAARC

 Abul Ahsan16 January 1985 to 15

October 1989

 Kishore Kant Bhargava 17 October 1989 to 31

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December 1991

 Ibrahim Hussain Zaki1 January 1992 to 31

December 1993

 Yadav Kant Silwal1 January 1994 to 31

December 1995

 Naeem U. Hasan1 January 1996 to 31

December 1998

 Nihal Rodrigo1 January 1999 to 10

January 2002

 Q.A.M.A. Rahim11 January 2002 to 28

February 2005

 Lyonpo Chenkyab Dorji1 March 2005 to 29

February 2008

 Sheel Kant Sharma1 March 2008 to 28

February 2011

 Fathimath Dhiyana Saeed 1 March 2011 to 11

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March 2012

 Ahmed Saleem12 March 2012 to

present[25]

SAARC summits

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No Date Country Host Host leader

1st 7–8 December 1985  Bangladesh Dhaka Ataur Rahman Khan

2nd 16–17 November 1986  India Bangalore Rajiv Gandhi

3rd 2–4 November 1987    NepalKathmand

uMarich Man Singh Shrestha

4th 29–31 December 1988  Pakistan Islamabad Benazir Bhutto

5th 21–23 November 1990  Maldives Malé Maumoon Abdul Gayoom

6th 21 December 1991  Sri Lanka Colombo Ranasinghe Premadasa

7th 10–11 April 1993  Bangladesh Dhaka Khaleda Zia

8th 2–4 May 1995  India New Delhi P. V. Narasimha Rao

9th 12–14 May 1997  Maldives Malé Maumoon Abdul Gayoom

10th 29–31 July 1998  Sri Lanka Colombo Chandrika Kumaratunga

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11th 4–6 January 2002    NepalKathmand

uSher Bahadur Deuba

12th 2–6 January 2004  Pakistan Islamabad Zafarullah Khan Jamali

13th 12–13 November 2005  Bangladesh Dhaka Khaleda Zia

14th 3–4 April 2007  India New Delhi Manmohan Singh

15th 1–3 August 2008  Sri Lanka Colombo Mahinda Rajapaksa

16th 28–29 April 2010  Bhutan Thimphu Jigme Thinley

17th 10–11 November 2011[26]  Maldives Addu Mohammed Nasheed

18th 2013[27]    NepalKathmand

uKhil Raj Regmi

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Objectives of SAARC

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 selective 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 co-operation with other developing countries;

to strengthen co-operation among themselves in international forums on matters of

common interest; and

to co-operate with international and regional organizations with similar aims and

purposes.

to maintain peace in the region

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Agreement for Establishment of SAARC Arbitration Council

The Governments of the South Asian Association for Regional Cooperation (SAARC) Member

States comprising the People’s Republic of Bangladesh, the Kingdom of Bhutan, the Republic of

India, the Republic of Maldives, the Kingdom of Nepal, the Islamic Republic of Pakistan and the

Democratic Socialist Republic of Sri Lanka;

Desirous of creating conditions favorable for fostering greater investment by investors of one

Member State in the territory of another Member State;

Desirous of providing a regional forum for settlement of commercial disputes by conciliation and

arbitration;

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Article-I

  Establishment of the SAARC Arbitration Council

(1) There is hereby established a body to be known as the SAARC Arbitration Council

(hereinafter referred to as the “Council”).

(2) The Council shall have full legal personality.

(3) The legal capacity of the Council shall include:

(a) The capacity to contract;

(b) To sue and be sued in its name; and

(c) To acquire, hold and dispose of properties.

The location of the Council shall be decided.

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Article-II

  Objectives and Functions of the Council

    The objectives and functions of the Council are to:

(a) provide a legal framework within the region for fair and efficient settlement through

conciliation and arbitration of commercial, investment and such other disputes as may

be referred to the Council by agreement;

(b) Promote the growth and effective functioning of national arbitration institutions

within the region;

(c) Provide fair, inexpensive and expeditious arbitration in the region;

(d)    Promote international conciliation and arbitration in the region;

(e) Provide facilities for conciliation and arbitration;

 (f)  Act as a co-coordinating agency in the SAARC dispute resolution system;

(g)    Coordinate the activities of and assist existing institutions concerned with arbitration,

particularly those in the region;

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(h)   Render assistance in the conduct of ad hoc arbitration proceedings;

(i)     assist in the enforcement of arbitral awards;

(j)    Maintain registers/panels of:

(i) Expert witnesses, and

(ii) Suitably qualified persons to act as arbitrators as and when required; and

(k)    Carry out such other activities as are conducive or incidental to its functions.

The Council shall have the powers necessary to enable it to carry out its objectives and

functions.

Article-III

Organisational set-up of the Council

(1) There shall be for the Council a Director-General who shall:

(a) Be a citizen of a SAARC Member State; and

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(b) Be appointed, on the principle of alphabetical rotation among SAARC

Member States commencing from the Member State hosting the Council, by

the Secretary-General of SAARC with the approval of the Council of

Ministers.

(2) The Director-General shall hold office for a non-renewable period of three years on

such terms and conditions as may be determined by the Council of Ministers.

However, the tenure of the first Director-General will be for a period of four years.

(3) The Director-General shall be the chief executive of the Council and be responsible

for the day-to-day administration of the Council and will work under the supervision

of the Governing Board comprising a Member nominated by each Member State.

(4) The salary and allowances of the Director-General shall be determined by the Council

of Ministers.

(5) With regard to matters not covered in this Agreement, including the Service Rules,

Provisions relating to Financial and Administrative Matters, Financial Regulations,

Financial Rules and Procedures and Rules of Procedures for Governing Boards

applicable to the SAARC Regional Centres under the Harmonized Rules will be

applicable, mutatis-mutandis, to the Council.

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6.  The Council, its Director-General and staff shall enjoy such immunities and privileges as are

essential for the effective functioning of the Council to be specified in the Headquarters Agreement

between the Council and the Host Member State.

Article-IV

Rules

(1) Subject to the Conciliation Rules to be agreed and annexed to this Agreement, the Governing

Board may make any additional rules for the administration of conciliation

proceedings conducted under the auspices of the Council, including the schedule of

fees to be charged.

(2) Subject to the Arbitration Rules to be agreed and annexed to this Agreement, the

Governing Board may make any additional rules for the administration of arbitrations

conducted under the auspices of the Council, including the schedule of fees to be

charged.

(3) The Rules made under sub-paras (1) & (2) of this Article shall be made public.

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ARTICLE VII

Reservations

1. This Agreement shall not be subject to reservations either at the time of signature or at the

time of notification to the SAARC Secretariat of the completion of formalities in terms of

Article V.

ARTICLE VIII

Amendment

1 This Agreement may be amended by consensus amongst the Member States. Any

Member State proposing amendment(s) shall notify the other Member States through the

SAARC Secretariat. Such amendment(s) shall become effective upon the notification

issued by the SAARC Secretariat on completion of formalities, including ratification, by all

Member States.

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Reducing barriers for export to SAARC countries

The Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL), the

Secretariat dealing with SAARC Chamber of Commerce and Industry (SCCI), wants to

minimize any trade barriers with other SAARC countries.

Hildon U. Hamangoda, Director, SAARC and International Affairs, FCCISL, said that

according to compiled data trade among SAARC countries is less than five percent of the

total trade of the region with the rest of the world. But other regional blocs are showing

much bigger volumes of intra-regional trade. For instance the North America Free Trade

Agreement intra-regional trade is over 50% and ASEAN countries have over 20% trade

among its member countries. The Intra-SAARC trade is dismally low as compared to

other regions. The trade and economic activity needs to be increased.

Hamangoda said, keeping in mind the current state of trade in SAARC member countries,

SCCI has decided to identify specific obstacles which are holding back and restricting

trade among SAARC countries in bilateral as well as regional trade e.g. “restrictions in

the cross-border movement of goods, lack of infrastructure, non-acceptability of

standards and certifications regime etc.”

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Political issues

The dispute over Kashmir’s accession to India has been standing in the way of the lasting peace

and prosperity of the Indian subcontinent.[15] While awarding the European Union with the 2012

Nobel Peace Prize, the Norwegian Nobel Committee stated that "...today war between Germany

and France is unthinkable. This shows how, through well-aimed efforts and by building up mutual

confidence, historical enemies can become close partners." Southern Asia can become unified just

as Europe has become unified as the European Union. Political dialogue is often conducted on the

margins of SAARC meetings which have refrained from interfering in the internal matters of its

member states. During the 12th and 13th SAARC summits, extreme emphasis was laid upon

greater co-operation between the SAARC members to fight terrorism.

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SAARC Charter

Desirous of promoting peace, stability, amity and progress in the region through strict adherence

to the principles of the UNITED NATIONS CHARTER and NON-ALIGNMENT, particularly

respect for the principles of sovereign equality, territorial integrity, national independence, non-

use of force and non-interference in the internal affairs of other States and peaceful settlement of

all disputes.

Conscious that in an increasingly interdependent world, the objectives of peace, freedom, social

justice and economic prosperity is best achieved in the SOUTH ASIAN region by fostering

mutual understanding, good neighborly relations and meaningful co-operation among the

Member States which are bound by ties of history and culture.

Aware of the common problems, interests and aspirations of the peoples of SOUTH ASIA and

the need for joint action and enhanced co-operation within their respective political and economic

systems and cultural traditions.

Convinced that regional co-operation among the countries of SOUTH ASIA is mutually

beneficial, desirable and necessary for promoting the welfare and improving the quality of life of

the peoples of the region.

Convinced further that economic, social and technical co-operation among the countries of

SOUTH ASIA would contribute significantly to national and collective self-reliance.

Recognizing that increased co-operation, contacts and exchanges among the countries of the

region will contribute to the promotion of friendship and understanding among their peoples.

Recalling the DECLARATION signed by their Foreign Ministers in NEW DELHI on 2 August

1983 and noting the progress achieved in regional co-operation.

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South Asian Free Trade Area

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 1995) agreed on the need to strive for the realisation 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 SAFTA Agreement was signed on 6 January 2004 during Twelfth SAARC Summit

held in Islamabad, Pakistan. The Agreement entered into force on 1 January 2006, and the Trade

Liberalization Programme commenced from 1 July 2006. Under this agreement, SAARC

members will bring their duties down to 20 per cent by 2009. Following the Agreement coming

into force the SAFTA Ministerial Council (SMC) has been established comprising the

Commerce Ministers of the Member States.

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SAARC Visa Exemption Scheme

The Twelfth Summit (Islamabad, January 2004) approved the institution of the SAARC Award

to honor and encourage outstanding individuals and organizations within the region. The main

objectives of the SAARC Award are:

To encourage individuals and organizations based in South Asia to undertake programmes

and activities complementing the efforts of SAARC

To encourage individuals and organizations in South Asia contributing to the improvement

of the conditions of women and children

To honor outstanding contributions and achievements of individuals and organisations within

the region in the fields of peace, development, poverty alleviation, environment protection

and regional co-operation making the SAARC Award the most prestigious Award in the

region; and

To honors any other outstanding contributions and achievements, not covered above, of

individuals and organizations in the region.

The SAARC Award comprises a gold medal, a letter of citation and cash prize of US $ 25,000.

Since institution of SAARC Award in 2004, it has been awarded only once and the Award was

posthumously conferred upon Late President Ziaur Rahman of Bangladesh.

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Council of Ministers

Council of Ministers consisting of the Foreign Ministers of the Member States established

with the following functions:

Formulation of the policies of the ASSOCIATION

Review of the progress of co-operation under the ASSOCIATION

Decision on new areas of co-operation

Establishment of additional mechanism under the ASSOCIATION as deemed necessary

Decision on other matters of general interest to the ASSOCIATION.

The Council of Ministers meets twice a year. Extraordinary session of the Council may be held

by agreement among the Member States.

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Standing Committee

The Standing Committee comprises of the Foreign Secretaries of the SAARC Member States. As

provided in Article V of the SAARC Charter, they take measures /decisions relating to: overall

monitoring and coordination of programme of cooepration under different areas; approval of

projects and programmes, including modalities of their financing; determination of inter-sectoral

priorities; mobilisation of regional and external resources; and identification of new areas of

cooperation based on appropriate studies.

Standing Committee is mandated to meet as often as necessary. Generally, they have met

preceding the sessions of the Council of Ministers i.e. both during the Summit as also as the

Council is convened in between two Summits. That way, the Committee would be meeting at its

thrity-seventh regular session in Thimphu on 25-26 April 2010 (preceding the Council of

Ministers and the Sixteenth Summit). Depending on special requirement, Standing Committee

has met at Special Sessions, on stand-alone basis: till date, the Committee had held five such

Special Sessions, the last (fifth) being in Dhaka on 12 April 2006.

The Committee reports to the Council of Ministers, on regular matters; and, as needed, asks for

specific decision on policy matters from the Council.

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Customs Cooperation

Cooperation in the field of Customs

The Group on Customs Cooperation, comprising heads of customs organisations of Member

States, administers and implements cooperation in the area of customs which has held five

Meetings so far.

The Fourth Meeting of the Group on Customs Cooperation (Faridabad, India, 12-13 August

2004) had decided to set up a Sub-Group to facilitate further discussion in the areas of (a)  Draft

Agreement on Mutual Administrative Assistance in Customs Matters; (b) Harmonised System;

(c) Commercial Fraud; (d) Capacity Building.

During 2004 to 2009, the Sub-Group on Customs Cooperation held six Meetings to carry out the

above mandate during which discussion on Draft Agreement and on commercial fraud was

finalised and concluded successfully.

The Sub-Group has held seven Meetings so far since its inception. The Sixth Meeting of the Sub-

Group on Customs Cooperation (SAARC Secretariat, 14-15 January 2009) focused, inter-alia, on

issues relating to documentation and procedure and timeframe for their implementation. It

attempted Harmonization of Customs clearing procedures and documentation among the

SAARC Member States. In this context, it undertook detailed examination of basic export/import

documentation of the Member States, and procedures for their filing. It also focused on

harmonizing those 8-digit tariff lines which are being traded or have the potential of being traded

among the SAARC Member States.

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The Seventh Meeting of the Sub-Group on Customs

Cooperation

(i)                  focus on building infrastructure including roads and railways

networks near the Land Border Customs Stations (LCSs).

(ii)                Customs Clearance procedures at LCSs also need to be smoothened;

(iii)               Customs Administrations may consider a system of Customs

facilitation in which Export documentation of one Member State could be

considered by the Customs administration in the importing country for the

purposes of assessing and clearing the consignment.

(iv)              As individual Customs Administrations in the SAARC countries

move towards automation in clearing trade consignments at the LCSs, the Sub-

Group on Customs Cooperation shall work towards developing an Electronic Data

Exchange System within the region, including at LCSs, with a view to ensure

better facilitation of trade in goods among the SAARC countries including

improved compliance.

(v)                SAARC Secretariat may develop a regional/sub-regional project to set up

automated customs clearing mechanism at the designated LCSs. In this regard, the Member

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States may indicate the name of the LCS in their respective country where the facility would

need to be established.

The Seventh Meeting of the Sub-Group on Customs Cooperation also discussed the matter of

harmonisation of 8-digit tariff lines in detail and felt that in order to make this task easier, all

Member States would further provide upto only 100 8-digit tariff lines with a trade potential of

75% (in value terms) in the region.   It also agreed that on receipt of this information as per

agreed format from all the Member States, the Secretariat may outsource the job of carrying out

analysis of the differences in the descriptions of the 8-digit tariff lines submitted by the Member

States. 

The Eighth Meeting of the Sub-Group on customs Cooperation was held on 22-23 August 2011

at the SAARC Secretariat.

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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 the Secretary General appointed by the Council of Ministers from Member

Countries in an alphabetical order for a three-year term. He is assisted by the Professional and

the General Service 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 organisations.

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.

In several recent meetings the heads of state or government of member states of SAARC have

taken some important decisions and bold initiatives to strengthen the organization and to widen

and deepen regional co-operation.

The SAARC Secretariat and Member States observe 8 December as the SAARC Charter Day1.

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SAARC Summit

The Charter (Article III) provides that the Heads of State or Government "shall meet once a year

or more often as and when considered necessary by the Member States".

However, the Summit has generally been convened at an interval of one and half year or so. The

next i.e. Sixteenth Summit of the Heads of State or Government would be held at Thimphu on

28-29 April 2010.

Summit Declarations provide directives and mandate for regional co-operation. Following are

the past Summit Declarations:

First SAARC Summit, Dhaka, 1985

Second SAARC Summit, Bangalore, 1986

Third SAARC Summit, Kathmandu, 1987

Fourth Summit, Islambad, 1988 

Fifth SAARC Summit, Male', 1990

Sixth SAARC Summit, Colombo, 1991

Seventh SAARC Summit. Dhaka, 1993

Eighth SAARC Summit, New Delhi 1995

Ninth SAARC Summit, Male', 1997

Tenth SAARC Summit, Colombo, 1998

Eleventh SAARC Summit, Kathmandu, 2002

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Twelfth SAARC Summit, Islamabad, 2004

Thirteenth SAARC Summit, Dhaka, 2005

Fourteenth SAARC Summit, New Delhi, 2007

Fifteenth SAARC Summit, Colombo, 2008

Sixteenth SAARC Summit, Thimphu, 2010

Seventeenth SAARC Summit, Addu City, 2011

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