SAARC Topic: SAARC (South Asian Association of Regional Cooperation) -Past, Present and Future Prospects Kanwal Batool Naqvi 1.

SAARC

Topic:SAARC (South Asian Association of Regional Cooperation)

- Past, Present and Future Prospects

Kanwal Batool Naqvi

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SAARC

1: HISTORY 1977-85: Bangladesh Contribution1985: Charter-December 08, 19852012: Economic Union Dream?2015: Single Currency?

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SAARC

2: PRINCIPLES Focus: Cooperation in SAARC

- Bilateral - Multilateral

1. Sovereign equality2. Territorial integrity3. Political independence 4. Non-interference in internal affairs

af other states and mutual benefits

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SAARC3: OBJECTIVES 1. Inter-SAARC

1. Welfare to people (quality of life)2. Economic growth 3. Collaboration

- Economic - Social - Culture- Scientific

4. Collective self reliance5. Mutual trust, under-standing and appreciationIntra-SAARC

1. Inter-cooperation in national forums2. Domestic countries strengthening3. International and regional organizations

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SAARC4: SAARC-Current Members1. Afghanistan (Number 13, 2005)2. Bangladesh3. Bhutan4. India5. Maldives6. Nepal7. Pakistan8. Sri LankaShare of Population in the World: 23.19%Based on: World Development Report 2012.

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SAARC6: SAARC-Summits

S. No. Location Date of Summit

1st Dhaka 7-8, December, 1985

2nd Bangalore 16-17 November, 1986

3rd Kathmandu 2-4 November, 1987

4th Islamabad 29-31 December, 1988

5th Male 21-23 November, 1990

6th Colombo 21st December, 1991

7th Dhaka 10-11 April, 1993

8th New Delhi 2-4 May, 1995

9th Male 12-14 May, 1997

10th Colombo 29-31 July, 1998

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SAARC6: SAARC-Summits

S. No. Location Date of Summit

11th Kathmandu 4-6 January, 2002

12th Islamabad 2-6 January, 2004

13th Dhaka 12-13 November, 2005

14th New Delhi 3-4 April, 2007

15th Colombo 1-3 August 2008

16th Thimphu 28-29 April, 2010

17 Male November 10-11, 2011

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SAARCWORK PACKAGES 1. India

1. Business information data networking 2. HRM3. S & T4. Social dimension in business

development2. Pakistan

1. Trade2. Investment

3. Sri Lanka Women Entrepreneurship

4. Bangladesh Telecommunication

5. Nepal Travel & Tourism Maldives-tourism

6. Bhutan & NepalEnergy

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SAARC8: INITIATIVES

- SAPTA- SAFTA- SAARC UniversityINSTITUTIONS1. People to people contact 2. Regional

- Agricultural infrastructure: Bangladesh3. Funds

- Regional Projects- Japan Special Funds- South Asia Development Fund- Other Funds

4. SAARC Chamber of Commerce & Industry: Islamabad-1992

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SAARC10: UNIQUE FEATURES1. The oldest ancient living civilizations2. World’s sleeping giant-started moving3. People of all regilons, faiths, ideologies live4. Economic force-common market 5. The largest irrigated area6. The second largest railway network7. The largest English speaking area8. The largest labour force: 425m people9. Home of the poorest:

- Job openings- Self employment

10. 750m commerce-the largest single block

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SAARC12: CHALLENGES 1. Poverty2. Unemployment3. Literacy 4. Governance5. Education6. Development 7. Enabling environment 8. Defense expenditure

ECONOMIC CHALLENGES AND OPPORTUNITIES IN SAARC REGION

ECONOMIC CHALLENGES FOR PAKISTAN The Pakistan’s economy is currently passing through the

most difficult phase of its economic history. Once a robust economy, with economic growth over 6% of

GDP, now it has been transformed into a fragile economy, due to serious economic challenges, the most important being our country’s frontline role in ‘War on Terror’ and the persistent ‘Power and Energy Crisis’ which has crippled our industrial sector.

Before I proceed further, let’s see what the IMF Mission, which recently visited Pakistan in October 2012, says in its Report :

“The Pakistan’s economic situation is deteriorating and Islamabad urgently needs to address deep problems in its energy sector while boosting growth to meet a rapidly growing population”.

The IMF Mission further goes on to say that:

“The country’s GDP in 2012-13 is likely to grow at the annual rate of 3% to 3.5%, not enough to provide jobs to the growing labor force. Decisive and far-sighted action is needed to address this challenging outlook”.

The IMF Mission Report points out that ENERGY PROBLEM is the largest single impediment to higher

economic growth for Pakistan and a major factor behind macroeconomic imbalances. For this, it has outlined a

comprehensive approach to reform to tackle these problems.

The above observations of IMF are no doubt a ‘Reality’.

For more than three consecutive years, our country has been experiencing low growth, which has almost stagnated the per capita income level. This has

aggravated poverty and worsened unemployment rates

The Challenges that our Country faces today do not commensurate with the abundant and vast potential that it possesses.

Pakistan offers huge potential and opportunities for trade and investment to both foreign investors and the local economy.

Pakistan is ranked number one in the World Bank’s ‘Ease of Doing Business Index.’ in Asia

Pakistan is world’s 2nd largest producer of water, buffalo meat and milk

Pakistan is world’s 3rd largest producer of cotton

Pakistan is the 4th largest goat meat supplier

Pakistan has 5th largest Coal and Gold reserves

Pakistan is the 7th largest wheat grower

Prospects and Economic Revival Efforts The economic growth of Pakistan stood at 3.7% in FY

2012 which is higher than 3% realized in previous year, but less than the target of 4.2 percent. The State Bank of Pakistan in its third quarterly Report ‘State of the Economy” says that this performance is notable, given the following challenges:

Considerable damage to cotton crop due to floods

Ongoing energy shortages; Rise in international oil prices; and Security concerns.

The State Bank comments on the economy recovery prospects as follows:

“Although Pakistan’s economy has shown some recovery in terms of GDP growth, the key macro indicators still remain weak. Persistent inflation and pressure on the fiscal and current accounts, remain the key challenges for the economy”

Like IMF, the State Bank of Pakistan also pinpoints that “Low investment and energy shortages have direct growth implications. Other areas that poses challenge and major risk to the macro-economy is the ‘persistently high fiscal deficit’

Pakistan must overcome its economic challenges as it has vital role to play to bring economic

prosperity in SAARC RegionSAARC region has potential of becoming a vibrant region in the world given its enormous resources in manpower, technology, agricultural and mineral assets, its history and civilization. Pakistan must take immediate measures to meet its present economic challenges as it has a more vibrant role to play for the regional cooperation in the SAARC region. Pakistan could play an important role in bringing the people of SAARC together by promoting investment, trade and people to people contacts.

The Existing Potential in the South Asian Region

South Asia is the second fastest growing region in the world and it has the potential to be an economic power by the year 2025. Many in South Asia, however, still face extreme poverty, especially the SAARC countries.

South Asia is home to half of the world’s poor, with 40% of its population living on less than $1.25 a day.

South Asia accounts for only 2.5% of GDP 2% of world exports, and 1.6% of world Foreign Direct Investment .

SAARC countries have common economic goals and economic challenges

Significant challenges and barriers still exist which continue to restrict the economic growth and integration in the SAARC region.

What is required is a firm commitment by the SAARC countries to move towards prosperity by placing stronger emphasis on economic development through REGIONAL PARTNERSHIPS as they share common economic goals and challenges.

Private Sector in SAARC countries have to play a Pro-active Role

The private sectors of SAARC countries are already involved in promoting economic cooperation in the region but they must be pro-active to put a firm pressure on their respective governments to provide a business enabling environment to foster the pace of economic development and cooperation within the region. The Private sector must play a dynamic role to bring about revolutionary changes and foster the pace of regional integration in SAARC region.

Key Challenges for SAARC Region

While SAARC countries continue to make efforts for economic development and intra-regional integration, their progress is curtailed by a continuing sub-set of systemic issues and challenges common to all member nations.

I would like to outline few of the key challenges and issues that are creating barriers in the way of increasing flow of trade and investment among the SAARC Countries

• Political Mindsets and Issues

• Abject Poverty

• Low Intra-regional trade

• Low- Intra-regional or cross-border Investment

• Poor Transport Network or Infrastructure to facilitate trade

• Sizable Sensitive List, Para Tariff and Non-Tariff Barriers

• Food Security issues

• Climatic Change Issues (floods and natural disasters)

• Under-utilization of renewable energy resources

• Stringent visa requirements

The above challenges need to be dealt on preferential basis by the SAARC countries, especially the two big nations – PAKISTAN and INDIA.

More Intra–SAARC Trade can lead to Better economic conditions for People

Intra-regional trade is one of the important measures to alleviate and improve the economic condition of the people of this region. However, as also indicated in the list of barriers – the Intra regional trade among the SAARC member states is marred by the issues of non-tariff barriers and sensitive list. The SAARC states must, therefore, address this issue immediately and effectively for rapid expansion of intra regional trade.

More Intra-SAARC Investment can lead to less dependence on Western Investors

The investment regime in SAARC is not only restrictive but lacks policy harmonization. Supporting mechanisms are needed to support capital flow and help attract more Foreign Direct Investment (FDI) within SAARC countries and depend less on investment from outside the region.

The FDI sources are highly diversified in SAARC countries, mostly still originating in developed countries, outside the region. India, Bangladesh and Pakistan attract most of their FDI inflows from countries outside the region.

There is strong case for deeper intra‐regional investment.

Expanding intra regional investment is the key to ‐bolstering the investment regime in SAARC region.

I would suggest that Boards of Investments in the SAARC countries should promote more intra regional investment by establishing their ‐offices in each other’s country. .

I would like to highlight two other issues, which are not directly concerned with economy, trade or investment, but these issues or challenges have direct bearing on all of them. These challenges are Food Security Issues and Natural Disaster

Food Security Issues

Considering that the estimated population of South Asia will rise by 25% to 2000 million in 2025, food security is the most tangible threat to all SAARC countries.

This threat cannot be mitigated by a variable increase in food production alone, but by efforts to drastically improve access to food sources and clean drinking water.

Natural Disasters

SAARC countries are at greatest risk of natural disasters like earthquakes, floods and cyclones, which are already having major impacts on their economic performance. These have resulted in lower agricultural productivity in the entire region. If this continues, it can turn out in shape of severe economic shocks for the SAARC Countries.

To address the above two issues, the SAARC countries must take action on immediate basis.

Key Opportunities for SAARC Region

There is always a blessing in disguise.

Though the SAARC region is facing a host of challenges but there are Opportunities as well. We need to identify and explore them.

Few areas are highlighted here, which have so far not been explored.

(1) Cooperation in Services

Telecommunication Banking Energy Transport Software services

(2) Sharing Renewable Energy SAARC Region has enormous potential in Energy, especially HYDRO-POWER, but only 10% of this potential is currently being utilized. Renewable energy options such as SOLAR and WIND-POWER need to be seriously considered as these are vital for the economic growth and sustainability of SAARC.

India has around 25000MW of wind power, which can be exported to other SAARC countries.

The Renewable Energy sources in SAARC countries need to be tapped through infrastructure development, integrated investment promotion policy and government pledges.

(3) Greater involvement of Private Sectors of SAARC

The SAARC Governments must consider an increased role for their private sectors in establishing public-private partnerships, where possible, in SAARC countries.

The Private sector needs to be more involved in guiding Government policies through lobbying and advocacy efforts.

The private sector is effective in bringing in a commercial orientation and operating in a non-political way. They also have strong implementation capacities to strengthen economic and business opportunities along with trade in the region.

(4) Promising Youth leadership

The young business leaders of SAARC region should be brought together to prepare them as the next generation of business leaders for South Asia and to identify their role in the formation of an integrated future business community. There is strong need for youth empowerment and focus on business leadership for South Asian economic development.

(5) Investment in Health and EducationSAARC countries have received bulk of FDI in sectors like Telecommunication, Transportation, Exploration of mineral and natural resources, while other core sectors like health and education are given least importance.

Investment in health and education sectors in form of FDI or Joint Ventures between public and private enterprises is squarely productive, which will not only enhance Human Development Index of the region but also help achieve sustainable economic growth.

Concluding Remarks

SAARC was established in 1985 and the primary objective identified in its Charter says: “To promote the welfare of the peoples of South Asia and to improve their quality of life" The question is has SAARC achieved this objective?

Way Forward

I think that the two bigger countries – Pakistan and India – should have to play their due role to move SAARC towards the objective as given in its Charter. I also think that the Role of private sector is quite important as economy drives politics, and business shapes the social values.

Businesses have the power to make a difference.

Way Forward

As far as Pakistan is concerned, I think that there is need to create synergy between government and business community to help resolve the present economic crisis and put the country on path of progress and prosperity. The Institute of Cost and Management Accountants is always there to help the Government in its efforts to bring economic prosperity by extending its professional expertise.

South Asian Regional Standards Organisation (SARSO)

Chandan BahlScientist ‘E’(International Relations)

Bureau of Indian StandardsIndia

Disclaimer: This is not a presentation by SARSO but it is presentation of factual information on SARSO by

BIS

ABOUT SAARC

• South Asian Association for Regional Cooperation (SAARC) was formally launched in 1985

• Its seven founding members are Bangladesh, Bhutan, India,

Maldives, Nepal, Pakistan, and Sri Lanka. Afghanistan joined SAARC in 2007

• The main objectives of SAARC are to place regional cooperation on a firm foundation, accelerate the pace of social and economic development of the countries, and further the cause of peace, progress and stability in the region.

TRADE AND REGULATORY COOPERATION

• With the increase in non-tariff barriers in trade, countries/ regions need to look at ways to combat them and thus Regulatory Cooperation assumes importance.

• Harmonization of technical standards and mutual recognition of conformity assessment procedures between trading partners are forms of Regulatory Cooperation that helps in removing the technical barriers to trade and facilitates flow of goods and services in the region.

ESTABLISHMENT OF SARSO- BACKGROUND

• SAARC Committee on Economic Cooperation (CEC) - established in 1991, for identifying and implementing programmes in the core area of economic and trade cooperation.

• The Sub-Group on Standards and Quality working under the auspices of the CEC in its 2nd meeting on 30-31 August 2006, decided to set up the SAARC Standards Coordination Board (SSCB), as a precursor to the setting up of the SAARC Regional Standards Body

• SSCB comprised of a member from each of the National Standards Body of the Member States

ESTABLISHMENT OF SARSO- BACKGROUND

• SSCB at its 3rd meeting held on 1-2 Nov 2007, recommended for setting up of the SAARC Regional Standards Body, to be formally named as the South Asian Regional Standards Organization (SARSO)

• SSCB approved the text of the draft agreement for establishment of SARSO

SARSO AGREEMENTThe Agreement on the Establishment of the South Asia Regional

Standards Organization (SARSO), was signed at 15th SAARC Summit held in Colombo, Sri Lanka on 2nd - 3rd August, 2008, by the Foreign Ministers of the SAARC Member States

The Agreement on establishment of SARSO has since been ratified by all Member States with Afghanistan ratifying the Agreement in May 2011.

The Agreement on establishment of SARSO has entered into force with effect from 25 August 2011 with issuance of Notification to this effect by the SAARC Secretariat.

SARSO is to be located in Dhaka, Bangladesh The first meeting of the Governing Board of SARSO is likely to be held in

December 2011 in Bangladesh

OBJECTIVES OF SARSO

• To promote and undertake harmonization of national standards of the SAARC Member States with a view to removing TBT and facilitate flow of goods and services in the region

• To develop SAARC standards on the products of regional/sub-regional interest

• To encourage the use of international standards published by ISO, IEC, etc. by way of adoption, where appropriate, as SAARC Standards

OBJECTIVES OF SARSO (Contd..)

• To encourage exchange of information and expertise among the NSBs of the Member States in the fields of Standardization and Conformity Assessment

• To facilitate capacity building among the Member States in the fields of Standardization and Conformity Assessment by way of training, workshops, seminars, etc

• To act as a source of information for the Member States on standards, regulations, conformity assessment

• To present the common interests of the Member States in the various international standardization organisations

OBJECTIVES OF SARSO (Contd..)

• To establish mutually beneficial cooperation with the relevant international and regional organizations as per relevant SAARC guidelines

• To promote MRAs on Conformity Assessment Procedures among

the Member States

• To encourage sharing of facilities relating to conformity assessment procedures among the Member States

• To explore the possibility of having a common mark of conformity among the Member States

• To undertake any other task(s) as deemed appropriate.

STRUCTURE OF SARSO

The Organisation shall comprise of:• Governing Board• Technical Management Board (TMB)• Director-General; and• Secretariat.

Composition of Governing Board

• highest authority of SARSO vested with all powers relating to its functioning.

• consists of the Heads of respective NSB of each Member State. Each Member and his/her Alternate shall serve at the pleasure of the appointing Member State.

• The Chairperson of TMB, the Secretary General of SAARC or his representative and the Head of the Secretariat to be the ex-officio Members of the Governing Board.

Functions of Governing Board (GB)

• GB may create and assign other entities, as and when required, for the smooth operation of the activities of SARSO

• In line with the objectives and functions of SARSO, GB shall formulate policies for the effective functioning of SARSO

• GB may also give directives and provide guidance to the other organs of SARSO including TMB and Sectoral Technical Committees.

Technical Management Board (TMB)

• consists of one technical expert nominated by each NSB of the Member States.

• responsible for the planning, coordination and monitoring of all the technical work of SARSO.

• may establish Sectoral Technical Committees (STC) as and when deemed necessary for development of harmonised standards

• scope and programme of work for each STC under TMB shall be approved by GB

• shall meet at least annually preferably immediately before GB meetings and submit its reports to GB

Director-General and the Secretariat

SARSO shall be headed by a Director-General who will be appointed by the Governing Board for a period of three years from among the nationals of the Member States

• The Organisation shall have a Secretariat consisting of

officers and staff

ON GOING WORK

Development of SAARC StandardsThe following products have been identified for

harmonization/development of SAARC Standards: Sugar Skimmed Milk Powder Biscuits

Instant Noodles Vegetable Ghee Electric CablesTextile FabricJute Cement

Steel Tubes Structural Steel Toilet Soap

Sector based approach adopted for harmonization/ development of SAARC standards with setting up of Sectoral Technical Committees

(i) Food and Agricultural Products(ii) Electrical, Electronics, Telecoms and IT(iii) Jute, Textiles & Leather(iv) Building Materials(v) Chemical and Chemical Products

ON GOING WORK

Draft SAARC Agreement on Implementation of Regional Standards

The objective of this agreement is to provide the framework as well as the guiding principles for implementation of the

SAARC standards

ON GOING WORK

Draft SAARC Agreement on Multilateral Arrangement on Recognition of Conformity Assessment

The objective of this Agreement is to facilitate SAARC Member States to accept results of conformity assessment

EXPECTED BENEFITS – INDIAN PERSPECTIVE

Harmonization of national standards of the Member States would help in removing the technical barriers to trade and facilitate flow of goods and services in the region

Facilitate in projecting common interests of the Member States in the various international standardization organizations

Facilitate acceptance of results of conformity assessment amongst the countries in the region, and

Facilitate capacity building among Member States