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'SAARC needs a common strategy to address challenges'

Dec 14, 2009

On the occasion of the 24th SAARC Charter Day, efforts to strengthen and push forward the SAARC process, promote bi-lateral trade, and enhance technological cooperation among the member countries have been emphasised. With high levels of poverty, food and environmental crisis in the region, there is need for improving the quality of life.

Islamabad: Despite concerted efforts, South Asia remains a backward region where the largest number of illiterates live, where the infant and maternal mortality rate is highest in the world, and where the number of poor is more than 550 million - more than one third of the region’s total population.

The region represents almost 23% of the world population, but shares only 2.5% of the world’s gross national income (US$1,339 billion in 2007). It has not fully geared up to provide material benefits to more than 1.5 billion inhabitants. Most of the quality of life indicators are weak.

“On the human development index, SAARC is amongst the regions having a low profile quality of life,” said Dr Muhammad Aslam Khan, Director Saarc Human Resource Development Centre.

The average per capita income at US$880 is only 11% of the world’s average of US$7,995. With vast resources, the Saarc region is confronted with the formidable challenges posed by poverty, unemployment, low levels of production and pressures of population, Aslam said on the occasion of the 24th SAARC Charter Day, which was observed on December 8.

The South Asian Association for Regional Cooperation (Saarc) was established when its Charter was formally adopted on December 8, 1985 by its seven founding member states - Pakistan, Bangladesh, Bhutan, India, Maldives, Nepal and Sri Lanka.

SAARC provides a platform to the people of South Asia to work together in a spirit of friendship, trust and understanding and cooperation among the member countries, and reinforce links between the countries of the region. It also promotes mutual collaboration in economic, social, cultural, technical and scientific fields.

Lack of accelerated economic growth, social progress and cultural development in SAARC countries have severely hampered the SAARC objectives of promoting welfare of the people of South Asia and improving the quality of life.

In spite of SAARC’s emphasis on trade as one of the major priority areas of economic cooperation, total external trade of the region amounts to a mere 1.6% of the world trade, 1.4% of the world exports and 1.8% of the world imports. Intra-regional exchanges represent only 4% regional trade - 5.3% exports and 4.8% imports.

The region receives only a nominal amount of private capital inflows with regional share in foreign direct investment (FDI) limited to less than 1.5% of the world FDI flows. While the other regional trade blocs got momentum as an attempt to operate in the global market with increased economic strength, the SAARC member states are still struggling to move effectively from the SAARC Preferential Trading Arrangement (SAPTA) to South Asia Free Trade Area (SAFTA).

SAARC countries as a bloc remained least interested in moving along with the world and deprived themselves of the changes that occurred on the global economic scene.

Efforts to strengthen and push forward the SAARC process, enhance the level of bilateral trade and strengthen trade and commercial relations between member countries were grossly short of expectations.

The operationalisation of SAPTA was the first step towards liberalisation and creation of the SAARC trade bloc, but since 1993 to 2009, not much progress has been achieved to strengthen the regional position in the world trade. South Asia has also achieved limited success in technological advancement.

The region has not developed the required technological knowledge and skill-base to become competitive in the global market due to which, productivity per worker is low and the cost of doing business in the region is very high.

The SAARC countries need to respond to the emerging situation in a holistic manner by forging a common strategy by exploring options to safeguard regional interest through joint ventures, and technology transfer among its member countries.

A cohesive and economically integrated South Asia would be better positioned to negotiate globally for trade with WTO regime and development institutions. The South Asian countries have so far not received the full brunt of the global crisis but plummeting global output, trade and finances will affect the regional economies in coming days.

A well-coordinated regional approach is required to minimise the impact of slowing down the global economy after years of remarkable growth. South Asia has the potential to accelerate economic growth, strengthen intra-regional trade and contribute to global solutions to the crises.

Source : The News
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