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Forget SAARC, create a `South Asian Union'

Rajesh Nair

THE emergence of the European Union as a major actor in world politics and economics has brought to the fore the immensely rewarding prospects which a regional grouping can afford.

The realities of the post-Second World War and the possible gains from unified action in the economic, political and cultural fields led Western countries to plan such an initiative. Starting with the European Coal and Steel community to th e recent Maastricht and Amsterdam initiatives, European countries have exhibited a sense of purpose and unity of vision in extracting maximum gains from common action. Today, Western Europe thinks and acts commonly on a host of areas ranging from commercial to security policies.

Perhaps, there is no other region in the world which needs to emulate the West European initiative than South Asia. This statement may take quite a few people by surprise. But the fact remains that the positive benefits from such a concerted e ffort, far outstrip any possible disadvantage to any of the member-nations. A brief overview of the possible benefits from such a move will make this clear:

(a) The South Asian region is fortunately a unified geographical entity. This provides many opportunities for the initiation of cross-country economic activities. For example, Bhutan offers substantial scope for the setting up of a variety of agro-based industries. Due to inadequate financial support from within the country, much of the country's fruit production goes unprocessed. If the countries of the region join together, not only can there be a sufficient market for these products, but there can al so be adequate financial investment.

(b) Lack of adequate infrastructural facilities hinders the development of many of these countries. These countries lack the basic knowhow to develop reliable infrastructure. Resource constraint is also a major problem. If a South Asian infrastructural f und is set up with financial aid from the developed countries and the multilateral agencies, the financial difficulties could be overcome. The purpose of the fund would be better served by sharing the more-advanced technology in the infrastructural field available with countries such as India, with the more technologically-backward countries of the region.

(c) Much of the resources of the region are asymmetrically distributed among the countries. A pertinent example of this is the availability of water resources. For example, Nepal has a great potential of being developed as a major exporter of hydro-elect ric power. But it lacks the technology and financial resources to make this happen. Nepal could have done well by accepting India's help in this regard. Excepting a few instances, this has not happened since mutual suspicion and the relative gains questi ons have been major determining factors in the bilateral relations between the two countries.

Such a co-operative outcome would also have helped India's cause, which is now power-deficient. Again, where there has been a ready availability of surplus power (as in the case of Pakistan), enhancement of mutual benefit through trade in power has been prevented by a bout of jingoistic nationalism. In fact, the South Asian region could benefit immensely by the setting up of a ``South-Asian Power Production, Control, Pricing and Distribution Board''.

South Asia is among the poorest regions in the world. Almost all countries suffer from the same malaise. It is also the region which has innovative experiments in the field of poverty alleviation. In this regard, special mention should be made of the Gra meen Bank programme, introduced by Mr Mohammed Yunus. With its emphasis on ``collateral-less, group-lending'', this programme was a great success. The Employment Guarantee Scheme was also fairly successful. The aim of all the poverty alleviation programm es could be better served if a common South-Asian poverty alleviation programme is mooted, which incorporates the salient features of successful poverty alleviation programmes.

(e) Intra South Asian trade even today stands at an abysmally low level. Except in a few countries, majority of the trade is extra-South-Asian. But the sad fact is that many of the items that the countries import today can be produced with in the region itself. Though SAPTA and SAFTA are being talked about in glowing terms, many of the countries in the region have been hesitant to enhance the list of free-tradeables with in the region. Satisfactory progress has been made between India and Sri Lanka in t his regard, but with other countries, especially Pakistan, vested domestic interests in those countries have prevented progress in this regard.

All these factors indicate the urgent necessity for the creation of a South-Asian Union. A clear road map is needed for the successful completion of this task. The probable stages can be enumerated as follows.

1. Advanced levels of cooperation among the countries on the development of common resource endowments should be accomplished with in the span of the next decade.

2. The current SAARC framework to deal with common problems such as drug-trafficking, immoral trafficking, and so on, should be made to work more effectively rather than being allowed to be made hostage to petty political considerations.

3. An agreement should be arrived at among all the countries of the region to stipulate common targets for economic variables such as interest rate bands, exchange rate fluctuation bands, deficit range bands, and so on, so that a South Asian monetary Uni on could become a reality within the next one decade.

4. It is obvious that moves on these fronts would be accompanied by demands for free mobility of labour. This is a tricky topic since, freedom on this front would mean that countries such as India would be put under a great deal of pressure because of th e influx of cheap unskilled labour into its already bloated labour market. So it would be in India's interest to go slow on this issue.

5. The countries of the region should also see to it that no one country hinders progress towards the achievement of greater co-operation among the countries. So it would be pertinent to think in terms of a two-tier South Asia in which the countries whic h are willing to make progress in a particular sector shall move ahead to co-operate while the laggards could join at a later stage.

6. It would also be in the interest of the fledging Union to take up high-intensity political issues such as security cooperation at a later stage after the low-intensive economic co-operation has been achieved. The target date for the achievement of the final union should not be later than 2020.

Thus, it should be noted that the creation of such a union is in the interest of all the countries of the region. Even though many of the above ideas have been incorporated as the objectives of SAARC, the achievements have not been appreciable. Hence, th e need for forming the proposed South Asian Union. The earlier the union is formed, the better it is for the whole region.

(The author is research scholar, School of International Studies, Jawaharlal Nehru University, New Delhi.)