During the 1980s, Bangladesh, India, Sri Lanka, Pakistan, Nepal, Bhutan, and the Maldives established the South Asian Association for Regional Cooperation (SAARC) to deepen economic, cultural, and political linkages between the people of a culturally and geographically diverse South Asia. However, despite its lofty ambitions to promote cooperation in agriculture, technology, transport, rural development, meteorology, telecommunications, and health, we have likely already seen the end of an association that has comprehensively failed to deliver on its agenda. However, given the costs of abandoning this SAARC, India may want to reconsider whether it is willing to compromise on political differences to protect its economic interests, particularly in light of the country’s growing rivalry with China.
The organisation’s primary purpose was to build collective self-reliance, promote socio-economic development of member states, and cooperation and mutual assistance in several sectors and with other regional and international organisations like the Association of Southeast Asian Nations (ASEAN) and the European Union (EU). To this end, members agreed to hold annual meetings and refrain from discussing bilateral political issues at the meetings.
At times, SAARC has shown promise and offered a glimpse of what it was envisioned to be. In fact, in 2006, during a meeting in Delhi, SAARC leaders discussed the creation of free trade area for specific items. Likewise, in 2014, Indian Prime Minister Narendra Modi invited all SAARC leaders to his swearing-in ceremony. India has also used SAARC as an avenue to strengthen its vaccine diplomacy efforts during the ongoing pandemic.
Yet, despite these periodic shows of solidarity, members have by and large failed to adhere to the SAARC’s founding principles and instead used the organisation as a forum to exchange blame on issues such as international boundaries, water resources, democratic principles, and religion. Political analyst Pran Chopra has opined that “excessive nationalism among members is one of the major obstacles in SAARC’s slow progress,” pointing to how member states view national interests as entirely incompatible with the goal of regional unity, even on mutually beneficial matters such as trade.
The last SAARC meeting was held in 2014 in Nepal. During the Summit, Pakistan refused to commit to measures to improve road connectivity, citing incomplete internal processes to endorse the pact. The motor vehicle pact would have allowed for free movement of passenger and cargo vehicles through member states. After Pakistan refused to sign the motor vehicle act, India hoped to boost regional connectivity with its eastern neighbours—Nepal, Bangladesh, and Bhutan. However, Bhutan’s comparatively higher standards for vehicular emissions thwarted India’s plan. Similarly, in 2017, India launched a satellite to ensure better communication between South Asian countries. All SAARC countries welcomed the move except for Pakistan, which refused to participate in the venture.
Aside from a crippling lack of flexibility, members have also shown a lack of initiative to implement the agreements that they do reach. For example, despite signing the South Asian Free Trade Agreement in 2004, which came into effect in 2006, members have failed to increase trade among each other and instead largely prioritised trade with China.
Following the 2014 summit, the organisation’s chairmanship was handed over to Pakistan, which was to host the subsequent meeting in 2016. However, the meeting was cancelled due to strained relations between India and Pakistan; SAARC’s rules say a summit can only be held if all members agree. Subsequently, the 2019 Pulwama attack further deteriorated ties between India and Pakistan.
The latest meeting of the foreign ministers of the member nations on the sidelines of the United Nations General Assembly in September was also cancelled due to a lack of consensus on the participation of Afghanistan. Pakistan wanted to include the Taliban representatives despite them not being internationally recognised as the legitimate government of Afghanistan by a majority of members. Unlike Pakistan, other countries wanted to keep a symbolic empty chair at the meeting.
It is inevitable that there are likely to be differences among members in any organisation. India and Pakistan continue to spar and hold incredible tense relations over terrorism, Kashmir, religion, and the treatment of minorities. Bangladesh, too, has taken issue with India’s treatment of minorities and even previously criticised the National Register of Citizens (NRC) and the Citizenship Amendment Act (CAA). Additionally, the water of the Teesta river also remains a point of contention between the two countries. India is currently engaged in a border dispute with Nepal as well, which reached a new high under now-former Nepalese PM KP Sharma Oli. Furthermore, India also appears increasingly unlikely to recognise the Taliban government in Afghanistan, particularly given the group’s close ties with Pakistan and its recent comments about the Kashmir conflict.
Nevertheless, despite these severe differences, the lack of willingness to compromise and search for areas of mutually beneficial convergence in spite of political differences is severely out of step with other such organisations. Compared to other regional organisations, SAARC is the least consolidated organisation, despite occupying a land area greater than the European Union and ASEAN. SAARC’s intra-regional trade amounts to less than 5%, compared to 35% among East Asian countries and 60% among European nations. To put this into perspective, India’s trade with Brazil is 20% cheaper compared to Pakistan, despite Pakistan being right next door.
Moreover, these countries are not alien or averse to multilateral cooperation. India, for instance, has been forging deeper ties with the United States, Australia, the European Union, and investing in other organisations such as Quad and the Bay of Bengal Initiative on Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), a key component in Modi’s “Act East” policy.
However, despite the obvious allure and benefits offered by these other multilateral engagements, India should be cautious of what abandoning SAARC means for its growing rivalry with China—which is making in-roads across South Asia—and its trading competitiveness.
As part of the Belt and Road Initiative (BRI) and the China-Pakistan Economic Corridor (CPEC), China has already pledged more than $60 billion to Pakistan in loans and investments to construct roads, industrial parks, power plants, and ports. Similarly, in 2016, China committed $26 billion to Bangladesh. Likewise, in 2019, Chinese President Xi Jinping pledged to provide Nepal with approximately $752 million over two years for development programmes. In addition, as of 2020, China’s loans to Sri Lanka amounted to $4.6 billion and approximately $1.2 billion to the Maldives. In 2019, 43% of loans for development projects in Sri Lanka came from China; China also accounts for 53% of the Maldives’ external debt.
In this respect, the full exploitation of SAARC offers a unique and crucial opportunity for India to close the gap on China. If SAARC were to realise its true potential, trade between India and Pakistan could increase from less than $3 billion to $20 billion and Bangladesh’s exports to India could grow by 300%. It would also reduce prices and increase connectivity with landlocked regions such as Nepal, Bhutan, Pakistan, and Northeast India. The benefit of reduced tariffs, the elimination of non-tariff barriers, private and intraregional investment, efficient connectivity and border crossings, and more streamlined logistics, shipping, and air travel procedures offer untold benefits.
If India to rein in China’s influence in its own backyard, then it must seek to prioritise regional cooperation and leverage the underutilised value of its neighbours. However, whether India is willing to set aside political differences or whether other SAARC countries like Pakistan are willing to respect the principles of the Association and not use it as a forum to undermine India’s internal policies is much easier said than done. Regardless of however much potential SAARC might hold, trust among members remains difficult to achieve. As it stands, this lack of trust stands in the way of SAARC rivalling ASAN or the EU.
Given China’s Ascendancy, Can India Really Afford to Abandon SAARC?
At times, SAARC has shown promise and offered a glimpse of what it was envisioned to be. More often than not, however, it has been used as a forum to air bilateral grievances.
November 16, 2021
SOURCE: THE PRINT