40th Charter Day of SAARC

• 09 Dec 2024

For Prelims: South Asian Association for Regional Cooperation, South Asian Free Trade Area, National Knowledge Network , European Union (EU), Association of Southeast Asian Nations, Belt and Road Initiative , BIMSTEC 

For Mains: South Asian regionalism, India's role and contributions to SAARC, Economic and Political cooperation. 

Source: HT 

Why in News?

On 8^th December 2024, the South Asian Association for Regional Cooperation (SAARC) marked its 40th Charter Day. This day is commemorated annually to honor the establishment of SAARC.

What is the South Asian Association for Regional Cooperation? 

• Origins of SAARC: Regional cooperation in South Asia was first discussed at the Asian Relations Conference (1947), the Baguio Conference (1950), and the Colombo Powers Conference (1954). 
  • The SAARC concept took shape in 1980 when Bangladesh's President Ziaur Rahman proposed regional cooperation to promote peace and stability. 
  • SAARC was officially established on 8th December 1985, in Dhaka, Bangladesh, with 7 founding members: Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. 
    • Afghanistan joined as the 8th member in 2007. 
• Objectives: 
  • Promote welfare and improve quality of life in South Asia. 
  • Accelerate economic growth, social progress, and cultural development. 
  • Strengthen self-reliance and mutual trust among member states. 
  • Enhance collaboration in economic, social, cultural, technical, and scientific fields. 
  • Cooperate with other developing countries and international organizations. 
• Key Principles: Sovereign equality, territorial integrity, non-interference, and consensus-based decision-making. 
• Significance of SAARC:  SAARC comprises 3% of the world's land area, 21% of the world's population and 5.21% (USD 4.47 trillion) of the global economy, as of 2021.  
• Scope of Cooperation: SAARC's agenda includes the South Asian Free Trade Area (SAFTA), established in 2004 and effective from 2006, aimed at reducing tariffs and promoting free trade in South Asia.  
  • The SAARC Agreement on Trade in Services (SATIS) came into force in 2012, to enhance intra-regional investments and liberalize trade in services. 

What is the Relevance of SAARC in Today’s Context? 

• Platform for Dialogue: Despite its dysfunction, SAARC remains the one of the few platforms where South Asian countries, including India and Pakistan, can engage in dialogue. 
  • Periodic summits provide opportunities to address pressing regional issues, such as climate change and poverty, even if no concrete outcomes emerge. 
• Shared Regional Solutions: Issues like cross-border terrorism, and pandemics demand a collective regional response. 
  • SAARC has previously coordinated initiatives, such as the establishment of a Covid-19 Emergency Fund, highlighting its utility during crises. 
• Potential for Economic Integration: With a combined GDP of over USD 4 trillion and a population of nearly 1.8 billion, South Asia has significant untapped potential. 
  • SAARC’s frameworks, such as SAFTA and the SAARC Agreement on Trade in Services, can still be revitalized to enhance trade and economic cooperation. 
• Avoiding Overdependence on External Frameworks: Ignoring SAARC may force member nations to rely heavily on external platforms like ASEAN or China-led initiatives such as the BRI. 
  • SAARC provides a means for South Asia to control its developmental trajectory. 

What is India’s Contribution to SAARC? 

• SAARC Summits: India has hosted three out of the eighteen SAARC Summits: the 2nd summit in Bengaluru (1986), the 8th summit in New Delhi (1995), and the 14th summit in New Delhi (2007). 
• Technological Cooperation: India has extended its National Knowledge Network (NKN) to countries such as Sri Lanka, Bangladesh, and Bhutan, fostering educational and technological exchange.  
  • Additionally, India launched the South Asian Satellite (SAS) in 2017, providing satellite-based services to SAARC countries. 
• Currency Swap Arrangement: In 2019, India approved the incorporation of a ‘Standby Swap’ in the Currency Swap Arrangement for SAARC members, amounting to USD 400 million, aimed at enhancing financial cooperation. 
• Disaster Management: India hosts the Interim Unit of the SAARC Disaster Management Center  in Gujarat.  
  • This center provides policy advice, technical support, and training for disaster risk management across SAARC countries. 
• South Asian University (SAU): India is home to the South Asian University, established through an Inter-Governmental Agreement at the 14th SAARC.  
  • It provides world-class education and research opportunities for students and scholars from SAARC nations. 

Role India Can Play in Strengthening SAARC 

• Leadership Role: As the largest economy, India constitutes over 70% of the area and population among the SAARC nations and is strategically connected to almost all the member nations. 
  • Initiatives like the SAARC satellite and support for infrastructure development underscore India's commitment. 
• Proposed Measures: India must continue offering unilateral concessions, such as duty-free access for least developed SAARC nations. 
  • Smaller nations should reciprocate by leveraging India’s growth for their own development rather than perceiving it as a threat. 
  • Strengthen regional connectivity projects like the BBIN Motor Vehicle Agreement and integrate them with global value chains. 
  • It is essential for India to counter China's growing influence in South Asia, while managing the "Big Brother" perception among smaller neighbors.  
    • Utilizing platforms like QUAD and Indo-Pacific partnerships can help counterbalance external pressures and ensure regional cooperation. 
  • India also can utilize BIMSTEC to  engage with  South and Southeast Asian nations, bypassing Pakistan. 
  • Promote People-to-People contact through Scholarships, cultural exchanges, and tourism-focused initiatives. 

What are the Key Challenges Facing SAARC? 

• Political Tensions and Bilateral Conflicts: India and Pakistan dominate SAARC in terms of Gross Domestic Product (GDP) and population, but their strained relations, including issues like terrorism and territorial disputes, have hindered cooperation. 
  • Pakistan's refusal to address cross-border terrorism led to India boycotting the 19th SAARC Summit in 2016, resulting in its postponement. 
  • The 18^th SAARC summit was held in Kathmandu in 2014, and its outcome was a 36-point Kathmandu declaration. 
  • Many member states, including Bangladesh, Afghanistan, and Pakistan, face political instability and governance issues that disrupt long-term regional planning.  
• Low Economic Integration: Intra-regional trade in SAARC is a mere 5% of its total trade, compared to 65% in the  European Union (EU) and 26% in Association of Southeast Asian Nations. 
  • Limited implementation of the SAFTA and lack of product diversification have stymied economic growth. 
• Asymmetric Development: India's dominance often leads to the "Big Brother Syndrome," causing mistrust among smaller nations.  
  • Smaller member states often perceive India as overly dominant, leading to resistance against Indian initiatives. This perception discourages collective action and fosters reliance on external powers like China. 
  • Nepal, Bhutan, and Maldives struggle with infrastructure deficits and limited resources. 
• Institutional Weaknesses: SAARC’s charter requires unanimous agreement for decisions, enabling any member to veto progress on critical issues. 
  • Pakistan has frequently used this mechanism to block agreements like the SAARC Motor Vehicles and Railways pacts. 
  • Observers like China, the EU, and the US lack clarity on their roles, limiting external support. 
  • The exclusion of contentious bilateral matters limits SAARC’s ability to address underlying causes of regional tensions. This provision undermines the organization's relevance in resolving disputes. 
• External Influences:China's growing presence through the Belt and Road Initiative (BRI) and its strategic investments in Sri Lanka, Bangladesh, and Pakistan complicates intra-SAARC dynamics. 
  • The China-Pakistan Economic Corridor (CPEC) and Hambantota port developments amplify China's influence. 

Way Forward 

• Promoting Economic Cooperation: Accelerate the operationalization of the SATIS. 
  • Expand initiatives like the SAARC Development Fund to support regional projects in infrastructure, healthcare, and education. 
  • Resolving Political Conflicts: Mediation mechanisms within SAARC could help address bilateral tensions. Promote Track-II diplomacy involving academia, business leaders, and civil society.  
  • Track II diplomacy is an informal, non-governmental approach to resolving conflicts through dialogue and workshops to reduce tension. 
  • Prioritize issues like disaster management, education, and public health, which are less politically sensitive. 
• Leveraging Sub-regional Groupings: Initiatives like BBIN (Bangladesh, Bhutan, India, Nepal) and BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) can complement SAARC’s objectives and foster trust. 
• Combating Non-traditional Security Threats: Strengthen regional cooperation on counter-terrorism, disaster management, and enhance intelligence-sharing frameworks among member nations. 
• Reform Institutional Mechanisms: Replace the consensus-based decision-making model with weighted voting to prevent a single country from blocking progress. 
  • Strengthen the SAARC Secretariat with greater autonomy and financial resources. 
• Encouraging Youth Participation: Utilize South Asia’s demographic dividend by fostering student exchanges, scholarships, and youth-centric development programs through the South Asian University and other regional platforms. 

Conclusion

SAARC remains a crucial platform for regional cooperation despite challenges like political tensions and low economic integration. India's growing leadership can strengthen the organization’s potential. To realize its full potential, SAARC must focus on enhancing economic cooperation, resolving political conflicts, and fostering sub-regional partnerships. 

Drishti Mains Question: 

Discuss the role of SAARC in promoting regional cooperation in South Asia. What challenges hinder its effectiveness in achieving economic integration?

 

UPSC Civil Services Examination, Previous Year Questions (PYQs) 

Mains:

Q. “Increasing cross-border terrorist attacks in India and growing interference in the internal affairs of several member-states by Pakistan are not conducive for the future of SAARC (South Asian Association for Regional Cooperation).” Explain with suitable examples. (2016)