South Asian Association for Regional Cooperation (SAARC)  regional alliance consisting of seven countries, namely, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. The region is full of diversities in terms of size, ethnicity, religion, governance, resources, etc. South Asia consists of unequal partners, India being by far the largest and the strongest, and on the other hand, the Maldives, Bhutan and Nepal are much smaller and politically weaker. A unique characteristic of this region is that ethnic or religious violence in one state often generates repercussions in the neighboring states. The natural and human resources are skewedly distributed among these countries. The region has a total population of about 1.3 billion of which India has 76.2%, followed by Pakistan with 10.7%, Bangladesh 9.7%, Nepal 1.7% and Sri Lanka with 1.5%. India is by far the largest country in terms of land, population and other resources. The average nominal per capita GNP of the region is hardly $400. The lack of regional cooperation is considered as an important factor responsible for the slow development in the region.

Formation of regional bloc is considered a useful step for accelerating regional economic development. Expansion of intra-regional trade and investment is a common goal of the community of nations. Political conflicts often work as hurdles to regional cooperation. Economic regionalism creates a propitious climate for political cooperation. Political cooperation and understanding, in turn, are necessary for meaningful economic cooperation. The idea of forming a regional bloc for cooperation between the seven South Asian countries was initiated by ziaur rahman, the President of Bangladesh, in 1980. Ziaur Rahman suggested that these seven countries should explore the possibility of establishing some institutional arrangements for regional cooperation. The idea received enthusiastic response from the leaders of the seven countries of South Asia. The initial meetings were held at the foreign secretary level followed by the ministerial level meetings. These countries eventually established South Asian Association for Regional Cooperation (SAARC) in 1985 at Dhaka Summit attended by the heads of the state of the seven countries. In general, the regional blocs aimed at achieving economic integration for prosperity. Another important goal was to gain bargaining strength vis-a-vis the non-members. But the goals of SAARC do not include economic integration although the objectives under Nos. 7 and 8 (as stated in its Charter) would indicate a goal to increase bargaining strength.

The original Charter of SAARC simply recognized the possibility that increased cooperation, contact and exchanges would contribute to the promotion of friendship and understanding among the member states and promote the welfare of the people of South Asia. The Charter as declared at Dhaka Summit included eight broad objectives which are: (1) to promote the welfare of the peoples of South Asia and improve their quality of life; (2) to accelerate economic growth, social progress and cultural development in the region, and to provide all individuals opportunity to live in dignity and to realize their full potentials; (3) to promote and strengthen collective self-reliance among the countries of South Asia; (4) to contribute to mutual trust, understanding and appreciation of one another's problems; (5) to promote active collaboration and mutual assistance in the economic, social, cultural, technical and scientific fields; (6) to strengthen cooperation with other developing countries; (7) to strengthen cooperation among themselves in international forums on matters of common interests; and (8) to cooperate with international and regional organisations with similar aims and purposes.

Since then efforts were made to materialise the SAARC objectives. The permanent secretariat of SAARC was established in Kathmandu with its first secretary general from Bangladesh. This created opportunities for establishing people-to-people contact through private initiatives. The Katmandu Declaration, the outcome of the third SAARC Summit, issued on 4 November 1987 reemphasized the need for promoting peace, stability, amity, and progress in the region. The Islamabad Declaration (31 December 1988) reaffirmed the objectives of SAARC and emphasized the schemes designed for promoting greater people-to-people contact. These include, the SAARC chairs, fellowship and scholarship scheme, the SAARC volunteer exchange programme and SAARC visa exemption scheme. The scheduled annual summit could not be held in 1989. The Fifth SAARC Summit held at Male reviewed the progress and issued Male Declaration on 23 November 1990. It contributed to regaining the momentum of SAARC activities.

During 1985-88, SAARC attempted to create vitality and efficacy of regional cooperation. Four regional centres have been set up to supplement the work of the technical committees to share information and coordinate activities in priority areas identified by the member states. These centres are SAARC Agricultural Information Centre; SAARC Regional Meteorological Centre; SAARC Documentation Centre; and SAARC Tuberculosis Centre.

The initial SAARC Charter did not have any clearly defined provision for economic and trade cooperation. Later, the SAARC member countries declared their commitment at the sixth SAARC Summit held in Colombo in December 1991 to trade liberalization with a view to increasing intra-regional trade and investment in such a manner as will ensure that countries in the region can share the benefits equitably.

The South Asian Preferential Trading Arrangement (SAPTA) was established in April 1993. This is the fist major economic initiative taken by SAARC since its inception. The SAPTA aims at promoting and sustaining mutual trade and economic cooperation among the member-countries on the basis of reciprocity. Under SAPTA, product wise tariff concessions have to be negotiated amongst the member countries on a step-by-step basis. It is envisaged that both tariff and non-tariff barriers will be removed phase-wise selecting specific group of commodities. It is believed that the anticipated trade expansion through SAPTA will increase economic activities leading to enhanced intra-regional trade, which will in turn help the region alleviate its poverty by generating new employment opportunities for the people at different levels of production and export services.

The SAPTA agreed to offer tariff concessions for a total of 226 products. A total of 100 products were earmarked for the four least developed countries of SAARC (Bangladesh, Bhutan, Maldives and Nepal). For these 100 products, the four countries could get special treatment from the relatively more developed members, namely, India, Pakistan and Sri Lanka with no reciprocity requirement. In the second round of negotiations, some 2013 products were offered for tariff concessions of which 764 are exclusively in favour of the least developed countries of the region.

The potential of intra-regional trade in SAARC has to be examined in the context of the historical relations between the member countries. Historically, the seven countries that have formed the SAARC mostly traded with non-members, that is, mostly with industrialized countries and NICs. The intra-regional trade is hardly 3% of the total trade of the region. One reason for this low intra-regional trade has been the application of tariff and non-tariff barriers by relatively more developed member of the SAARC. There is no reciprocal and adequate market access. Due to pressure of globalization, the SAARC members have accepted the principle of free trade as a strategy of economic development. The member countries emphasize the need for moving up from the current low level of intra-regional trade and investment to higher level through some institutional arrangements. As such the SAARC has formally launched the process of operationalizing the concept of SAARC Free Trade Area (SAFTA).

The Charter of SAARC does not prevent member countries to sign bilateral agreements or form sub-regional cooperation within the SAARC region. Sri Lanka and India have signed bilateral Free Trade Agreement to boost up trade and investment between these two countries. Similarly, Bangladesh and India have signed the ganges water treaty for sharing water that flows through the river Ganges. Similarly, bilateral agreements have been signed between India and Nepal, India and Bhutan.

Due to various reasons SAARC did not make substantial progress toward its goals. Rather, from 1989 a deceleration in the activities of SAARC is noticeable. During this period the SAARC only organised seminars, workshops and short training programs; facilitated cultural exchanges and sport events. Although some progress has been made through two rounds of negotiation on SAPTA, the SAARC is far from maturing as a regional economic grouping. The SAARC so far held ten annual summits and many high level official meetings. But intra-regional trade has not moved to desired direction. This was due to political tension among the member countries.

The SARRC leaders recognized the importance of private sector to promote the SARRC spirit. Successive high-level meetings have recognized that academicians, private organisations and professionals can play important roles in promoting SAARC. The SAARC Chamber of Commerce and Industry was established with its secretariat located in Karachi. The SAARC has been able to generate a growing interest among the members of the civil societies. To make the SAARC play an effective role, they occasionally take initiative to establish contact among the people of member countries. The SAARC Chamber of Commerce and Industry organises meetings of the business people in which possible expansion of intra-regional trade is explored at private levels. Similarly, SAARC Federation of University Women, another private initiative, was formed in 1992. The Association of Management Development Institutions in South Asia was recognized as a private institution to promote the spirit of SAARC among the business schools and management training institutions. The Ninth SAARC Summit asked a 12-member group, the SAARC Group of Eminent Persons, to come up with its recommendations to make SAARC more effective. As demonstrated by the experiences of most regional economic groupings, achieving institutional goals will take a long time. The progress will depend on the ability of member countries to foster confidence and trust for each other. [Hafiz GA Siddiqi]