• SAARC

SAARC

This paper focuses on the institutionalised ability of the South Asian Association for Regional Cooperation (SAARC) to foster economic cooperation in the sub-continent. SAARC is the only multilateral regional organisation in the sub-continent, and has enjoyed a relative degree of success in discussing social and cultural agendas. The author explores the structural capacity of this network to go beyond the socio-cultural agenda to engage with economic cooperation.

The author examines the major impediments to developing a regional network, including focussing on India’s dominance of the sub-region - both in terms of physical and demographic size, as well as economic prowess in the region in comparison to the other members of SAARC. The paper then examines the level of economic and financial integration amongst the economies of SAARC. Investment is found to be relatively low, thereby generating weak institutional and structural ties amongst the SAARC member nations.

The paper focuses on the development of the South Asian Free Trade Area (SAFTA), and considers the impacts of this framework on the weaker economies of the sub-region. While the prospects are encouraging, the author also argues that India’s position of dominance has historically threatened SAARC’s efficiency, and could do the same for the SAFTA.

The paper concludes with a set of recommendations aimed at paving the way for the free trade area, which include:

• declaring SAARC as a visa free zone for citizens of the region
• addressing the process of convertibility of currencies of member states
• establishing regional level institutions for the insurance, export financing and stock exchange sectors
• strengthening the institutional capacity of the SAARC secretariat

Summary originally provided by GDNet, an Eldis content partner

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