If SAARC Stumbles: Go for Sub-regional Alternatives

 

 

 

Way Ahead

In Kathmandu, a frustrated Modi remarked that regional integration in South Asia would go ahead “through SAARC or outside it, among all of us or some of us”. South Asian countries should listen to him and go for bilateralism and sub-regionalism outside the SAARC. These approaches could be more successful in enhancing economic integration in South Asia than multilateralism under the SAARC.

 

A case in point is bilateralism between India and Nepal which was fruitful for Nepal despite the stalemate on regional issues at the Summit. In the sidelines of the Summit, the US$1 billion credit that India had promised to Nepal was operationalised. Hydropower cooperation between India and Nepal was enhanced by the signing of a power development agreement of the Arun III power project and public bus services between various Indian and Nepalese cities were flagged off.

 

A co-author and I have argued that sub-regionalism in South Asia should be market-led and target East Asia, its largest market. South Asian countries need to implement the second round of their “Look East” policies to link themselves to production networks in East Asia. Such policies would not only lead to higher economic growth in the concerned countries, they would also reinvigorate economic integration in South Asia.

 

Revisit Look East Policies

A second round of “Look East” policies should comprise the following moves by the South Asian countries:

 

1. • First, complete the economic reform programme that they began in the 1990s mainly in the areas of governance and institutional reforms;
2. • Second, improve their information, communication, and technology systems to coordinate supply chains efficiently;
3. • Third, reduce logistics costs as this is a key determinant of their competitiveness; and
4. • Fourth, support the proposed Trans-Himalayan Economic Corridors to connect South Asia, with Central Asia, and East Asia in a seamless manner.

 

 

The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is the appropriate institutional framework to support the above policies because it connects South Asian countries (except Pakistan and Afghanistan which are not members) with several East Asian countries (Myanmar and Thailand).

 

In a survey of Asian opinion leaders that we conducted, four out of five leaders felt that BIMSTEC, which is presently chaired by Nepal, should play a more active role in promoting regional connectivity and integration in Asia.

 

As China steps up efforts to forge trade and connectivity with Central and Southeast Asia, the South Asian countries will need to pursue bilateral and sub-regional arrangements to promote their own integration. They should not wait for SAARC as time is not on their side.

 

 

Pradumna B. Rana is Associate Professor at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU) in Singapore.