Buck up, SAARC!

With the West mired in economic woes of its own, several countries in Asia are turning towards regional peers to establish a firm ground in this emerging hub. The meeting of South Asian Association for Regional Cooperation (SAARC) being held in Maldives is one such step by South Asian nations to join hands and iron out political differences to smoothen economic ties with each other. However, while India and Pakistan seem to be sailing on pleasant tides as far as relations between the two neighbours are concerned, Bangladesh adopted a contentious stance towards the very-mooted trade concessions extended to Pakistan by the EU. That this issue came up towards the beginning of a meeting for the promotion of regional cooperation is quite ironic itself begging the question of the efficacy of the bloc to function as a sound hub of regional trade. As it is, SAARC as a regional bloc leaves a lot to be desired. According to a paper published by the Reserve Bank of India (RBI) assessing intra-regional trade in ten regional blocs, intra-regional trade in SAARC was the lowest at 4.8 percent in 2008. Another issue that might explain Bangladeshs antagonist stance observed lately is that of the similarity of export baskets of major SAARC countries. With the leading most common category being textile and related products in main South Asian countries; these countries are essentially competing with one another in international markets. This may also explain the protectionist stance of South Asian countries towards each other as the RBI report quotes: "World Bank highlights that the reasons for (the) low level of trade include protectionist trade regimes, which discriminated against trade among larger neighbours; continued conflict between India and Pakistan; and transport and trade facilitation constraints." The issue of such non-tariff barriers was highlighted recently when MFN status was granted to India and it was widely criticised that it were the non-tariff barriers put up against Pakistan by India which are the main cause of concern rather than merely tariff barriers. One hopes that thick ice of contentious competition between regional peers is allowed to break via the current SAARC meeting. While the countries seem to be on the path towards eliminating tariff barriers against each other, non-tariff barriers, as well as greater cooperation in international forums such as WTO and EU meetings need to be the order of the day. Its time for the South Asian giants to think big and collective and not merely individualistic in order to cash in the opportunity of emerging as regional force to reckon with.