SAARC Its History and Future Opportunities.reaserch

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INTRODUCTION The South Asian Association for Regional Cooperation (SAARC) is an organisation of South Asian nations, founded in December 1985 by ZiaurRahman and dedicated to economic, technological, social, and cultural development emphasising collective self-reliance. Its seven founding members areBangladesh, Bhutan, India, the Maldives, Nepal,Pakistan, and Sri Lanka. Afghanistan joined the organization in 2005. Meetings of heads of state are usually scheduled annually; meetings of foreign secr
  INTRODUCTION The South Asian Association for Regional Cooperation (SAARC) is an organisation of South Asian nations, founded in December 1985 by ZiaurRahman and dedicated to economic, technological, social, and cultural development emphasising collective self-reliance. Its seven founding members areBangladesh, Bhutan, India,  the Maldives, Nepal,Pakistan,and Sri Lanka. Afghanistan  joined the organization in 2005. Meetings of heads of state are usually scheduled annually; meetings of foreign secretaries, twice annually. It is headquartered in Kathmandu,Nepal.The 16 stated areas of cooperation are agriculture and rural, biotechnology, culture, energy, environment, economyand trade, finance, funding mechanism, human resource development, poverty alleviation, people to people contact,security aspects, social development, science and technology; communications, tourism .The concept of SAARC was first adopted by Bangladesh during 1977, under the administrationOf President Ziaur Rahman . In the late 1970s, SAARC nations agreed upon the creation of a trade blocconsisting of South Asian countries. The idea of regional cooperation in South Asia was again mooted inMay 1980. The foreign secretaries of the seven countries met for the first time in Colombo in April 1981.The Committee of the Whole, which met in Colombo in August 1985, identified five broad areas forregional cooperation. New areas of cooperation were added in the following years.(1)   SAARC BODIES. Council of Ministers. Council of Minsiters comprises of the Ministers of Foreign /External Affairs of the Member States. As provided inArticle V of the Charter, The Council is mandated to meet twice a year as also to hold its extra-ordinary session (byagreement of among the Member States). The next (thirty-second) session of the Council will be convened atThimphu on 27 April 2010, preceding the Sixteenth Summit. Standing Committee . The Standing Committee comprises of the Foreign Secretaries of the SAARC Member States. As provided in ArticleV of the SAARC Charter, they take measures /decisions relating to: overall monitoring and coordination ofprogramme of cooepration under different areas. Standing Committee is mandated to meet as often as necessary.Generally, they have met preceding the sessions of the Council of Ministers. The Committee reports to the Council ofMinisters, on regular matters; and, as needed, asks for specific decision on policy matters from the Council. Technical Committees . Technical Committees comprising representatives of Member States are responsible for the implementation,  coordination and monitoring of the programmes in their respective areas of cooperation.In addition to determining the pontential and the scope of regional cooperation in agreed areas, TechnicalCommittees are involved in formulation of programmes and preparation of projects. They also coordinate theimplementaion of sectoral programmes and assess the implementation regularly. The following TechnicalCommittees work on their respective areas to provide support to SAARC activities.Technical Committee on Agriculture and Rural Development.Technical Committee on Health and Population Activities.Technical Committee on Women, Youth and Children.Technical Committee on Science and Technology.Technical Committee on Transport.Technical Committee on Environment.(2) CAUSES OF FORMATION OF SAARC. Over the years countries through the world have formed many regional trading blocks, and it is also proved by theexperience of successful regional groupings like the European Union that they play an important role in the worldeconomy and trade. Looking through the world since 1960's we can see that an important motivation of the formationand development of regional trading blocks is to compete with the growing world outside. One of the purposes of the   establishment of trading blocks is to arrange easier trade within the region and to increase efficiency, growth andcompetitiveness. In the recent years interest in economic analysis of preferential trade liberalization has increased   with the rise of regionalism. It is argued that trade liberalization and regional economic integration can help a regionto increase its intra-regional trade by exploring the size of the market. This may in turn yield efficiency and bringbenefits not only by exploration of economies of scale but also by dynamic and upward shifts in production function(1). Driven towards integration by the pressure of economic interest of the region, seven of the South Asian countries-Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Srilanka formed the South Asian Association for RegionalCooperation (SAARC) in 1985. One the major objective of the formation of SAARC forum was to accelerate theprocess of economic and social development in member States. Subsequently, trade promotion was also activelypursued as an area of economic cooperation. They formed the SAARC Preferential Trading Agreement (SAPTA) in1993 and transformed it into South Asian Free Trade Area (SAFTA) For a number of South Asian nations, the 1990smarked the liberalization of their domestic trade and investment regimes to intensify their integration with the worldeconomy, by launching of the regional cooperation body SAARC in 1985(3). However, since the inception of SAARC,   the achievement has been considered very insignificant and the level of intra-regional trade among the SAARCcountries is still very low. With a total population which accounts for one-fifths of the world population and a combined   gross national income of $ 3 trillion, SAARC only provides about one per cent of world production . With the present  low level of intra-regional trade and the perceived competitiveness among the SAARC countries question rises on thepotential gains of regionalism which has not yeilded much in the case of SAARC since its initiation primarily due tothe tenuous political relations between India and Pakistan and a general environment of mistrust among itsmembers. Compared to other regional blocs, the performance of the SAARC is dismal. In this background the paperattempts to analyze the performance of SAARC as a regional block, the trend in the intra-SAARC trade, intensity ofIndia's trade with the other members of the SAARC and a brief analysis of the trade basket of the four potentialmembers of the 2004 with a view to enhance their productive capacity and the region's trading interests(4).   PRESENT OBJECTIVES OF SSARC. 1. To present an overview of the basic indicators of the SAARC nations.2. To assess the trends in the intra-SAARC trade.3. To estimate the intensity of trade relations between India and the other SAARC members.4. To identify the potential commodity groups possessing trade potential between these nations.5. To assess the future potentiality of the intra-regional trade of this regional grouping.(5) PRESENT SITUATION OF SAARC REGION. The South Asian region is extraordinarily diverse in terms of country size, economic and social development,geography, political systems languages and also cultures. Three of the eight countries under South Asian region, viz.,Afghanistan, Nepal, and Bhutan are landlocked and mountainous: while Srilanka is an island and the Maldives is anarchipelago of low-lying coral islands in the central Indian Ocean. India is the only SAARC country that shares a landborder with four members and sea border with two, no other SAARC country shares common border with eachother.(6)Compared with the rest of the world, this region--The SAARC is not open enough in terms of international trade,rather is very much inwards oriented. Intra regional trade flow in this region is also very much insignificant whencompared with other regional blocks. This is partly because the major economies such as India, Pakistan,Bangladesh are not outward oriented but the region translated itself from a position of slowest growing region duringthe 1960s and the 1970s to one of the fastest growing regions in the world since the 1980s. In terms of  GDP  growth,the South Asia has performed robust growth over the years among the low income countries (7). As per the WorldBank database, during the 1960's, GDP growth in the region was placed at 4.2 per cent as compared to 5.4 per centat the global level. Except during the 1960s and 1970s, the GDP growth in South Asia was higher than those of the  world output growth till 2008 . The growth in South Asia had been sustained at an average of 5.4 per centduring 1980-1999 followed by higher average growth of 6.8 per cent during 2000-08. Reflecting growing savings, thegross capital formation of South Asian economies almost doubled from 15.1 per cent during the 1960's to 29.1 percent during 2008 as against a decline from 23.1 per cent to 21.5 per cent during the same period at the world level.However some economies of the region Viz., Afghanistan, Nepal, Bhutan and Bangladesh still depend on foreignsavings/aid for financing their resource gaps in their respective economies. The annual average growth of the GDPpercapita along with the classification of four sectors Agriculture, Industry, Manufacturing and services sector for twosub periods 1988-98, 1998-08 presents that the growth of the industrial sector along with the manufacturing sectorand the service sector is gradually on rise over the past two decades except in the case of Maldives and Nepal andthe growth of GDP percapita is low in Pakistan (1.7%, 2.6% respectively), followed by Nepal (2.4%, 1.5%respectively) for the two sub periods under study. The number of people living below the poverty line is high in theseeconomies, In the case of literacy Maldives ranks high and with reference to population India ranks first. Under theWorld Bank designated category, amongst the seven countries, four economies namely Bangladesh, Bhutan,Maldives and Nepal are least developed countries (LDC's); and India, Pakistan, Sri Lanka are considered asdeveloping countries. On the basis of income Bhutan, Maldives and Srilanka are lower-middle-income countries andBangladesh, India, Nepal and Pakistan are low income countries. CURRENT ISSUES AND HURDELES IN SUCCESS OF SAARC. Historically, South Asia was one political entity with many decentralizedstructures. Each sub-region had its own shade of culture. This unity indiversity continued even after colonization by Britain. However, some kind of standardization, particularly in legal and administrative frameworks, tiedtogether the diverse units during the British era. When colonial rule ended,those diverse units got truncated, leaving behind not only unprecedentedethnic flows of population across the borders but also a permanent source of ethno-religious discord.(8)Colonial rulers had largely created the South Asian states by executiveorders. The burden of resolving the unresolved and bitter territorial or border
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