SAARC: Ushering a New Era of Cooperation

In the era of aggressive globalization, block politics hardly matters. But, economic integration, free trade, GDP growth, connectivity through infrastructure development does matter most to the international system. Where all the leaders have failed to forge a regional cooperation during 22 years of South Asian Association for Regional Cooperation (SAARC) existence, the International Financial Institutions (IFIs) like the World Bank (WB) and the Asian Development Bank (ADB) have rekindled hope in SAARC to become relevant, although economically. This is politically incorrect but true.

The 14th Summit meeting held in Delhi in early April is a milestone in SAARC’s chequered history. Now, who believes that SAARC is a dead letter, will think twice to write off SAARC. The Delhi meet witnessed many landmarks like the inclusion of Afghanistan as its 8th member country, the observer status of the US and European Union with China, Japan and South Korea and clearance of Iran’s entry as an observer. The Heads of Governments have come out of their hard shell of bilateral jinx to foster a new cooperation on many fields as accepted as 30 point Delhi Declaration notably on energy and environment. But, will the new found environmental stewardship cooperation bring any result? The potential is huge for this new initiative to address the present and clear danger of climate change and poverty in South Asia. After nearly two decades of uncertainty, which always marred by bilateral skirmishes, at last SAARC is heading for a possible integrated regional market within larger Asian market.

Despite a common location, history, customs, cuisine, and culture, according to the World Bank, the South Asia is the least-integrated region in the world! The trade pundits believe that countries that have opened up trade with the rest of the world remain closed to each other. International developmental agencies believe that each country can gain from economic cooperation. More than the Heads of Governments, the international development partners and bilateral donors in South Asian region want to see a strong cooperation among countries to address the perpetual poverty in this part of the world.

The WB and the ADB are the major and influential development partners of the South Asian Countries. While SAARC being the political outfit struggling to forge a common development plan in South Asia, both IFIs have their regional development plans as well as country specific strategic plan which complements each other. Thus, the strategy for cooperation has already been put forward by the IFIs through their developmental prescription to each country in such a way that now the integration seems tangible. The strong evidence of this is that the WB was the official Knowledge partner of the SAARC business leaders conclave held at Mumbai in March 2007. The ADB has already engaged with financial assistance as well as knowledge inputs in the South Asian Sub-Regional Economic Cooperation (SASEC) on the sectors like infrastructure, tourism, environment sector etc.

Meantime, the countries are projected as fast growing energy consumers in Asia. However, the energy base is mostly from conventional energy and imported oil from outside the political boundary which poses insecurity among the countries. The fossil fuels, major energy base for the South Asian countries, are also emitting greenhouse gases (GHG) which causes climate change. To sustain the current economic growth simultaneously protect the environment and address the ill effects of climate change, the countries need to influence their energy policy accordingly.

The new priorities for emerging economy are development of energy sector and protection of environment and natural resource base. In the globalize economy, the solution are not confined to national capacities or capabilities but being sought from a wide range of actors outside the political boundary. For international actors, the South Asia energy requirements can be addressed in many ways. The prospects of importing gas from the Middle East as well as from the Central Asian Republics to South Asia, which are being assessed by the ADB. In all probability the bilateral hitch of gas pipeline between India and Pakistan as well as India and Bangladesh will certainly be resolved with the help of international development agencies.

The World Bank is very ambitious about the cooperation on eastern Himalayan Rivers. The exclusive brokering on the Indus River between India and Pakistan in 1960 by the World Bank has put its ambition to make such arrangement on the eastern Himalayan Rivers among the riparian states. The Statement made by the Nepal Prime Minister during the 14th SAARC meeting to harness all source of energy including hydropower for the promotion of the welfare of the South Asian people through common endeavors marks the end of Nepal’s moratorium on bilateral water issues with India and may go for implementing large hydro-projects with India.

At the conclusion of the meeting, the Leaders agreed to make tangible progress in the next six months on four issues such as water (including flood control), energy, food (agriculture) and the environment that affect the daily lives of South Asians. The leaders decided to work with international agencies to develop and implement viable cross-border regional projects in these four sectors. All these four sectors commonly indicate to the large hydropower structure over international Rivers. While World Bank can be interested to help riparian countries in production of the hydro-power, the ADB will be laying transmission lines to transfer the power though out South Asia. Most probably, India’s North East states will be the transition point for the energy trade (electricity) within and outside South Asia.

As finance minister of India, Manmohan Singh liberalized India’s economy to the world in early 1990s, now as the Prime Minister of India and Chairman of SAARC meeting, he has opened the SAARC to the World. The expansion of SAARC and the developing external linkages are indicative of the opening of SAARC to the World. India will be on the upper edge on this new found cooperation on energy, food and environment. The strong bilateral energy engagement with the US, China and being a member of Asia-Pacific Cooperation on Climate and Development, India will take the advantage of any energy charter or economic integration in South Asia. A reorientation of foreign policy and diplomatic activity of India appears necessary and imperative for addressing climate change and energy and environment.