Nepal‘s role in SAARC

Eric Hobsbawm has defined periods of history in terms of ages, Age of revolutions, of Capital, of Empires and of Extremes etc. By this analogy, our age can be called an “Age of Contrasts” which is the sum total of interdependence and marginalization, abundant prosperity and anxiety, technological revolutions and exclusion. This is the reality we live in.

Similarly, the present time also reminds us of what John Dunne had said about four centuries and a half ago, “No man is an island unto himself, every man is a piece of the continent, but part of the main”. It rings as true today as it was then. South Asia therefore is no exception to this general trend.  In fact we are a microcosm of the world at large. The region enjoys a high growth rate but has one of the lowest Social indicators with incidence of poverty. It has a high potential of human and natural resources, yet it faces the great challenge of deprivation and marginalization. It is in that overall context that we would like to look at the SAARC process.

Before going to the specifics, let me state at the beginning that SAARC has gone through the vicissitudes of time in the last two decades. We have passed through moments of euphoria and also moments of frustrations. We are striving hard to gear up slowly towards the objectives of the SAARC. Let us also remind ourselves that SAARC holds a great promise only when we are all able to fully implement what we have agreed in various SAARC forums, and only when we practice what we preach.

South Asia at this point of time is at the crossroads. Globalization has really come to our door with all its attendant characteristics, both opportunities as well as challenges. The overall growth rate of the region has remained high for some years and there is a prospect of getting it even to a higher level and sustaining it at that level, if we all manage distributive effects of growth, infrastructure constraints and well-calibrated and visionary integration with the rest of the world. South Asia has also teeming millions, who are deprived and marginalized and hence have not been able to enjoy the fruits of this overall macro-level prosperity. There are problems of imbalances of growth, unemployment, violence and marginalization. Though such problems are of different nature and of different magnitude in each of the south Asian county, a humane and inclusive development strategy with high and sustainable growth is what every country is striving to achieve. And that has to be seen against the global trends and global reality.

That brings me to the core issues of SAARC, namely economic cooperation, cooperation in social fields, cooperation in poverty alleviation, cooperation in other areas of mutual advantage.

We are all aware that that there is no finality in the sequence between the economic and social cooperation and its impact on making political environment more conducive or vice versa. We have seen both the routes being equally effective. Each region has to deal with its own internal dynamics depending upon the intensity of the issues involved in that particular region. However, we all know that they reinforce each other if they move in tandem. We all must be a1le to look beyond the present and take a longer-term view so that we would be able to ensure peace, security and prosperity in the region and uplift the quality of life of the people as envisaged by the SARRC Charter.

We have also reached an important point of time at the moment. We have finally brought all the countries of geographic and historic South Asia together by having Afghanistan as our member. It is also very important from both short term as well as long-tent perspectives that we are having a number of observers from the neighboring region as well as beyond. These two events are very significant for SAARC and we hope that it would help us inject a new dynamism in the region for an enhanced level of effective cooperation and further promote regional consciousness.

Economic Cooperation

We are all aware that if we want to really touch the lives of the people and ensure them peace, security and prosperity as enshrined in the charter, economic cooperation should receive the highest prominence within the SAARC framework. History, geography, culture and now our common economic and social challenges have bound us together. Of late, the world has been fiercely competitive, and globalization has changed the world into a prospective single market for all, Cut-throat competition, global outsourcing, component trading, seamless flow between production and consumption, and the fast pace of changing taste and fashion are some of the defining features of the global trade today. And its intensity shows no sign of abating. On the contrary, it would be deeper and wider as we see the interplay of further liberalization drive through WTO negotiations and uninterrupted revolutions in science and technology. In this context, regional trade provides us with two important prospects. One is that geographical proximity still makes the bilateral trade more beneficial among the neighbors, as transaction costs become lower and the countries in the neighborhood enjoy the familiarity with the quality1 taste and the purchasing trend and power of the people. Besides, the South Asian community has a very large market within itself. Secondly, the robust regional trade helps the individual countries and their economic units to prepare better for the fierce competition at the global level as they share more strength, experience and the economies of scale through regional trade not only in production and marketing capacity but also in meeting standards and dealing with obstructive non-tariff and pan-tariff measures. Thirdly, regional economic cooperation and deeper integration are gaining in strength even in the regions that were riot that much involved in these endeavors before, such as Mercosur in Latin America, SADCC and COMESA in Africa. This is a general trend at the moment.

Despite our best efforts, SAFTA is yet to be operationalized and we are losing time and opportunity. It is illogical for a region that is enjoying so high an economic growth rate and so vibrant an economy to have less than five percent of its total trade within the region. We all know that there is more competition than complementarity in our products but as per the principles of comparative advantage, we could gain more by intensifying trade within the region through specialization and diversification, which would ensure benefits to all. Similarly, a the nature of trade and global financial markets go through transformation fuelling economic growth around the world, we must also look beyond the core sector of trade in goods and include cooperation in all trade facilitation measures such as services, investment, infrastructure, non tariff barriers including macro economic policies1 It is through the right mix of these factors that we can get due benefits from economic cooperation. Now we are glad to see that the energy issues are slowly coming to SAARC for discussion and cooperation. An important South Asia Energy Dialogue took place in March 2007 in New Delhi. South Asian border-crossings are more cumbersome than that of many other regions. Many studies have shown that the physical and non-physical barriers need to be reduced, as smooth connectivity would be indispensable for such activities. The cost of non-cooperation and benefits of cooperation in South Asia have been thoroughly analyzed innumerable times by many specialists and we should not be oblivious to those hard facts. Nepal strongly feels that we have a lot of stake in promoting economic cooperation in a comprehensive manner, but also in such a way that all share the fruits of cooperation on an equitable basis. The expansion of the capacity of the least developed countries among them should receive due priority. Otherwise such cooperation would not take off and even if it takes off, it would not be sustainable.

Cooperation in Social Sector

This is another area that needs our urgent and effective attention. We are all aware of the not so good record of this region on social issues. Low literacy rate, poverty, low health standards vulnerability or children, gender discrimination and exclusion are indeed serious constraints to harmonious development and prosperity in South Asia. We should concentrate our minds on how we can best coordinate our individual policies on these fronts, how we complement national programs with regional linkages and how we should not only devise but also execute effective regional programs. We have agreed to various action plans and programs to uplift the status of the targeted and vulnerable groups. Sharing of best practices, common standards in identifying and comparing the situations, bringing regional synergy in social programs have occupied our discussions of late. But when it comes to the effect on the ground of regional cooperation in these sectors, they are at best tentative, at worst non-existent. Therefore recent decision relating to the commencement of specific projects under the SAARC development fund is of great significance and indeed is a welcome sign. We must make sure that the projects are effective on the ground and they really bring about a change in the lives of the common man. We also hope that the other windows of the SDF would soon come into operation in an effective manner. This should therefore create additional momentum to our national efforts and also should work as an effective bridge between national programs and international cooperation.

We only hope that the decade of implementation as agreed during the thirteenth SAARC Summit is linked up with the decade of poverty reduction.  The 22  SAARC development goals and elaboration of their indicators and monitoring mechanism are important addition to our collective commitment, but we should make efforts to translate them into reality with dedicated programs. Social issues are important not only for their own sake and not only from the perspective of human development, they are also important if we do not want to lay to waste precious human resources and wish to do away with violent internal conflicts and insurgency in the region! Therefore perhaps we should look at the social issues more seriously in a comprehensive manner. SAARC could look at how conflicts and violence fuelled by marginalization and exclusion have ravaged our region as a whole, even though they are of different magnitude and of different nature in each country in South Asia. As it has undermined the lives of the people throughout the region, this should be studied in a holistic manner within the framework of SAARC. There could be lessons that could be learned from each other on this issue as well.

Similarly, in other areas of cooperation, the first meeting of the SAARC home ministers has taken place in order to address the menace of terrorism and drug trafficking more effectively. Similarly, first meeting of finance ministers was also held and instructed IGEG to develop modalities for expeditious and time-bound realization of the mandate of SAARC economic union.

Relationship with Agencies and International Organizations

We are glad that interactions with the international organizations have increased over the years. It has two fold objectives. It provides us with technical expertise in the respective fields. Because of their long experience in their specialized areas, it propels us more towards creating a regional synergy in our projects as they start developing more inter- country operations. We all know that they cannot be a substitute for regional projects, but they can play an important complementary role in giving the necessary support for regional cooperation. One of the major stumbling blocks in the SAARC process in terms of deepening cooperation in the region has been the lack of regional projects. So far what we have is cooperation on the soft side, which is sharing of best practices, studies and meetings of technical experts. They are important to establish facts and understand the region better. However, what is now required is how to implement those common programs which would have a visible impact on the ground in terms of changing the lives of the people. The studies and fields of cooperation with the international organizations is expected to help us have a wider perspectives and also to initiate effective programs of cooperation. We would continue to strengthen our relationship with such organizations to improve our conditions as per the objectives of the Charter.

People-to-people Contacts and Business Contacts

One of the most important features of SAARC has been that it has opened up vast possibilities for people to people contacts through various associations of regional character. There is now more sense of regional identity than before; there are more contacts among the professionals of the region. Among them, the role and influence of the SAARC chamber of commerce and SAARC level think tanks have been more visible. They have created a distinct space for themselves and we are glad that they are coming forward with innovative ideas to give the strong popular character to this regional consciousness. We know that there are still many areas in which we can further promote people to people contacts by facilitating their interactions in a most comprehensive manner. We greatly value all such initiatives, as it helps us to look at different issues afresh.

Political Consultations

Though the charter does not provide for discussions on contentious issues and bilateral issues, informal political consultation process during the SAARC summit meeting has taken on its own life over the years. The practice of organizing retreats during the summit for a free wheeling discussions on all issues of importance, and the forum that the SAARC summit provides for bilateral consultations on the sidelines have been very useful to break the deadlock, as well as warming up relationship in times of difficulties. Considering the history of relationship among the South Asian countries, this provides an easy forum to engage in discussions without elaborate preparations and constraints of full-fledged bilateral visits. To what extent this process has contributed to crack the hard knots is a moot question, but it could certainly create a better atmosphere for serious negotiations.


We are glad that the forthcoming SAARC summit is taking up some of the issues outlined above. We are also talking about a vision for the third decade of SAARC. We are aware that there are a lot of expectations of the people from the process. We fully share that. And it is also a fact that there is much to be desired in terms of its impact on the ground, even though we have made a good progress on the conceptual clarity of our vision for a peaceful, cooperative and prosperous South Asia. We went through our infancy and adolescence and we are now at the young age of 21. And like anyone at that age, we must have an indomitable spirit, an ambitious vision and a vibrant energy to pursue our goals and objectives. Nepal will play its due role in taking the SAARC process forward with commitment and clarity. And I am hopeful that other members would also take it in that spirit, look around and move ahead with the times, with open eyes and an open heart.