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South Asia cooperation: Progress made, challenges remain
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In its 23rd anniversary of establishment this year, the South Asia Association for Regional Cooperation (SAARC), the largest regional bloc in South Asia, made progress in regional cooperation, but is still facing many challenges in the coming years.


After 23 years of existence, the SAARC is now an eight-member regional bloc with the entry of Afghanistan. More importantly, it has drawn the attention of main powers in the world, including the United States, the European Union, China and Japan, all of whom are its observers, manifesting its importance strategically and economically.

Together with its expansion, the aspiration of regional cooperation has become increasingly strong among the bloc's member countries.

The cooperation efforts peaked when leaders from SAARC's eight members, Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka, gathered in the Sri Lankan capital of Colombo to hold the 15th SAARC summit on Aug. 2-3, which topped combating terrorism, economic cooperation and poverty alleviation on its agenda.

In combating terrorism, leaders of the SAARC member countries pledged in the final declaration of the 15th summit that they would strengthen the legal regime against terrorism, including the implementation of all international conventions relating to combating terrorism and the early conclusion of the proposed UN Comprehensive Convention on International Terrorism.

It was agreed at the summit that the member countries should firmly cooperate through the exchange of information on terrorism.

Pakistani Prime Minister Yousaf Raza Gillani said in his opening speech at the summit that each country in the region should combat terrorism independently as well as collectively.

Addressing the closing session of the summit, Sri Lankan President Mahinda Rajapaksa pointed out that "South Asia can not progress, unless there is stability and security throughout the region."

The SAARC Convention on Mutual Legal Assistance in Criminal Matters was also signed during the summit. It requests the member states to "provide to each other the widest possible measures of mutual legal assistance in criminal matters, namely investigations, prosecution and resulting proceedings."

Economically, the SAARC member countries signed the Agreement on the South Asian Free Trade Area (SAFTA) on Jan. 6, 2004, aiming at creating a free trade zone covering about 1.5 billion people.

The SAFTA requires the three developing countries in South Asia(India, Pakistan and Sri Lanka) to bring their duties to zero by 2012 in a series of annual cuts. The least developed nations in South Asia consisting of Nepal, Bhutan, Bangladesh and the Maldives have an additional three years to reduce tariffs to zero.

It's an urgent need for the SAARC to make the SAFTA more effective considering the fact that intra-trade among SAARC countries now accounts for only about five percent of the members' total trade, while the figure for the EU is 55 percent and the NAFTA (North America Free Trade Area) is 61 percent.

To improve the intra-trade, the eight leaders vowed during the 15th summit to "implement the SAFTA in letter and in spirit."

They agreed at the summit to address the major barriers hindering effective trade liberalization in the region, which include sensitive lists of items and non-trade barriers.

The eight members also signed the Agreement on the Establishment of the South Asian Regional Standards Organization, which was supposed to facilitate free trade in the region.

In September, Pakistani President Asif Zardari and Indian Prime Minister Manmohan Singh announced that the two countries would start cross-border trade in October.

Analysts said the move of the two largest members would serve as a key to unlock South Asia's trade potential as it may begin to accelerate a full normalization of relations through trade. They said an improved bilateral relationship could have tangible spill-over effects on the region.

The first South Asia Economic Summit was held in Colombo on Aug.28-30 as a follow-up to the 15th SAARC Summit.

The economic summit, attended by a wide range of stakeholders including the World Bank, Commonwealth Secretariat, UNDP, ADB, as well as the SAARC, was also seen as a positive step to promote regional economic cooperation.

Facing the critical issue of absolute poverty in the region, leaders of the SAARC member countries "resolved to continue to combat poverty through all available means, especially through people's empowerment."

They committed themselves to continuing to share each other's experience and success stories of pro-poor poverty reduction strategies such as micro-credit systems, community-driven initiatives and the raising of the consciousness of the poor on their right to resources and development.

The leaders also expressed satisfaction at the signing of the Charter of the SAARC Development Fund (SDF) and called for an early ratification of the SDF Charter.

The SDF will provide financial assistance for the economic, social and infrastructure development of SAARC member countries with an initial corpus of 200 million U.S. dollars. In addition, India has pledged an ad-hoc contribution of 100 million dollars for the proposed Fund.

As a follow-up measure of the 15th summit, agricultural ministers of the SAARC countries met in New Delhi on Nov. 5 to discuss the operation of the SAARC Food Bank.

The SAARC Food Bank is aimed at maintaining a food stock to be used in case of emergency. With an initial stock of 243,000 tons of food grain, the bank will be set up with the contributions of the SAARC nations and operationalized by the end of December.

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