SAARC’s performance disappointing

The performance of the SAARC in the last 27 years has been mixed. On the economic front, the South Asian countries have achieved impressive growth rate above 7.0 percent on the annual average in the last two decades. The regional economies have best weathered the impact of severe global economic recession inflicted by a massive financial crisis have since 2007.

In 2007, Afghanistan and Bhutan witnessed growth in double digit. The other regional economies, except Nepal, have growth above 6.0 percent. They, however, are facing slumping demand for their exports, significant reduction in foreign investment particularly foreign direct investment. The decline in exports has weakened the region’s current account position.

The South Asia has also achieved limited success in technological advancement at a time when the world is witnessing rapid changes in the technological conditions, high sophistication of development and huge capital mobility in countries with developed infrastructure, skilled manpower, security and political stability. The region has not developed required technological knowledge and skill-base to become competitive in the global market. Because of low knowledge and skill-base, the productivity per worker is low and cost of doing business in the region is very high. South Asian countries are more exposed to new challenges and great uncertainty in the global economy.

The global economic crisis has affected developed and developing countries alike. Fundamental structural imbalances have resulted in economic inequality and retarded growth. The shape of globalisation, WTO regime and structural conditional ties by IMF and other development finance institutions are requiring efforts for removing fundamental structural and macroeconomic imbalances which have perpetuated increase in poverty and economic inequity in most of the regional economies. The SAARC countries need to respond to the emerging situation in a holistic manner by forging a common strategy by exploring options to safeguard regional interest through joint venture, and technology transfer among its member countries.

Cohesive and economically integrated South Asia would be better positioned to negotiate globally for advantageous terms of trade with WTO regime and development institutions. The acceleration of regional economic activities would help to enrich the lives of the people of the region and resolve the problem of poverty, weak social indicators and barriers of global trade policies to mutual comparative advantages.

The region is full of challenges and opportunities. South Asia is home to more than 1.5 billion people associated with various racial, lingual and religious groups. Some of the main challenges and problems facing the region include poverty, illiteracy, underdevelopment, terrorism, human trafficking, and racial and ethnic conflicts. Similarly, food and energy crises have also come out as burning issues of the region. In spite of such challenges and problems, South Asia is abundant in human as well as natural resources. When these resources are managed and utilized effectively, the region is sure to make considerable socio-economic progress within a short span of time.

The South Asian people have many reasons to be optimistic if we look at the SAARC Charter that has included all the existing realities in the sub-continent, with the countries of different sizes, various levels of socio-economic development, historical legacies between and among the nations of the region. But, when the progress made by SAARC is assessed minutely, we do not find a very encouraging picture in terms of quality of life the people in South Asia.

SHUMAILA RAJA

Islamabad