Three years after the Addu Summit, Nepal is hosting the 18th summit of the South Asian Association for Regional Cooperation (Saarc) in November this year. So, early last week Nepal’s Minister for Foreign Affairs Mahendra Bahadur Pandey started his regional sojourn to personally invite member nations to the Summit.

Currently, Saarc’s profile in the world as one of the least integrated regions belies its potential, given its geo-strategic capacity and the enticing markets with the world’s 20 percent population. Narendra Modi’s ascent to power in India, the largest Saarc member, and the impetus he provided have given the region renewed international attention, from the point of view of emerging global security realignments and, with equal importance, economic opportunities.

Building blocks

Apart from the security of the member states, a more pronounced vision of Saarc is the region’s economic advancement. In this respect, the last summit held in Addu, the Maldives’s second largest city, tied in with past traditions and gave the region certain assignments. The leaders of the Saarc nations, issuing a 20-point declaration in Addu, had pledged to bring down customs duties of all traded goods to zero by the year 2016, under the arrangement of South Asian Free Trade Agreement. 

To channel greater intra-regional investment, the finance ministers of Saarc countries had been mandated by the summit to work towards ensuring greater mutual flow of financial capital. A sub-regional demonstration of a cargo train connecting Nepal, India and Bangladesh was planned. In Addu, the region’s pledge to implement the Thimpu Statement on Climate Change was repeated, which meant allocating a higher percentage of the national incomes of the member states in harnessing their renewable energy resources and in commissioning several Saarc inter-governmental initiatives on mountain ecosystems, monsoon and climate induced disasters, among others. These were only some of the many items in the to-do list.

Looking back three years later, what has Saarc achieved in terms of performance? Nothing. In fact, it has been the curious case of a dismal history repeating itself. Saarc, therefore, must rise above tokenism to deliver on its own promises, for which connectivity is the key word. 

In place of big promises made undeliverable by contrasting interests of larger players, namely India and Pakistan, Saarc must rethink itself on a sub-regional level, which could make things a lot easier.

Sub-regional platforms created collectively by the governments, away from the burden of Saarc’s institutional weight, can become viable instruments to carry forward the process of regional integration. In the Saarc region, two such platforms, both with India in the central role, come into the sight right now. 

Growth quadrangle

The sub-region involving Nepal, Bhutan, Bangladesh and India is often called by experts the South Asian Growth Quadrangle. These four countries share land borders in the east of the region. The integration of the local economies would, apart from bringing direct benefits to the peoples, allow this area to improve its competitive edge. The Southern Silk Route, jointly proposed by China and India, could emerge as a real game-changer in favour of this compact geographical cooperation.

A focus on hydropower alone bears the potential to transform the economic landscape of this sub-region. What augurs well is India’s positive engagement in harnessing hydropower in Bhutan and Nepal. Bangladesh could be invited to join in, as well. The option of a sub-regional power grid has been opened up by the Power Trade Agreement (PTA) soon-to-be concluded between Nepal and India. Bangladesh and Bhutan could accede to it since the agreement envisions extending itself to a sub-regional level. Building transmission lines and generation of hydroelectricity could go hand in hand. Such cooperation would have an immense potential of achieving what Saarc has been striving to achieve in the last 30 plus years.

Scaling up supportive infrastructure is vital for drumming up inbound investment in the hydropower sector. One factor keeping the investors away in Nepal is the need to develop access routes through the difficult terrain, adding up to the integral cost of a hydro project. This process is further

complicated by difficulties in land acquisition. Completing the vital initial infrastructure for a project under the aegis of the Investment Board would certainly attract quality investors in the sector. Bhutan has devised its own green growth policies. Hydropower thus could drive the cooperation between these countries to a new level of trust and shared success.

The PTA between Nepal and India fulfilled a part of the promise of Regional Energy Cooperation and Energy Exchange as made in Addu. In the regional context, however, actual instruments for energy supplies were never discussed after the Addu Summit. Sub-regional engagements like this could prepare effective answers for the deriders of Saarc, who equate the organisation to a talking shop for the region’s heads of government—big in rhetoric but petite in performance. 

Blue economy

The second sub-regional group within Saarc that comes in mind is the partnership between India, Sri Lanka and the Maldives. They share maritime borders and are positively engaged through several bilateral mechanisms. A trilateral partnership on a host of result-oriented issues could give them a new basis to work on, which cannot be achieved under Saarc’s big and complex umbrella.

A field where a partnership could be useful is the development of marine technology in order to achieve food security in the world’s most populous region. Conserving the marine environment and utilising the possibilities of blue water economy through transport and tourism fits into the growth agenda articulated by Modi. Chinese President Xi Jinpning in his first ever visit to the Maldives has invited the atolls to join the Maritime Silk Route. All these countries could strive towards a synergetic marine economic policy, similar to what Australia, China and USA have done together in recent years.

The sub-regional ideas, complementing the Saarc process, might work, since Saarc so far has been reduced to symbolism because of the problematic relationship between India and Pakistan, who are not on the best of terms since they achieved independence. It is important to note that sub-regional instruments exist not at the expense of the larger regional collaboration; rather, they deserve a chance as Saarc staggers on its way. 

Successful regional integrations around the world, mainly in the European Union and the Association of the South East Asian Nations, demonstrate that government-driven integrations with routine summits and the easing of trade laws play only the role of a catalyst. What ultimately integrates a region is the combination of enhanced intra-regional mobility and businesses. Mobility brings people closer; businesses help governments identify trade barriers, which necessitate prompt action. Saarc must rethink its vision in smaller blocks and eventually link them to build the envisioned larger regional platform. 

Dhakal is a co-author of ‘From a Buffer towards a Bridge: Nepal’s new foreign policy agenda’ (*[email protected])