The plan to hold the South Asian summit last November was stalled. A pertinent question is whether the South Asian Association for Regional Cooperation (Saarc) has a future in this rapidly changing global landscape, particularly with individual country interests subverting the collective interest. 

Should it matter what happens to Saarc? When the centripetal forces unleashed by regional initiatives wane and centrifugal forces are allowed to prevail, the space for collectivism is bound to be taken over by more promising ventures. This has already started to happen. 

Huge swathes of humanity

A burning example is the recent failure of the regional organisation to forge consensus on connectivity issues giving way to the BBIN [Bangladesh, Bhutan, India and Nepal] initiative, albeit in a sub-regional capacity. Those in a better position of connectivity may be able to use it as a tool to push their national interest, even if it means the undermining of the collective interest. There are countries for which connectivity is a life and death issue. One may even view the birth of Bimstec [Bay of Bengal Initiative for Multisectoral Technical and Economic Cooperation] in a similar light. The lesson here is that when issues are not addressed, some will seek alternative avenues, particularly given the perennial geo-political flux of today’s world.

As an organisation with a mandate to work for the welfare of millions of poor people, Saarc has an opportunity to act as a common forum with regional strategies that are aligned with and complemented by national priorities. But various developments have proved that the opportunity is hardly being exploited. Due to the lack of monitoring and evaluation, nobody knows about the impact of the Saarc Development Goals which were designed to complement the United Nations Millennium Development Goals (MDG), to be met through various initiatives between 2007 and 2012, later extended to 2015. 

What is certain, however, is that the Saarc efforts to meet those goals were ineffective and not much impact was felt. Instead of making the approach more effective through follow-ups, Saarc seems to have turned into a bystander. The United Nations has moved towards widening the MDG initiative by moving towards Sustainable Development Goals. But Saarc has yet to acknowledge the need for contextualising the Sustainable Development Goals for South Asia. 

Issues that impact the lives of over a billion people will not die down just because regional leaders are in no hurry to address them. Other initiatives are sure to fill the void. Just like sub-regional initiatives have taken over the issues left out by the regional one, supra-regional ones are poised to take on the larger regional issues. It is here that the Chinese initiatives to link large swathes of Asia, Europe and Africa come into the picture. 

China’s role

China, a Saarc observer and a neighbour sharing borders with five of the eight member states, has laid out its plans for South Asia. Called the One Belt One Road (OBOR) initiative, it aims at reopening commercial land and sea routes. The ambitious plan, which touches about 65 countries in Asia, Africa and Europe, would require building and upgrading highways, railways, ports and other infrastructure. Another China-led initiative—Asian Infrastructure Investment Bank (AIIB)—complements it by providing funds to develop infrastructure in Asia.

For instance, the OBOR initiative has already made progress in South Asia through projects like the China-Pakistan Economic Corridor (CPEC), which is expected to build infrastructures linking China with the Indian Ocean at an estimated cost of US$54 billion. OBOR also plans to connect China with India via Myanmar and Bangladesh. China is readying itself to enter South Asia via Nepal as well. Nepal has already expressed its willingness to participate in the transnational project. 

China is not a newcomer in South Asia. In 2006, it received support from all the Saarc members to become an observer. China’s importance in South Asia has been gaining pace ever since. A proposal for its full membership had been floated during the last Saarc Summit held in Kathmandu in 2014, but there was resistance from some countries that feared a decline in their regional influence by China’s entry. That Chinese presence in South Asia was already substantial seems to have been forgotten. Its infrastructure projects in countries like Pakistan, Sri Lanka, Bangladesh, the Maldives and Nepal are already bigger than those supported by other countries in South Asia. Any effort to undermine the Saarc cooperation from within would, therefore, produce contrary results. 

Politics is marginalising regional cooperation at crucial times, even when there is already a convincing economic reason for Saarc cooperation to benefit from non-Saarc initiatives. The massive funds necessary for the development of South Asia cannot be supplied by South Asians alone. Saarc’s economic heavyweight, India, is grappling with its own economic challenges, with little money to spare for regional initiatives. Even when it has shown the necessary commitment, like with the BBIN initiative, there is no clear vision for financing the connectivity projects. Remember that this was an initiative pushed by India itself. Indeed, while Indo-Pak rivalry may be the main reason for Saarc’s ineffectiveness, lack of resources to address the socio-economic problems should not be ignored. 

Funding concerns

Saarc’s funding mechanism, the Saarc Development Fund (SDF), absolutely lacks the capacity to fund large infrastructure projects. The funding so far has been limited to some small projects through its ‘social’ window while the ‘economic’ and ‘infrastructure’ windows have remained dormant due to lack of funds. 

Compare that with the OBOR initiative’s potential to fund. It is expected to spend around US$1 trillion for more than 900 projects over a period of several years. However, Indian reservations about Chinese engagement in South Asia has hindered the latter’s involvement in the region’s development. The problem could be largely resolved if India shed its reluctance to join the OBOR.

Such divergence between two neighbours is regrettable. As China and India together have more than 25 percent of world GDP in purchasing power parity terms, it would be good if the two countries came together. OBOR not only benefits China but will make India more connected. Security and other concerns can be resolved in a strategic manner. 

As far as the Saarc process is concerned, it has stalled many times in the past. This is the sixth time the Saarc Summit has been cancelled. Venues have been changed too. The birth of BBIN-like sub-regional initiatives is ample proof that any member’s inclination to hold regional initiatives hostage to politics will not work in the long run. Moreover, there could be better trans-regional or supra-regional initiatives that could ultimately drown out ineffective regional ones. 

- Subedi is Senior Programme Officer at South Asia Watch on Trade, Economics and Environment (SAWTEE), Kathmandu