New
Delhi: The Federation
of Indian Chambers of Commerce and Industry (Ficci) has advocated a
three-pronged economic agenda for the 11th ongoing Saarc summit
at Kathmandu. Ficci is the only member-body representing Indian
business on the Saarc Chamber of Commerce and Industry, which is the
officially recognised business association by the Saarc secretariat at
Kathmandu.
 First,
the summit should take concrete steps towards the Saarc Free Trade
Area (SAFTA). There should be a time-bound plan for
achieving SAFTA and all the leaders should commit themselves for
signing this treaty in this year itself. Second, the
summit should take up the proposal for the regional investment
framework to attract foreign capital. Third, Saarc countries
cooperation on WTO issues on a sustained basis.
- The expectations of the
business community of India and South Asia are one of taking
forward the process of regional economic cooperation in Saarc. South
Asian economies have taken significant steps forward in
liberalising and globalising their economies. Saarc, with renewed
commitment expressed by all its leaders, has the potential
of a formidable economic bloc by making full use of regional
synergies to maximise benefits of globalisation. Moreover,
only a joint collaborative effort by all Saarc nations is the
panacea for common ills of poverty, unemployment and illiteracy
that confront this region. (Unfortunately, while the share of
people who live on less than a dollar a day has fallen in South
Asia in recent years from 44 per cent in 1990 to 40 per cent
in 1998 throughout the 1990s the number of poor has continued
to expand along with the growth of population in 1998. There
were 522 million poor people in South Asia, almost 30 million more
than 1990). Already, with a very large-sized middle
class of about 400 million, South Asia has attracted the attention
of the rest of the world, including the developed world.
- The present summit is
important, because of the very fact that the South Asian leaders
are going ahead despite the prevailing not-so-conducive political
and security environment. This testifies the deep desire and
willingness in Saarc countries to go ahead with the process of
regional cooperation, of which economic cooperation has been an
integral part ever since the signing of SAPTA in 1995.
- Three rounds of SAPTA
negotiations have already been held and around 3,000 tariff
lines have been offered for concessions by all Saarc
countries. However, even after this entire exercise, the
intra- Saarc trade, which was of the magnitude of just 3 per cent
of the total trade of Saarc, has merely reached around 4 per cent.
The reasons for the lack of surge in the intra-regional
trade, despite the Saarc Preferential Trading Arrangements, are
several.
- The first relates to the
fact that the concessions offered by various countries have been
more or less symbolic in nature and the commodities targeted do
not form a significant part of the trade basket or the potential
trade of Saarc countries. So also, concessions offered have
been to the tune of 10 to 15 per cent of the prevailing tariffs,
which is not significant enough to result in a surge of intra-
Saarc trade. Hence, a further deepening of the tariff concessions
as well as the right targeting of tradable products like agri-products,
drugs and pharmaceuticals, textiles, fertilisers, iron and steel
is necessary in the forthcoming round of SAPTA for a more
meaningful negotiation.
- The other obstacles in the
intra- Saarc trade relate to the procedural handicaps, lack
of physical infrastructure for movement of goods (for
example, with reference to the movement of goods between India and
Bangladesh, between the Gede-Darshna border presently there is
no road link between this two border points; at the
Petrapole-Benapole border, through which 90 per cent of
India-Bangladesh trade takes place, and the trucks carrying export
cargo take four days on an average to cross the border points),
lack of harmonisation of customs and banking and insurance
procedures. Hence, the absence of information flows with regard to
comparative advantages of each other. For this, Ficci has
hosted a website called www.saarcnet.com
on behalf of the Saarc Chamber of Commerce and Industry, which
gives the requisite information.
- The Saarc Chamber of
Commerce and Industry has recently completed a study on the Saarc
Motor Vehicular Agreement on the lines of the European
Union. It has been conducted by Ficci and the Asian Institute
of Transport, and is likely to be submitted to the Saarc
secretariat soon. The study recommends that to facilitate a
free flow of goods and passengers in the Saarc region, member
states need to harmonise the policies, which impact on road
transport. Towards this end, they will have to evolve and
establish mutually complementary legislation, rules, standards,
practices or systems, on the basis of agreed minimum requirements.
- It is heartening to see
that a special mention has been made for realising the potential
of Regional Tourism in South Asia. Ficci is partnering with
Saarc Chamber of Commerce and Industry for promoting the theme of
regional tourism in its forthcoming International Tourism
Conference and Exhibition on South India, organised from 3 to 10
February 2002 at Hyderabad.
- Any further deterioration
between India and Pakistan at an official level shall lead to the
further lowering of an already-dismal US $200 million official
trade between India and Pakistan. Ficci fears that it might
increase the unofficial trade that is both illegal as well as
the third-country trade would further increase. While Ficci
expresses solidarity with the Indian government in its fight
against terrorism, it hopes the
recent positive moves by both the governments shall open windows
of opportunities in the present political matrix. Once the
national security issues reach a comfort level, business can take
the process of mutual cooperation forward. It is somewhat
reassuring to note that a dialogue has begun between India and
Pakistan on the wanted terrorists list and Ficci hope that it
shall deepen the process and bring confidence in the bilateral
relations in future. Ficci strongly believes that a
resurgence of the second track diplomacy will lend a holistic and
sustainable relationship between the nations.
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