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NEW-AGE REGIONALISM -- EXPLORING THE

SOUTH ASIAN POTENTIAL

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Dr. Divya Nath

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ABSTRACT

The continents of the world have not been bestowed equally, with either resources, power or prosperity. This could be achieved to a large extent though, with the help of coherent units, of effective regional blocs. As regards South Asia, the lukewarm existence of the SAARC leaves much to be desired in terms of regional cohesiveness. Since the region houses more than half of Asia’s poor, the research question posed by this paper is, whether a viable regional cooperation is feasible among the South Asian nations, and if so, how? Also, what can be the pros and cons of such a co-operation for the region in question, and for creating a balance vis-à-vis the various international blocs, namely, the OAS, OAU, EU, CIS etc. The answers to these questions, to be dealt with in detail, will therefore relate themselves to the Main Theme proposed by the Congress. Regionalism today aims at multifarious levels of integration, aimed at creating a distinct identity ,for the particular region of the world in question. Through the study of authentic primary and reliable secondary sources, the first part of the paper will deal with new-age regionalism, as a prism through which local and global forces can interact, with mutually beneficial results. The second part, tracing the historical glory of the region, will focus on the efforts at regional co-operation in recent times, and where they have been lacking. The final part will deal with the future prospects of and suggestions to achieve the full potential of co-operation in the region, thus creating a balance among the major regional blocs of this unequal world.

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The international system at all its levels, is characterized by inequality par excellence. This is so, not only because political collectives vary considerably in terms of the natural resources that contribute to their wealth and power, but also because of the basic condition in which they have always existed. In their physical extent, population, natural endowments and geographic position, the states are so very much unequal, that its repercussions become a topic of great interest to the observer of state relations. Moreover, to the inequalities that mark the birth of political collectives, must be added the unevenness that characterizes their subsequent development. The age of industrial civilization has enhanced this unequal development, thereby heightening the earlier disparities of power and wealth.

Besides the above, the inequalities in the international system persist not merely due to these disparities – however important they may be – but the condition in which its members have existed in the past, and from which they have yet to emerge. It is the condition of a society marked by the absence of effective collective procedures, competitive rather than cooperative, and lacking in commitment to a common good, which have ensured, that differences in power and wealth will be employed to perpetuate inequality. The erstwhile device of power management, popularly known as the Balance of Power was largely understood to mean the even distribution of power; but, that distribution implied above all, a rough equality of the powerful. It is after all, no accident that until very recently, claims to equality regularly originated from the strong rather than the weak, presumably, in order to maintain the balance. That the weak might also benefit

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from the rough equality of the strong was an incidental result, not intrinsic to the operation of the balance.1

A world of inequality:

The modern national state came into being during the 19th century, and along with that, a very intense global economy. Some parts of the world became extremely strongly developed which opened up a very large power gap and created an extremely uneven form of international relations. This scenario more or less continued into the 20th century too, when in the structure of the United Nations Charter, despite the affirmation of the “equal rights of nations large and small”, and the pledge to respect “the sovereign equality of all the members of the United Nations”, the feature of fundamental importance, is the practically exclusive power and almost unlimited discretion conferred upon the Security Council, that is, upon the Great Powers, in providing for international peace and security. If today we are to find in the United Nations, the principal institutional expression of the demand for greater equality, we must do so in terms of what the organization has become and not in terms of what it was initially intended to be.2 The change from an instrument of the great powers, to a forum in which the new states could press their claims began in the late 1950s, coinciding with the impact of the rapid decolonization, and to the very novelty of an international system that had achieved universality.

Inequality shifted to centre stage in world politics, alongside North-South politics in the 1970s. Southern coalitions of decolonized and developing states emerged, sharing a collective identity, cemented by a shared sense of historical injustice and significant material inferiority to the industrialized world. North-South negotiations, which had commenced with the formation of the Non-Aligned Movement, expanded into the Group of 77 within the UN economic system, and into the formation of the UNCTAD. Over-coming inequality became a key tenet of demands for a new international economic order. What became known as the North-South debate was fed by three very different kinds of arguments about the injustice of inequalities among states – neo-colonialism, dependency theory, and theories of distributive justice.3 These three arguments put inequality at the top of the agenda of world politics and posited that the evolution and continuation of international order depended upon a degree of greater “justice”.

In the 1990s and thereafter, it may still be said that developing and industrialized countries do not compete on a level playing field. This reality contrasts sharply with the theory, that globalization will open up new opportunities for countries which make good policy choices. Developing countries have been persuaded to liberalize and deregulate their economies, so as more fully to exploit opportunities in a global world economy. Yet if we take international rules as an example, their study clearly shows that the opportunities developing countries might exploit, are far from equal. Most developing countries have not participated in setting the rules of global trade or investment, and in various groupings they suffer from unevenly and unfairly drawn regulations. Furthermore, as globalization proceeds, both political and economic inequality are likely to increase.4

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Source: Credit Suisse Research Institute. Global Wealth report 2015, October, 2015.

The above diagram clearly shows the inequality prevalent in the world, with the

Western and European countries hosting the lion’s share of the world’s millionaires. The

only non-western nations, with a significant share of millionaires are the industrial

powerhouses of Japan, China and Taiwan. The South Asian countries obviously form part

of the negligible 12%, which constitute the Rest of the World category in the diagram.

The dynamics of regional co-operation:

The need of the hour is to understand what the developing states really want. All the study directed to find an answer to the above question shows, that they want the eradication of dependence and removal of all traces of inequality. This can be brought about only through a redistribution of power. An effective way to bring this about is by the coming together of states having mutual interests belonging to a common region, and may be, sharing a common history. Therefore, from the early 1990s onwards, there has been a notable surge of interest and activity in both regions and regionalism

Regional cooperation was chosen by the post-colonial developing countries, as a strategy to overcome the dependence on the developed West. With both political and economic objectives in mind, these countries sought to cooperate in agriculture and industry, reduction of intraregional trade barriers, common harnessing of resources, pooling regional development funds and sharing scientific and technical know-how, in order to promote mutual interdependence and self-reliance. Economically their regional arrangements were designed to be protectionist by pursuing an import substitution economic policy. And, politically the developing world saw regionalism as a viable strategy to safeguard the newly-won freedom of self-governance, as against western domination and cold war bloc politics. Membership in a regional association of equal partners, served to secure one’s own identity as an independent sovereign state, rather than as a member in a super power dominated alliance system. The anti-colonial and

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anti-imperialist philosophies of the non-aligned movement, north-south dialogue and the New International Economic Order, reinforced regional cooperation as an alternative strategy to reduce dependence on the developed world for aid, markets and capital investment.

Politics is at the core of regional cooperation. States organize into a regional group, to meet a collective threat from a common adversary, or to reduce economic and political dependence, or to gain a voice in the international community through a regional collectivity. Within the region, states integrate to counter a regional hegemon. Regional economic cooperation is more often a means to achieve a larger political goal.6 Thereafter, the functional dynamics of such a regional economic group is determined by security issues, border disputes, infiltrations, external vested interests etc. Due to this, though the intentions of such groups may be sound, unless it is complemented by a sound political climate, the efforts end up in rhetoric. The character of a regional venture is historically conditioned and is determined by regional specificity. Therefore, no pattern of regional cooperation with universal application to every region exists till today whether in the developed or the developing world. Regional political equations either sustain or weaken regional cooperation.

Having made the above observation the questions that arise are – why do regional organizations emerge, how do they relate to other global institutions, and does the coming together of several nations undermine the predominance of the state itself? The answer to these questions is that regions and regionalism can act as a prism, through which local and global forces can interact with mutually beneficial results, or, through which central issues of world politics are refracted and given particular shape. Cooperation and integration are achieved more easily at the regional level, but at the same time regional conflicts can assume violent proportions at times, which call for intermediary interventions by a bigger power or a world organization like the UN. It is also argued that regionalism contributes to the broader development of global order which can be seen as a reflection of globalization, but along with the above, there is also the fear that regional groupings can become introspective and protectionist in their leanings, closing themselves off from the world economy.

Regionalism has therefore always expressed a constant tension, between the demands of statehood and the pressures for collective action or adjustment to regional realities. One of the key issues is the distribution of power between major regional actors, usually, but not always states. Thus for all states in the Western hemisphere, the dominance of the United States is an inescapable fact of life. In the EU, the actual or potential predominance of a united Germany was one of the underlying themes of the 1990s. Not surprisingly, other regional systems also demonstrate the importance of the regional distribution of power. Thus in South Asia, the centrality of India and of its conflicts with its neighbours, has been a relatively permanent aspect of the regional economic and political orders. The effective management of regionalism in world politics thus depends to a large extent on how it reflects state strategies, as opposed to integrative forces. If it is problem-centered as opposed to legalistic in style, it has the potential to be both a bridge and a barrier to the achievement of order. What is does express, is the emergence of a multilayered policy environment characterized by a multiplicity of institutions and the need for political action, to take account of linkages and complexities in novel ways.7

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New-Age Regionalism:

The globalization process has theoretically changed the structural and operational dimensions, of a variety of transnational forces. The dynamics of regional integration has not been an exception to the above rule. This brings us to the concept of new regionalism, which, as Hettne points out, is “a multidimensional form of integration which includes economic, political, social and cultural aspects, and thus goes far beyond the goal of creating region based free trade regimes or security alliances.” It posits that we should begin “to see regionalism as a return of the political, the need to control the transnational context.” Modern day regionalism is thus a defense mechanism against the effects of globalization. It comes across as an effort by states of a region to integrate in whichever areas possible, so that they can collectively, if not individually attempt to even out the natural inequalities of the world, and at the same time resist Big Power dominance over their economies.

Rather than a single theoretical frame-work, four themes shape the ‘new regionalism’. First is the relationship between regionalization and globalization. It challenges the conventional dichotomy that frames regionalization as, either a ‘stumbling bloc’ to or a ‘stepping stone’ for further world-wide liberalization. Second, while the state plays a prominent role in the new regionalism, the new actors are no longer just states. Third, regionalization cannot be understood, in many cases, without understanding the dynamics of local and global interactions. Lastly, there is an attempt to escape the linearity of traditional integration theory and thereby the teleology of a new world order.8

Thus the past few decades have witnessed a revival of interest in regional integration, due to several factors, including the demise of socialist economies in Eastern Europe paving the way for adoption of liberal economic policies in those countries, the philosophical shift on the part of the US towards embracing regionalism; the ‘domino effects’ induced by a proliferation of trade blocs, and the foreign policy and national security calculations of states.9 The recent embrace of regionalism by the US has been ascribed partly to its frustration with the slow pace of the multilateral trade process, particularly the Uruguay round of trade negotiations. From the point of view of the developing nations, this second upsurge of preferential trade arrangements differs from the old regionalism, in that it is based on outward-oriented economic policies. Furthermore, while five decades ago, the developing countries sought regional integration only with other developing countries, in recent years they have promoted integration with advanced industrial nations.

The political salience of regionalism rose significantly as a result of developments within Europe (the EC decision to press ahead with the completion of the Single Market, the negotiation of the Maastricht treaty, and the enlargement of the Union towards Scandinavia and central Europe; the successful negotiation and ratification of the North American Free Trade Agreement (NAFTA); the increased momentum of cooperative efforts within ASEAN, and continuing discussions within the Asia-Pacific region over new economic and security arrangements (APEC, PECC, ARF). The revival of interest in regionalism thus needs to be seen within a global perspective. While intra-regional dynamics remain important, the re-emergence of regionalism needs to be related to changes in the global system – in a state system previously dominated by the super powers; in an economic system, in which state policies are ever more shaped by the

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structure and dynamics of an increasingly globalized world economy; in a world political system in which, the boundaries between the domestic and international have become increasingly blurred, and in which transnational flow of ideas and values and transnational patterns of social mobilization become more powerful and more prevalent.10

The current wave of regionalism is a response to the shift of world economic power from one region to another. The locale of economic dynamism has moved from west to east and the global economic pull is centered around the Asia-Pacific region of higher levels of growth, investment, trade and technology transfers. Clearly reflected in the regional groupings associated with North America, East Asia, the Pacific and South East Asia, it is meant to facilitate greater movement of capital, technology, labour, trade in goods and services and competition for larger markets. The entire exercise is directed at promoting economic growth through trade regimes like PTA and FTA. Guided by the philosophy of free trade and competition, the New-Age Regionalism is also transcending national boundaries, thus resulting in trans-regional associations, for e.g., ECO represents Southern Asia, Central Asia and Gulf countries; APEC is a blend of North American, Pacific, East Asian and South East Asian members, IOR-ARC embraces the rim countries belonging to all the sub-regions of the Indian Ocean Region, and EAEC (East Asian Economic Caucus) comprises Asian and North Eastern States.11

An important aspect of institutional design is to achieve an efficient distribution of labour, between different regional organizations and to deal with contradictory objectives if any, in some cases where there is an overlap in membership. A number of approaches have now been developed to facilitate the coherence of regional organizations, as well as to deal with the accession of new member states and the introduction of new policy areas. These include variable speed, variable geometry, integration ‘a la carte’ and flexible integration. Under the variable speed approach, common objectives are agreed upon, but some member states can move more rapidly towards implementation. As a result, progress is not left to be determined by the slowest member. Variable geometry accommodates a situation where a subgroup of member states moves towards deeper integration than the others. With ‘a la carte’ integration, each member can make its own selection from a menu of integration policies This involves defined core themes to which all state parties must subscribe and other areas where participation is voluntary.12

In order to fully comprehend the dynamics of New-Age Regionalism, we have to pinpoint its contrasting nature with, what is now referred to as Old Regionalism of the 1960s and 70s. So, while the erstwhile regionalism was either institution or government driven, the New Regionalism is market driven. The former focused on import substitution as the basis of industrialization, the latter aims at export promotion and trade liberalization. Whereas the competition faced by the former was regional or sub-regional, the new regionalism unabashedly takes on global competition. This may be the reason why old regionalism discriminated against the rest of the world, but the new regionalism does not think of doing so. Instead, it emphasizes open trade, investment and growth, while the former laid stress on intra-regional trade and security. The membership of old regionalism was characteristic of being either South-South or North-North, but new regional units like NAFTA and APEC etc have North-South membership. Also, earlier a country had membership generally of one particular group, but new-age regionalism is characterized by a country having overlapping membership in a number of groups.

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With the rise of important blocs like the European Union (EU), North American free trade Agreement (NAFTA), MERCOSUR in South America, South African Development Community (SADC) in Africa, Association for South East Asian Nations (ASEAN) in South-east Asia, regionalism assumed important proportions on the world scene. South Asia has been slow in exploiting the potential of regional economic integration, and the important arrangements that exist in this region today are, the South Asia Association for Regional Cooperation (SAARC), the Economic Cooperation Organization (ECO), the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) and the Asia-Pacific Trade Agreement (APTA). To support its growth, the South Asian region had till recently, been relying mostly on the demand for its products in advanced economies, but now, with the Western economies facing a debt build-up in the wake of the global recession of 2008-09, they are exploring other viable alternatives for growth, and it is here that a dynamic regional economic integration can play a crucial role.

The South Asian region:

In the annals of world history, the region of South Asia has always remained a volatile and conflict-ridden area. High levels of insecurity at the inter-state and intra-state levels characterize this region, consisting of eight states of different sizes and capabilities. South Asia accounts for nearly 23% of the total world population, but its share in the global, GDP is less than 3%. Nearly 30% of the region’s population lives below the poverty line, and has a rather low ranking on the Human Development Index (HDI). The combined trade of all the eight countries accounts for less than 2% of the global trade. Not only this, the intra-region trade among the SAARC member countries in also low, accounting for less than 5% of the total regional trade.13 To top all this, there are long-standing bilateral disputes among the SAARC countries, which mostly stand in the way of effective regional cooperation.

Despite the reality of the grim picture presented by the above statistics, there are several reasons why regionalism and regional cooperation in South Asia promises to be a viable development strategy. Significant complementarities exist across the region and sub-regions, as the patterns of development over the years have diverged between the countries. This creates space for development of vertically integrated regional production networks, that can enable the region to harness economies of specialization and economies of scale. The eight countries of South Asia share cultural, ethnics linguistic and historical commonalities that can facilitate integrated production networks14 They have also emerged as large and dynamic markets for the international economy, contributing significantly to global growth.

The relevance of regional economic integration for the South Asian region, also arises from its potential to contribute to a balanced and equitable regional development, providing more benefits to the smaller and poorer parts of the region. This is because, regional economic integration leads to a process of efficiency, seeking industrial restructuring, which takes place in such a manner that relatively smaller and lesser developed parts get a better deal thus bringing about balanced regional development.15 The South Asian sub-region turns out to be among the least integrated in the world, and much of the potential for regional economic integration remains unexploited. While a number of initiatives have been taken over the past several decades, their implementation schedule needs to be reworked, the progress consolidated, and new initiatives taken, in

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view of the new international context. Besides, an integrated South Asia would be in a better position to play its due role in the broader Asian and Pacific market.

The multilateral and trans-regional character of regional cooperation in South Asia, can be observed from the several such initiatives, which are as follows. The SAARC came into being in 1985 and is the sole association which has purely South Asian membership, but its member countries do have overlapping associations with other neighboring countries too which clearly follows the path charted by new-age regionalism. Thus initiatives together with other sub regions in Asia and the Pacific include ECO, formed in the beginning with Turkey, Iran and Pakistan in 1985, but later expanded to cover Afghanistan and six Central Asian countries. Another similar initiative is BIMSTEC involving five south and South West Asian countries – Bangladesh, Bhutan, India, Nepal – Myanmar and Thailand, bridging the two sub-regions. These are complemented by the Asia Pacific Trade Agreement (APTA), signed under the auspices of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) in 1970s, along with some of the South Asian countries like India, Bangladesh and Sri Lanka, under which member countries exchange tariff preferences between them. Together, SAARC, ECO, BIMSTEC and APTA present overlapping sets of multilateral frameworks for regional cooperation in South Asia, as shown in the figure below, though SAARC is the most prominent among them, and is therefore the focus of this paper.

The SAARC:

Starting from relatively humble beginnings over thirty years ago, the SAARC has gradually been extending its scope of operations to cover newer areas of common interests and activities. During this period of evolution, SAARC’s focus areas have been undergoing calibrated shifts, to adjust to new global and regional realities. In the beginning, they aimed at technical cooperation, in order to create a common ground and a shared agenda. Eleven ‘Technical Committees’ were set up covering Agriculture, Communication, Education, Culture and Sports, Environment and Meteorology, Health and Population Activities, Prevention of Drug Trafficking and Abuse, Rural Development,

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Science and Technology, Tourism and Transport and Women’s Development. These committees exchange information, formulate programs and prepare projects in their respective fields. Over and above these areas, meetings take place on specific subjects of common interest, as and when required.

Beginning early 1990s, the second stage of regional cooperation under the ambit of SAARC focused on the Social Agenda. In this phase, major initiatives have been taken on social issues, such as eradication of poverty, promotion of literacy and the development of women and children. The SAARC charter focuses on social issues under the broad heading of Health and Population Activities. In addition there are a number of regional projects underway, through the SAARC Development Fund (SDF) and others to support social development in the region. Besides the above, the SAARC Agenda for Culture was approved by the 33rd session of the Standing Committee (New Delhi 31st March-1st April 2007), which envisaged the promotion of SAARC culture online, production of cultural source materials on South Asia, establishing linkages between culture and other sectors in attaining social and economies development, promotion of cultural products, and SAARC Exchange Programme on Culture etc.

It was during the late nineties itself that the winds of change became visible in global economic environment, necessitating a shift of focus in SAARC activities. With globalization insistently knocking at the South Asian doors, and the developing and the least development countries (LDCs) of SAARC, not being able to withstand the vagaries of the market, it was essential to work out an arrangement of cooperation in economic affairs, business and trade that would help the region to sustain itself and be an engine of growth and prosperity for it. This could only be done by extending and intensifying economic cooperation, equitable trade practices and accelerated business practices. The earliest manifestation of this new awakening could be seen in the formulation and implementation of S. Asian Preferential Trade Agreements (SAPTA) and South Asian Free Trade Agreements (SAPTA) which were conceived as the key to unlocking the economic potential of the region.

However, economic growth though important, is a small component of development, as the latter is a comprehensive and multidimensional phenomenon. It involves social harmony and cohesion, a stable and responsive political order based on the consent and commitment of the governed, and an ‘emancipative cultural change;’ All these components have a mutually reinforcing relationship and must be in harmony with each other to ensure development. South Asia has thrown up unique and impressive paradigms of development in contrast to that of Europe, that are based on material prosperity and well-being. The Bhutanese approach of discarding Gross Domestic Product (GDP) as a yardstick to measure national growth and evolving in its place the concept of Gross National Happiness (GNH) has been endorsed worldwide, including the UN. Many other countries are trying to emulate this innovative idea of Bhutan, where overall contentment and spiritual harmony of its people is the goal of national endeavour. It is also a matter of pride for the South Asian region, as Bhutan is a SAARC nation. Therefore the challenge before the world and South Asia is to explore the prospects of a constructive relationship between stability and development, and not to remain bogged down by concerns for economic growth.16

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Despite the above observation, and persistently high levels of poverty notwithstanding, the South Asian region has enjoyed steady economic growth in recent years. A gradual movement away from primary product dependence to a concentration on manufacturing and services, has enabled these states to reposition themselves favorably in the field of international trade. As an indicator the share of agriculture in South Asian GDP fell from approximately 40% in the 1970s to under 20% in 2006.17 However, the success of these economics in this regard has been somewhat constrained by such factors as a lack of infrastructure, insufficient investment in private enterprise and skill shortages in the labour force. Regional cooperation is ideally, a means of overcoming such obstacles to growth. As a result, various intra-regional infrastructure development projects, the establishment of a Common Investment Area, and the sharing of resources at many levels have all been proposed at various SAARC summits and meetings over the years.

It is a known fact that the level of intraregional trade remains below its potential in South Asia, owing to structural barriers such as high transport costs, poor connectivity and other non-tariff and tariff barriers. On the other hand it is equally true that an enormous amount of informal trade along the borders goes on, which mostly remains unreported. In this context, increased regionalism would allow these economics to improve their competitiveness, increase the export of services and add value to traditional exports. In the aftermath of a global recession that has profoundly impacted many developed economies, which are the customary recipients of a large proportion of South Asian exports, cooperation and trade within the region seems increasingly important. Since South Asia is inhabited by approximately one-fourth of the global population, the potential benefits to be reaped are extensive, and thus the burden of responsibility borne by the SAARC is immense.18

Growth comprises individual national growth figures, where the regional dimension comes in through trade and economic relations, among the eight countries that make the region. The SAARC aimed to maximize the comfort levels of all, with the assurance that together the member states would do nothing to any single member’s distress, or in other words, consensus would rule. It is within these broad parameters that the SAARC agenda has evolved over the past thirty years, and should continue to cooperate regionally for mutual benefit. It is complimentary to all other tracks that pursue the same goals including bilateral, multilateral and trans-regional.19

The potential of the South Asian region is clearly manifest in its 1.64 billion people comprising the largest working age population in the world, as also almost 45% of the world’s bottom billion. It has had better than average global growth rates, at above 6% for the past two decades. It has commonalities of languages, legal systems, education, bureaucratic institutions and jurisprudence and dormant legacies of an infrastructure, that sustained a more or less uniform economic space even a decade after independence. These are ingredients for regional cooperation and the SAARC’s progress so far has shown some promise, though much of its potential remains yet to be tapped.20

The prescience of the founding fathers of SAARC was reaffirmed half-way through its journey, when a Group of Eminent Persons (GEP), set up in 1997 stated in its report that the “SAARC region must discover for itself the compelling logic underlining a process of constructive regionalism.” The stability in South Asia and the sustained development of

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the countries of the Association in such a complex setting continues to hinge on their ability to realize their full potential derived from regional co-operation in the widest possible sense.”21

Inspired by the successes of the European Union (EU), the GEP Report further recommends the creations of a similarly integrated South Asian Economic Union (SAEU) by 2020, preceded by the establishment of a Customs Union. As steps to achieve this aim, there should first be a creation of a single market for South Asia, involving an integration of transportation, energy, telecommunications and other services, as well as the espousal of a common competition policy for all states in the region. However, given the prevailing geopolitical tensions in the region, the achievement of these goals by the specified deadlines seems difficult.22

Among other partial successes attributed to the SAARC in recent years, and which also point towards its potential for having better regional integration, are the establishment of the SAARC Energy Centre in Islamabad in 2006 and the South Asian University in New Delhi, in 2010. The uneven spread of energy resources, with oil, coal and natural gas reserves in India, along with natural gas reserves in Pakistan and Bangladesh, means that the region as a whole would benefit greatly from cooperative energy policies. The SAARC Energy Centre is charged with the tasks of developing existing energy resources, promoting conservation and energy efficiency and working towards the development of alternative and renewable energy sources. Given the high costs invariably incurred by such endeavors, the pooling together of regional resources in order to fund energy development projects is important. For example, gas pipelines can only be economically viable if they transit more than one country, so as to take advantage of the economies of scale. In fact, most of South Asia is a contiguous landmass, which makes it easier to put in place integrated power grids and gas pipelines (RIS Policy Brief).

The other positive step was the formation of the South Asian University, which is funded by the Indian government, and all SAARC members are expected to contribute towards its operational costs. The University has the potential to achieve some measure of the cross-border flows of skills, that regional cooperation is envisaged to generate. Also, in providing its students with a regionally recognized qualification, the South Asian University goes some way towards achieving the equivalence of qualification, that is a desirable characteristic of education in a truly integrated region.23 Moreover, research work at the University can be encouraged to provide SAARC-centric data in several needed areas, such as trade, climate change and other environmental issues, disaster management etc. The need for such data has arisen in recent years, as several issues have emerged which though appear regional, are often global in scope, difficult or even impossible to control at a national level. So the need for deeper regional integration, in order to combat such challenges, provides the SAARC a fresh impetus for collaborative action.

The fourth report of the Intergovernmental Panel on Climate Change published in 2007, pointed out several challenges for South Asia – increased flooding due to melting of glaciers, pressures on natural resources and environment, due to raped urbanization and industrialization, decrease in crop yields up to 30%, periodic floods and drought, soil erosion and coastal hazards to name a few.24 Such environmental issues are all-encompassing and are best tackled with collaborative and cooperative means. Collection,

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exchange and dissemination of meteorological and hydrological data and statistics among the SAARC member nations, would strengthen the process of mitigation and adaptation. Keeping this in mind, the 16th SAARC Summit at Thimpu, Bhutan adopted a 16-point resolution, as Thimpu Statement on Climate Change, in April 2010. Thereafter, the 17th Summit adopted the theme of “Building Bridges” to address the issues arising out of the impact of climate change. The SAARC nations in fact, aimed to come together to be able to face global challenges affecting the region, because social and economic sustainability is interdependent beyond the political boundaries. Therefore, if they succeed in this endeavour, it would not only serve the vital interest of the 1.64 billion people who call this region their home, but would also serve as an example to the world, which is unable to set aside its competitive mindset, in addressing what is clearly a threat to human survival itself.25

In addition to the above ecological problems, the currently emerging water crisis in the Indus Basin River System, and in the decades ahead in the Ganges-Brahmaputra-Meghna Basin, unless collectively addressed, could have major implications for the economies and societies of the region. Unsustainable developmental practices have exacerbated the problem, with the intrusion of salinity into ground water, contamination of aquifers with harmful chemicals like fluoride and arsenic and pollution due to lack of safe disposal of urban and industrial waste. The city governments in India and Pakistan face similar problems in managing the provision of municipal water and sanitation. Therefore, institutional mechanisms could be put in place, to share best practices and policy lessons.26

Need of the hour:

However, the issue that has relentlessly beleaguered SAARC from the very outset, is that of a geopolitical climate characterized by mutual tension, mistrust and jealously guarded state sovereignty. Since such political realities are unlikely to change in the near future, instead of viewing them as obstacles, the SAARC must find ways of working with them and even using them to its advantage.27 This would require skilled diplomacy and the efforts of individuals who understand the nuances of South Asian politics.

The area of infrastructure-building is one where the above diplomacy can be put to good use. This is because, the cost of infrastructure development projects are often too great to be borne by a single government and therefore requires cooperation. Also, cross region projects are difficult to implement, largely as a result of political challenges to the process and difficulty of coordination. Consequently, the pursuance of smaller-scale bilateral deals could be an alternative, and a more feasible means of working towards the same goal.28 In order to further turn regional politics to its advantage, the SAARC has potential to develop its relationships with multilateral regional organizations like the ASEAN and EU, to its advantage.

If we look beyond statistics, by any objective reckoning, South Asia’s record of economic growth for the past three decades, has been fairly creditable. Except for some downswings in some countries for a few years, the general trend has been one of a steadily rising GDP growth rate. Income levels have been increasing for all segments of South Asia’s population, which in turn has given rise to a burgeoning middle class in many of the South Asian countries. The consumption basket of households both in small

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and urban areas, is steadily moving away from food to non-food items e.g. education, health, entertainment etc, which is a welcome development. For some countries like India, industrial activities have proliferated into newer areas, reflecting an expanding cosmos of manufacturing technologies, market reaches and international collaborations. The expanding global visions and business ambitions, are pushing many economies of the Region into global investment production and trade vortices. All these developments naturally lead many international development analysts to foresee a global leadership role for the South Asian region in the foreseeable future.

In order that the Region as a whole may benefit from the progress of some nations, the transport connectivity needs to be strengthened, considering the geographically contiguous landmass of South Asia. And, as a next logical step, free movement of goods and persons must be allowed in an atmosphere of mutual trust. The SAARC Regional Multi-modal Transport Study (SMRTS) during 2005-06, identified a number of strategic corridors and gateways which could be developed on a priority basis, to establish an integrated transport system in South Asia. This could make Bangladesh, Afghanistan and Pakistan attractive for foreign direct investments (FDI). Besides, it would bring several economic opportunities created by the process of globalization at the doorstep of the otherwise deprived land locked countries. The challenge today is for us to build interdependencies, which not only integrate our region, but also create a vested interest in each other’s stability and prosperity.

Economic integration in South Asia, could accelerate and help sustain economic growth in the member countries, due to several factors. These are, gains from trade emanating from comparative advantage, increased investment due to a large regional market, lower capital costs of projects due to availability of cheaper capital and intermediate goods through regional trade, a broader base of innovation and an environment of greater competition, through a free-trade regime. Trade and investment across national boundaries in South Asia, could create new interstate peace that would bring material benefits and enable interplay of diverse cultures. Such a process would make possible the rediscovery of unity in diversity, which is part of the perennial wisdom of South Asian societies. These cultural concomitants of economic cooperation could strengthen the attempt by South Asian states, to build pluralistic societies and sustainable democracies.29

The balance of power in the region has been shifting during the past decade, because of important events such as the US-India strategic alignment, Pakistan’s deteriorating relationship with the US, and China’s emergence as global power. In addition, new events such as the US-Iran détente and the new Cold War between Russia and NATO, could further alter the balance. Moreover, Afghanistan’s entry into the SAARC in 2007, with its unique geographical position, opens up tremendous opportunities for it to become a hub for trade and transit between South and Central Asia.30 The recent change in leadership in India and Afghanistan, as well as a shift in Pakistan’s foreign policy vis-à-vis the two countries, rekindles hope for renewed regional cooperation in South Asia.

Given that friction amongst some member states, has been a constraining factor in the efforts towards regional economic integration, one alternative is for member countries to come together in small anti-regional groups for facing common challenges, that are cross-border in nature. In due course sub-regionalism would merge into larger groupings

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preparing the ground for a stronger regional hub. The Bangladesh-Bhutan-India-Nepal growth quadrangle could be one such sub regional grouping towards the regional issue of energy cooperation.31 Sub-regionalism would thus catapult the region into one of the most prosperous and integrated economic regions of the world. Keeping this in mind, if the South Asian nations implement a second round of their ‘Look East’ policies, it would lead not only to higher economic growth in the concerned countries, but also resolve the internal crisis and bilateral bottlenecks.

The SAARC has nine observer nations, whose contributions have so far been limited to training and capacity-building. However, there must be a broader vision, to utilize the expertise of these nations, to build a more substantive association on a regional basis, given that some of these observer nations are our co-participants in emerging regional economic formulations. The EU, in particular may have a useful role to play in this respect, and South Asia has much to learn from the former’s success, in putting the goal of economic prosperity through cooperation over that of conflict.32

The people of South Asia not only share a contiguous geographical space, but also a social and cultural history that shapes our lifestyles, belief systems, cultural peculiarities, material practices and social relationships. Our natural environments are related, interdependent and form elements of a common ecosystem. There is a similarity in our life practices which have been influenced by one another. On the other hand the unique diversity of our region in all aspects, has enriched the common heritage and mutual respect for each other. At the same time, there also exists tremendous suspicion, hostility, intolerance, misinformation and prevention of interaction among the people to maintain the status quo. All of this has led the South Asian nations towards increasing militarization in the name of enhancing national security. Due to this it is widely acknowledged that South Asian, regionalism lags behind the ASEAN, EU, OAS, MERCOSUR etc. Reclaiming the region means recreating regional integration based on principles of human rights – people-centered and people – oriented.33

With this understanding, South Asian people’s movements (women, youth, peasants, people’s labour, serially marginalized groups) and civil society groups have over the last decade, organized themselves as People’s SAARC, with the hope of deepening people-to-people solidarity, and crafting a collective and common vision of South Asia, as well as engaging with South Asian governments, in order to realize a people’s vision of South Asia. The theme of the 18th SAARC Summit of Nepal was ‘Deeper Integration for Peace and Prosperity’, which is possible only when this cooperation goes beyond the needs of regional elites and corporates, and allows and enables the people of South Asia, to build their regional identity and shape democratic institutions for peace and prosperity.34

A regional organization such as the SAARC, can and will get off the ground only when the people and not only the governments in the member-states, begin to take an active participatory interest, in the proceedings of the association. This would demand a public say, and the institutionalized expression of opinion in the association’s political and economic affairs. The challenge then for civil society and people’s movements in the South Asian region, is to come up with and assert an alternative vision of regional integration, or new regionalism based on the needs and aspirations of the people of the region, while also taking into consideration different levels of development.

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The potential of South Asian regionalism therefore, can be realized further, through an effective say by the people of SAARC’s member states in its political and economic affairs. This can be achieved by two measures – a SAARC Parliament and a common currency. The idea of a general debate and discussion of political approaches in SAARC deliberations was mooted at the Tenth and Eleventh meetings of the heads of government, but the proposal fell through. But, with the passage of time, it has became imperative that the SAARC be given a Parliament, where people may express their views undirected and uninhibited by then governments. And as happened in Europe, it is very likely that like-minded people, groups and political parties in the member-states should associate across national borders. A SAARC Parliament would not only lead to, but also hasten the emergence of the association as a cultural, political and economic community.

This brings us, to the second development necessary to provide the South Asian public an active say in the SAARC’s political and economic affairs, which is the need for a common SAARC currency. For this region, deciding to have a single currency would be a great deal easier, than it was for the European Union, as it would amount really to a ‘return’ to a common currency of the Rupee, as it was when the British ruled the sub-continent. It is still called the Rupee in the various countries of post 1947 South Asia, even if nationality and value has changed. A common currency would have practical as well as psychological advantages, in the growth of the region into an effective socio-economic community. It should help to level inflation rates, with growth rates probably becoming equal and results measurable all over the region. This would relate closely to the growth of a single SAARC market, with distinct possibilities of ‘cross border’ investment by business and industry houses in the member-states. Besides, the psychological impact of a SAARC Parliament and common currency, it would have over-all significance in cementing peoples into a South Asian community. And, needless to say this global transition from the concept of nation state to that of one cultural-economic region would be irreversible.35

Challenges ahead:

There are three fold challenges confronting contemporary South Asia today. They are – the challenge of a multi-polar world and globalization at the level of the world order, of upsurge in people’s aspirations and expectations from within the South Asian societies, and that of terrorism haunting most of the South Asian states. All three create pressures for the South Asian region, to not only recognize its inherent potential for harmony and cooperation, but also to explore possibilities of harnessing this potential. Also, the extra-regional powers would impinge less menacingly on the South Asian states, if they had greater harmony and understanding among themselves.36 In this sense, a regional order is a way of transforming a regional security community. It mitigates the problem of anarchy and helps overcome it through the creation of collective institutions, based on common values and goals.

South Asia’s growing economy, its emerging markets and expanding middle class with greater purchasing power, has made the region one of the most sought-after destinations, for trade and investment. This is despite the reluctance of the countries in the region, to form a common economic unit. However, there is a prospect for greater

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regional cooperation now than ever before. The recent political transition and establishment of democratically elected governments in many South Asian countries, has generated hopes of political stability in the region. The popular aspirations of the people of South Asia, who have high expectations from their governments, are likely to create pressures for greater indulgence of governments in economic development and integration. At the political level too, there is scope and need for inter-governmental synchronization of efforts to fight the common threats of terrorism, religious radicalism and illegal immigration etc. which have longer socio-economic and security repercussions. Therefore relations between the South Asian countries becomes crucial as a framework of analyses, to envision a common regional future in terms of economic cooperation and political stability of the region.37

The above table shows the serious disjuncture across South Asia, between the

stunning growth rates and trade performances on the one hand, and desolate figures on

the inequality front. Despite poverty ratio reductions, all South Asian countries, with the

exception of Pakistan also experience growing income inequalities, due to the benefits of

economic growth being inadequately (re)distributed to the socially excluded, destitute and

marginalized. Given the diverse nature of the large and growing population of the South

Asian countries, it is challenging no doubt for them to achieve their goals, but their macro-

economic growth rates and ensuing fiscal resources could facilitate and finance far better

achievement of the Millenium Development Goals.

From the standpoint of the integration process, the lessons learnt, are as follows :-

First, sustained macroeconomic stability in the member countries is essential for advancing regional integration.

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Second, regional integration and cooperation needs political commitment at the highest level, and sustained benevolent leadership from major market partners.

Third, regarding sub-regional or extra-regional integration agreement, preserving secure preferential market access for trade is the essential ‘glue’ for deepening integration.

Fourth, forward momentum must be maintained in the development of equitable rules-based systems, accompanied with realistic road maps and calendars.

Fifth, effective domestic policies and democratic institutions are necessary, to ensure equitable public access to the benefits of regional integration, especially keeping the poorer sections in mind.

Finally, for regional integration to be effective, both collectively and for the individual partner, there is need for efficient national counterparts of regional policy.38

Conflicts are an inevitable and unavoidable phenomena, which will always be there, so the solution is to resolve and transform them. For this purpose, developing human resources and building the capacity of the people, especially the younger generation is greatly needed. Investing in education for peace is of paramount importance. This will ensure that the next generation is not drawn into a culture of violence. Also, madarsa education needs to be reformed and brought in tune with modern times. This will strike at the roots of religions militancy prevalent in the South Asain region. Besides, academics should engage more with policy makers and guide them on peace and security issues. Apart from training, networking and coordinating efforts amongst the conflict resolution experts and professionals working in this area, is very important. This will lead to exchange of ideas resources and expertise and also help to make the shift from a culture of violence to a culture of peace.39

For the last over thirty years, the South Asian region under SAARC, has treaded

on an uneven path. But it does not definitely mean that the paths would be so forever. Given the single geographical component, the fates of 1.64 billion people of South Asia are inter-connected Even though the dream of Common Market on the lines of the European Union in South Asia by 2020 seem farfetched, the visionary process should move on and help South Asia, in addressing issues such as natural disasters, non-tariff barriers, the sensitive lists in SAFTA, implementation of Regional Standards, poverty alleviation, food security, cooperation in higher education, simplification of visa procedures, terrorism, climate change and infectious diseases etc. The people of South Asia have a common cultural heritage and historic experience. With better understanding of each other ,the sincerity of political will and commitment to a better common future, this region can secure for itself its rightful place on the world stage.

Evolving a regional identity is a process which requires states involvement. While

there is no readymade solution to the bilateral problems, regional cooperation cannot be made hostage to it. The most important achievement for the SAARC, is to bring the leaders of South Asian countries to meet fruitfully and think of solutions to regional issues.

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The leaders need to think regionally and promote a regional identity, that is based on the positive aspect of the individual state, which should be attractive for the people of the SAARC countries to emulate. Analysts like Pratap Bhanu Mehta argue that “regional cooperation can gather momentum only when it is based on organic links between different sub-regions of the subcontinent – not on links enforced from the centre of each country. There is also a need to integrate agendas of SAARC, with the national agendas of the countries of the region. Political opposition at home does not allow governments to experiment with new ideas. Thus, domestic consensus needs to be built within the member countries before a summit meeting takes place.40 The South Asian region offers great prospects and its potential itself is enough, to argue for its integration into a coherent mutually beneficial regional unit.

Conclusion: With economic globalization and international bodies deciding on vital issues, it

has become imperative for the South Asian region through SAARC, to coordinate their position in the interests of the region as a whole. It is an important forum for the smaller countries of the region especially, where they are able to wield an important influence. Moreover, regional projects have the capacity to negate the sting attacked to bilateral projects. It is ‘action’ on the part of the members, to implement the decisions arrived at, which in the final analysis, will make the difference between success and failure. It is in this sense that the coming years will be crucial for the member countries, the region and the association.41 Regional cooperation becomes all the more essential in a scenario, where challenges in the present and the future are trans-border in nature, requiring a regional approach and not national solutions.

Thus, despite its limitations and dangers, regionalism remains an important tool for

promoting a range of positive values and practical approaches, in responding to the economic and strategic challenges of the 21st century. In Europe, it has become the chief promoter of human rights and democracy. The Third World countries, unable and unwilling to follow European models and practices of regionalism, nonetheless recognize its potential, to foster a greater decentralization and democratization of global institutions and regimes. Regionalism is no longer associated, with a set of relatively narrow security and welfare goals. The end of Cold War and the effects of globalization have introduced a wider range of issues and actors into the practices of regional cooperation. New regionalism promises to foster greater respect for democracy and human rights, in the international system. Regional cooperation and integration has become a crucial element of the development process. The benefits of new-age regionalisms undergoing such transformation may well outweigh its dangers and shortcomings.42

The recent discourse on regionalism in South Asia has been marked more with the

problems that hinder regional cooperation, rather than the prospects that the grouping has, in shaping the collective future of the region During the last three decades, the SAARC has made attempts to serve as the engine of cooperation in South Asia with all the right intentions, but it has allowed political logic to dominate over the economic and has therefore lagged behind several other regional and multilateral initiatives. South Asia finds itself today at a very critical juncture of economic and political transformation in the world. Economically, it is a region that faces daunting challenges of human development, constitutes nearly half of the world’s poor and one-fourth of the world population. Yet, the

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region also possesses a vast human resource potential, which if nurtured productively, can make the region both the contributor and the recipient of the benefits of knowledge, technology and skills in a globalizing world. Politically, the region remains a house divided, witnessing bitter conflicts and remaining perilously close to some of the most volatile regions of violence.43 Yet, as the then Prime Minister Dr. Manmohan Singh remarked at the 16th SAARC Summit in April 2010 held at Thimpu in Bhutan, “It is unfortunate that together the people of South Asia do not have the voice that they should and could have in the global polity. The 21st century cannot be an Asian century unless South Asia marched ahead and marched ahead together.”

REFERENCES

1. Robert W. Tucker, The Inequality of Nations, Martin Robertson & Co. Ltd., London 1977, pp. 3-7.

2. Ibid, pp. 33-34.

3. Andrew Hurrell and Ngaire Woods (eds.), Inequality Globalization and World Politics, Oxford University Press, 1999, pp. 13-14.

4. Ibid, pp. 17-20.

5. P. V. Rao (ed), Regional Cooperation in Indian Ocean – Trends and Perspectives, South Asian Publ, . Delhi, 2001, P-17

6. Ibid, p. 30

7. Michael Smith, ‘Regions and Regionalism’ in Brian White Richard Little and Michael Smith (eds), Issues in World Politics, Palgrave Mac Millan 2005, pp 66, 75.

8. James J. Hentz, ‘New Regionalism and the Theory of Security Studies’ in New and Critical Security and Regionalism’ N.Y., 2001, p. 3

9. B.M. Hokeman & M.M. Kostecki, The WTO and Beyond Oxford University Press, 2001, pp 348-349.

10. Louise Fawcett & Andrew Hurrell (eds)’ Regionalism in World Poltics, Oxford University Press 1995, pp 1-3.

11. P. V. Rao, op. cit, pp. 15-16

12. Sonu Trivedi, ‘Politics of Regionalism in the World Economy,’ India Quarterly, Vol. 61, No. 2, Apr. June 2005, p. 99

13. Tridib Chakraborti, ‘India’s Relations with South Asia in 2010; A Journey of Crests and Troughs,’ World Focus, Nov.-Dec. 2010.’

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14. Nagesh Kumar, ‘South Asian Economic Integration; Potential, Challenges and the Way Forward’ in Vishal Chandra (ed) India and South Asia : Exploring Regional Perceptions Pentagon Press, N. Delhi, 2015, p 154.

15. UNESCAP, 2012a No. 1

16. S. D. Muni, ‘Stability and Growth : The Uneasy couple in South Asia,’ in Sumitra Kumar (ed.) Stability and Growth in South Asia, Pentagon Press 2014, N. Delhi P. S.

17. Saman Kelegama, ‘Changing Face : The Trials and Fortunes of Regional Coop under SAARC’ in Rajiv Kumar and Omita Goyal (eds), Thirty years of SAARC Society, Culture and Development, IIC Quarterly, Spring 2015, p. 34.

18. Saman Kelegama, op. cit., p. 34

19. Sheel Kant Sharma, ‘SAARC and S. Asian Stability and Growth : Potential and Promise’ in Sumitra Kumar (ed.) Stability and Growth in South Asia, Pentagon Press 2014, N. Delhi, p 300.

20. Ibid, p. 301

21. “SAARC Vision Beyond the Year 2000” Group of Eminent Persons Report, SAARC Secretariat, 1999.

22. Saman Kelegama, op. cit. pp. 34-35.

23. Ibid, P. 38

24. 4th Report, IPCC, 2007.

25. Shyam Saran, ‘South Asia’s Mounting Ecological Challenge : Regional Coop is the Only Answer,’ in Rajiv Kumar and Omita Goyal (eds.) op. cit, p. 63.

26. Akmal Hussain, ‘South Asian Cooperation : Towards a Humane World,’ in Rajiv Kumar and Omita Goyal, op. cit, pp 79-82.

27. Saman Kelegama, op. cit., p. 46

28. This is suggested in SACEPS, Assessing and Reformulating SAARC Road Map, 2008 p. 62, particularly with regard to improving the regional energy grid.

29. Akmal Hussain, op. cit., pp. 74-75.

30. Eric Gonsalves, ‘Reviewing Regional Cooperation in South Asia,’ in Rajiv Kumar and Omita Goyal (eds.) op. cit, p. 30.

31. Amita Batra, ‘SAARC and Economic Cooperation,’ in Rajiv Kumar and Omita Goyal (eds.) op. cit, p. 59

32. Ibid, p. 60

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33. Rakhi Sehgal, ‘South Asian Regionalism : A Peoples,’ Movement Perspective, in Rajiv Kumar and Omita Goyal (eds.) op. cit, pp. 200-2012

34. Ibid

35. Rakshat Puri, ‘Giving SAARC to the People,’ in IIC Quarterly, pp. 3-9

36. S. D. Muni, ‘South Asia as a Region,’ in South Asian Jounal, Aug-Sept 2003, No. 1, p. 5

37. Smruti S. Pattanaik, ‘Moving Beyond the Rhetoric of Cooperation,’ in South Asia : Envisioning a Regional Future, Pentagon Press, N. Delhi, 2011, p. xviii’

38. Sonu Trivedi, op. cit, pp 107-108.

39. Dr. Kaushikee, ‘Peace and Conflict Resolution in S. Asia : Discipline, Challenges and Prospects,’ in Soz, Srivastava & ‘Gupta (eds.), in SAARC : Building Bridges in the South Asian Region, FPSD, N. Delhi, 2011, pp. 66-67.

40. Smruti S. Pattanaik, ‘Does SAARC have a Future ?’ op. cit., pp. 50-51

41. Padmja Murthy, Managing Suspicions, Knowledge World, New Delhi, 2000, pp. 132-133.

42. Sonu Trivedi, op. cit, pp. 109-110.

43. Rahul Tripathi, ‘Reorienting the Regional Discourse on S. Asia : Vision for a People’s SAARC,’ in South Asian Survey, 13: 2 (2006), Sage Publ., p. 323.

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