Round Table on Prospects of Regional Integration in South Asia

A Round table conference on ‘South Asia: Prospects for Regional Co-operation’ was organised at IDSA on June 27, 2013. The Panellists included, Dr Arvind Gupta, Director General IDSA, Dr Rajiv Kumar, Senior Fellow, CPR,; Professor Mahendra Lama of South Asian Studies, SIS, JNU; Mr. Manish Chauhan Joint Secretary SAARC, Ministry of External Affairs; Dr Nitya Nanda, Senior Fellow, TERI; Dr Nisha Taneja, from ICRIER and Dr, Smruti Pattanaik from IDSA.

Following is the summary of the points highlighted by the panellists:

South Asia is a peculiar region. Prior to 1947 it was integrated and after the partition it got disintegrated and now it is once again trying to reintegrate. Today, South Asia is the least integrated region in the world. Since its inception, SAARC could not make much progress. It is still in the first phase of integration i.e. ‘market’ phase, whereas EU and ASEAN has already crossed the second phase and reached the third phase that is ‘functional’ phase. As far as form of integration is concerned, SAARC has not entered the ‘Free Trade Agreement’ category yet.

Panelists identified the following factors responsible for failure of SAARC in playing an effective role in regional integration:

1) Functioning of SAARC is hampered by Indo-Pak relations; 2) Fear of India’s size; 3) Difference of opinion within the region on the role of China; 4) Lack of Implementation, poor co-ordination and poor monitoring of integration projects. There exists a huge gap between summit declaration and action. SAARC has been consistently inconsistent to achieve goal.

However, despite of these drawbacks, there is ground for optimism. There is greater realisation now within the region about the need for co-operation. Fear of India is gradually declining and countries are now considering India’s economic growth as opportunity than threat. India’s bilateral relations with some countries like Bangladesh, Maldives, Bhutan, Sri Lanka and Afghanistan have become better and are expanding. Some of the positive aspects of SAARC are:

1. Establishment of South Asia University. Mandate is given to this university to create a critical mass of educated people;
2. Initiation of SAARC Development Fund;
3. Major progress in SAFTA in expanding trade.

Optimism was expressed on regional trade. It was argued that whatever trade is happening is comparatively high though less than the real potential, but, at the same time it was also argued that much can be achieved if some trade related non-tariff barrier and pruning of negative list are addressed. A large amount of trade is channeled through informal routes which is a major source of revenue loss for the states. Though informal trade is cheaper and easier than the formal trade, it should not be encouraged. It was mentioned that many goods are smuggled between India and Bangladesh which are not banned, precisely because of lack of border points. In this regard it was recommended that trade points with limited facilities can be provided to address this issue.

It was pointed out that cooperation needs involvement of many issues other than trade and commerce, such as ability of the policy makers to connect with the local people. Learning local language is extremely important. MEA’s role in this regard was questioned. Some of the panelists argued that South Asia is not a strategic concern for the government. Thus trade and economic relations often remain neglected. Countering this view, others have argued that South Asia has been very much a priority region for the MEA, but it has practical problem of resources both human and capital to concentrate on South Asia.

Role of India

There exists a mutual distrust between India and its neighbours on the issue of Regional integration. India has an ambivalent attitude towards regional co-operation. Therefore, it has always given priority to bilateral relations. However, panelists were of consensus that it is India’s responsibility to take a lead role in regional integration. India’s global ambition will not be realised until and unless stability in South Asia is achieved. As of now South Asia is not a strategic concern. India does not recognize that there are certain issues which cannot be resolved without regional co-operation. Concern was also raised that India does not deal with its neighbors on ground as is expected. While, at the bureaucrat level there is no leadership in dealing with issues of mutual concern in South Asia, at political level there is also a lack of political will.

Nonetheless, it was argued that even if India does not take steps to foster regional cooperation, countervailing forces will integrate the region. Some of the countervailing forces identified are: 1) China; 2) Climate Change and Disaster; 3) perceiving border as opportunities rather than as threat in traditional sense; and 4) Changing Federal structure of the country

Way Forward

1. Though Foreign Policy is Central Government’s mandate, states need to be involved as stakeholders. MEA can take up a liberal view on states in their neighbourhood policy. Nevertheless, it was accepted that probably incremental approach is the only way for India.
2. South Asia should be made a part of discussion and debate in the public domain.
3. South Asian integration has to be made an electoral issue. There is a need to integrate SAARC agenda to domestic agenda.
4. Emphasis should be given on multilateral integration.
5. There must be proper coordination within ministries of the region and the governments of the region.

General Discussion

Some of the points that came up during the discussion include:

• India’s credibility in the international forum gets affected due to its failure to take up lead role on the issue of regional integration. India needs to address the sensitivities of the neighbouring countries. India needs to be careful about its patronizing attitude.
• India is a factor in the domestic issues in the neighbouring countries. India has to make these countries dependent on it and therefore, India needs to think big. Despite following unitary model, China has given bordering states the power to take decisions on the issue of foreign policy relating to the neighbouring countries. Why can’t India give such power to its bordering states to take decision on the issue of trade? Focus should be on sub-regional co-operation. India needs to play significant role to redeem SAARC as an organization responsible for furthering regional cooperation.
• It is important to acknowledge the fact that China will continue to make its presence in the region. India needs to resolve its quandary of China. Trilateral co-operation involving India and China in the region has also been suggested. There are number of issues where both India and China can co-operate ignoring the differences.
• Trade and economy has to be the driving factor behind regional integration. There is a potential for trade within the region, but there is lack of political will to make them into reality. Primary spoiler is lack of common security perception. Focus should be given on the issue of soft security.
• Emphasis should be given on achieving a South Asian identity.
• China is one factor which will push regional integration.
• India’s unilateral action is accepted, but funding needs to be considered. Out of 9662 crores expenditure that was budgeted for the ministry of External Affairs -33% was used for technical and economic cooperation, 19% is on loan and investment in foreign countries and 19% is spent on MEA’s headquarters and missions. Given the budgetary constraints India is doing a tremendous job.
• Role of social media is immense to bridge the gap among countries of the region