SAARC: The Sign of Solution of Problems In South Asia
The South Asian Association of Regional Co-operation comprises of India, Pakistan, Sri-Lanka, Bangladesh, Bhutan, Maldives, Nepal, and Afghanistan. It established with the aim to promote the well being of the population of South Asia and improve their standard of living to speed up economic growth, social progress and cultural development. This Association provides a platform for the peoples of South Asia to work together in a spirit of friendship, trust and understanding. Its aim is to promote the welfare of the people of South Asia and solve the problems like food, shelter, education problems, diseases, economic problems, social problems, political problems, terrorism etc. There are a number of problems which no country of the region can solve single-handed and which can be solved only if the countries of the region cooperate. So let us come to the point that the paper is actually about the “SAARC: The Sign of Solution of Problems in South Asia”. So I want to examine it and explain how we can find the solution of problems and in what sense we can call it the Sign of Solution.
The Political Economy of Regional Cooperation in South Asia
Regional cooperation arrangements (RCAs) have produced vastly dissimilar performances; some have spurred remarkable expansion in trade and cooperation among members, while several others have achieved little. Studies show that performances vary because RCAs differ from one another in important characteristics, namely the (i) objectives they aim to achieve, (ii) balance of power among member states, and (iii) political structures and processes of decision-making within individual member states. Subject characteristics uniquely influence and condition the functioning of RCAs. An assessment of the performance of the South Asian Association for Regional Cooperation (SAARC) reveals that the extremely skewed balance of power within the region and antagonistic inter-state relations among member states have stunted the organization’s effectiveness. To reverse the situation, SAARC’s member countries need to repair the prevailing atmosphere of distrust and suspicion, and build cordial inter-state relations. They also need to empower the SAARC Secretariat to function as a competent and neutral facilitator of cooperation in South Asia.
Trade Possibilities and Non-Tariff Barriers to Indo-Pak Trade
This paper aims to identify the bilateral trade possibilities and non-tariff barriers between India and Pakistan. The study shows that there is a large untapped trade potential between the two countries. Using the potential trade approach, the study finds that the export potential from India to Pakistan is to the tune of US$ 9.5 billion while that from Pakistan to India is US$ 2.2 billion. Items having export potential from Pakistan are largely in the textile sector while items having export potential from India are predominantly in non-textile sectors. Very few items having export potential from India are on the positive list adopted by Pakistan. At the same time there are several items that India is importing from other countries but not from Pakistan. This indicates that there is a huge information gap on both sides on items that can be imported by India from Pakistan. A working definition of non-tariff barriers adopted in the study included six major categories, namely, quantitative restrictions, trade facilitation and customs procedures, technical barriers to trade and sanitary and phytosanitary measures, financial measures, para-tariff measures and visas. The study was based on an extensive survey conducted in several cities in India and Pakistan. Further, despite the two countries having liberalized their import regimes, Pakistan continues to follow a positive list approach towards Indian imports. The study identifies the ways in which this policy impedes Indias exports and recommends the dismantling of the positive list. It also identifies problems related to transportation, custom procedures, rules of origin certification and valuation and suggests measures to address them. The imposition and application of standards in India was perceived as a major non-tariff barrier by Pakistani exporters. The study found that even though the TBT and SPS measures are not discriminatory across trading partners, Pakistani exports to India are surely affected by these. Pakistan has an export interest in textiles and agricultural products which also happen to be sectors where import restrictions/standards are most rigorously applied by India. It also found that due to a restrictive visa regime only selected traders have access to trade-related information. Thus lack of transparency, market imperfections and information asymmetries on both sides raise transaction costs and restrict market access for several other aspiring traders.