Saarc in limbo, rethink concept of South Asia

unday, December 8 was South Asian Association for Regional Cooperation (Saarc) Charter Day. On this day in 1985, seven South Asian countries—India, Pakistan, Bangladesh, Bhutan, Nepal, Maldives, and Sri Lanka—convened in Dhaka and signed a charter to establish Saarc to promote peace and development in one of the world's poorest and least integrated regions, which has historically been marred by conflicts.

- Prabhash Ranjan

In terms of economic integration, Saarc set ambitious goals, such as the formation of a South Asian Economic Union (SAEU). This would be a trade bloc where all member countries would adopt common policies regarding the movement of goods and a unified external trade policy. Ultimately, Saarc aimed to develop into a common economic and monetary union, which would entail having a single currency. These objectives were reiterated during the last Saarc summit held in 2014.

After 39 years since its establishment, it can be said that Saarc has spectacularly failed to achieve any significant regional integration. Rather than becoming an economic union, South Asia is not even a dynamic and functional free trade area. Although the South Asian Free Trade Area agreement was signed in 2006, intraregional trade within South Asia remains a meagre 5.6% of the region's total trade. This figure becomes even more striking when compared to the intra-regional trade rates of 25% in Asean and 22% in Sub-Saharan Africa. Additionally, Saarc countries have signed the Saarc Agreement on Trade in Services to enhance intraregional trade in services, yet the level of trade in services within South Asia remains very low.