South Asia Forum calls for regional economic union

Members of the South Asian Association for Regional Cooperation (SAARC), at the South Asia Forum here Thursday, called for removing tariff and non-tariff barriers to boost regional trade and investment and prepare a road map for regional economic union.

SAARC has eight members - India, Pakistan, Nepal, Bangladesh, Sri Lanka, Maldives, Bhutan and Afghanistan. Afghanistan is the newest member of the grouping, being admitted in the regional grouping in 2007.

Addressing the two day meeting of first South Asia Foundation in New Delhi, Pakistani delegation head Farzana Raja, who is a member of the National Assembly said the economic integration of the region should not be held hostage to historical legacies, differences and political disputes.

Farzana Raja called for implementation of the South Asian Free Trade Agreement (SAFTA) in letter and spirit. Nepal’s Land Reform and Management Minister Prabhu Sah said the implementation SAFTA was hindered by tariff, non-tariff and para-tariff barriers. He said SAARC members should take lessons from the success of economic integration in Europe and other parts of the world.

Earlier in his inaugural speech Planning Commission Deputy Chairman Montek Singh Ahluwalia of the Indian Government said "A range of tariff and non-tariff barriers, that have been erected in our region in the early years of our respective independence prevented businesses from developing value in the neighbourhood."

He said the South Asia region is geographically and culturally designed for the widest possible cooperation but in reality, is the least integrated region in the world and existence of tariff walls, problematic as it is, is in a sense as much a symptom of a problem as its a challenge in itself and hinders flow of trade and investment.

Referring to a World Bank report, Ahluwalia said intra-regional trade in South Asia is less than percent of GDP, as compared to over 20 percent in East Asia. "Cost of trading across borders in South Asia is one of the highest in the world."

Maldives Minister of Finance Ahmed Inaz said his country will reduce the sensitive list of goods by 60 percent as against 20 percent reduction required under the SAFTA. He emphasized on the need for allowing greater movement of people among the SAARC region.

Source: Sify Finance