SAARC revisited

By Javid Husain

The absence of a long-term sense of direction has been a perennial feature of Pakistan’s foreign policy since its independence. This shortcoming has been the direct result of the lack of vision on the part of our policy makers about the place and the role of our country in the comity of nations and the disease of day-to-day thinking which afflicts our leaders and officials collectively. There is no issue which has suffered more from these collective failings of ours than our membership of the SAARC. It appears from a close examination of the way we have handled the SAARC issues that neither our leadership, nor our officials have paid serious attention to the long-term goals that we wish to achieve through our participation in this regional cooperation organisation. We have not bothered to carry out an in-depth study of the long-term potential of the SAARC as well as its limitations. The focus instead has been on making tired clichés, frivolous statements and invalid comparisons with the experience of the European Union. The cacophony of voices coming out of the Pakistani leadership after the recently concluded 16th SAARC Summit at Thimphu reflects this confused state of mind rather than clarity of thought.

It is true that regional economic cooperation has been successful in accelerating the economic progress of the member states of many regional cooperation organisations, the foremost being the European Union. The process of economic integration within the EU has resulted in unprecedented economic prosperity of its member states thus providing an impetus for the establishment of similar regional cooperation organisations in other regions like ASEAN, MERCOSUR, GCC, ECO and SAARC. However, the record of these organisations in promoting regional economic cooperation and accelerating the economic growth and development of their respective member states varies from region to region depending upon their economic conditions, cultural affinities, political and security conditions, and strategic goals.
The economic rationale for a regional economic grouping rests primarily on the advantages of free trade among the member states. The operation of the law of comparative advantage through the dismantling of trade barriers among the member states leads to an efficient allocation of resources and increase in their gross domestic product. The greater the economic comple-mentarities among the member states, the greater would be the potential for intra-regional trade and the resultant beneficial effect in the form of increase in gross domestic product. The ability of a regional economic grouping to realise fully its potential for economic cooperation depends upon the political will of the member states which in turn is determined by three main factors: firstly, the state of political relations and climate among the member states, in particular the existence or absence of serious disputes between the member states; secondly, the harbouring of hegemonic ambitions by one or more member states; and thirdly, the feeling of cultural commonality and affinities among the peoples of the member states.

The trajectory of the evolution of regional economic groupings moves from the establishment of free trade areas to customs union, and then to economic union in which for all practical purposes the member states are unified as one market and one economy. Inevitably, as the process of economic integration takes place in a regional economic grouping leading to an economic union, stresses and strains do develop because of the restructuring of the economies of the member states. In addition, the market forces operate in such a manner as to shift the locus of economic decision making to the economically powerful member states. The feeling of cultural commo-nality helps in overcoming these strains. The European Union has been able to move successfully through the various stages of the evolution of a regional economic organisation because it fulfils the necessary conditions for its success. Above all, the peoples of the EU member states feel that they have a common cultural heritage whose roots can be traced to ancient Greece, the Roman Empire and Christianity.

On the other hand, the SAARC has failed to take off because it lacks the necessary conditions for the success of a regional economic organisation. As far as the economic side is concerned, the economies of many of the SAARC member states are competitive rather than complementary thus limiting the scope for increase in intra-regional trade and the resultant beneficial effect in the form of increase in GDP. This is particularly so between the economies of Pakistan and India which are competitive rather than complementary in such sectors as textiles, agriculture (e.g. rice), carpets, simple manufactured goods, etc. This, however, is not to deny that a more liberal trade regime between Pakistan and India on a level playing field will be to the advantage of the two countries.

More importantly, the SAA-RC lacks the necessary political conditions for its success. Its biggest member, India, harbours hegemonic ambitions in the region with the objective of bringing its neighbouring states in South Asia under its domination. India again has serious disputes with many of its neighbours, particularly with Pakistan with which its relations have been bedevilled because of wars, the Kashmir dispute and differences on many other important issues such as Siachin, Sir Creek, the water issue and terrorism. In short, the political relations and climate between Pakistan and India are not conducive to the deepening of economic cooperation and integration between the two countries within the framework of the SAARC on the lines of the European Union. Finally, the peoples of Pakistan and India lack cultural affinities and the feeling of cultural commonality which form the bedrock for the process of the deepening of economic cooperation and integration within a regional economic organisation. After all, Pakistan’s creation was based on the well-considered view that the Muslims were culturally distinct from the Hindus and constituted a separate nation. Therefore, the process of economic and political integration within the framework of the SAARC would negate the very rationale for the creation of Pakistan.

For all of these reasons, our leaders and senior officials would be well-advised to order a detailed specific study on the long-term pros and cons for Pakistan of the process of economic integration in SAA-RC. We should deal with the various SAARC related issues in the light of the findings and conclusions of such a study. My belief is that a comparative study of the SAARC and the Economic Cooperation Organisation (ECO) would conclude that for Pakistan it would be much more beneficial to concentrate its energies on the deepening of economic cooperation and integration within the framework of the ECO, which fulfils all the necessary conditions for the success of a regional economic organisation, rather than SAARC which can be useful only for limited schemes of economic, commercial and cultural cooperation. An economic union within the framework of the SAARC will rob Pakistan of its economic independence by shifting the locus of economic decision making to New Delhi.

The writer is a retired ambassador.