The New Nation - Internet Edition

Dr.Abdul Ruff

Leaders of the eight SAARC nations are expected to take part in the 15th SAARC Summit scheduled in Sri Lanka on August 2 to 3. According to the available information, the host Sri Lankan President Mahinda Rajapaksa, Pakistani Premier Yousuf Raza Gilani, Bangladesh Chief Advisor Fakhruddin Ahmed, Nepal Prime Minister Girija Prasad Koirala, Bhutan Prime Minister Jigme Thinley, Maldives President Maumoon Abdul Gayoom Prime Minister Manmohan Singh and the new member Afghanistan President Hamid Karzai will participate in the Summit to discuss mainly the economic issues of the region.

Besides, this year's Summit will be observed by seven States, namely, China, the European Union (EU), Iran, Mauritius, Japan, Korea and the United States. The representatives of the Observer States who will take part in the main summit are Chinese Vice Minister of Foreign Affairs Wu Dawei, EU Director-Asia James Moran, Iranian Foreign Affairs Minister Monoucher Mottachi, Mauritius Minister of Agro Industries and Fisheries Arvin Bolell, Korean Vice foreign Minister Kwon Jong Rak and Assistant Secretary to the US Bureau of South and Central Asian Affairs Richard A. Boucher.

It is envisaged that the Colombo SAARC Summit would map out and deliberate other sources of alternative energy. Further, the Colombo Summit would focus on enhancing air connectivity between and among the member countries. The connectivity could lead to a great degree of economic and commercial activity such as enhancement of tourism, intra-regional investment and trade, international joint ventures and people to people contact among others. Special focus would be on the price rise and oil crisis. India insists on debating upon issues like "terrorism" and keeping in view of the latest "terror attacks" in India (at a time when India was losing cricket in Sri Lanka and the impact of defeat was reduced by them), the SAARC would discuss the issue, including state terrorism.

The Summit will address issues like standardization of goods, cost-effectiveness, transportation costs, the operational aspects and other concomitant dynamics of the SAFTA as well. The SAFTA could be the catalyst to transform and evolve the region of SAARC as a free trade area, thus increasing the bilateral and multilateral trade of goods. It may also be stated that hosting a Summit with such a pantheon of South Asian leaders and other global dignitaries would reflect the stability, capacity and finesse of the country, thus stimulating economic and commercial activity. The Summit would ponder over other methodologies to implement tele-medicine, visa free entry among the member States and facilitation of religious pilgrims among others. These economic initiatives and propositions would have a direct impact on the economic fabric of the country.

Sri Lanka would be assuming the Chairmanship of the most populated and one of the most endowed regional blocs in the world. It estimated that the total cost of the SAARC Summit in Colombo would be in the vicinity of SLR 2.8 billion or US$ 27 million. Compared to the importance of security at the recently held G-8 Summit in Japan, known as Hokkaido Summit, the cost of security alone was an exorbitant figure of USD 280 million. The assumption of the Chairmanship of this regional bloc would reflect the proactive engagement of Sri Lanka in geopolitical and geo-economics issues in the region, which in turn would transcend to Asia in particular and the rest of the world in general.

Primarily for economic integration and integrated development in the region, the South Asian Association for Regional Cooperation (SAARC) was established on December 8, 1985 by eight countries in Southern Asia, namely India, Pakistan, Bangladesh, Sri Lanka, Nepal, Maldives Bhutan, and Afghanistan (2007) and, like ASEAN, D-8, and G8, etc., it is an economic and political organization forging ties with several international and regional forums.

Comprising the Foreign Ministers of Member States, the Council of Ministers is responsible for formulating policies, reviewing progress, deciding on new areas of cooperation, establishing additional mechanisms as deemed necessary, and deciding on other matters of general interest to the Association. The Council meets normally twice a year and may also meet in extraordinary sessions by agreement of Member States. With a Secretariat established in Kathmandu on 16 January 1987, SAARC was founded to promote peace, stability, amity and progress in the region through strict adherence to the principles of the UN Charter and Non-Alignment, particularly respect for the principles of sovereign equality, territorial integrity, national independence, non-use of force and non-interference in the internal affairs of other States and peaceful settlement of all disputes. The idea of regional cooperation in South Asia was mooted in May 1980.

The Objectives of the Association as defined in the Charter are: to promote the welfare of the peoples of South Asia and to improve their quality of life; to accelerate economic growth, social progress and cultural development in the region and to provide all individuals the opportunity to live in dignity and to realize their full potential; to promote and strengthen collective self-reliance among the countries of South Asia; to contribute to mutual trust, understand and appreciation of one another's problem; to promote active collaboration and mutual assistance in the economic, social, cultural, technical and scientific fields; to strengthen cooperation with other developing countries; to strengthen cooperation among themselves in international forums on matters of common interest; and to cooperate with international and regional organizations with similar aims and purposes.

Although economic cooperation is chief goal of the organization, over the years, the SAARC members have expressed their unwillingness on signing a free trade agreement. Like the G8 and WTO, the SAARC is supposed to take collective corrective measures for economic development of the region. The key function of the SAARC is economic cooperation and collective decisions. The Agreement on SAARC Preferential Trading Arrangement (SAPTA) was signed in Dhaka during the 7th SAARC Summit, in 1993. It aims to promote and sustain mutual trade and the economic cooperation among the South Asian States, through exchanging concessions. Later, with the broad objective of moving towards a South Asian Economic Union (SAEU), the SAARC Member States signed the Agreement on SAARC Free Trade Area (SAFTA) on 6 January 2004 at the 12th SAARC Summit held in Islamabad and came into force on 1 January 2006. SAFTA has six core elements covering trade liberalization program, rules of origin, institutional arrangements, safeguard measures, special and differential treatment for least developed countries (LDCs), and dispute settlement mechanisms.

Its sphere of influence is the largest of any regional organization: almost 1.5 billion people, the combined population of its member states, but has one of the highest number of people under the poverty line and the current development of the region is far from satisfactory. The concept of connectivity, as stated earlier, has a number of economic as well as political and social benefits to the member countries.

SAARC is one of the weakest regional cooperation forums in the world as the actions for dis-connectivity take an upper-hand over even the normal process of collective organization. As a result, the intra- regional trade of the SAARC is still at a dismal figure of approximately 5.5% of the total trade of the member countries. Strong and well established degree of connectivity and partnership between and among people and member countries could increase the share of intra-regional trade markedly.

Summit would also focus on economic, trade and investment aspects as well. The newest member of the SAARC, which is Afghanistan, would offer increasing opportunity in the realm of construction and re-development. Seven Observer States too would be engaged in bilateral discussions. Given this context, one could comprehend the fact that these seven Observer States are not only affluent and economically and politically endowed but also belong to many regional and economic groupings.

For any given country, particularly the member countries of SAARC, the human resource base would be of paramount significance and importance for the development and advancement of the respective countries. One could foresee that a Development Fund of this magnitude and scale would benefit most of the countries with regard to, particularly, the construction and advancement of their infrastructure. It is no doubt that the Colombo SAARC Summit would lead to physical economic and commercial benefits to all member countries. The establishment of the SAARC University should benefit all the member countries in enhancing the human resource development and marketable skills and knowledge. The establishment of the SAARC Development Fund (SDF) which consists of US$ 300 million would be used for development purposes in all aspects.

Bilateral Agreements among the member-states also would be clinched in the Summit or on the sidelines of it. For instance, it is slated that India and Sri Lanka would sign key agreements such as Science and Technology, National Thermal Power Corporation of India (NTPC) and CEB of Sri Lanka, and Power Grid Transmission Agreement.

Regional peace is the key to strong economic development of the region. SAAC should consider influencing India to consider surrendering sovereignty back to the struggling and dying Kashmirs. Kashmir should, in due course, join the SAARC as a member to play a constructive role in its activities. UN should be pressured to resolve the freedom issue of Kashmiris from occupying India in their favor.

Shared power, energy, food and other natural and human resources can make wonders for the South Asian region gifted with plenty of them. But mutual suspicion and hatred have harmed the process of any purposeful cooperation among the SAARC members.

That is unfortunate. It is equally important for the member States and particularly for the Chair of the SAARC, Sri Lanka to continue to establish and promote greater connectivity in all aspects. The theme of this year's Summit, which is SAARC Partnership for People, would make a strong impingement on further development of the region.

There are several issues that need concrete decisions and immediate follow-up action by the SAARC leaders. Of these, the first priority needed to provide uninterrupted, direct, and cheap communication links between the SAARC nations, either without the requirement of visa or liberal visa regime. Some SAARC countries already have this facility for their citizens that need to be extended to all others.

India should shelve the age-old practice of fusing terrorism plank to keep itself away from sharing collective responsibility for economic revival of the region. Similarly, the restricted travel and goods transport facilities by cheaper modes like railways and road transport should be open to the citizens of all SAARC countries having their countries' travel documents. It is strange that one cannot travel between Peshawar and Dacca while the same was possible about a century ago.

SAARC has so far kept internal and bilateral issues outside its scope while its members and even the Summit leaders do make a mention in their official addresses. Sensitive internal issues with political implementations should continue to be dealt with separately while there are many an issue that were of immediate concern for the economic development of the region and its countries. US-Afghan and Sri Lankan officials also must have talked about the activities of Taliban and Tamil Tigers as they consider them to be "terrorist" bodies.

What makes our governments reluctant about opening up the travel facilities that would generate billions worth tourism between these countries who have so much to see and enjoy in each other's country? And why should someone not drive in less than 48 hours from Kathmandu to Lahore and enjoy an overnight stay in some Indian city in the UP. Isn't it absurd that such a travel has turned into a dream in the post 1965 decades despite the establishment of SAARC?

Price rise? When some of the SAARC nations face staple grain shortage while some have surplus available. SAARC should save them of the exorbitant rates being charged by multinational corporations (MNCs), who have earned huge profits at the cost of developing countries whose markets they were pressing through the WTO to be opened for the imperial loot. Instead of opening the markets for MNCs, it would be in the interest of regional cooperation to open the same for countries in the region.

Regional cooperation among SAARC nations could do wonders with the development of electric power generation and the provision of alternate energy sources. It was not hydel and coal alone that could generate the required megawatts (MW) of electricity but there could be combined efforts to develop wind and solar energy. SAARC leaders need to demonstrate political will and restrain themselves from subverting mutual cooperation where it was beneficial for all.

Of course, there do exist genuine suspicions and fears on several issues. One would not expect an overnight change in the mindset of the decision-makers and even other sections of public who have lived their lives hating the neighbors more than others. This hate game is not only between adherents of different faiths but also amongst them. The feelings were easily discernable, say between India and Pakistan; India and Bangladesh and India and Nepal and even amongst Pakistan and Afghanistan. There was no denying the fact that. But instead of nursing them while living with the same and looking ahead in future would be more desirable.

Need of the hour is a collective effort by all the countries of the region for relieving millions and millions of their citizens from poverty and deprivation that it accompanied. Among the member-states India seems to the strongest and richest and it has to shoulder prime responsibility in keeping the SAARC well-knit and economically strong and cooperative. Issues like economic integration, combating terrorism and anti-Islamism should find their due place in the Summit. The region's development and prosperity of its around one and a half billion people remains hostage to myopic forces of the status quo with the result that almost half of their population lives below the poverty line and points to a colossal waste of human resources.

It is anticipated that the Colombo Summit would focus on increasing connectivity not only air connectivity but by land and by sea as well. The Connectivity and Partnership would lead to closer cooperation among the member States in many spheres such as trade, services, food security, tourism, oil and natural gas, and investments as well as FDI/FII among others.

It should be realized that there is no possibility of poverty alleviation or sustainable development or real people's welfare in SAARC community, unless collective efforts are consciously made for mutual trust and constructive cooperation among the SAARC members. India the so-called fastest growing among the developing nations should take the organization a bit more seriously.

Kang Seok-hoon

Life has its ups and downs. We have to act properly on the uphill road in order to succeed. But acting properly on the downhill road is much more important. In most people's lives, success or failure is determined by competition on the downhill. In economy, too, there are up and down cycles. The Korean economy is now about to slump, despite the absence of a boom over the past several years.

Like a human life, success or failure of government economic management is determined during a downturn. The problem with President Lee Myung-bak's economic policy seems to be that his administration is determined to make Korea an exception to a worldwide economic downturn. Considering today's globalised economic structure, such an attempt can hardly succeed.

Through our own experiences, we're already aware of what happens when the Korean economy moves in opposite direction from the global trend. In the early 1990s, when the world economy was weakening, the Korean economy was booming At that time, the entire nation was bustling with construction work under a government drive to build 2 million housing units. In the early 2000s, when the global economy was again backpedaling, the Korean economy posted extraordinarily strong growth. At that time, credit card companies were indiscriminately doling out cards on street corners, urging consumers to enjoy themselves.

But the boom times brought us only short-lived pleasure. When the global economy began to recover, Korea was forced to suffer from the side effects of its economic boosters.

The same mistake should not be repeated. The Lee administration, which vows to pursue pragmatic policy lines, is now being asked to pay attention to the disparities of an economic slowdown.

In Korea, economic upturns tend to benefit everyone, though to varying degrees. In bad economic times, however, the lower income people suffer the most. When the economy slows, sales at luxury hotel restaurants remain unchanged, but sales at small-scale neighbourhood restaurants fall sharply.

Salaries of regular workers at conglomerates are not affected much, but non regular or part-time workers lose jobs or assignments. Eventually, the middle and low income people feel the brunt of the slowdown, and small and mid-sized enterprises that depend on middle-class consumers are driven to the brink.

The government needs to establish temporary income-boosting policies to help the people below the middle-income class survive an economic slump. Tax cuts that benefit low-income earners are necessary. Tax-exempt financial products should also be introduced and the government needs to reinforce its loan guarantee programme.

Attention to small and medium-size enterprises also is needed. The focus of the Lee administration's "business-friendly policy" should be on small businesses, rather than conglomerates.

In addition, the government has to further reinforce policy mechanism to boost fair competition and coexistence between large and small businesses. Small and medium-size companies should be given greater state support to beef up their R&Ds and hire superior employees. Small businesses struggling with troubled overseas investments also deserve government attention and support.

The Lee government, under fire for the appointment of controversial scandal-tainted figures as Cabinet ministers and presidential secretaries, can be truly loved by the public, if it makes sustained efforts to support lower income people weather an economic downturn.