For­mer Fi­nance Min­is­ter of Nepal, Mad­hukar SJB Rana speaks to Southasia in this ex­clu­sive in­ter­view.

Southasia - - CONTENTS -

What are the achieve­ments of SAARC so far?

SAARC’s most ma­jor achieve­ment is that it has man­aged to sur­vive de­spite the vi­cis­si­tude of the In­dia-Pak­istan re­la­tions and the in­abil­ity of their lead­ers to break out of the vi­cious grip of their na­tional pol­i­tics.

The sec­ond ma­jor achieve­ment of SAARC is its in­sti­tu­tion­al­iza­tion and es­tab­lish­ment of a cost-ef­fec­tive modal­ity for re­gional co­op­er­a­tion with full par­tic­i­pa­tion of all. A to­tal of 10 Re­gional Cen­ters have been cre­ated in ad­di­tion to the South Asia Univer­sity. This is no mean achieve­ment.

The third achieve­ment is the adop­tion of the So­cial Char­ter. This is a sig­nif­i­cant de­vel­op­ment for its con­tent as well as for the process in­volved which shows how dy­namic and in­flu­en­tial civil so­ci­ety of South Asia is as com­pared to other re­gional blocs in de­vel­op­ing so­ci­eties. In its ini­tial ob­jec­tives, SAARC aimed to cre­ate an en­vi­ron­ment of trust and un­der­stand­ing be­tween mem­ber states. How far has it suc­ceeded in this?

The SAARC Char­ter lays down eight sets of ob­jec­tives. One of them is “to con­trib­ute to mu­tual trust, un­der­stand­ing and ap­pre­ci­a­tion of one another’s prob­lems.” It is be­lieved that when Pres­i­dent Zi­aur Rah­man floated the idea of re­gional co­op­er­a­tion among South Asian coun­tries, In­dia and Pak­istan were taken by sur­prise by the very no­tion. Both won­dered where the idea orig­i­nated from. Con­sid­er­ing that the birth of almost all re­gional group­ings is ex­plained by an ex­trare­gional threat to their col­lec­tive se­cu­rity, which does not ex­ist in SAARC’s case, it was nat­u­ral that the two big­ger South Asian pow­ers were taken aback by the Bangladeshi pro­posal.

An­nual sum­mits have been in­valu­able to get the whole process mov­ing, par­tic­u­larly since the process was largely sup­ported by all the smaller pow­ers of the re­gion. Th­ese sum­mits also have prac­ti­cal ben­e­fits to all par­tic­i­pants who could use the op­por­tu­nity for solv­ing pend­ing bi­lat­eral is­sues, mostly stuck in bu­reau­cratic quag­mires, through per­sonal con­tacts be­tween sec­re­taries, joint sec­re­taries and di­rec­tor gen­er­als of each coun­try.

The process has also helped “to strengthen co­op­er­a­tion among them­selves in in­ter­na­tional fo­rums on mat­ters of common in­ter­est,” which is yet another im­por­tant SAARC ob­jec­tive. That said, many crit­ics have won­dered whether the cost of sum­mits have ex­ceeded the ben­e­fits of SAARC. To cur­tail pomp and fan­fare and to make it more business-like, it is now de­signed to meet bian­nu­ally.

How can SAARC work around the on­go­ing dis­putes be­tween var­i­ous mem­ber na­tions, par­tic­u­larly In­dia and Pak­istan?

This ques­tion has eluded our lead­ers for the 29 years of SAARC’s ex­is­tence. It’s a Catch-22 sit­u­a­tion and the catch lies in the Kashmir ques­tion with no signs of res­o­lu­tion. For Pak­istan it is the sine qua non of its very ra­tio­nale as a na­tion state. For In­dia it is the sine qua non for its ex­is­tence as a sec­u­lar state. Three of the four wars be­tween In­dia and Pak­istan have been over Kashmir.

SAARC can work around this by al­low­ing the pri­vate sec­tor of all mem­ber na­tions to take the lead and come forth with an eco­nomic char­ter. This business to business (B2B) co­op­er­a­tion and col­lab­o­ra­tion should be done in co­or­di­na­tion with the SAARC Sec­re­tariat and should be led by an em­i­nent per­son­al­ity like Rattan Tata. He can best lead and mo­bi­lize all the 55 plus South Asian billionaires, as iden­ti­fied in the For­tune 500 list, to come forth and unite for the cause of our re­gion and in their own col­lec­tive in­ter­est for their sur­vival and self in­ter­est as a highly priv­i­leged class in the wake of the un­prece­dented in­equal­ity, in­equity and ex­clu­sion of re­gions, classes, castes and eth­nic com­mu­ni­ties en­su­ing from the new era of glob­al­iza­tion.

This is the best way to se­cure the eco­nomic goal of the SAARC

Char­ter “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 re­alise their full po­ten­tials.” The World Or­der is chang­ing and new se­cu­rity threats are emerg­ing. How is SAARC pre­par­ing for this in terms of bet­ter co­op­er­a­tion be­tween mem­ber states?

SAARC was the first re­gional or­ga­ni­za­tion to sign a Con­ven­tion on the Sup­pres­sion of Ter­ror­ism. It is a his­toric break­through in in­ter­na­tional diplo­macy con­sid­er­ing the fact that the UN is yet to adopt the draft on the Com­pre­hen­sive Con­ven­tion on In­ter­na­tional Ter­ror­ism. The UN fal­ters be­cause of its in­abil­ity to de­fine ter­ror­ism and break­away from an at­ti­tude that tends to dis­tin­guish be­tween ‘good ter­ror­ists’ and ’bad ter­ror­ists’.

The SAARC Min­is­te­rial Dec­la­ra­tion on Ter­ror­ism solemnly pro­claimed, "We re­it­er­ate our com­mit­ment to im­ple­ment mea­sures against or­ga­niz­ing, in­sti­gat­ing, fa­cil­i­tat­ing, fi­nanc­ing, fund rais­ing, en­cour­ag­ing, tol­er­at­ing and pro­vid­ing train­ing for or oth­er­wise sup­port­ing ter­ror­ist ac­tiv­i­ties. We will take ap­pro­pri­ate prac­ti­cal mea­sures to en­sure that our re­spec­tive ter­ri­to­ries are not used for ter­ror­ist in­stal­la­tions or train­ing camps, or for the prepa­ra­tion or or­ga­ni­za­tion of ter­ror­ist acts in­tended to be com­mit­ted against other States or their cit­i­zens.”

How­ever, SAARC meet­ings on se­cu­rity is­sues have cen­tered only on pe­riph­eral is­sues such as smug­gling of goods and peo­ple, coun­ter­feit cur­rency and drug trafficking. While home min­is­ters have be­gun to meet pe­ri­od­i­cally, which is a move for­ward, what is miss­ing at the prac­ti­cal level are pe­ri­odic meet­ings by the lo­cal po­lice au­thor­i­ties. To put it sim­ply, SAARC is to­tally un­pre­pared to cope with the se­cu­rity threats em­a­nat­ing from the emerg­ing world or­der. The new­est se­cu­rity threat is cy­ber se­cu­rity. One reads about cy­ber hack­ers and cy­ber piracy where one is asked to pay ran­som for hacked files or face their dele­tion. Ex­perts are also speak­ing of the pos­si­bil­ity of cy­ber ter­ror­ism where in­di­vid­u­als seek to sab­o­tage nu­clear in­stal­la­tions, satel­lites, air­crafts, etc.

In the emerg­ing multi po­lar global or­der, South Asia will be at the fore­front of new se­cu­rity threats. The as­cen­dency of Mao­ism amidst land­less peas­ants and tribal com­mu­ni­ties suf­fer­ing acute poverty and de­pri­va­tion is one such threat. The sec­ond is the politi­ciza­tion of re­li­gion to make elec­toral gains.

South Asia will be the new vor­tex of the emer­gent real politic of the 21st cen­tury’s multi po­lar­ity. There­fore, se­cu­rity should and must be a cen­tral agenda for SAARC lead­ers, es­pe­cially if SAARC is to be a pow­er­ful re­gional bloc. It is time the SAARC lead­ers put aside na­tional se­cu­rity (as com­monly un­der­stood in mil­i­taris­tic terms to mean to safe­guard na­tional in­ter­est and val­ues) and be bold enough to hold di­a­logue on the ur­gent need for a "com­pre­hen­sive re­gional se­cu­rity” as a cen­tral the­matic agenda of SAARC hence­forth.

They should in­vite re­gional

think tanks, through the aus­pices of the SAARC Sec­re­tary Gen­eral to come forth with a time bound SAARC Com­pre­hen­sive Re­gional Se­cu­rity Char­ter to be adopted by the SAARC Sum­mit in 2018. How can SAARC na­tions de­velop their economies in a man­ner that their debt bur­den is re­duced?

It is dif­fi­cult to gen­er­al­ize debt pol­icy and man­age­ment at the coun­try level since SAARC coun­tries are dif­fer­ent in sizes and lev­els of de­vel­op­ment. Bangladesh, In­dia and Pak­istan are huge as com­pared to the other five na­tions. Four South Asian na­tions – Afghanistan, Bangladesh, Bhutan and Nepal – are clas­si­fied as Least De­vel­oped Coun­tries (LDCs) with only four – In­dia, Mal­dives, Pak­istan and Sri Lanka – cat­e­go­rized as De­vel­op­ing Coun­tries (DCs). Nepal is seek­ing to grad­u­ate by 2022. In­dia is in the G20 and also in BRICS that puts it in a dif­fer­ent league al­to­gether.

The fi­nance min­is­ters of SAARC coun­tries have sim­ply ig­nored the is­sue of debt and the scope of re­gional co­op­er­a­tion to de­velop lo­cal and re­gional bond mar­kets for their po­ten­tial ben­e­fit to the re­gion. Let us face the fact that fi­nan­cial mar­kets in South Asia are mostly bank dom­i­nated with eq­uity mar­kets de­vel­op­ing fast only in In­dia and Sri Lanka.

As a re­sult all South Asian fi­nance min­is­ters are at the mercy of the IMF’s con­di­tions which they ab­hor but do noth­ing to en­hance their fis­cal in­de­pen­dence. Most fi­nance min­is­ters be­lieve that since SAARC does not al­low cap­i­tal con­vert­ibil­ity, the is­sue of ex­ter­nal debt is only mar­ginal. The re­mit­tance econ­omy has come to the res­cue by ser­vic­ing for­eign debt even if the ex­ports are not as dy­namic as one would hope for. For­eign aid and debt for­give­ness too have pro­vided a thresh­old. Ex­cept for Afghanistan, the IMF would not be alarmed by the for­eign debt to GDP ra­tio of all other South Asian coun­tries.

De­vel­op­ment of lo­cal bond mar­kets and re­gional co­op­er­a­tion in debt man­age­ment would be a way for­ward. Re­gional co­op­er­a­tion in bond mar­kets will per­mit a broad­ened choice of in­stru­ments with which to man­age debt with a

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