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