Comment: South Asia should become single economic entity

There is an increasing realisation in New Delhi about the cross-benefits available to the country on social, political, economic and strategic fronts from its neighbours as they are bound to benefit from healthy bilateral and multilateral arrangements encompassing the entire South Asian region. The idea should be making the rest of the world see the South Asia region in its geo-strategic and politico-economic entity without individual nations having to compromise on traditional rights of sovereignty, as understood in the modern times.

Owing to a variety of reasons, both historic and management-related, India is the dominant force in South Asia. This fact cannot be ignored, over-looked or upset. Sovereignty rights do exist without compromise, but there is a greater understanding in all South Asian countries that it should be used as a tool for greater integration and inter-dependence, and not as a weapon to out-shout one another in terms of numbers in organisations such as the South Asian Association for Regional Cooperation (SAARC). Increasingly, SAARC summits that once used to be a periodic pause have come to acquire a certain degree of cohesion, direction and cooperation among member-nations.

This scheme needs to be further strengthened, so as to make South Asia a single economic entity while dealing with the rest of the world. Sovereignty would not be compromised if member-nations volunteered to surrender some to the regional forum themselves. Political controversies of the India-Pakistan kind have ceased to undermine the relevance and usefulness of SAARC. Such differences have often come in the way of regional cooperation taking faster strides. Yet, to expect SAARC to take any political initiative to try and resolve the problems between the ‘Big Two’ in the South Asian community is fraught with consequences for the regional entity, which is still fledging despite being around for 25 long years.

Over the years, a view had emerged among certain strategic thinkers in India that the neighbours stood to benefit more from a regional union than was the other way round. The real situation was always not so – and it continues to remain more so even today. India of the economic reforms era has to begin looking at South Asian neighbours not as a challenge in the global job market. It is a synergy all nations can build into a common cause, particularly in the services sector that they excel in. It is going to take a long, long way, to ensure that bilateral and regional cooperation of the kind, but time is no more on the side of South Asia, if it has to benefit from the existing advantages that once used to be seen as disadvantage.

Time was not long ago when the world used to growl at the growing population in countries such as China and India, the underpinning being that the rest of ’em all were being forced to produce food and other consumables for populous countries to consume without any check on their growth rates on this score. Magically over the past decades, both nations have become attractive markets not only for goods but also for investments. Controlled population in the developed world has re-engineered their perception of Third World countries like India and China for out-sourcing not only the 21st century services sector jobs but also their traditional manufacturing strengths.

Learning from the West

South Asia has lessons to learn from this new and changing perception of the West. New Delhi, to begin with, has to acknowledge that the entire South Asian region is a market for India and Indian investments in this continuing era of economic instability in the developed world. It is not unlikely that the ‘New Cold War’ between the West and China may lead to a situation where a weakened dollar could hit on the former more than the latter, both in terms of existing concepts and practices. Big-time Indian investors seeking to serve even the Indian markets may be attracted by the comparable costs prevailing in the manufacturing sector in some of the neighbourhood countries. Likewise, South Asian neighbours of India may find distinct advantages in doing business with and in India, not available to them elsewhere, particularly in terms of transportation costs, etc.

Economic integration would still require a lot more to be done, and thought of. The ‘big-nation-small-nation’ mix in the European Union and the ASEAN have shown the way for South Asia not to mix up sentiments with the business of planning for the future. For larger nations like India, and even Pakistan up to a point, to feel comfortable, nations of the region should unite not to encourage profligacy and also address governance and procedural issues in a big way. At the same time, they will have to fashion an economic model that addresses inherent socio-economic disparities that have political consequences, as is being evidenced at present in countries of the region after the IMF-dictated economic reforms came into force. This would be a departure from the IMF model that all of them have got accustomed to but may have to deviate from.

In sectors like education and engineering, agriculture and automobile sector, healthcare and rocket science that India has a lot to offer the neighbourhood. None of these nations can grudge India for what it is. The sheer size of its landmass, economy and market has together made it an attractive investment proposition. There is this realisation in all the neighbourhood countries that they should also seek to benefit from the current Indian boom and participate in the processes involved. At the same time, there is also a need for India and Indians to recognise the talent-pool that these nations have to offer, particularly in the labour sector. Encouraging this pool in positive ways alone would help India create the markets that it would need to seek in the immediate neighbourhood, to benefit from the logistical and transportation advantages that proximity has to offer.

The Indian decision to create a `50,000-crore fund to help nations in need would go a long way in fostering better relations in the neighbourhood, if administered as effectively and efficiently as intended. The taste of the pudding is in the eating, and nations and people in the neighbourhood and also elsewhere in the world could appreciate the Indian assistance, only if it is both adequate and timely. In countries like Sri Lanka and Maldives, and also in the extended South-East Asian neighbourhood, nations were appreciative of the Indian intervention when tsunami struck in end-December 2004. In money-value, the Indian decision to rush Navy, Air Force and medicines to the affected people in these countries was not as substantial as on many other occasions. But I t was the timeliness of it all that came to be appreciated, including the fact that New Delhi had rushed help when parts of India were also similarly affected by tsunami. In tactical terms, it also proved the preparedness of the Indian armed forces to rush aid to the neighbourhood without much of a notice.

Ending ‘Cold War’ perceptions

Independent of economic perception is the evolving regional strategic consideration that South Asia has to learn to live as a single unit in overall terms if individual nations have to be secure and feel secure. Barring India, no other nation in the region has to fear for extra-territorial aggression of any kind. Their security concerns are domestic in nature, or are based on their perceptions of India, flowing from a collective ‘Cold War’ past. In the case of former, linkages are beginning to be made as to how problems can multiply for everyone if the regional nations did not work together — or, do not stop targeting one another.

In terms of their perceptions of India, New Delhi has been doing enough over the past decade and more, to make individual nations of the region, including Pakistan, feel friendly. India too continues to be affected by its memories about the role individual nations of the region could play to make it feel insecure in different ways. Where nations could not take on India directly, whatever their perception and consideration, they were known to have provided base for other adversaries of India to do so. Whether it was a strategy or tactic, their attempts had paid off in terms of making India feel uncomfortable, if not aggressive.

Steeped in contemporary history as also the distant past, the chances would not occur overnight, but here again there is a need for everyone concerned to acknowledge that time is running out, after all. Political India is however beginning to understand the complexities in multi-lateral relations, where individual neighbours are seen as trading with extra-territorial powers, in terms of politics, economic cooperation and infrastructure creation. There is also an emerging understanding all-round that their strategic security is closely linked, and any effort at inducting extra-territorial powers would have an economic and developmental cost to play — which their domestic constituencies might not countenance hereafter.

In this context, it is necessary for everyone, including India, to acknowledge that the packaging development aid (in whatever form) is also a way for extra-territorial powers to acquire strategic depth in the region. The question now will be to accept certain realities, including problem areas, and address the issues in a forthright manner in which solutions are found. A road-map for collective development has to be laid out and practised in ways in which they do not hamper the strategic security cooperation that these countries have to adopt – but become part of that process, too. The step-by-step approach adopted by SAARC may not be fast but it is the right way. As resolved by them at the Addu Summit in Maldives in 2011, it would be a good idea if the SAARC nations meet the goals set for them before the next Summit, and yet fast-track the processes in ways that the political leaderships would find the need for shortening the deadlines for individual and collective action, without having to extend them, indefinitely.

Yet, political issues will remain, as between India and Pakistan, but not exclusive to them alone. Even smaller nations such as Nepal and Bhutan, for instance, have issues between them. Problems flowing from governance apparatus and decision-making processes remain. Though most South Asian nations had inherited the British colonial model, post-Independence, many have reverted to the pre-colonial model of personalised decision-making apparatus but under a constitutional, democratic scheme. Though in India, too, personalised politics is a hallmark, structures of decision-making remain intact. In Pakistan, at different levels, the armed forces may have their say. Differences in perceptions among South Asian nations about the decision-making processes in others have often led to confusion and consternation. Either they put their heads together to work on a common governance scheme for them all to draw from, or learn to live with whatever they have in others, instead, and work together, still.

The writer is a Senior Fellow at Observer Research Foundation

All comment pieces are the sole view of the author and do not reflect the editorial policy of Minivan News. If you would like to write an opinion piece, please send proposals to [email protected]


11 thoughts on “Comment: South Asia should become single economic entity”

  1. I wish this writer's dream come true as we all know such a full union between all the SAARC nations will make us all strong nations in everyway. But we all this is not going to happen unless India and Pakistan makes real and genuine peace, a PEACE which lasts forever. The only and main reason why SAARC is still nothing more than just an annual summit is because of the problems between the TWO BIG nations in the SAARC. And the main reason why there is no peace between these two countries is KAshmir. Unless Kasmir is not resolved, short term peace talks between the two countries will always last only for few weeks or months maximum. For an everlasting peace, Indian should withdraw all its millitary forces out of Kashmir and talk sincerely with Pakistan to resolve the Kasmir issue. In return Pakistan should stop sponsoring or harbouring its territory for terrorist activities in Kashmi and sit down with India to resolve Kasmir issue sincerely. Other issues like Indian sponsor terrorist activities in Pakistani Balochistan and Pakistani sponsored anti India hatred should also be resolved. The two countries should sign nuclear peace deals and zero tolerance for any kidn if violence and terrorism against each other. This is the only thing they have been unable to do so far.They have been talking and meeting over the decades but non of the two nations have had a solid politician to sincerely agree into these issues sincerely. I hope the hopeful next PM of Pakistan Mr Imran Khan could achieve these goals with India. He seems very genuinely and the only uncorrupt politician Politician has so far ever seen. But he alone cannot do anything. We would need a similay sincere politician from the Indian side too to bring about peace between Indian and Pakistan. I hope we, the rest of the SAARC nations get to see this day soon and witness SAARC boom to great day in the history, as fully developed nations.

  2. Should South Asia should become a single economic entity? Why? What for? And who would win with that?

    Like we say in the police, who profits from the crime?

    Dear all, I don't want to be too long on my comment, I don’t want to be boring to you, but how can I otherwise react on the subject with consistency if not by developing some ideas?
    Lets see what’s in the article and maybe take advantage of the first artificial economic entity called Europe as you know. Point one: it is very suspicious that the article talks about an economic entity but says nothing about respect for other cultures. India is not a good example at that is it? Just look inside their house to understand it. How many regions and how many fights and murders? So before talking about a bigger house it would be better to set things internally. Put order first and create an empire after. Nevertheless I'afraid they already started as MLE airport belongs now to them and, at least for the moment, unless you, The Dhivehi people, do something as you still have time, you already lost the sovereignty over one of your most strategic national (use to be) owned assets: the airport.
    Europe was the first to think about uniting a continent with a economic fence. Shame on us!!! shame on us !!! Towards the people the message was: let's be just one europe, free, great and rule again the world …(:-) but behind the curtains the real message was: let's have a bigger market for the european corporations and let's milk better the europeans by putting them into a single shoe box. The result is very visible today and Greece has just recommend to step out the EU market. Irland is suffering and so is Portugal. Spain is on its way and has to tight the belt in order to not follow Greece (our Queen is Greek) and Italy as usual is doing it's mambo-jumbo no keep up. So, please be careful, there are plenty of snake enchanters. Your airport is already gone, whats after?
    Antonio V. ( former teacher of business management & development at the Pompeu Fabra University Barcelona, international management executive coach, psychologist expert in management stress disorders and ex-owner of a business in the Maldives)

  3. No way!

    India is trying to enforce Budda-worship to the maldivians. We know better.

    They are Hell-dwellers. We are going to Heaven.

    Indians are jealous.

    We know their cunning ways. They are learning from Jews.

  4. Dream on. Better talk about a world government with New Delhi as the capital.

    South asias is the most diverse and asymmetric part of the world and anyone contemplating such a wild thought ought to have his head examined. Why not talk of solving regional conflicts first

  5. Yes, why not just hand over our monetary policy to someone else.

    There are regional variances within so called 'single bloc' economies, and a currency value that is geared towards benefiting Indian export industries may not be so beneficial to us.

    Our monetary policy should be set by our central banks; by educated, competent Maldivians, who understand the nuances of our economy; not by Hrithik Bachans flipping coins to discern whether or not their four-armed Oogah-Boogah Elephant-Gods approve of the policies they want to put into effect.

  6. I suspect this is the Indians trying to emulate the European Union, not merely for the economic benefit it brings but to mitigate the severity of the conflict they have ongoing with our Pakistani brethren (refer to the history of Germany of France to gain a contextual perspective).

    Though, to iterate, what benefits Indias exporting industries with regard to a currency value or their political aspirations for regional hegemony within South Asia, are not necessarily in alignment with Maldivian interests.

    If prosperity is what we seek, and we are willing to alter the structure of our government to do this, and we are willing to do what it takes to make it so - then, instead of listening to the lunatic ramblings of the mad Kuffar, there are other sources to which we can turn to for guidance and good ideas.

    Ideas that have been mightily successful for, and remain unsurpassed in 1400 years.

  7. Pipe dreams.

    Competing interests within our region make it difficult to achieve regional integration within 5 or 10 years.

    Take the Maldives for example. Our trade is mostly with Europe. Our current government is heavily influenced by Britain. Our foreign policy is actually dictated by these influences.

    Our economy is dependent on tourism for which the main source market is once again Europe.

    These are real issues which need to be addressed in the longer term. Also American foreign policy goals conflict with those who wish to promote peace between regional giants Pakistan and India.

  8. If you have to take a decision and not be alone in the world constellation, (just in case you cannot be alone as a country ...) maybe it would not be a bad idea to request Europe to become an attached country just like Puerto Rico has done with the US since long. You would keep your full sovereignty and would have a participation in the European parliament and as you clients are mostly from Europe, the tourism would be assured and fully integrate within Europe. Maldives would benefit then from all European structures army included, but with your own parliament and laws and rules. I am not talking about becoming a member of the Union, like Turkey wants to be come, that would not be good for the Maldives and politicly is not possible as Europe is still very racist on religion matters, but being an associated country would surely bring you advantages. It would be like a joint-venture contract where you don't loose your freedom. Nothing to do with give away your assets like you did with the Airport. People in Puerto Rico are independent but benefit from the structure and policy of US. Of course in such a JV there are always risks and duties as well. You are now a member of the Commonwealth but honestly I don't see any wealth to be common. It would something like enlarging the circle, but I repeat, only if you need it from a political point of viw. Europe is not doing so well these days.

  9. @Tsk tsk

    "These are real issues which need to be addressed in the longer term. Also American foreign policy goals conflict with those who wish to promote peace between regional giants Pakistan and India."

    The Cold War ended champ, that's one of the few things this "commentator" got right. In the event that you still haven't recovered from your senility, (lets not accuse me of being someone else this time 🙂 ) General Zia-Al Haqs (who the Americans indeed funded) days ended a long time ago.

    American foreign policy goals with regard to Pakistain, today, are to use it as base to monitor Afghanistan - they have no interest in exacerbating the tensions between Pakistan and India.

    It is the Pakistani inter service intelligence (ISI) that continue to surreptitiously fund and equip the Taliban to use them as proxies in the Kashmir squabble. While you can make an arguement that American funds are an indirect contributor to this - Pakistans behaviour with regard to their "double game" are not in alignment with American foreign policy goals; in fact, the United States have condemned Pakistans sponsorship of anti-India militants.

    Partly that's because the U.S stands to lose from increased hostilities between the two regional giants - as any conflict would propel Pakistans insane military to a position of authority that its civilian government couldn't even dream of aspiring to, and the Amerians prefer to work with a corrupt civilian government instead of a corrupt Military that is known to contain strong anti-American elements.

    As much I despise them, it is not the Americans that are preventing peace between Pakistan and India. The logic of Nuclear deterrence currently keep the peace somewhat and, given those parameters, the cost benefit analysis of India taking a more belligerent stance depend entirely on wether or not Pakistans ISI continue to aid elements that are willing to target Indian civilians.

  10. Maldives should chose to become an attached overseas country of EU. Let go SAARC. The latter will not give us anything except violence and extremism.

  11. @Dhivehi Hanguraama:

    I was merely referring to the preferential nuclear deterrent policy and the gradual gravitation of Pakistan towards China which in turn has led to more maneuvering on the part of the U.S.

    Peace between the nations is of course favorable to the current goals of the U.S. However, those goals will of course be determined by those in power and relationship between China and the U.S. if I understand correctly. In which case more preferential treatment for India may be expected leading to what some say might be increased tensions between Pakistan and India.

    I agree with your view however. I never claimed that Cold-War foreign policy was the reason for American interests possible interfering in peace between India and Pakistan. That was all you son.

    All I said was that Pakistani-Indian relations are a quagmire with U.S. interests interfering in the form of third-party goals along with China's growing influence. This leads me to have the senile opinion that regional integration in our region is a long way off. Also my concerns about the Maldives and its relationship with the rest of SAARC was what I was mainly focusing on.


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