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

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Maldives a good ear for SAARC think-tank pointers

“A lot of countries in South Asia don’t see solar energy as a main power source – yet. Let’s put it this way: Maldives does.”

Tomislav Delinic, Director for Regional Program SAARC at German political organisation Konrad Adenauer Stiftung, believes the Maldives has a significant role to play in improving environment and energy policies across South Asia.

“Every country needs to find its own most suitable solutions, but it should also share these solutions with others,” he said. “Since the Maldives is pushing forward the renewable energy sector, it can be an asset for the region.”

Renewable energy has been a leading issue for researchers at the Consortium of South Asian Think-Tanks (COSATT) this year. COSATT is an informal non-profit organisation convened by the Institute of Peace and Conflict Studies (IPCS) to bridge policy research in South Asia.

Since 2008 COSATT has developed annual SAARC summit themes into year-long research projects for and by South Asian think-tanks. Previous topics include trade, connectivity, and counter-terrorism.

Delinic was one of several participants in COSATT’s third and final meeting held at Bandos Resort between Tuesday, October 11 and Thursday, October 13.

“We know South Asia lacks connectivity and we try to bridge it by bringing together leading think-tanks which are politically engaged to discuss the most important issues of connectivity,” said Delinic.

Last year’s topic, ‘Green Asia’, lead COSATT to organize a 12-month international research project on environmental security and renewable energy. Research institutes from all SAARC countries have contributed to a summary publication, released yesterday, as well as an eight to ten page letter of recommendations, to be submitted to policy makers prior to the SAARC summit in Addu this November.

The Maldives is figuring into COSATT’s 2011 recommendations in important ways.

The President’s Office last week hosted the release of COSATT’s 2011 report “Energy and Environmental Security: A Cooperative Approach in South Asia”; Vice President Dr. Mohammed Waheed delivered the keynote address.

Delinic said significant potential for action was in store for the Maldives over the next two SAARC summits. Partnership, however, is thin.

“We released the book here not only because SAARC summit will be held here but also because environment is so important for the Maldives. But we lack partners in the Maldives and are looking for researchers to contribute to our work. This is now even more crucial because we will soon pick up next year’s SAARC summit topic, ‘Building Bridges’. Since this has been initiated by the Maldives, their participation at COSATT would be very good.”

Delinic said several Maldivian policy makers and think tank members had met with the COSATT team during last week’s meeting to discuss opportunities, although no agreements have been reached.

While COSATT does not implement policies according to its findings, proposing suggestions is a key step.

“Cooperation has to start somewhere,” Delinic said. “If you’re lacking common ideas, you can’t develop concepts. So we don’t want to allow that our politicians are saying ‘We don’t have the concepts.’ We will give them the concepts. Leading think tanks from the region agree on that.”

Delinic said think tanks are the key to getting recommendations from groups such as COSATT off of paper and into action.

“Countries might have issues with each other, but if you see the think-tanks in many of these places, they’re doing very well. They’re cooperating, they’re agreeing, sometimes they even oppose their own government. This is the future, and we need to work on it further,” he said.

COSATT takes its biggest test at the government level.

According to IPCS research officer and COSATT report editor, J. Jeganaathan, bureaucratic processes tend to block efficiency. “I see the bureaucratic process in each South Asia member countries as an issue. They are rooted in traditional thinking, they cannot move beyond traditional values, and that is an obstacle to progress. Political will is also an issue, it leads to lack of commitment for common funds and cooperation in implementing new policies.”

Jeganaathan added that although international organisations such as the World Bank (WB) and United Nations Development Program (UNDP) have funds to support SAARC regional resolutions, poor cooperation among country officials prevents these funds from being applied.

However, India’s retired Major General Dipankar Banerjee, a mentor at COSATT, was optimistic about the Maldivian government’s support.

“Energy is a vital and immediate concern for the Maldives and for all of coastal South Asia. The Maldivian government ministers are particularly keen that our recommendations be put on the agenda at the summit,” he said.
Banerjee cautioned that implementation is a slow process. Agreeing with Jeganaathan, he said getting recommendations past the suggestion phase was difficult.

“One can’t expect the recommendations of a think-tank to immediately translate into official government policy. But our goal is to sensitize our respective governments, to show them the options as to how we can move forward, and show them a direction. And that’s a slow learning process, nothing happens instantaneously,” said Banerjee.

Delinic was keen to identify the COSATT recommendations as “an incentive of South Asia for South Asia,” and said maintaining close relationships with governments was important. He did note that follow-up has been a constant issue, and said the group’s final meeting today aimed to resolve it.

“Naturally we cannot push the governments further than offering ideas. But still, one can remind them of this. Keeping contact with the policy makers, dropping information through the media, and connecting with local NGOs on certain topics. For example, in the Maldives we feel sure we can find partners in civil society for certain issues,” he said.

Policy recommendations will be released on 9 November, however they will be distributed to the appropriate government ministries and departments prior to the summit.