DEVELOPMENT-SOUTH ASIA: Outlook Bright for Regional Cooperation

By Farhan Haq Reprint | | Print |

NEW YORK, May 11 1997 (IPS) - South Asia, divided for 50 years by wars and religious and political tension, now has its best opportunity for regional cooperation, according to South Asian economists.

“I believe there is a major change in politics that has taken place which is more conducive than before” to cooperation in South Asia, says Arjun Sengupta, a member of India’s Planning Commission.

Political changes in the two main nations, India and Pakistan, particularly bode well for prospects for improved trade and relations, he says. “The Indian national state is now much less powerful,” he notes, with regional parties – such as those supporting the ruling centre-left United Front coalition – holding more power at the expense of the once dominant Congress party.

That focus could boost cooperation because some Indian states and regions already forge close ties with their neighbours, as West Bengal and Assam do with Bangladesh, or southern Indian states do with Sri Lanka. By the same token “in Pakistan, we are witnessing a very genuine experiment with democracy,” which in turn looses the grip of the often strongly anti-Indian military heirarchy. Sengupta says.

Sheikh Hasina Wajed’s new government in Bangladesh also has adopted a more friendly tone with India than its predecessors, he adds.

Ultimately, however, it will not be political forces that will end the hostility among South Asian states, but economics – says the South Asia Forum, a New York-based discussion group.

In particular, the tremendous growth predicted for India – six to seven percent annually for the next few years – could easily boost the economies of its neighbours, and could well tempt leaders to seek greater economic harmony.

During recent wheat shortages in Pakistan, Sengupta observes, wheat was smuggled openly across the border from India. He notes that Pakistani President Farooq Leghari recently conceded that their could be further opportunity for legal trade across the same border from coal-rich Pakistan to the nearby Indian state of Rajasthan, which strongly needs energy sources.

Bangladeshi economist Nural Islam, Chairman of the U.N. Committee for development Planning, says “If you have no discriminatory trade with your neighbour, obviously trade will increase.”

Most regional governments – notably Prime Minister Inder K. Gujral’s United Front in India, Wajed’s Awami League in Bangladesh and Prime Minister Nawaz Sharif’s Muslim League in Pakistan – are embracing free-trade and liberalisation measures that have boosted trade opportunities in other regions. Yet South Asian politicians have been pessimistic about such chances for cooperation, largely because of the enmity between the two largest nations, India and Pakistan, and the difference in power among the nations.

India – a nation whose population is expected to exceed one billion by the year 2000 – boasted a 1993 gross domestic product of more than 225 billion dollars, about three times that of all the other members of the South Asian Association for Regional Cooperation (SAARC): Pakistan, Bangladesh, Nepal, Sri Lanka, Bhutan and the Maldives.

“The fact is that the bigger partner may follow hard-line bargaining,” Islam says, noting that Brazil has similarly dominated some Latin American trade arrangements and that Nigeria looms large over Western Africa. “Because of India’s huge size, any gains in cooperation…would appear very marginal.”

More importantly, SAARC itself has yet to make its mark as a body capable of bringing its seven members closer together. “In concrete terms, it would be difficult to point out what SAARC’s achievements are,” Islam concedes.

But even more prosperous groupings, such as the seven-nation Association of South East Asian Nations (ASEAN), are not much more effective than SAARC, argues Rafeeuddin Ahmed, a Pakistani and Associate Administrator of the U.N. Development Programme (UNDP).

ASEAN’s success has not been so much economic as the political achievement of having a forum to discuss regional problems. What South Asia, and the continent as a whole, lacks is a strong organisation that can help to resolve such disputes, in the same way that the Organisation of African Unity or Organisation of American States do for their respective regions, Ahmed contends.

In lieu of that approach, he adds, UNDP is encouraging the seven SAARC nations to develop “sister cities” which could share experiences in poverty alleviation.

Economists at the South Asia Forum acknowledge that many tensions are still in the way of full-fledged cooperation, from the unresolved Indo-Pakistani dispute over Kashmir to rising nationalist and fundamentalist sentiments, exemplified by the rise of the rightist Bharatiya Janata Party in India.

But at least for now – as Ahmed puts it – economic forecasts and the trend toward globalisation means “we could have a very good basis for regional cooperation.”