Address energy, transit problem, Pranab urges SAARC nations

WOMEN TO THE FORE: Pranab Mukherjee, External Affairs Minister of India sharing a joke with business women of SAARC countries at a conclave in Mumbai on Saturday.   | Photo Credit: Photo: Paul Noronha

Special Correspondent

Stresses need for smooth, complete implementation of SAFTA

MUMBAI: External Affairs Minister Pranab Mukherjee on Saturday urged SAARC (South Asian Association for Regional Cooperation) nations to address the problems of energy shortage, constraints of transit for land-locked regions of the subcontinent and overcoming high transaction costs due to poor trade facilitation across regions, for the region's integration.

"Regional cooperation on transport and trade facilitation can transform these land-locked regions into land-linked regions. The SAARC Multimodel Transport study has given important suggestions which should be carried forward," Mr. Mukherjee said, inaugurating the two-day Second SAARC Business Leaders Conclave here.

SAARC chairmanship

He said India had pledged to upgrade connectivity amongst the members to open up the channels of communications and transport, provide transit facilities, access to roads, railways and waterways and air links, as it prepared to take over the chairmanship in April 2007 at the summit meeting in New Delhi.

The conclave has been organised by the SAARC Chamber of Commerce and Industry (SCCI) and the Federation of Indian Chambers of Commerce and Industry (FICCI).

Mr. Mukherjee underlined the imperative need for smooth and complete implementation of South Asian Free Trade Agreement (SAFTA) as it would catalyse other areas of economic integration, including enlarging the scope of SAFTA to services and investment.

While South Asia made significant progress in integrating with the global economy, Mr. Mukherjee said, its integration within the region remained limited. "South Asian countries have maintained a higher level of protection within the region than with the rest of the world. Our restrictive policies have neutralised the benefits of cultural affinity and geographical proximity and restrictions on freer movement of goods and people within the region have ensured that intra-regional trade remains the lowest for South Asia," he said. "There is little cross-border investment and equally little flow of ideas or the purchase of technology and royalty payments."

The region could also benefit through cooperation in tourism, education, health, and professional services, which, in turn, could lead to positive benefits, including peace dividends through regional cooperation, he pointed out.

Minister of State for Commerce Jairam Ramesh expressed the hope that India would do away with the restrictions on foreign direct investments from Pakistan so that real investments take place in this country and India-Pakistan trade was not confined to goods. "The key to balanced cooperation in South Asia is not just trade but investments as well."

Mr. Ramesh said that to upgrade trade infrastructure and connectivity India was implementing a $ 200-million project for establishing 13 land customs stations on the Pakistan, Bangladesh, Nepal and Myanmar borders for facilitating border trade.

India, he said, was committed to reviewing and negotiating with members the negative list of items under SAFTA. "The real bottleneck to deepening intra-SAARC trade cooperation was the Non Tariff Barriers (NTBs) that the bureaucrats had so ingeniously created," he said.

SAARC Secretary-General Lyonpo Chenkyab Dorji announced that the SAARC was engaged in the early finalisation of the agreement on promotion and protection of investments. He noted: "The challenge before SAARC was to develop and adopt a framework that would promote intra-SAARC investment flows and enhance harmonisation of investment policies."

He said the SAARC leaders, at the last summit meeting, reiterated the need to strengthen transportation and communication links for accelerated and balanced economic growth. "I am confident that the implementation of the recommendations of the SAARC Multi-modal Transport Study would be a major step forward in this direction."

Poverty eradication

SCCI president Dasho Ugen Tsechup Dorji said the overarching agenda of the SAARC was to eradicate poverty and establish peace in the region. Growth, he said, must be accompanied with equity, else it would turn into a liability. "Insecurity anywhere is a threat to prosperity everywhere," he said.

FICCI president Habil Khorakiwala noted that the need of the hour was freedom to trade without barriers, freedom to invest across borders, freedom to travel seamlessly, world class infrastructure with open skies, open roads and open seas, joint development and sharing of energy resources and perhaps the common strategy to face that challenges of globalisation. "Let us collectively bridge the divides whether it is digital divide, knowledge divide, poverty and wealth divide or for that matter divides in our heart and soul," he said.