Challenges for SAARC

Written by Mudassir Jalal  •  Special Features  •  November 2009 PDF Print E-mail

21In order to fulfill the high aspirations of its peoples in the face of current global economic and financial crises, SAARC will need a new strategic vision.In South Asia, over the past six decades, development practitioners, economists and politicians have presented a number of measures and approaches to address and fix South Asia's socio-economic problems, but nothing sufficient has been done in this regard. Unfortunately South Asia happens to be a region afflicted with terrorism, ethnic rivalries, different kinds of fatal diseases, shortage of food, intra and inter-state wars, political turmoil, instability, leadership crises and security issues. The region is bestowed with enormous natural resources but has little to demonstrate for it. It is a region endowed with fertile land but cannot feed its people, a region that has given birth to learned human resources in all walks of human endeavour but has not yet been able to liberate itself from the shackles of underdevelopment, foreign intervention and vested interests.

These factors, besides limiting the development of the region, raise one basic question: what role has leadership played to help improve the situation? Could South Asia have been better with visionary, devoted leaders? It is often said that "the only safe ship in a storm is leadership." Martin Luther King, Jr. once said, "The ultimate measure of a man is not where he stands in moments of comfort, but where he stands at times of challenge and controversy." Unfortunately, leadership has not played its due role to tackle the challenges and problems plaguing the region. Most of the conflicts, intra and inter-state rivalries and the worst terrorist activities in the region, thrive on the wings of leadership. In the region, we see that human life, property and resources have been lost and wiped out in pursuit of this leadership.

In South Asia, the agenda to achieve prosperity is driven by the need to achieve sustainable growth and reduce poverty. This requires public sector reform, including tax reform and expenditure restructuring, and an improvement in the performance of public enterprises through increased competition, privatisation, a wider distribution of shared ownership and removal of entry barriers that still impede participation of the private sector. Tax reform is still in the early phase. Financial reform remains an elusive objective although some important steps have been taken in Pakistan while India has placed it at the top of the policy agenda. Little progress has been made in reforming land and labour markets.

23Developing South Asia's human resource base is particularly important in pursuing an outward-looking, pro-poor growth strategy in the current global scenario. South Asia's ability to pursue this strategy will depend on its success in shifting public expenditure priorities to the social sectors to ensure a more rapid buildup of human capital. Currently, life expectancy in South Asia lags behind that in East Asia; out of every ten children born, at least one is expected to die before reaching his/her first birthday and nearly half of the children in the region do not complete primary school.

Although there is a danger of raising the level of expectations about the ongoing inter-governmental talks between India and Pakistan, which can result in serious disappointment as only modest results can be achieved in the face of existing ground realities and the limited vision of the political leadership in both countries, it is essential not to lose sight of the opportunities in store and to analyse the causes of those opportunities that have been missed in the past. The most serious impediment in achieving even a modest degree of improvement in the presently dismal state of Indo-Pakistan relationship is the high level of misunderstanding and misperceptions that the public opinion in each country has about the problems facing the other.

Relationship of South Asian countries is often a source of discord than unity among them. The challenge for South Asian nations is not that they should forget the history of hostility towards each other, but they should rather develop an understanding about the evolution of culture and society in the subcontinent through objective research based on respect for various religions and social groups that have lived in it and have contributed to its development and splendour. The term "enlightened moderation" does not need to be restricted to the relations between Western and Eastern cultures, but also needs to be applied to relations among various religions and cultures which thrive in South Asia. Even more importantly, history need not be viewed simply as a clash of religions and cultures, but be interpreted in terms of its economic and social dimensions as well.

24Unfortunately, SAARC has not yet delivered on its promise. In order to fulfill the high aspirations of its peoples in the face of current global economic and financial crises, SAARC will need a new strategic vision. It will have to change its ways and its structure and will have to make efforts to revitalize itself. SAARC's new vision could be seen as a bridge between East Asia, rich in its human resources and technology and West and Central Asia, rich in natural resources and finance.

The SAARC region's massive population and educated elites could complement the needs of both nations, with India overseeing the Eastern flank and Pakistan providing the linkage to West and Central Asia. This will help realize the dream of the Asian century. It will also avoid the counterproductive competition between India and Pakistan in their respective regions of influence, which has often been a mutual diplomatic irritant between the two countries. This vision will present a win-win, non-zero-sum situation for all concerned. The only downside such a vision may entail is the possible fear of smaller SAARC countries that collusion between India and Pakistan - the reverse of the present situation and far from probable - may result in some detriment to them.

27South Asia's growth prospects depend to a large extent on what happens in India. The reform efforts in India, combined with similar reforms of investment and the trade and payments system initiated in Bangladesh, Pakistan and Sri Lanka, augur well for the medium-term growth prospects of South Asia. Contingent to the successful completion of current reforms, export growth is expected to improve and boost growth to the 5-6 percent range from the present low of 3-4 percent.

Uncertainties remain. Almost all South Asian countries face transition in leadership. The political process is broadening out in these countries and generational changes in political and economic leadership are taking place. No one can be sure how these processes will evolve or what the economic consequences will be. And in some of the bigger countries in the region - India and Pakistan - there are large numbers of poor people at early stages of an accelerated development process. Rapid rates of growth are not synonymous with robust institutions at the local level, which is where ultimately most decisions on investment and implementation are made. It will take time for the institutional infrastructure - public and private - to effectively support the modernisation of these economies in the face of the current global economic and financial crisis.


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