South Asian Association for Regional Cooperation (SAARC) -

Background and Structure

South Asian Association for Regional Cooperation was established with the signing of the SAARC Charter in December 1985 at Dhaka.
The SAARC Secretariat was set up in Kathmandu in 1987 to coordinate regional activities.
Member States: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.
Observers: Australia, China, European Union, Iran, Japan, South Korea, Mauritius, Myanmar, and USA.
Supreme Authority: Meetings of Heads of State or Government, constituting the highest decision-making body.
Summits: Held biennially, hosted by Member States in alphabetical order; host assumes Chairmanship.

Institutional Mechanisms

Specialised Bodies: SAARC Development Fund, SAARC Arbitration Council, South Asian Regional Standards Organization.
Regional Institutions: SAARC Disaster Management Centre supports disaster risk reduction and cooperation.

Major Achievements

South Asian Preferential Trading Agreement (SAPTA): Signed in 1993; operational since 1995 to promote trade.
South Asian Free Trade Area (SAFTA): Signed in 2004 to reduce tariffs and enhance intra-regional trade.
SAARC Development Fund (SDF): Established in 2010 at Thimphu Summit to fund social sector projects.
Trade in Services Agreement: Entered into force in 2012 after ratification by all members.
Double Taxation Avoidance Agreement: Signed in 2005; India ratified in 2011.
Regional Initiatives: SAARC University in India; food bank and energy reserve in Pakistan.
SARSO (2011): Strengthens cooperation in standardisation and conformity assessment.

Importance of SAARC

Regional Cooperation: Addresses shared challenges like poverty, health crises, and underdevelopment collectively.
Economic Integration: SAFTA aims to raise intra-regional trade, currently around 5%, with high potential.
Common Security Issues: Facilitates dialogue on terrorism, climate change, and disaster management.
Cultural Integration: Promotes people-to-people contacts through cultural festivals and literary exchanges.
Global Representation: Enhances collective bargaining power in forums like WTO and climate negotiations.
Connectivity and Stability: Acts as a confidence-building platform, enabling dialogue even amid bilateral tensions.

Challenges and Limitations of SAARC

- Political rivalries, especially India–Pakistan tensions over terrorism and Kashmir, obstruct effective regional cooperation.
- 2016 Islamabad Summit cancellation after the Uri attack highlighted SAARC’s vulnerability to bilateral disputes.
- Lack of mutual trust persists, with Pakistan opposing India-led initiatives like the SAARC Satellite project.
- Security divergences remain unresolved, particularly India’s concerns over cross-border terrorism from Pakistan.

- Weak economic integration, with intra-regional trade only 5.6%, far below ASEAN’s 25% benchmark.
- SAFTA’s limited impact reflects non-tariff barriers, protectionism, and poor connectivity infrastructure.
- Low intra-regional investment, just 0.6% of global inward FDI, reduces economic interdependence.
- Consensus-based decision-making causes deadlocks, stalling agreements like Motor Vehicles and Railways pacts.
- Charter limitations exclude bilateral disputes, restricting SAARC’s ability to address core regional conflicts.

- Perception of India’s dominance generates apprehension among smaller members, weakening cooperation.
- India’s bilateral-first diplomacy reduces emphasis on SAARC-led multilateralism.
- Rise of alternatives, especially BIMSTEC, has shifted political and economic focus away from SAARC.
- External influences, notably China’s BRI, deepen divisions within the grouping.
- Internal instability, such as Afghanistan’s post-2021 uncertainty, disrupts collective engagement.

Way Forward for Reviving SAARC

- - Reform decision-making by replacing strict consensus with qualified majority voting for regional initiatives.
  - Prevent bilateral disputes from stalling multilateral cooperation and delaying development-oriented projects.

- Foster structured dialogue through confidence-building measures to address terrorism, trade, and connectivity issues.
- Create a neutral SAARC platform to sustain communication during diplomatic downturns.

- Prioritise economic cooperation through cross-border energy grids, railways, highways, and digital connectivity.
- Enhance intra-regional trade and interdependence, reducing over-reliance on extra-regional markets.

- Expand cultural, academic, tourism, and youth exchanges to build trust beyond political leadership.
- Leverage South Asia’s shared cultural, linguistic, and historical affinity to strengthen regional identity.

- Use SAARC as a confidence-building and dialogue forum, even amid active political conflicts.
- Maintain regular engagement to prevent escalation and diplomatic breakdowns.

- Develop collective climate strategies focusing on disaster risk reduction and renewable energy cooperation.
- Strengthen regional mechanisms for early warning systems and climate resilience.

- Align SAARC’s agenda with India’s Act East Policy, linking South Asia with Southeast Asia.
- Promote broader economic and strategic integration across the Indo-Pacific region.

South Asian Association for Regional Cooperation (SAARC)