Pakistan blocks South Asia’s trade growth

Over the past two decades, India has sought to promote the growth of trade, investment and connectivity in an area extending from Kabul to Bangkok, through SAARC and BIMSTEC. SAARC extends across the Arabian Sea and Bay of Bengal, from Kabul to Dhaka. BIMSTEC comprises littoral and landlocked states across the Bay of Bengal: Sri Lanka, Bangladesh, Myanmar, Thailand, Nepal and Bhutan. India’s Free Trade and Comprehensive Economic Cooperation Agreements with ASEAN, Japan and South Korea complement these networks.  

The one stumbling block in this effort has been Pakistan, which has not implemented the SAARC Free Trade Agreement, signed in 2006. This agreement was part of a larger vision to make SAARC a Customs Union and then an Economic Union by 2020. Pakistan rendered this virtually unattainable by retaining barriers to trade with India. On the other hand, BIMSTEC, comprising our eastern Bay of Bengal neighbours, is moving ahead in promoting cooperation in many spheres. BIMSTEC leaders were specially invited by India to the BRICS Summit in Goa in 2017.

Given Pakistan’s continued support for terrorism and its complicity in backing extremist and terrorist groups in Bangladesh, India joined Bangladesh after the 2016 Uri attack in boycotting the SAARC Summit, scheduled to be held in Islamabad in November 2016. This decision was accompanied by a withdrawal of Afghanistan from the Islamabad Summit “due to increased levels of violence and fighting as a result of terrorism imposed on Afghanistan” by Pakistan. Bhutan followed suit, declaring that “recent escalation of terrorism in the region has seriously compromised the environment” for a successful summit. Maldives, then ruled by President Abdulla Yameen, said that the atmosphere was not conducive for a meet. Sri Lanka and Nepal did likewise, with Nepal asking member countries “to ensure that their respective territories are not used by terrorists for cross-border terrorism”.

Given the pro-Chinese propensities of Nepal’s present Prime Minister Khadga Prasad Sharma Oli, it remains to be seen how Nepal will react to calls by Pakistan, for soon hosting the next SAARC Summit in Islamabad. During the recent meeting of SAARC Foreign Ministers in Kathmandu, Foreign Minister Sushma Swaraj condemned the constant threat of cross-border terrorism that India and Afghanistan faced. With India now engrossed in general elections scheduled for April-May this year, there is little prospect for any progress in resolving the SAARC impasse.

Unlike in SAARC, there is readiness to cooperate on terrorism in the BIMSTEC grouping especially given the cooperation India receives from Nepal, Bhutan, Bangladesh and Myanmar, with whom it shares land borders. Thailand and Sri Lanka are also very cooperative. Going even further, the army chiefs of BIMSTEC countries met recently in Pune, setting the stage for greater military cooperation. In these circumstances, we need not hurry to ‘revive’ SAARC, given continuing Pakistan’s intransigence on economic integration and terrorism.

G Parthasarathy

Former diplomat

dadpartha@gmail.com