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Inclusion of political framework to lend ’tremendous’ clout to SAARC: Iftekhar

Financial Express, Dhaka

Inclusion of political framework to lend ’tremendous’ clout to SAARC: Iftekhar

FE Report

5 May 2007

Business leaders Sunday expressed their dismay that the SAARC had failed to deliver "much" in the fields of economy and politics in the South Asian region, although it could attract the attention of the international community.

"There has been a surge in interest in the SAARC, but it lacks reflection in trade," president of the Bangladesh chapter of the International Chamber of Commerce (ICC, B) Mahbubur Rahman told a discussion meeting.

"Today, Afghanistan is a member; the United States, Japan, South Korea are showing interests in the regional club. I see a surge in interests only, but there is no surge in trade in the region," Rahman said referring to poor state of intra-regional trade.

According to the World Bank, South Asia remains the least-integrated region in the world, with the intra-regional trade hovering below 5.0 per cent.

The comments of ICC, B president were echoed by his fellow business leaders in the discussion meeting, organised by the Metropolitan Chamber of Commerce and Industry (MCCI) to take stock of the economic aspects highlighted at the 14th SAARC summit held in India.

Foreign affairs adviser Iftekhar Ahmed Chowdhury was the key-note speaker at the meeting, chaired by president of the MCCI Latifur Rahman.

The ICC, B chief said although the seven-nation SAARC (South Asian Association for Regional Cooperation) has come of age, its performance remains lackluster.

Founded in 1985, the SAARC is derided as a club of impoverished nations, torn by political mistrust and antagonism.

Foreign affairs adviser seemed to have conceded to the fact, saying the regional block would have "tremendous political clout" if it had developed a political framework.

"There’s a general resonance in the SAARC that we’ll have tremendous political clout if a political framework is put in place," he said.

Iftekhar A Chowdhury called upon the business leaders to come up with a strategic vision to reap the benefits of economic cooperation in South Asian region, given the maturity of the SAARC as a regional body.

"In the aftermath of the 14th SAARC summit, my view is that there is a need for a strategic vision on the part of the business community," Chowdhury noted.

He suggested the major chambers to consider the entire spectrum of changing contours of the region’s economic space and the impacts of the decisions in a regional cooperation framework.

Outlining the major decisions taken at the just-concluded SAARC summit in India, the foreign affairs adviser said the implementation of SAFTA (South Asia Free Trade Area) constituted the "first critical block" in regional economic cooperation.

The SAFTA implementation-related bodies were directed to review progress regularly, he said, adding that the subject would be further examined at the third SAFTA ministerial council in India towards the later part of the year.

The foreign adviser, who served as the permanent representative to the United Nations, expressed the hope that an array of trade-facilitation measures taken by the SAARC would ultimately lead to a South Asian Economic Union in a planned manner.

The trade facilitation measures include harmonisation of customs procedures, setting up of a Regional Standards body and the proposed Regional Multimodal Transport system.

Chowdhury termed the Indian prime minister’s announcement of duty-free access to products of SAARC poorer nations "a welcome gesture" by the country’s largest trading partner in the region.

"Through this announcement, India has, in effect, undertaken the commitment to advance its schedule of the SAFTA tariff reduction in respect of the LDCs, by at least a year," he remarked.

As per the original schedule, New Delhi was to reduce its tariff to zero per cent to 5.0 per cent by December 2008.

He also recognised the unilateral offer to cut the India’s sensitive list as another key announcement.

But Chowdhury said it would require keeping out some products from India’s sensitive list, which are of export interests to Bangladesh.

In his speech, Latifur Rahman said Indian prime minister’s commitment at the Summit for according duty-free and quota-free access of the LDCs’ products to the Indian market on a non-reciprocal basis by the end of this year is "crucial" to Bangladesh.

"This announcement is an advantage of the commitment of India for duty-free access by July 2008 under the SAFTA trade liberalisation programme," he added.
The trade and industry are keen to see expert level discussions for scheduled implementation of the Indian government’s decision for duty-free market access, he noted.

The MCCI president feels that the government should take preparations for a time-bound implementation of the SAFTA agreement so as to ensure effective market access within the stipulated time-limit.