Speech by HE Mr. M. Morshed Khan, MP, Foreign Minister of Bangladesh at
a seminar on " The Future of SAARC and Bangladesh" on 27 April 2005
Bangladesh Institute of Strategic Studies (BIISS), Dhaka

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Speech

By

Mr. M. Morshed Khan
Hon'ble Foreign Minister
Government of Bangladesh

Seminar on " The Future of SAARC and Bangladesh"

Wednesday, 27 April 2005
BIISS, Dhaka

Mr. Chairman,
Ambassador Abul Ahsan, Ambassador CM Shafi Sami,
Distinguished participants,
Ladies and Gentlemen,


Ambassador Abul Ahsan and Ambassador CM Shafi Sami have dwelt at length on the subject. I share their optimism in the future of SAARC.

During my visits to the SAARC capitals last year, I was happy to note the abiding commitment of the South Asian leadership to SAARC. There was a common urge to see SAARC progress to the next phase - the phase of implementation.

Preparations for the 13th SAARC Summit were accompanied by enthusiasm and a great ferment of ideas at all levels, be it the government, business circles, civil society, media professionals and academics. A series of seminars were held focused upon specific inputs that could be incorporated into the Declaration of the 13th Summit. Of particular importance were the outcome of meetings such as that of the SACEPS in Wilton Park, UK, the meeting of former SAARC Secretaries General and former Foreign Secretaries in New Delhi, the discussions at the Roundtable on SAFTA held in New Delhi under the aegis of the Council of Social Development, Delhi and the Commonwealth Business Council, UK.

As is now well-known the 13th SAARC Summit was postponed twice. Once because of the impact of the Tsunami and second because of the decision of India not to attend citing the political situation in Nepal and the security situation in Bangladesh. Whatever be the background of this somewhat controversial decision, it is the policy of Bangladesh to look forward and not to look back. It is our hope that the 13th SAARC Summit will soon be convened on a date acceptable to all members. As you are aware, I had an occasion to meet Indian leaders at the Afro-Asian Summit in Jakarta. They have indicated India's readiness to participate in the 13th Summit on any date agreed upon by member states.

In this context, the present seminar by BIISS is a welcome initiative. My focus will be on the substantive issues facing SAARC.

Mr. Chairman, First: The context of South Asia as a whole.

South Asia today is an emerging global economic force.
It has been enjoying sustained growth and macro-economic stability for over a decade. It has a huge market of 1.4 billion people and a combined GDP of $605 billion. India the largest economy is emerging as a major economic powerhouse with the capacity to offer opportunities for its neighbors. South Asia's opportunities are enhanced by the scope of intra-regional cooperation with BIMSTEC, ASEAN and the Greater Mekong Sub-region. The potentials of a free trade area of 1.4 billion people itself bears immense economic possibilities.

South Asia however, is faced with formidable challenges. Our region's per capita GDP was US$ 510 in 2003 as against developing country average of $1280. South Asia's intra-regional trade accounts for only 4.2% as against ASEAN's 27.8%. Only 1% of global FDI comes to South Asia. Widespread incidence of poverty and natural disasters are common challenges faced by most South Asians. South Asia needs to attain a sustained growth of 7-9% in order to achieve the Millennium Development Goals. External challenges such as the post-MFN regime, globalization and increasing protectionism and an emerging world energy crisis further deter South Asia's growth potentials. Meeting these challenges requires collective regional approach.
SAARC provides the framework for that and also for realizing the potentials of our region.

Second: A look at other models of regional cooperation in Asia

The 21st Century said to belong to Asia. South Asia must make itself part of the Asian century. In this century there is no alternative to regional economic integration for growth and development. It is no more a choice. We have a good number of successful models to follow including the ASEAN in our neighborhood. ASEAN has charted a vision 2020 and a strategy towards partnership for dynamic development for economic integration. Apart from a Free Trade Area ASEAN has embarked on a Common Investment Area by 2010, an Action Plan for Energy, an ASEAN Power Grid, a Trans-ASEAN Gas and Water pipeline. It has embarked on a major harmonization drive on trade, technology and services, customs and multi-modal transportation. These examples could be emulated in charting the future of SAARC.

Third, Mr. Chairman, The key elements facing the 13th Summit and beyond.

South Asia must realise a free trade area. SAARC's progress will be measured by the timely implementation of SAFTA. The Framework Agreement signed in Islamabad left four issues outstanding - rules of origin, sensitive lists, revenue loss compensation for LDCs, and technical assistance to LDCs. Progress in negotiations have been slow. Every effort should be made to ensure entry into force of SAFTA by the agreed date of 1 January 2006.

SAFTA Agreement alone will not be sufficient to realize a free trade area. There has to be effective removal of non-tariff barriers. Also necessary trade facilitation measures will have to be put in place. Four regional agreements were to be signed at the 13th Summit. Two of them could be finalized - one on Customs Cooperation and the other on Avoidance of Double Taxation. Further negotiation is required for the other two Agreements on Investment and Arbitration. We have asked the new Secretary General to convene meetings to finalize the two agreements at the soonest.

Harmonization of regional standards is also essential for intra-regional trade. We have recommended conclusion of a regional agreement on mutual recognition in standards, testing facilities and conformity assessment procedures on a priority basis.

Intra-regional trade and investment cannot increase without necessary infrastructure and related facilities. A Regional Multi-modal Transport Study is being undertaken. This initiative, I hope will lead to a regional policy and building of necessary transport and communication infrastructure.

The Ministerial Meeting an Energy has been postponed. It should be reconvened as a matter of priority. There is a pressing need to decide on a regional energy policy and projects.

Regional Economic Integration also requires harmonization of macro-economic policies. The SAARC FINANCE entrusted with this responsibility have so far met at the sidelines of annual meetings at the World Bank. I believe they need to devote exclusive time to initiate work on harmonization of macro-economic policies.

Fourth: The crucial factor of implementation.

Regional cooperation requires more than rhetoric. SAARC has come of age on completion of 20 years of its existence. It is time for SAARC to move onto the phase of implementation. SAARC has identified a number of key areas for regional action. They include Environment, Energy, Transport, Tourism, Telecommunications and ICT, Human Resources Development, Science and Technology, Health and Population, Women and Children. These Technical bodies have yielded four regional Plans of Action, on Poverty Alleviation, Environment, Telecommunications, Information and Media. But so far, none has been implemented in terms of concrete regional projects or programmes. Because, there is no institutional mechanism, because there is no funding. The Secretariat does not have necessary mandate and means to assume such responsibilities.

The only other existing mechanism one could think of is the South Asian Development Fund (SADF). The SADF with a meager 5.6 million US dollars has no physical presence or personnel as a development finance institution for financing of regional development projects. If we mean SADF to finance regional projects we must create a fund with institutional and financial capacities. A number of SAARC Funds have also been proposed for various purposes. There is a general feeling that all these proposed funds could to be brought under the purview of the SADF. The proposed Poverty Alleviation Fund (SPAF) could be established separately given the special nature of the matter and its funding. We could take special initiatives to hold the SAARC Finance/ Planning Ministers Meeting at an early date for consideration of the decisions regarding the SADF as well as SPAF at the earliest.
Mr. Chairman, Fifth: A vision for SAARC's third decade.

Shaping the future of SAARC requires decisions on its agenda for the coming years. At the 11th Summit our leaders expressed their clear commitment to the vision of a South Asian Economic Union (SAEU). The 12th Summit reiterated the commitment and made tangible progress in that direction by adoption SAFTA Agreement. Realizing the vision of the SAEU requires a phased and planned process. It is in this perspective that last year I launched the idea of a Vision for the SAARC's Third Decade. We have received some inputs and are awaiting more from member states. Some of the points that I have outlined should form part of that Vision. I believe that this should constitute SAARC's agenda for the coming decade.

Early holding of the 13th Summit is essential for putting the process of regional cooperation back on track. A number of important decisions are pending before the Summit. The SAARC Development Goals (SDGs) are to be endorsed by the Summit. The leaders are also to give their directives on new proposals such as the proposed High Economic Council, SAARC Infrastructure Fund, SAARC Poverty Alleviation Fund. The Summit would also provide impetus for cooperation in the energy, tourism, health and education sectors and intra-regional investment etc. Most of all, the Summit was expected to adopt a Vision for SAARC's Third Decade.

Finally: The spirit of SAARC.

Building the future of South Asia will depend on the political will of the member countries. It will require an atmosphere of good will, mutual trust, respect and understanding. Such an atmosphere should eschew negative impulses and should concentrate on what unites us rather than what divides us. It goes without saying that larger economies of the region have larger responsibilities.

There is not a single issue between Bangladesh and her neighbors that cannot be resolved through dialogue. This also holds true for the rest of the region. Much of our resources have been wasted in confrontation. Devoting even a part of that to cooperation would have changed the face of South Asia. SAARC was envisioned to promote the welfare of the people of South Asia, to accelerate economic growth and social progress across the region. There must be clear political will and commitment to realize this vision. It is now, more than ever before within our reach. We must make it happen.

Bangladesh remains deeply committed to SAARC and the vision of its founding fathers. We shall continue to play our part and take every possible initiative in building the future of South Asia.

I thank you all.

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