Speech
by the Hon'ble Foreign Minister on the SACEPS Seminar
on "Promoting Regional Cooperation in South Asia",
BRAC
Centre Inn, Mohakhali, 03 August 2005
Mr.
Chairman,
Special Guest,
Distinguished Participants,
Excellencies, Ladies and Gentlemen, Good Morning,
Please
allow me to thank SACEPS for this laudable initiative
to enrich the discussion on promoting regional cooperation
in South Asia by engaging relevant stakeholders. Warm
tribute is due to Professor Rehman Sohban, Executive
Director of SACEPS and CPD for arranging the Seminar.
Its outcome will be immensely useful as we prepare
for the 13th SAARC Summit.
SACEPS
Task Force reports published last year offered us
policy inputs on a variety of important issues such
as intra-regional trade, investment and energy. Today's
Seminar is focused on three subjects - trade, transport
integration and poverty alleviation. Some of these
issues were also deliberated upon at Wilton Park in
October 2004. I am confident that this Seminar will
provide us further insights for a more informed decision-making
on the future of South Asia.
Mr.
Chairman,
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 with 450 million middle class
consumers and a combined GDP of US $605 billion. India,
its largest economy, has emerged as a major economic
powerhouse with substantial prospects for its neighbours.
The potentials of a free trade area of 1.4 billion
people bear immense economic possibilities.
Our
region, however, continues to grapple with formidable
challenges. The average per capita GDP of South Asia
was US $ 510 in 2003 as against the developing country
average of $ 1280. South Asia needs to attain a sustained
growth of 7-9% in order to achieve the MDGs. South
Asia's intra-regional trade accounts for only 4.2%
as against ASEAN's 27.8%; NAFTA's 46% and EU's 62%.
Only 1% of global FDI comes to South Asia; only 1%
of global tourists visit this region. Widespread poverty,
illiteracy and natural disasters are among the most
pressing common challenges faced by the South Asian
countries.
Advancing
regional economic cooperation in South Asia was already
an imperative when Shaheed President Ziaur Rahman
mooted the idea of SAARC about the two decades and
a half ago. As he underlined at the time, we were
already late compared to other regions. Therefore,
we can hardly afford to waste any more time to take
the process decisively forward and translate commitments
into action. The 13th SAARC Summit in Dhaka marks
twenty years of SAARC's existence and entry into it's
third decade. For us, therefore, the central theme
is carpe diem - we must seize the day to launch an
era of implementation.
Mr.
Chairman,
I
recall here that the leaders of South Asia made a
solemn commitment at the 2002 Kathmandu Summit for
the realization of the "vision of a phased and
planned process leading eventually to a South Asian
Economic Union". Progress towards this end requires
drawing up a road map detailing the successive steps
forward - in deepening integration progressively towards
a Free Trade Area, Customs Union and a Common Market.
There is a need in charting a course of action for
the future beginning with an 'Agenda for the Third
Decade of SAARC'. The Agenda should include initiatives
and actions that would facilitate progress towards
the vision of the SAEU.
Free
trade is the first building block of regional economic
integration. SAARC's progress in this respect is to
be measured in terms of the timely implementation
of SAFTA. The Framework Agreement signed in Islamabad
last year left some issues outstanding. These included
rules of origin, sensitive lists, revenue loss compensation
for LDCs, and technical assistance to LDCs. I understand
that the Committee of Experts will conclude its negotiations
by mid-October. We should try to ensure SAFTA's entry
into force by the agreed date of 1 January 2006. As
the Trade liberalization programme begins, the member
states will have to ensure that the Free Trade Agreement
(SAFTA) does not suffer the same fate as the Preferential
Trade Agreement (SAPTA).
We
have to address a number of issues so as to facilitate
implementation of the SAFTA Agreement. These are reduction
of sensitive list, elimination of non-tariff barriers,
integration of bilateral FTAs with SAFTA, ensuring
greater concessions from the largest economies, and
meaningful support to LDCs. These will have to be
addressed in due course for making the free trade
area work. At the same time, necessary trade facilitation
measures will have to be put in place to realize a
free trade area. Four regional trade and investment
facilitation agreements are under negotiation. Two
of them are now more or less finalized, one on customs
cooperation and the other on avoidance of double taxation.
It is also important that the other two agreements
on Investment and Arbitration are also concluded at
the 13th Summit.
Bangladesh
has called for a regional agreement on mutual recognition
in standards, testing facilities and conformity assessment
procedures on a priority basis. Such a move for Harmonization
of regional standards is essential for intra-regional
trade.
In
charting our future course of action, we should also
bear in mind the limitations in the scope of the SAFTA
Agreement. SAFTA covers only trade in goods leaving
out services and investment. We shall have to consider
expanding the scope of SAFTA at some point of time
in the future.
As
you all know, intra-regional trade and investment
cannot effectively take off without necessary infrastructure
and related facilities. Bangladesh will work with
the other South Asian partners to enhance connectivity.
I hope the regional Multi-modal Transport study, which
is being undertaken, will facilitate building of necessary
transport and communication infrastructure as part
of a mutually beneficial regional strategy. We must
therefore look closely at issues of integrating the
transport infrastructure, optimising the use of existing
facilities and establishing new facilities like sea
and land ports.
The
12th Summit recognized poverty alleviation as the
overarching goal of SAARC activities and endorsed
the ISACPA Report. There is also in place a SAARC
Plan of Action for Poverty Alleviation. We hope at
the 13th Summit the South Asian Development Goals
will be endorsed by our leaders. As you would recall,
India made a commitment of US $ 100 million for poverty
alleviation projects in all SAARC countries except
India. Pakistan has subsequently proposed a $ 300
million SAARC Poverty Alleviation Fund(SPAF) with
each member State contributing according to their
share in South Asia's GDP for programmes and projects
in all member countries. The principle of establishing
a separate Fund for Poverty Alleviation has the support
of all. We need to take a decision on establishing
the Fund and its modalities.
We
think it would be appropriate for SAARC to declare
2006-2015 as the Decade for Poverty Alleviation. This
would be in keeping with the UN Millennium Development
Goals and our own SAARC specific Development Goals.
The proclamation of the Decade will keep poverty alleviation
high on our agenda and create impetus for sustained
action and stakeholder involvement.
Mr. Chairman,
Any
regional economic integration process needs to protect,
for a transitional period, the smaller and the weaker
members, in line with the S&DT priorities of the
WTO. It is important to ensure that market integration
does not marginalize any of the economies. Furthermore,
in the long term, the goal would be on standardization
and strengthening of weaker economies specially the
LDCs.
Mr.
Chairman,
The
essence of SAARC lies in our commitment to combine
our strengths to face our common challenges and effectively
realize the potential of our region. We must meet
the common aspirations of our peoples and build a
more peaceful, progressive and prosperous South Asia.
Today, there is a growing confidence that together
we can make it happen.
I thank you.
