Saarc must act to reap fruits of economic integration: Modi

By Sarkaritel November 26, 2014 13:44

Saarc must act to reap fruits of economic integration: Modi

Kathmandu, Nov 26  Prime Minister Narendra Modi Wednesday called for a better economic within integration Saarc, expressing concern that under 5 percent of the region’s global trade takes place between its eight member countries.


The Indian prime minister also promised a special funding vehicle, overseen by his country, to finance infrastructure projects in the region, while also proposing a Saarc business travel card and cross-border industrial corridors to facilitate trade.

“Indian companies are investing billions abroad, but less than 1 percent flows into our own region,” the prime minister said as the two-day, 18th Saarc Summit began at the Nepalese capital.

“It is still harder to travel within our region than to Bangkok or Singapore, and more expensive to speak to each other,” he said.

The value of regional trade was estimated at $22 billion last year.

Giving an example of the lack of economic integration, the prime minister said goods today have to travel from one Punjab in India to the other Punjab in Pakistan through New Delhi, Mumbai, Dubai and Karachi, making the journey 11 times longer and four times costlier.

At the same time, he conceded that India, too, had its share of responsibility because of its sheer size and location, and knows well that merchandise from one Saarc nation has to go around the Indian peninsula to reach their destinations.

“Just think of what we are doing to our consumers and to our environment! We must shrink the distance between our producers and consumers and use the most direct routes of trade. I know India has to lead, and we will do our part. I hope, each of you will, too.”

At the same, Modi said India has moved ahead in this area and cited some examples:

-Duty free access to five South Asian partners for 99.7 percent of their goods

-Assistance of nearly $8 billion in South Asia over a decade.

-The deepening of infrastructure links with Bangladesh through rail, road, power and transit

-New era of cooperation with Nepal and Bhutan on energy

-A flourishing free trade pact with Sri Lanka

-A new pact soon to meet the energy needs of Maldives

-Reaching out to Afghanistan despite the distance and difficulties

-Train service to Pakistan for better people-to-people connect.

Modi said infrastructure was the Saarc region’s greatest weakness and its most pressing need. “When I thought of coming to Kathmandu by road, it made many officials in India nervous. Because of the condition of roads at the border!” he said.

“I also want to set up a special purpose facility in India to finance infrastructure projects in our region that enhances our connectivity and trade,” he said, adding: “We speak of ease of doing business in India. Let’s extend this to our region.”

The prime minister told the assembled leaders that he was aware of India’s huge trade surplus with other Saarc countries, which was neither right nor sustainable, and assured: “We will address your concerns and give you a level playing field in India.”

At the same time, he called for the right business environment in the region that can attract Indian capital to produce more for the Indian market and create jobs. This, he added, will also allow the region to take advantage of the natural synergies.

Speaking about the Saarc grouping, as people view it today, the Indian prime minister said there were usually two reactions – cynicism and scepticism. “This, sadly, is in a region throbbing with the optimism of our youth.”

He said the region’s development gap must spur Saarc leaders to do more and said one must not get stuck behind the walls of differences and be hesitant to move out of the shadows of the past.

“This won’t resolve our differences, but will certainly deprive us of opportunities.”

By Sarkaritel November 26, 2014 13:44