South Asia's untapped trade and economic potential

The regional think-tank summit held in the capital on Saturday has raised the old question of closer cooperation among South Asian nations for collectively realising their untapped potential. It would be worthwhile to remember that the South Asian Association for Regional Cooperation (SAARC) and the South Asia Free Trade Area (SAFTA) have long become non-functional. If the first formed after the European Union (EU) model to serve as a regional socio-economic and cultural forum and the second after the North American Free Trade Agreement (NAFTA) to mainly serve commercial and economic interests, they soon became spent forces sooner than later. Now the on-going economic slowdown all across the globe brings the issue of forging meaningful and mutually beneficial cooperation among them to the fore. Not only can the nations of SA thus withstand the stormy weather but also initiate what can be termed the 'Age of South Asia'.

However, the political history of South Asia with India and Pakistan remaining at loggerheads with each other is not specially propitious for developing highly effective multilateral trade and economic cooperation and collaboration. Obviously, bilateral agreements on trade and investment have predominated mutual relations. With India and Bangladesh speeding up their economic and development agenda in the past couple of decades in particular, global powers also started paying more attention to the South Asian region. Had it been without hidden agenda linked to geopolitical rivalry between those powers, things would be easier for both South Asian nations to advance their causes. Geopolitics has of late turned aggressive and at times nasty to the point where small and neutral countries cannot often pursue their independent economic and trade policies. In this age of information, the divisive global politics also stands in the way of forging closer regional cooperation -- only more so when the developing and least developed countries are dependent on the big players for financial aid, military hardware and other supports.    

Pursuing an independent foreign policy may be difficult but yet if a nation reforms its agricultural, industrial and to a large extent monetary policies, economy takes off on a higher trajectory. In South Asia, not all countries could grab the opportunities of groundbreaking technologies by reforming their systems and therefore their development has remained at uneven stages. Even within the country, economic disparities have remained yawning. Therefore, the challenges before the South Asian countries are both external and internal. If the countries could deal with corruption leading to erosion of resources through money laundering with an iron hand, they would be better placed to explore avenues for mutual cooperation.

However, the soured relations arising out of mistrust and a lack of understanding of the value of standing together in the face of crises like the pandemic, the economic recession following the Ukraine war and fallouts of strifes such as in Gaza have not helped the cause of a united approach to regional development and prosperity. With a 4.4 million sq kilometre area, one-tenth of the Asian continent and a population of 1.9 billion, one-fourth of the global population, South Asia is a formidable stock of natural and human resources. Even in conventional areas the potential for cooperation is immense. Non-conventional areas like blue economy opens up a vista vast enough for the members of the region to exploit in the days to come. The question is, if they are ready to do so unitedly.