PRESENTATION ON

South Asian Association for Regional Cooperation(SA

SUBMITTED BY

Aanchal Arora
Bhomik Anand
Mansi Didwania
MBA IB SAP (2015-2017)

INTRODUCTION
The South Asian Association for
Regional Cooperation or SAARC
was established when its
Charter was formally adopted
on 8December,1985 by Heads
of State or Government of
Bangladesh, Bhutan, India,
Maldives, Nepal, Pakistan and
Sri Lanka.

The purpose of SAARC is to

accelerate the process of
economic and social
development in Member
States.

In terms of population almost

1.9 billion people.

SAARC provides a platform for

the people of South Asia to
work together in the spirit
understanding.

HISTORY
Idea of regional cooperation in South Asia was discussed
atleast in 3 conferences1. The Asians Relations Conference in New Delhi in April 1954.
2. The Baguio Conference in the Philippines in May1950.
3. The Columbo Powers Conference in April 1954.

. The first concrete proposal for establishing a framework for

regional cooperation in South Asia was made by the late
president of Bangladesh, Zia-ur-Rehman , on May2, 1980.
. Established on 8 December, 1985.
. Its seven founding members are Sri Lanka, Bhutan, India,
Maldives, Nepal, Pakistan and Bangladesh.

Objectives
To eliminate barriers to trade in, and to facilitate the
cross- border movement of goods between the
territories of the Contracting States.
To promote conditions of fair competition in the free
trade area, and to ensure equitable benefits to all.
To increase the level of trade and economic
cooperation among the SAARC nations.

 To create effective mechanism for the

implementation and application of this
Agreement
To establish a framework for further regional
cooperation to expand and enhance the mutual
benefits of this Agreement.

Principles
Respect for sovereignty, territorial integrity,
political equality, and independence of all member
states.
Non-interference in the internal matters.
Cooperation for mutual benefit.
All decisions to be taken unanimously.
All bilateral issues to be kept aside and only
multilateral issues to be discussed.

MEMBERS AND OBSERVERS OF SAARC

CURRENT MEMBERS

OBSERVERS

Afghanistan
Bangladesh
Bhutan
India
Maldives
Nepal
Pakistan
Sri Lanka

Australia
China
European Union
Japan
Iran
Mauritius
Myanmar
S.Korea
USA

SAARC PREFERENTIAL TRADING

ARRANGEMENT(SAPTA)
The Agreement on SAARC Preferential Trading
Arrangement(SAPTA) was signed on 11April 1993 to promote and
sustain mutual trade and economic cooperation within the SAARC
region through the exchange of concessions.
The basic principles underlying SAPTA:1. Overall reciprocity and mutuality of advantages . Trade Reform.
2. Preferential measures in favour of Least Developed Contracting
States.
3. Inclusions of all products, manufactures and commodities in their
raw, semi-processed and processed forms.

The SAFTA experience

Signed in Dec 1993, came into force in 1995
3 rounds of PTA

Objective was to create and sustain mutual trade &

economic cooperation through exchange of concession
In the first round 226 tariff lines included & No discussion on NTB

Distinction between LDC & developing countries

Despite tariff reductions under Sapta, intra-regional trade in South Asia
did not register any noticeable growth in percentage terms

 The seven foreign ministers of the region signed a

framework agreement on SAFTA to reduce customs
duties of all traded goods to zero by the year 2016.
SAFTA required the developing countries in South
Asia (India, Pakistan and Sri Lanka) to bring their
duties down to 20 percent in the first phase of the
two-year period ending in 2007.
It was decided that in the final five-year phase
ending 2012, the 20 percent duty will be reduced to
zero in a series of annual cuts.
The least developed nations in South Asia (Nepal,
Bhutan, Bangladesh, Afghanistan and Maldives)
have an additional three years to reduce tariffs to
zero.

Some Statistics at a
glance
1

The SAARC countries house 23.4% of world

population in just 2.96% land area.
Per capita - US$ 2,779

The total GDP (PPP) is only 6.66% of the world

GDP.
Total Area - 5,130,746 km2

Total GDP-US$ 4,382,700 million

Population (2009 estimate) 1,600,000,000

SAFTA-INSTRUMENTS
Trade Liberalization Programme
Non Tariff Barriers
Sensitive List
Rules of Origin
Special and Differential treatment Provision for
LDC

Sensitive List
Sensitive list is a list with every country which does
not include tariff concession.
Bangladesh has 1,233 products on the sensitive list
for the Least Developing countries and 1,241 for the
non-Least developing countries under the SAFTA.
India has 480 items on the sensitive list for the LDCs
and 868 for the non-LDCs.
Bhutan has 150 items for both the LDCs and nonLDCs and has no plan of shortening its list.

 Nepal has 1,257 for the LDCs and 1,295 for

the non-LDCs.
The Maldives has 681 for all seven SAFTA
nations.
Pakistan had 1,169 in its sensitive list but
has cut its sensitive list by 20%.
Sri Lanka has 1,042 and Afghanistan has
1,072 items on the negative list

Issues
Lack of commitment by Government
Self centeredness of the countries in the bloc
Political issues between member nations 1) India Pakistan 2)
China-India-Bhutan 3) India-Nepal
Dual Framework with more importance to bilateral agreements.
Lack of proper framework.
India ASEAN and Pakistan-Middle east

Economic Integration
The agreement is the first step towards such union. However, if
South Asias trade is to be integrated then this will require the
integration of the infrastructure of the region.
This would point to cooperation in the areas of energy as well as
the strengthening of transportation, transit and communication
links across the region. This would further require harmonization
of standards and simplification of customs procedures.
Trade cooperation would point to monetary cooperation, thereby
suggesting the need for greater coordination among Central
Banks.
To sustain trading links would require investment cooperation
involving public and private sector cooperation through joint
ventures.

For Example:
Energy cooperation could eventually lead to a common
energy grid with an integrated electricity and gas system
which should lead to the benefit of all members.
Transport cooperation could lead to an integrated transport
infrastructure which permits for uninterrupted travel from
Peshawar to Chittagong and from Kathmandu to Colombo.
Investment cooperation could culminate in regional
corporations with production facilities located across the
region within vertically and horizontally integrated
production systems.

Achievements of SAARC
ECONOMIC ACHIEVEMENTS
1. SAPTA (SAARC Preferential trading agreement) was signed
on 7th december,1995.
2. SAFTA (South Asian free trade area) was signed in
Islamabad in january,2004.
3. SAARC chamber of commerce and industry.
4. SAARC constitutes South Asian Development Fund (SADF).
5. Signed an agreement of mutual assistance.
6. Avoidance of double taxation was signed.
. POVERTY ALLEVATION
1. Promoted global objective of shelter for all.
2. Regional food security essence.

Achievements of SAARC
TERRORISM AND DRUG TRAFFICKING
1.
2.
3.
4.

Convention on terrorism was signed in November,1987.

SAARC convention on narcotic drugs was signed in November,1990.
SAARC terrorist offences monitoring desk (STOMD).
SAARC drug offences monitoring desk (SDOMD).

. PEOPLE TO PEOPLE CONTACT

1. SAVE (SAARC audio visual exchange) was implemented.
2. Library of SAARC.
3. Talks between countries lead to diffusion of tension.

NEW CHALLENGES
Climate change
The SAARC leaders adopted Thimphu statement On Climate
change in the 16th summit. It has been said that the SAARC
countries are more vulnerable to climate change. This included
cooperation in the field of environment and sustainable
development through exchange of best practices and knowledge.
Poverty
The leaders emphasise on deepening regional efforts on poverty
allevation.

Failures of SAARC
SAARC has intentionally laid more stress on core issues
rather than more decisive political issues.
SAARC is unable to play a crucial role in integrating South
Asia.
The bloc has not moved away from declaration of intent to
concrete implementation.
SAARC has failed to promote trust and understanding between
member nations.
SAARC has brought no major changes in the economic
conditions of the nations or for improving the quality of life.
SAFTA and SAPTA couldnt achieve much.

THANK YOU