Follow-up of the Eleventh SAARC Summit
IFA/FES
December 11th, 2002, Kathmandu

A one day seminar on "Follow-up of the Eleventh SAARC Summit" was organised by the Institute of Foreign Affairs in Kathmandu on December 11, 2002 with the cooperation of Friedrich Ebert Stiftung. The timing of the seminar was noted by speakers to be of importance as it came just one day after the 18th SAARC Charter Day, the day which also saw Pakistan officially announcing the postponement of the 12the Summit to be held in Islamabad. Participants of the seminar were made up of foreign policy experts, former diplomats, university professors and other observers of regionalism in South Asia. The discussions were organised into four different sessions including the inaugural. The three presentations were each followed by floor discussions.

In his keynote address the chief guest, Minister for External Affairs, Narendra Bikram Shah, noted the importance of the meeting particularly because Nepal was currently holding the rotating chairmanship of South Asian Association for Regional Cooperation. He hailed the gains made by the regional organisation in developing a common approach on many international issues, but he said that more efforts were needed to tackle complex international economic issues of the day. The minister had inaugurated the seminar by lighting a traditional oil-fed lamp. Narayan Das Shrestha in his welcome address had stressed the importance of programmes held outside the official SAARC realm especially at a time when the official process was facing obstacles. Shrestha said that in spite of the cynicism regarding the slow strides taken by SAARC, there was reason to be happy about the progress made on social and economic issues, and even issues like terrorism. In the three working session that followed the inaugural presentations were made by Prof. Mohan Lohani, Prof. Gunanidhi Sharma and Prof. Bishwa Keshar Maskay, each deliberating on the political, economic and social implications, respectively, of the Eleventh Summit held in Kathmandu last year.

WORKING SESSION I
Chair: Uddab Dev Bhatta, Former Foreign Secretary
Author: Prof. Mohan Lohani, Former Nepalese Ambassador to Bangladesh

Paper: Assessment of the Eleventh SAARC Summit Declaration: Need for Effective Implementation

The first working session saw the presentation by Prof. Mohan Lohani. His paper was titled "Assessment of the Eleventh SAARC Summit Declaration: Need for Effective Implementation" and the session was chaired by Ubbab Dev Bhatta. Prof. Lohani in his presentation outlined the challenges facing the region, particularly poverty and terrorism, and said that more efforts were needed to solve these ills. The floor was opened for discussion after his presentation.

Comments from the floor

Keshav Raj Jha: Pakistan has emphasized on the core issue, Kashmir. The Pakistani generals are not even willing to accept the line of control. Pakistan wants Kashmir solved for other issues to be taken up. But the SAARC charter prohibits discussion of contentious issues. India has blamed lack of progress on economic issues for not wanting to join the SAARC meets. What should be the role of Nepal in removing contentious issues and bringing the countries together? I think the time has come for us to be more forthcoming and stop talking about progress where there is hardly any. I do not agree with our PM that the setback to SAARC is temporary.

Prakash A. Raj: Prof. Lohani writes about kidnapping and extortion carried out by the Maoists on Page 6, but he should also add destruction of infrastructure. Another point that needs adding is the migration from hill to the Tarai and from rural areas to urban areas.
He also says that both India and Pakistan accuse each other for instigating terror in Kashmir. I do not know of Pakistan making such allegations regarding Kashmir.

Dambar Bir Thapa: Other countries have shown sympathy for our fight against terror. When the UNHCR recently said that it does not want to send back Maoists from India, India has supported our stance on the issue. Other countries have not said anything on the Maoist issue. What should South Asian nations have said on the issue?

Regarding education, what are the S. Asian nations doing in their national programmes?

Gopal Pokhrel: When even the government is not capable of ensuring security and people are migrating for fear, how can the poor contribute to poverty alleviation? You have cited Madhukar Rana for the idea.

Should there be cut-down of salaries of school teachers, that the Maoists have called for?

Do you recognise the Maoists also as a political force or just pure terrorists? Recognising them just as terrorists may complicate the issue.

Paras Ghimire: S. Asia is a repository of tremendous human and natural resources. That should a sound basis for human development in the region. But even with the establishment of SAARC eighteen years ago, there is no substantial change in the lot of the people. What has gone out of hand in the entire SAARC process that could be addressed?
Is the SAARC waiting for bold decisions in some of the areas we have prioritised for ourselves?

Sooryalal Amatya: Schools have been closed for five days and we do not know how long this is going to happen. Even Biratnagar appears to be in the list of places called to close down schools. Is regional cooperation justified when there is no progress on issues even after eleven or twelve summits?
Nepalese terrorism has been supported from outside. There appears to be regional cooperation among the Maoists. What do the other South Asian countries say about terrorism in Nepal?

Gyanchand Acharya: When we prepare declarations, we need to be continuously involved in self-introspection. What we do know is that there is no alternative to SAARC because when there is no SAARC there is no regional cooperation. We are not hoping our regional cooperation to turn into another European Union. We in fact know how difficult it was to move the idea of regional cooperation in South Asia only some time ago. But we also have to accept that progress has not been made as we expected. That is the reality. This is because there are some inherent contradictions in the charter.

While drafting the charter we had realized that we need not wait for all the problems to be resolved to take regional cooperation ahead. We had agreed that with progress on social and economic issues the existing problems would find some resolution. But this does not seem to have happened.
Obviously, we never underestimated the need for commitment from all the member countries to keep SAARC going.

Nischal nath Panday: Regarding the GEP report, there is skepticism that the report has not been implemented in spite of it being hailed by everyone. Do you think it is possible to implement it? Summits have been held after a gap of several years, not s schedlued, especially in the latter years. Does SAARC need to be summit-centric?

Sushil Raj Panday: Why do extra-regional powers move in to resolve issues, like terrorism, in SAARC member countries? Is it a failure of SAARC?

Dev Raj Dahal: The paper should also deal with left-out actors and potential actors so that all sides of cooperation can be dealt with. The civil society is networking with regional actors and working towards regional cooperation. Governance has a multilayered dimension and is not just a government domain. This needs to be realized and worked accordingly to make cooperation viable for the long run. All the actors need to be consulted for proper regional cooperation.

We have adopted globalisation and decentralization, a contradiction of sorts. We are talking about cores integrating with other cores (globalization) and promoting trickle-down even while talking of empowering the grassroots. We are also talking about terrorism while we have a democracy. We need to make the system more participatory.
Regarding common regional traits, we also need to talk of sub-nationalism. As ethnic nationalism has been at the centre of conflicts, proper conflict resolution mechanisms need to be in place in the regional cooperation process.

Anuj Mishra: If you take the body metaphor for SAARC, you need to have a common immunity mechanism to deal with sores in any part of the body. Unless we do that there is no utility for meetings just to hold talks. Shouldn't there be a mechanism to deal with bilateral problems as well?

Reply by Prof. Lohani

When the South Asian leaders get together on a common platform to bring out a declaration, we understand that they have gone at great lengths to go through the issues they have raised. So commitment should be there to resolve the issues that arise.

Jha has pointed out the role of India and Pakistan dominating regional issues. How should Nepal (chairperson) try to deal with their misgivings? The declarations do open ways for informal consultations and repeatedly emphasized their importance. But they have not become operationalized.

In 1985, when SAARC took off, the leaders saw the need for a "retreat" of several hours where all kinds of dialogues are held. But the agreements there do not get to the formal documents. Even India and Pakistan have been locked into talks in those informal sessions.

SAARC cannot move ahead without removing contentious issues. For that, the charter needs to be amended. Informal political consultations need to be initiated for amendments to take place. The Sri Lankans (when they held the chair) were approached for initiating the consultations, and I do not know the outcome of that effort. I don't know what Nepal can do to get the contentious issues to be solved, but it could bring together other smaller regional countries and start discussing how SAARC can be put back on track.

Regarding Prakash A. Raj's query, I just wanted to be impartial while saying that both accuse each other of terrorism. But you are right about India accusing Pakistan more. Your addition of infrastructure destruction and migration can be included in the paper. There is no problem with that.
The Third summit had put terrorism as an issue on paper. But there is no regional mechanism to solve terrorism in SAARC. India has promised that it will help in our fight against terror, but we have a eight hundred kilometers open border complicating it.

Regarding the political status of the Maoists, it is official that they are terrorists. I call them Maoist insurgents. Their activities show that that they areterrorists even while their objectives may be political.

I agree that there are other actors that need to come together for regional cooperation, not just the government, for progress to be made. Track II is an important process. While the official summit did not take place for the past three years, the Track II process went on giving a forum for regional issues. The actions of Track II need to be dovetailed with Track I at some level.

I agree that there is no alternative to regional cooperation. The only alternative is conflict, recrimination and what have you. The cost of non-cooperation is higher than cooperation.

In a sense, the Indian official is right in blaming lack of progress on the SAFTA framework agreement for not attending the SAARC summit. Indeed, if there is no progress there, what would be the objective of meeting at all?

Regarding Nischal Panday's query, I think there is agreement about lack of commitment to implement the GEP report recommendations to the extent of having the GEPs exasperated. The report is very comprehensive. The leaders have accepted some points but not the report in its entirety.

If the SAARC members agree on keeping out extra-regional powers, they can. Even in the case of Nepal, the UN secretary general has said that it is willing to help in mediation in the Maoist conflict 'if approached.' So there is room for keeping it within the region.

Chairman's remarks
I have enjoyed your participation very much on this important topic.

WORKING SESSION II
Chair: Yuvaraj Khatiwada
Author: Prof. Biswa Kesar Maskay, TU

Paper: Poverty Alleviation and SAARC Social Charter

Prof. Biswa Keshar Maskay's presentation was on the proposed social charter for SAARC and poverty alleviation as an important area that required a political approach on their solution. He discussed the SAARC's focus on economic and social issues and said that there was a lot of positive movement regarding social development. He called for the civil society to be taken more seriously in their ability to take social action.

Comments from the floor

Dr. Yuvaraj Khatiwada (Member, NPC): We need to be realistic, not too ambitious, in what we want to achieve. S. Asians are stricken with poverty and they can share among themselves areas that reinforce each other's efforts in alleviating poverty. For example, untouchability is a qualification for poverty. Such social issues need to be addressed at a regional level. Secondly, there is also prosperity within the system, calling for a better redistribution process. Here too, sharing of ideas can be done with the member nations. Third, we could also find areas of mutual interest on areas of natural resources like water. Fourthly, we can share our own experiences in areas where we have come out successful- India has done well in green revolution, Nepal in community resources, Pakistan in financial sector reform, Bhutan, may be, in tourism and Sri Lanka in social areas.
Let us confine to those areas where we do not need too much resources.

Prakash A Raj: On Page 5, you talk of political approach in eradicating poverty and that participation is necessary. Do you mean political approach by participation? I do not feel easy to use the term political.
On Page 12 the author writes about legislative power of the regional people. What does that mean? Again, what are the social areas where the South Asian interests converge?

Sooryalal Amatya: There are other islands of poverty apart from South Asia. Sub Saharan Africa and L. America are the other areas. L. American countries have made some improvements in poverty alleviation, the worst case is in Sub-Saharan Africa.
In South Asia, we are doing what Bangladesh has achieved in fighting poverty, but we have failed. Community forestry has not been duplicated in other parts of South Asia. Experience is not being shared even within the country. South India has made considerable achievements which eludes North India. While talking of poverty alleviation, we need to focus on decentralization and good governance. Until grassroots organisations are empowered with funds, we cannot think of productive activities and employment.

Dambar Bir Thapa: South Asia is a multiethnic region but Dr. Maskay does not appear to mention it in the paper. What will be the role of the civil society in realizing the social charter goals? The charter is said to be based on the spirit of humanity. This means that downtrodden people will be taken care of. But the operation of the charter has not been mentioned by the paper.

Gyanchand Acharya: The World Development Report shows that South Asians are going down in some areas like in equality and education. Is there any regionalism innate in poverty alleviation, although we have national programmes on it?

If we do have some similarities in the nature of poverty, we should come out with a common approach to poverty alleviation. The eleventh summit does recognise such similarities. The declaration mentions the millennium development goals as a general area of acceptance so as not to divert from the international commitments for the sake of regional commitment. Secondly on para 12 of the declaration, we focus on sharing experiences. Third, commitment was made to collect information on vocational training and run programmes on vocational activities for poverty alleviation. Fourth, we not only focused on best practices, we also asked the secretary general to disseminate such information. Safety nets were also emphasized as we had poor safety nets in the region. The need was also felt to find out a mechanism to find the depth and extent of poverty in the region. Also, the reconstitution of the commission was sought.
Would the charter be just a pious intention or is there going to be a mechanism of implementation? The main problem is of funding in SAARC. Funding is already a problem for realizing the existing commitments. What would be the method of enforcing the social charter?

Sushil Panday: Most of our civil institutions have been funded by foreign sources, especially since 1990. Is it justifiable to seek more role for them?

Reply by Prof. Maskay
Because of the haste in preparing it, the paper needs some correction. I do not have the answer to all the queries and I do not pretend to know everything as it is just a seminar paper which is supposed to generate discussion.

- Social goals means goals in education and health areas. Legislation means lawmaking by the respective parliaments.
- Yes, there is a problem with resources to fulfill regional goals.

- I do agree that there is a need to share experiences across and among countries. Empowerment and fighting corruption are areas where separate discussions can be held. I am thankful to Gyanchandji for elaborating the eleventh SAARC Summit declaration.
- I do not have an answer to the query regarding foreign sources of funding.

Chariperson's concluding remarks
We agree that growth is necessary for poverty alleviation but is not sufficient. Trade is said to be a catalyst for growth and we need to focus on that. Social development is needed in areas like social exclusion. But there are also areas like education and health. If you go to India for treatment, you are taken as a foreigner and not a South Asian. Can't we think about opening up such areas for regionalism to work?

Issues on governance and empowerment also exist. One area of regional cooperation where there is a lot of dispute is water resources. How do we make use of these resources for poverty alleviation? Similarly, we have tourism. Can we not have some regional cooperation in a network of village tourism, for example?

On the market and trade front, non-tariff barriers and restrictive trade measures are not suitable in the WTO context. For larger economies this may not matter much, but for smaller countries, issues of market access are important.

When we enter the international fora, do we have the same voting group and are we lobbying for the same goal? Nepal is in the South Asian voting group in World Bank and IMF a group which has done a lot on poverty alleviation. But Nepal has different needs. I would like some answers on this.
How can we be sure that we are not exporting poverty to each other? We need regional cooperation to prevent that.

Terrorism and conflict activities need to be overcome for poverty alleviation programmes to work. How do we avoid that?

WORKING SESSION III
Chair: Yadav Kant Silwal, Former Secretary-General of SAARC
Author: Prof. Gunanidhi Sharma, Tribhuvan University,

Paper: Economic Cooperation in South Asia: The problems and the impediment

Prof. Gunanidhi Sharma's presentation on economic cooperation covered the last session of the day. In it he outlined the tremendous prospects that the region held against the dismal achievements. This is particularly because, he says, of India's dominant role in the region, which has always been favour of bilateralism over regionalism. For a breakthrough in economic cooperation Prof. Sharma suggests a traverse to substance from rhetoric and to the real from the nominal.

Comments from the floor

Keshav Raj Jha: There has been contradiction between bilateralism and regionalism from the very beginning. So countries pay lip service for regionalism but indulge themselves in bilaterlaism. Bilateralism is a big problem in SAARC. In ASEAN too, the size of the countries are not all the same but they have achieved some progress in regionalism. We talk of peace in the international arena and preach it everywhere, but when it comes to peace within the region where are we?

In spite of the fact that contentious issues are not to be raised in SAARC, Pakistan has been using the Kashmir issue. Similarly India has blamed cross-border terrorism for hampering SAARC.

India appears to see itself graduating from SAARC and sees it fit to enter ASEAN where it has received a red-carpet welcome. We need to work on the confidence building measures before entering into cooperation on economic issues.

Yadav Kant Silwal: ASEAN did not work for about 30 years, and now after Japan came into the scene, they have been doing well. Even now, the bad blood between Malaysia and Indonesia on labour is not hampering ASEAN's move forward. In Europe, for a long time, it was seen that only Germany and France were pulling the alliance forward. Things do not have to be all very well for an alliance to work.
India has tried to become a member of APEC, but has been given no entry. It has tried to join the Euro-Asian summit, but there too, no.

Dambar Bir Thapa: I request you to explain how the SAARC process has become a reality. What are the benefits Nepal is receiving from SAARC?
How is it possible to have a visa-free zone in South Asia in view of the current India-Pakistan relations and terrorism in the region?

Prakash A Raj: How is profit motive of big countries an impediment to slow progress? Are you talking only about India or other countries also?
Unless the Kashmir problem is solved, a visa-free zone is not likely in the near future.

Sooryalal Amatya: It is because of India and Pakistan relations that SAARC progress has been hindered.
The volume of trade between Nepal and India is high. With third countries too it is high, but not much with Bhutan, Bangladesh, Lanka or Pakistan in spite of fifteen/sixteen years of cooperation.

Regarding visa-free travel, we have just introduced ID papers to travel to India and later on we may be introducing passports.
China attracts 44 billion dollars per annum, while India attracts only four billion, in spite of the 77 per cent of South Asian investment you mentioned. The two countries, China and India, are two largest countries in reform. China is opening fast in spite of the communistic heritage while India appears to be more conservative in spite of its democratic legacy.

Mohan Lohani: On page 5, you say that the only way out are the second and third track diplomacy, but later you accept that India's attitude is changing. How do you reconcile these contradictions?

Sushil Thapa: To what extent has India invested in Pakistan to bring them together economically?

Reply by Prof. Gunanidhi Sharma

Regarding Jhaji's comment on bilateralism vs. multilateralism, and Mohan Lohani's on inherent contradictions, I have answered them with follow up explanations in the paper itself. For example, I have said that leaders have tried to do things, if only to please their people. Again, in another instance I have said that there is confusion among members regarding how much to expect from SAARC. India does not expect much from SAARC. It expects more from the EU than SAARC. We expect more from the regional organisation than India does.

Since political cooperation is out, we have only social and economic cooperation. On the social front, we have done a lot, but on economics, India's role is vital. And, with respect to Nepal, it wants to maintain its market share in Nepal and other countries. It wants to have only a surplus in the region, not a deficit. That is why SAARC is not a priority for India. For Nepal, the added importance to SAARC comes from its need for transit rights.
The united stance of LDCs at the WTO and even China's help could be a powerful voice for Nepal in the international scene.

India has been slapping discriminatory duties on Nepalese products and trying to make the Nepalese export market unpredictable. But the positive aspect is that India too is liberalizing.

Regarding India-Pakistan economic ties, even during the Kargil conflict, the Pakistani delegation was there in India discussing economic issues. Even if the governments have problems, the civil society is automatically functioning like the Chambers of Commerce and Industries. Commercial interest is different from political interest. In spite of political differences, economic and commercial ties could be going on smoothly. SAARC is surviving, because summits and conferences are kept up by leaders not to alienate themselves from the people.

Because India is at the centre, it uses its strategic central position, it is obstructing the flow of goods and services between other members of the region. Otherwise, Kodak's position in Nepal should not have been an issue to be raised with Bill Clinton when he visited India.

Chairperson's remarks
Yadav Kant Silwal

When we talk of SAARC, we need to look at it on a wider and a long term scale. SAARC has just turned 18 years old. Whatever has been achieved by SAARC in the past is no mean achievement, if we look at South Asia from a different perspective. However, there is also the historical legacy of bitterness keeping the members apart.

What alternative can be contemplated with India and its size with all the other six pursuing their independent identity and interest? This is why we talk about a wider perspective.

Nepal may have a long border with India, but it also has one with China. Does Bangladesh have it? No.
A lot of interactions are necessary for our efforts to be fruitful. Free trade has to be regulated by the regional organisation through setting up of dispute resolution bodies and like mechanisms. Free trade does not happen in a vacuum. The official trade between India and Pakistan is 20 million, but the unofficial trade amounts to billions.

Gujral talked of non-reciprocity, but he could not get over the existing set-up.

Vote of thanks by Narayan D. Shrestha