Regional Conference on New Life Within SAARC

Organised by Institute of Foreign Affairs (IFA)

15-16 July 2005, Kathmandu

The burning issues of the day were highlighted in the 17 presentations made in the four sessions of the conference by experts from throughout South Asia. The floor discussions that followed the presentations helped clarify things further. While economic cooperation, terrorism and regional cooperation in the energy sector were the most discussed topic, there was ample discussion also on the social aspects-particularly the plight of women and children and ways to mitigate it through regional cooperation- and, most importantly, the revitalization of SAARC itself.

Accepting that the regional forum has not been able to deliver the initial promises made as would have satisfied everyone, the speakers at the seminar stressed the important gains achieved through an understanding of the issues that divide the region and identification of areas with the potential to close the historical gaps. Concerns were shown by participants regarding the frequent postponements of the official SAARC summits whose objective is nothing but to reduce the regional animosities and increase cooperation. There were also those who saw the light at the end of the tunnel saying that it was not unusual to see the prevailing regional scenario reflected in the workings of a regional organization. One remarkable character of the conference was that the more experienced hands were focused on experiences of cooperation and cautiously seeking ways to move ahead, and at the same time the younger participants were more ready to embrace new ideas and stressing a more generous approach to cooperation.

The organizers promised that the proceedings, including the papers and the discussion, will be published in book form. This will not only allow the expert ideas to be disseminated throughout the region but is also expected to be an important input for the official SAARC Summit slated for November in Dhaka, Bangladesh.

PROCEEDING

The first session of the seminar kicked off without any ceremonial fanfare, a usual menu of big conferences, and immediately got down to business IFA director Nischal Nath Pandey welcomed the participants to the discussions with a brief introduction to the theme of the seminar. He said that he hoped that the outcome of the discussion will help strengthen the SAARC process. Since the growing economies in the region, with the help of globalization, is going make it the largest economy in the whole world, Pandey said that goodwill and constructive approach can contribute to uplifting the poor of the region, who also make up the largest population in the region.

In his address, Dev Raj Dahal, head of FES-Nepal said that South Asians share a common space for cooperation to deal with the externalities. Globalization of development means that regional efforts can achieve better results in development a common area of concern to the whole of South Asia. While listing progress made by the regional organization in his brief address, he said that it is time to set up an "Independent Commission on Governance in South Asia to monitor the progress on poverty alleviation, human development, anti-corruption, good governance and pool information, knowledge and capacities of regional economic and civil society actors to address the issues of development."

Foreign Secretary Madhuraman Acharya in his keynote address said that it was only proper to talk about a renewal of the SAARC process in the third decade of regional cooperation in South Asia. "Sixty years ago, our regional economy had no barriers in movement of goods. Why cannot we have the same in the future," he asked? He said that the strength of the region is having over one fifth of humanity that is talented, water and gas resources to exploit and the fastest growing economy. He questioned whether SAARC has been able to realize the founding fathers' vision and added, "We should find out ways to make the regional organization relevant to the daily life of the people." Secretary Acharya said that with the passage of time new challenges have also come up like terrorism, natural disasters, the AIDS pandemic etc.

He hailed the agreements made in fighting poverty and the ability to converge it with the millennium development goals. Similar progress has been made on economic cooperation and trade, he said. "Nepal has put forth the proposal to act as a transit between China and India, even between south and north Asia. I hope some discussion is focused on this issue as well," Acharya said.

After the keynote he sat down to chair the first working session of the conference.

SESSION I

Chairperson: Madhuraman Acharya
Presentations: C. Safi Sami
KV Rajan's
Mohan Lohani

FLOOR

Soorya Lal Amatya
To Sami: Sami used the terms LDC and non-LDC but UN does not talk about non-LDCs rather as a medium highly developing country.
To Rajan: India was included in the G8 meting in Scotland to uplift Africa showing that it has a global role as well. How will the Indian engine benefit South Asia?

To Mohan Lohani: Terrorism has not affected the development process in any country of the region except Nepal. People think that only political, and not military, solutions will work

Prakash A Raj
To Rajan: On page 5, you say that India needs to be more generous with smaller countries and also that it needs to avoid double standards on democracy and terrorism. The SAARC summit was postponed earlier this year. Would you comment on democracy and insurgency with special reference to Nepal? Does India have different standards while dealing with different countries in the region? Maoist leaders are living in India, the Times of India says. Is this not double standards? You say that political solutions are needed to tackle terrorism. Even in your country you have terrorism and the Naxalite problem in spite of democracy for over 50 years.

Mana Ranjan Josse
To Rajan: Rajan has once again come across as a consummate diplomat. Below the surface in his presentation is the stress to strengthen interdependence. But again, India refused to participate in the Dhaka summit on two grounds- security situation in Bangladesh and political situation in Nepal. The Indian foreign secretary, Shyam Sharan, offered an official explanation [of the neighbourhood policy] saying that India is the dominant power in South Asia. There was then an acceleration of its push towards the Security Council. If India had been less pushy, maybe the countries that are also represented in the UN, might have wanted India to come in. The doctrine of Robert Schuman that no country can dominate in regional cooperation would fail if India wants to say that it is the dominant power.

Gopal Pokhrel
To Rajan: The ground reality in SAARC is such that we make some improvements and then slow the pace again. Do we really see SAARC as having the potential to remove hardships of the people? If military irritants are the cause, then I do not see the military dimension working regarding Bhutan, Nepal and the like small countries. Even minor issues have acted as an obstacle to progress at times.

Rabindra Shakya
To Sami: Sami's paper says that foreign direct investment is important in financing development. There is competition among SAARC nations to attract investment. We need to be calling for complementarities in attracting foreign investment. Capital intensity has always been the focus but less attention is given on the technical aspects. The total factor productivity needs to be increased to attract investment. The GEP report of 2000 is the latest that we have. We need to address the gaps your paper leaves by revisiting the GEP report. The policy recommendations are there but implementation is lacking.

To Rajan: Rajan says on page 5 that depoliticization of economic activity is needed for economic growth. When economic activity is guided by some political priority, it might even be warranted. India needs to depoliticize some cross border projects for cooperation to yield more.

Shambhu Rana
To Sami: Sami talked about SAFTA. There is a lot of confusion regarding SAFTA, WTO and the like. Your paper does not list the points that need to be clarified.

To Rajan: Rajan says India should play the leading role. What about the lead role in fighting terrorism? There was talk about including China and Afghanistan in SAARC. What about expansion of the SAARC? Also, why can't we have cooperation in intelligence gathering on terrorism?

Rahul Tripathy
The role India plays in SAARC should be commensurate with its size. The neighbours could tell us the kind of role India needs to play. The organizational structure also tells [whether we have only talk shops or otherwise] if we are going to give renewal to SAARC or not.

REPLY BY AUTHORS

C. Safi Sami
On Amatya's query: I took the terms from the documents, but I do agree that the terminologies are differently used.

On Shakya: Productivity increases are important. But for Bangladesh and also Nepal extra regional investors must be brought in. It is the smaller nations and not India that should be working to improve the investment environment. But investments by big Indian companies like Tata will also play a catalyst's role for extra regional investments.
Our efforts should be to shield economic activities from political influence.

Mohan Lohani
I agree with Amatya that development has been retarded by terrorism. But for dialogue to come about, both sides must agree. The 1987 convention on terrorism says it all but it needs to be enforced.

KV Rajan
On Prakash A Raj: On his question on double standards regarding Nepal. The paper talks about regional issues and treating bilateral issues along similar lines is not fair. In my writings elsewhere I have said that India's role leaves much to be desired. India says ISI is misusing the Nepal border but we are not so vocal when Maoists are doing it. The reason may partly have to do with the negotiations that the Indian government is holding with Naxalites [thus making it a sensitive issue]. There is a mismatch between our handling of the Maoists in Nepal and the Naxalites. When we call them terrorists you hold political talks with them here. There needs to be much more coordination.

On MR Josse: On interdependence, secretary Shyam Sharan can't help much on India's size. It is not that India is always trying to be dominating; it just appears so because of its size. But I agree with you that Robert Schumann's proposal to [regionalizing] countries to make commitments not to be domineering. India and other smaller countries too need to change their mindsets regarding that. But, still, interdependence needs to be fostered.

On Shakya: Regarding confidence building through depoliticizing of cross-border projects, Tata is going to Bangladesh and Dabur has come to Nepal. The initiative needs to be pursued much more vigorously from the private sector.

I also suggest that we take India's Uttar Pradesh and Bihar and Nepal as one development entity, although governments may not agree.

If G8 takes interest in India we should also be trying to make ourselves an attraction of such interest.

Chairman's remarks
There is benefit in cooperation, whether a country is big or small. Improvement in bilaterals is as vital. On economic cooperation, even countries on opposite poles could implement economic projects. This would reinvigorate SAARC.

SECOND SESSION

Chair: KV Rajan
Presentations: Dr. Lohani
Gen Dipanker Banerjee
Shamshul Islam
Ramzan Ali
Gen Arun Sahgal

FLOOR

Soorya Lal Amatya
To Prakash Chandra Lohani: Your presentation started with the Gujral doctrine. With change in the leadership in India, that policy was abandoned. SAARC too has been hindered by changes in leadership.

To Ramzan Ali: Ali talks about ambitious extra-regional gas pipelines. We are talking about knowledge. How long will that pipeline project take to come about?

MR Josse
To Dr. Lohani: Why has Lohani missed in placing some of the history of SAARC in the presentation? King Birendra had proposed regional cooperation in harnessing hydro resources. Even today, SAARC does not address the issue.

To Sahgal: Why should military pressure be applied to bring terrorists to talks? How is it possible to talk with terrorists who internationally inspired and foreign sponsored?

Prakash A Raj
To Ali: Iranian oil to be pipelined to China and Southeast Asia. I think you should go through Myanmar as well. But Myanmar has also its own reserves? Why would anyone finance such a long pipeline?

Karna Bahadur Thapa
If there is any illness that SAARC is suffering, it is in the security sector. Unless security is included in the regional mainstream, it will have to be acquired from somewhere else. If SAARC wants to cooperate in other areas, security needs to be addressed. Thousands have died in South Asian countries through terrorism and inter-state battles after SAARC came into being. How can you talk of new life without addressing security?

Gopal Pokhrel
Over the last 20 years, people have been dubbing SAARC as a ceremonial talk shop. The five papers did not specifically address the title of the seminar 'New life for SAARC.' What could be the steps to be taken for the new life or how do we make it more than a talk shop and contribute something concrete for cooperation?

REPLY BY AUTHORS

Prakash Chandra Lohani
To Soorya Lal: Regional cooperation makes some assumption. The Gujral doctrine did provide some concepts regarding that. Since the change of governments the concepts have not been so clear.

To MRJ: I agree that it was late King Birendra who made the proposal regarding exploitation of hydro resources on a regionwide scale. We had assumed that resource is a regional thing, but other countries do not appear to have accepted that concept.

Foreign secretary Sharan has said that SAARC has still not been able to do much in the past 20 years. Such is the existing mindset. Until we change the mindset at the political level, and make our views on SAARC known, particularly India's, nothing much is going to come out of it. India has so far adopted a policy of benign neglect. Since it makes up more than 80 per cent of SAARC, nothing will happen until it shows some determination.

Arun Sahgal
To Karna Bahadur Thapa: I do not think that addressing the overarching issue of security will make us move forward. I think it will in fact hinder the movement. We have to move away from using national security to hinder cooperation issues. In fact, we have allowed the situation to deteriorate in the member nations to such an extent that until we address them we can do nothing. If we can share intelligence with the Chinese or Americans to fight terrorism, I do not see why we cannot do so through our existing channels.

To MR Josse: Osama bin Laden cannot be dealt with properly until we cut off his roots.

Razman Ali
To Soorya Lal Amatya: I meant that we should diversify our energy profile and not rely on a single source of energy. They should opt for greener sources. That was my main contention while talking about the extra-regional pipelines. China is diversifying its own profile. We should do the same.

Dipanker Banerjee
It is not the lack of effort, but it is the constraints the governments face that have hampered the forward movement. This is unfortunately as far as we can go through the official process. The 12th Summit did however make some progress on the economic sector. But still the non-government sector and civil society organizations or the economic organizations can play an important role and even allow them to set the agenda. Today governments do not allow Bangladeshis to visit India and vice versa. We might see some difference if the non-governmental sector are allowed more say.

Chairman's remarks
Since government may not allow us to empower ourselves, we may have to do that ourselves.

DAY II

SESSION III

Chair: Keshav Raj Jha
Presentations: Biswa Pradhan
Tsering Phuntso's presentation
Deshal de Mel
Rajendra Khetan
Ayesha Manjoor al Hasan

The first session of the second day began with Biswa Pradhan's presentation. But his presentation focused more on making comments regarding the earlier day's discussions rather than his own paper on regional cooperation on energy. Some of the points he made were:

Biswa Pradhan
The comparison of SAARC by Madhuraman Acharya yesterday with NATO is misplaced as the two organizations were set up with different objectives.

Regarding Prakash Chandra Lohani's contention that our political leaders had no vision, I want to tell you that we had been working very painstakingly for five years to set up the regional organization. Late King Birendra had a vision of South Asian regionalism even before that. In the 70s, he proposed that Nepal's water resources be harnessed for the benefit of the whole region. The leaders of the time did provide good cooperation while setting up the regional forum. There was political will then.

I do not agree that SAARC is just a consultative body. SAARC has already taken root and has a productive base. SAARC has now reached its adulthood. What is needed is that we have to inject new life into it. The areas already covered have yielded benefits, although those fruits may have taken a bit more time to come about than expected. Now is the time to implement the commitments that have been made. Particularly, the Islamabad summit has made a leap by adopting the SAARC charter and evolved concrete projects at regional and sub-regional levels.

Regarding Rajan's contention that India is both an engine as well as a hindrance to the progress of SAARC because of its size, I do agree that the peripheral countries are beholden to India and will be duty bound to India's bigness. The responsibility also lies with India to show magnanimity, which would result in the smaller countries to start toeing the line that India would rightly want them to. I do believe that India has a bigger role to play in the success of SAARC. Pakistan is another important power. The two have started dialogue which we see as a positive development. They do hold the key to the progress of SAARC.

Regarding the Indian fear of ganging up of smaller countries, the smaller countries also initially feared that India would gag up its smaller neighbours.

Late King Birendra had been working very hard to bring the leaders of the region together thus playing a pivotal role particularly in bringing the two powers in the region together.

On the application of Robert Schumann's doctrine, it does not apply to South Asia. The heads of state of South Asia had shown a far greater vision when they came together than Schumann imagined.

FLOOR

Shanker Bairagi
To Biswa Pradhan: You did not like Madhuraman Acharya comparing SAARC with NATO. Acharya meant to be sarcastic about the organization's lack of progress. He was not actually trying to compare it with the security organization. You propose a trans-SAARC and China network. How do you see the transit proposal made by Nepal in this light?

To Deshal de Mel: He suggested that the revenue compensation mechanism be with by the help of the IMF and World Bank. Is it fair to seek compensation from elsewhere while regional countries benefit from trade? It would be better to emulate the EU here. They have developed their own fund to effectively compete in the marketplace. Capacity building can also be done through the fund. Regional trade should be designed to benefit all those who participate in regional cooperation issues.

Prakash A Raj
To Tsering Phuntso: He mentions Buddha as being born in India. Buddha was born in Nepal.

To Biswa Pradhan: He talked about gas pipelines? Have there been studies comparing gas and hydro electricity as sources of energy? Has there been any const-benefit analysis between the two sources?

Gopal Prasad Pokhrel
To Pradhan: What is the position of the so called sub-regional quadrangular arrangement at the moment? In the 20 years of SAARC we have not talked about the downtrodden people- the labour component, in spite of the large number of workers going for foreign jobs.

Rahul Tripathy
To de Mel: Don't you think that the problems in free trade all add up in the long term?

To Ayesha Manjoor al Hasan: Her concerns have already been included in the social charter but it needs a mechanism directed to address the global concerns as well.

To Rajendra Khetan: SAARC has already started taking common positions especially regarding the WTO. I do not know about common positions on industry.

Dipanker Banerjee
Comparison between gas and hydro is a complex issue and the actual costs can hardly be calculated. If US policy changes slightly, the oil price would come down to 20 dollars. We have lost out on the plan to transport Turkmenistan gas to South Asia. Today it is not available any more as it has gone to the west. Kazakhstan still has it but would be very costly. Similar is the case with Iran's which would cost double the going rate. Therefore, hydro has the potential. The rivers in Arunanchal Pradesh of India, Bhutan and Nepal have high potentials. But the development of synergy is a cost that needs to be calculated as we have not yet begun to do so. At a time when we cannot even harness the Brahmaputra, Nepal's case becomes even remote. But Bhutan and India have been mutually benefiting from good cooperation.

Shambhu Rana
To Banerjee: To give new life you need transformation and who is going to initiate that transformation?

To Pradhan: What are the core issues of energy cooperation?

To Khetan: You propose building partnership with the EU and ASEAN, what is the modality for such partnership?

To Ayesha: What is the state of the commitment made to the Beijing plan of action in SAARC?

Habibullah
To Biswa Pradhan: How can we have new life in SAARC when there are so many problems? Dr. Lohani could have explained the position of SAARC regarding globalization, liberalization and radicalization. This might have given some idea about it.

Madhav Bir Shrestha
To Khetan and de Mel: Given the level of development in the SAARC region and the fact that people are not much oriented towards trading, how far can SAFTA go to benefit us? How do you see such problems hindering SAFTA's success?

Banmali Lakoul
To Khetan: He talks about engaging SAARC with China, EU and ASEAN. India and China are the emerging economies. He has talked about engaging China in trade. It would be better to talk about engaging India in trade for the benefit of SAARC.

REPLY BY AUTHORS

Tsering Phuntso
I am sorry that the sentence on the birth of Buddha was included. Please delete it.

Biswa Pradhan
To Bairagi: if the comparison between SAARC and NATO was a joke I have nothing to say. But please understand that when you say something it carries meaning.

To Prakash A Raj: Hydro electricity is one source with vast potential, is inexhaustible and is also cheaper. But if it is to be shared by all in South Asia, there needs to be a principle of equity working at the regional level for it to yield benefits. But our technocrats have differed. Banerjee shares my views.

To Pokhrel: The 'quadrangle' was a term manufactured by Dr. Lohani when he was foreign minister with the help of Madhukar Shumsher Rana, the present finance minister. The SAARC charter has allowed several members to take up such sub-regional projects. There were also countries which opposed the idea. Since a sub-regional project exists only in the east, the idea should also extend to the west and also north-south.

I agree that nothing concrete has come out from 20 years of SAARC, but something will come out of it one day. And water resources is one area that can yield and act as a concrete example of cooperation. Gen Banerjee needs to impress upon his government that India is the market for the power and it will need to dish out the money for investment, it can go to the international market and institutions for the loans. But the cooperation issues should be based on equity.

To Shambhu Rana: India's role seems to be very important in hydropower cooperation. If India's attitude is positive everyone will benefit.

To Habibullah: Hydro electricity alone can inject new life to SAARC.

Deshal de Mel
To Bairagi: Regarding revenue compensation, it would be good to have the EU model, but we will not be able to sustain the fund for long because of the constraints we face.

To Lakoul: I agree that bilateral agreements are a hindrance to regional free trade agreements and this needs to be sorted out.

To Madhav Bir Shrestha: SAFTA can only help us, but transport, infrastructure, energy and education also need addressing for free trade to actually pay off.

Rajendra Khetan
To Gopal Pokhrel: The quadrangle concept includes Bhutan, Bangladesh, Nepal and India. There needs to be some more work for it to actually pay off.

To Rahul Tripathy We have LDCs and non-LDCs in SAARC. If India, Brazil and the like can come together on the WTO why can the LDCs not?

To Shambhu Rana: If we have the aim of emulating EU, with support from external countries, and then work on it we would find the problems that we need to sort out for ideal cooperation. Working with ASEAN on technological transfers would speed up our cooperation.

To Madhav Bir Shrestha: There are products some countries in the region have but other members need them, but transport infrastructure is needed to reach those markets. Only if countries start working can they reach the market one day.

To Lakoul: India does not appear to be taking SAARC seriously as it is taking more interest on global issues. But India should understand that if people of other countries go hungry the weapons they may take up in rebellion could damage India as well. India working to gain alone will mean that it will have to lose through other means.

To Bairagi: Regarding compensation for revenue loss, if we collect certain percentage from the trade, we need not beg from others.

Ayesha Manzoor Hasan
Very few people in South Asia know about the plight of South Asian women and children in the west after the September 11 attacks on America. I am trying to raise awareness about the issue. I hope you take it back home and tell people that this problem exists. I do agree that it is difficult to include the issue in SAARC summit, but if we start asking questions, some day that could be possible.

To Sambhu Rana: Regarding the Beijing commitments on gender issues, it is a work in progress. Education is a big problem which may take at least 5-10 years to come into fruition. Civil society involvement is key here.

Chairman's remarks
Four of the five panelists are young and have come with new ideas and new visions to make SAARC a working organization. The discussions were lively and I hope it will give new life to SAARC.

SESSION IV

Chair: Dipanker Banerjee
Presentations: Rahul Tripathy
Poshan Pandey
Nischal Pandey
Shumshal Ahmed

FLOOR

Bhattarai [from Foreign Ministry]
SAARC has not been affecting the dynamics of the region but it is the dynamics of the region affecting the regional organization. At the same time SAARC has not provided a forum to hold bilateral negotiations, but again it was SAARC that allowed India-Pakistan dialogues to take place on the sidelines. This led to the betterment of the environment and SAARC ultimately benefited.

SAARC has emerged as an organization without an alternative. The pace is slow but the gradualism has also paid off as it helped the regional organization weather several storms. The SAFTA and additional protocols endorsed in Islamabad during the 12th summit reflects the direction the countries want to go.

SAARC secretariat needs strengthening but it is an intergovernmental organization and the governments need to come together on it. There have been some steps towards that. They need to be elaborately explained.

The GEP report envisions an economic union and SAFTA is just a step on the way. We did that deliberately meaning that we can progress if we want to.

Mohan Lohani
To Rahul Tripathy: You talk of a specific mechanism where dialogue can take place.

To Nischal Pandey: You also talk about the GEP that the Male summit created. It was this summit in Male that recognized the need for informal consultations. But the mechanism of that informal forum still eludes us. The need has been felt that informal consultations are needed. And also, the second day of the summit is usually set aside for the informal discussions. This should work as a viable mechanism.

Keshav Raj Jha
To Posh Raj Pandey: You said that South Asians are not natural trading partners. How have you come to this conclusion where one fifth of humanity resides?

To Rahul Tripathy: How did you start thinking that monetary cooperation is needed? Is this not some way off? How can you do it at a time even when other cooperation issues are languishing?

Prakash A Raj
To Nischal Pandey: If we want to develop a south Asian parliament like the European one, we also need to realize how difficult it was for the Europeans to have one. Also, regarding comparison with the ASEAN, in ASEAN no country is dominant, but in South Asia India is domineering and this would lead to ceding sovereignty by other countries. It would not be very easy at this stage.

Soorya Lal Amatya
To Rahul Tripathy: Regarding informal consultations and political discussions, there is a day set aside for the purpose during the summits, but still, the SAARC charter needs to be changed to allow bilateral issues to be taken up.

Shamsad Ahmed has also focused on the positive side.

Shanker Bairagi
To Rahul: Given the negativity surrounding us, how do you see it possible for positive integration ideas to be implemented? What are the conditions to be fulfilled for SAARC to be a monetary union?

Yes SAARC needs to be restructured and revitalized, but we also need to give it the mandate without which it would not make much sense. Are we going for a supragovernment entity or an intergovernmental organization?

Thaneswar Devkota: We need to have positive value systems to get positive results and awareness is needed for that. What are we doing in changing the mindset of the people so that new life can be injected into SAARC?

Diwaker Pandey
To Tripathy: How can we establish a unified currency among countries as disparate as India and Bhutan and Maldives?

Arun Sahgal
Success of multilateral cooperation depends on the ability to address contentious issues and create an enabling environment. How will you do so by taking up the sovereignty issue? The Europeans decided to move ahead putting the sovereignty issue aside. I think in Asia we are not yet ready to adopt the multilateral security concept.

Habibullah
We are talking about hope, but the reality is something else. Human values in SAARC like freedom, social justice and social redistribution have not been adopted well by the regional countries. Certain principles need to be adopted by these countries regarding these values.

Shambhu Rana
To Posh Raj: The problem for the LDCs and the landlocked countries is how to manage commitments made to SAFTA and WTO. Could we not look at the ASEAN mechanism?
Please highlight the status of the various international commitments made regarding the LDCs in Alma Ata etc.

REPLY BY AUTHORS

Nischal Pandey
It is not that SAARC has not gone anywhere; only that the pace has been slow. If individuals do not change, a change in the charter will not bring about anything. We had invited the SAARC directors at this conference but they did not come to participate.

On Prakash A Raj's question: I know it is difficult to have a parliament, but the problem is that we have not even started discussing the issue.

Posh Raj Pandey
To Dr. Bhattarai: Let me tell you that mine is a critical approach. The new generation has every right to demand more and because the progress is slow I am just asking for more.

On Keshav Jha's query: The volume of regional trade, the complementarities, trade intensity and geographical factors had led researchers to conclude that South Asians were not natural trading partners. But other aspects like informal trading and other efficiencies have led me to counter this thesis. Also, BIMSTEC does not have provisions on LDCs. SAFTA needs to move towards non-tariff regimes.

Rahul Tripathy
To Bhattarai: I agree that there have been benefits from the SAARC like improved relations between countries.

To Lohani: I hope more discussions take place on political issues.

To Keshav Jha: I agree that there is no agreement in other areas. But that should not stop us from addressing related issues of monetary cooperation. Because we will have to do so some time in the future.

To Bairagi: For an optimum currency, complete factor mobility is needed but that is not possible in South Asia right now.

To Prakash A Raj: If sovereignty is no more contentious in South Asia, all problems would be resolved.

Chairperson's remarks
In spite of the delay in SAFTA's implementation, we cannot deny that it does incorporate the aspirations of the people in the region. Obviously, more delays could make them lose interest in the mechanism.

Sovereignty issues come into play in the negotiations among member nations. Pakistan refuses to provide MFN to India and India refuses to provide entry to Bangladeshi goods. This is in spite of the fact that such agreements would have benefits for all the countries. Bangladesh refuses to provide transit to India as it would lead to political issues at home. Similar is the case with natural gas. In 15 years time, gas may no more be practical for people to use.

Nepal has the potential to be a developed country, if it uses its hydro resources, but the question is sovereignty and politically a hot potato. India will be energy deficient and will continue to be so. This needs to be exploited. India and Bhutan have good understanding and that has paid off. Nepal can invite international capital and sell its power to India if it can depoliticize hydro power.

The 13th SAARC summit could be more than or as successful as the 12th and if the progress is not sustained regarding trade and economics, other alternatives may make people forget about the regional organization.

KV Rajan's concluding remarks from the participants' side
This has been one of the best conferences that I have attended and the credit goes to Pandey, Dahal and the FES.
The discussions and presentations have been frank and sincere. There have been different views and most of them were forward looking. While we do not want to denigrate the progress that SAARC has made in the past, we should also have the right to make constructive criticism.

There are opportunities to enable SAARC, and the civil society can do a lot here. If the civil society and our respective governments form partnerships, more can be achieved. For example, sensitive projects involving issues of sovereignty can be realized if transborder projects can be initiated to benefit a large number of people. The concept of increasing interdependence has been accepted by all.

The issues of terrorism that have divided us in the past have been dealt with by us so as to see that we resolve them for mutual benefit. We do have a common dream about the SAARC. Let us look towards the 13th summit for the next step. I would like to share the book from this seminar, after it is published, with my colleagues and see that if the deliberations can be provided to the participants at the 13th summit.