SAARC Member Countries Urged to Work Together to Achieve Goal of SAEU
17 March 2016
India's External Affairs Minister Sushma Swaraj called for further consolidation of the South Asian Free Trade Area (SAFTA) and the South Asian Trade in Services Agreement to achieve the goal of a South Asian Economic Union (SAEU), in her address at the 37th SAARC Council of Ministers' Meeting, held on 17 March 2016 in Pokhara, Nepal.
Expressing concern over the very high number of people still living in poverty in the region, despite significant growth and advances in education, healthcare, and rural development sectors, she urged SAARC member countries to work together to harness their economic complementarities and create an environment conducive to rapid growth.
The External Affairs Minister also emphasized the importance of connectivity to development, promoting economic activities, cultural connections, and people to people contact—which could promote and meet goals of growth, employment, and prosperity. SAARC agreements in rail and motor vehicles should be taken forward, said the External Affairs Minister.
SAARC accounts for merely 2% of world trade and 1.7% of world FDI. The region's intra-regional trade is less than 6%. According to economic analysis conducted in the study on SAEU, full implementation of SAFTA would generate significant increases in intra-regional trade and income gains for all SAARC member countries.
The SAARC study on SAEU was adopted at the 18th SAARC Summit in Kathmandu, Nepal in November 2014. It identifies the need for closer regional economic integration among SAARC member countries, including inter alia fully implementing SAFTA, reducing non-tariff barriers, Customs streamlining and harmonization, development of regional value chains, and integrating formal and informal trade. Investment is seen as key to economic integration.
The Asian Development Bank supports efforts of SAARC to boost regional cooperation and integration through the concept of SAEU. It continues to assist the SAARC Secretariat with associated analytical work and capacity-building activities.