It is generally acknowledged now that the South Asian Association for Regional Cooperation (SAARC) has failed to achieve most of its goals given in the SAARC Charter adopted in Dhaka in December 1985. In particular, the promise of regional economic integration, inspired by the experience of the European Union, remains unfulfilled. This is not surprising because SAARC does not meet the essential preconditions for the success of a regional economic cooperation organization with the ultimate aim of regional integration. Pakistan would be well advised instead to explore within the framework of SAARC opportunities for mutually beneficial regional cooperation on a level playing field in selected areas instead of seeing it as a vehicle for regional integration as implied by the goal of a South Asian Economic Union.
There are several prerequisites for the success of a regional economic cooperation organization in achieving the goal of regional economic integration or a regional economic union which implies not only free trade among the member states and a common external tariff but also harmonization of economic and monetary policies. To begin with, there must be a feeling of common destiny and a shared vision of the future or in other words shared goals and aspirations among the member states. The absence of such a feeling is likely to pull the member states in different directions politically, economically, and culturally, making the complicated task of regional integration difficult if not impossible to achieve. Secondly, cultural affinities are important for facilitating regional cooperation leading to integration through the development of a feeling of common identity among the member states. Thirdly, the absence of hegemonic designs on the part of member states is a necessary condition for the smooth progress of any scheme of regional economic integration. The quest for hegemony generates tensions and engenders disputes among the member states of a regional organization. It is unrealistic to expect that a climate of fear and tension would help promote the cause of regional integration.
Fourthly, the absence of serious disputes helps create a climate conducive to the promotion of regional cooperation. Conversely, the presence of serious disputes generates tensions, mistrust and hostility which act as serious obstacles in the way of the promotion of regional cooperation. Fifthly, it is worth noting that the economic benefits of regional cooperation are largely determined by complementarities among the economies of the member states. The greater the economic complementarities, the more would be the possibilities and benefits of regional economic and commercial cooperation.
A close look at the regional scene in South Asia and the state of relations between Pakistan and India reveals that other than the factor of geographical proximity, SAARC lacks all the other necessary prerequisites for the deepening of regional economic cooperation leading to regional economic integration. There is no community of interests among its member states, especially between Pakistan and India. India is more interested in establishing its hegemony in the region than in promoting regional cooperation on an equitable basis. While India looks at China as a rival in Asia, Pakistan considers it an important strategic partner. Pakistan has also legitimate security concerns relating to India which dismembered it in 1971.
SAARC also suffers from the absence of cultural affinities. After all it was the cultural divide between the Muslims and the Hindus which led to the demand for partition and the establishment of Pakistan. Whereas Islam establishes a society based on the principles of human brotherhood and social equality, Hinduism establishes an oppressive system that divides the society into castes precluding vertical mobility. With the rise of Hindutva or extreme Hindu nationalism in India under the leadership of Narendra Modi, who has been a life-long member of RSS, a militant Hindu organization wedded to the concept of Hindutva, the civilizational and cultural tensions will increase not only within India carrying with them the seeds of India’s disintegration in the long run, but also between Pakistan and India which represent two diametrically opposed ideologies.
It is extremely doubtful that the tidal wave of Hindutva sweeping across India will reverse itself in the foreseeable future. Therefore, coming decades will witness enduring tensions and even local conflicts between Pakistan and India. In such a state of affairs, how can anyone in Pakistan even think of economic integration in South Asia or a South Asian Economic Union, which would enable India to dominate the region through economic means and thus fulfill its hegemonic designs? Yet, till just a few years ago we were officially pursuing this impossible goal with India and other SAARC member states.
The regional climate in South Asia has been further vitiated by the presence of serious disputes such as Kashmir, Sir Creek, Siachen and the sharing of river waters between Pakistan and India. These disputes make the task of regional cooperation in South Asia that much more difficult. The current stalemate in SAARC which has prevented the holding of a SAARC Summit in Islamabad is the logical consequence of the Pakistan-India disputes which will continue to cast their shadow over the plans for South Asian regional cooperation.
SAARC also lacks economic complementarities which are necessary for a successful programme of regional cooperation. The economies of SAARC member states, by and large, are more in competition with one another instead of being complementary. For instance, Pakistan, India, Bangladesh and Sri Lanka are all in competition with one another in exporting textiles. Similarly, both Pakistan and India are rice exporting countries. These factors restrict the possibilities of expanding intra-regional trade in the SAARC region. Further, the competition for export markets for the same commodities such as textiles and rice has negative repercussions on incentives for regional cooperation among the member states.
Above all, the danger is that in a SAARC free trade area or in a South Asian Economic Union, India because of the enormous size of its economy, the economies of large scale production, the advanced stage of its manufacturing sector and political clout because of the huge size of its population compared with other countries, will tend to have a dominant role in the regional economic decision making processes thus furthering its goal of regional hegemony and reduce Pakistan and other member states to the status of suppliers of raw materials for its industries thereby slowing down their economic progress. It is worth remembering that bigger and economically advanced member states tend to benefit more from the process of economic integration as compared with the smaller and less developed members if the matters are left to the market forces alone, in accordance with the principle of social and cumulative causation propounded by the famous Swedish economist Gunnar Myrdal.
The foregoing analysis leads one to the inevitable conclusion that even if the SAARC cooperation process is resumed in right earnest at some time in the future, we should not attach high hopes and expectations to it. From Pakistan’s point of view, the pursuit of the goal of a South Asian Customs Union and more so a South Asian Economic Union would unleash economic and political forces which would result in decisions about Pakistan’s economy and ultimately even its foreign policy, as the two cannot be separated, being taken at dome regional forum dominated by India because of the sheer weight of its huge size. Instead we should use SAARC as a vehicle for regional cooperation on a selective basis in such areas as river water management, environment, transportation, cross-border crimes, communicable diseases and control of drug trafficking.