The summit meeting of the South Asian Association for Regional Cooperation (SAARC) held earlier this month was a landmark in the life of this organisation. SAARC was created in 1985 to promote economic development and social progress in South Asia through regional cooperation. Whilst SAARC has done commendable work in some areas, it has not advanced as expected. Continuing tensions between the two largest countries of the subcontinent have often been blamed for such lack of progress. The announcement of a composite dialogue between India and Pakistan is, therefore, a most important outcome of the summit. One does hope that the machinations of extremist elements, active in both countries, do not once again succeed in derailing the peace process.

The South Asia Free Trade Agreement (SAFTA) is another significant achievement. As mentioned at the summit, we in South Asia face the danger or marginalisation in the global economy and even the risk of regression in spheres of social and economic development. Regionalisation is an effective instrument to advance collective interests and a defence against unrestrained globalisation and the negative fallout of the WTO. At present, intra-regional trade among SAARC countries is less than five per cent whilst it is 62 per cent in the European Union, 55 per cent in the NAFTA area and 35 per cent in the ASEAN. SAFTA is the first step towards a more intense synergy aimed at the South Asian Union and the single currency.

The agreement comes into effect on January 1, 2006, but there are hurdles to overcome before it fully materialises. SAFTA rightly takes note of the asymmetry in the development stages of the South Asian countries. It aims at ensuring equitable benefit to all contracting parties taking into account their respective levels of economic development. It provides for a special and differential treatment to the Least Developed Contracting States (LDCS). The LDCS are allowed a larger time frame for implementing the trade liberalisation programme. Whilst the non-LDCS must implement SAFTA over a period of seven years, Sri Lanka, being a small country, gets eight years, and the LDCS are permitted 10 years for implementation.

In view of the constraints that this region does face, it would be advisable for India to enter into bilateral Free Trade Agreements without waiting for SAFTA to materialise fully. Indeed, if the Indian economy is to grow at the rate of seven to eight per cent, it is essential that it should have free trade access to entire South Asia and to as many other countries as possible.

Trade between India and China has increased seven times since their FTA was signed five years ago. Trade between India and Sri Lanka has expanded one and a half times since their bilateral FTA, two years ago. As a result of the very positive fallout and mutual benefit, a Comprehensive Economic Partnership Agreement is now being negotiated by the two governments to further expand bilateral trade and also to address the services sector. The Indo-Sri Lanka Free Trade Agreement ought to be a model for similar agreements with not only countries of South Asia but elsewhere. Formal trade between India and Pakistan stands presently at about $251 million. If a Free Trade Agreement comes into effect, bilateral trade could easily increase to over $4 billion within two to three years.

SAARC attaches great importance to people-to-people contacts in the region so as to strengthen goodwill and foster better understanding. Travel between India and Pakistan has now been restored but relaxation of the visa regime is essential for full benefit of the re-opening of road, rail and air links between the two countries. Sri Lanka, though it faces a major terrorist threat, has taken the initiative to exempt SAARC nationals from visa requirements for business and tourism. The Government of India should reciprocate this move not merely in regard to Sri Lanka but also other SAARC countries. Indeed, terrorists do not travel on passports and visas. Travel restrictions as well as those on exchange of books and journals should be removed without delay. The positive impact will far outweigh the negative factors involved in a visa free South Asia.

The Social Charter announced at the SAARC summit addresses itself to the issue of poverty alleviation, education and health. South Asia continues to have the highest number of people in the world living below poverty line, outstripping sub-Saharan Africa in this regard. Last year, UNESCO released the "Education for All Global Monitoring report 2002: Is the World on Track?" The report points out that among the 154 countries for which data are available, 28 are not expected to attain any of the three objectives which the international community gathered at the World Education Forum had agreed should be achieved by all nations by the year 2315. The three goals are: Universal primary education; free schooling of acceptable quality; and, removal of gender disparities in education. All the countries of South Asia, with the exception of Sri Lanka, are among these 28 countries. Regrettably, the subcontinent makes more investment on armaments than on social infrastructure.

India and Pakistan spend more than three times on weaponry than they do on education or health. Military expenditure in South Asia increased by 54 per cent from 1992 to 2001, whilst for the world as a whole such expenditure decreased by nine per cent during the same period. India has augmented its own defence outlay by 10 per cent per year since 1997, whilst the annual increase was 1.5 per cent during the previous decade. A crucial fallout of the Indo-Pak peace process ought to be a drastic reduction in defence expenditure of both countries so that our resources are utilised towards welfare of our people rather than on purchase of military hardware from abroad.

In the words of Prime Minister Vajpayee at the summit meeting, "The beads of ethnicity and culture which hold together the peoples of this region are more enduring than the barriers of political prejudice that have been erected quite recently." The Prime Minister of Pakistan added, "Peace is a matter of will for the leadership of both the countries." Pronouncements at SAARC summits are quite admirable but sometimes they are not matched by adequate implementation. Whilst congratulating the leaders of the seven nations for the success of the summit we do now look forward to the fulfillment of the agreements arrived at.

The South Asia Forum of present and former members of Parliament from all political parties was formed. It was inaugurated at Parliament House by Foreign Minister Yashwant Sinha last September. The Forum shall create awareness about the critical need for peace and cooperation. It will promote greater interaction between the civil society and the political class of the countries of South Asia. Such an interaction is needed for a quicker settlement of differences and greater South Asian solidarity, the key to progress and prosperity of all our peoples.

(The writer is a former Minister of State for External Affairs and Chairman of the South Asia Forum)