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I thank the Institute of Defense Studies and Analysis and the Indian Council for Research on International Economic Relations for organizing this Seminar on the important and relevant subject of “Economic Security for Peace and Development in South Asia”. Coming as it does barely a fortnight before the opening of the 14th SAARC Summit in New Delhi, this Seminar could not have been timed better.
Mr. Chairman,
“The battle for peace has to be fought on two fronts. The first front is the security front, where victory spells freedom from fear. The second is the economic and social front, where victory means freedom from want. Only victory on both fronts can assure the world of an enduring peace.”
These words, spoken by Edwin Stettinius, the US Secretary of State during the founding conference of the UN, remain as true today as they did when he uttered them in 1945.
South Asia is home to about 1.3 billion people, representing almost 1/5th of humanity. Through rich in cultural, natural and human resources, the region suffers from the problem of a large concentration of mass poverty. However, today, the countries of South Asia may also be on the threshold of a historic moment. It is up to them to recognize the potential for transforming their economic conditions and, together with other Asian countries, play a key role not only in the global economy but also in the development of human civilization in the 21st century. For the first time in the last 350 years, the global economy is undergoing a shift in its centre of gravity from the continents of Europe and North America to Asia. Asia’s real income per capita rose seven fold between 1950 & 2005 and its share in world trade has more than doubled during 1970-2005. Globalization, while creating unprecedented opportunities for the progress and prosperity of all countries, has also brought new challenges for developing countries, including in South Asia. It is, therefore, imperative for the countries of this region to make joint efforts and make the best use of the complementarities of the region as a whole to avail of the positives of globalization.
Mr. Chairman,
India has long argued that if South Asia is to become a dynamic component of the larger processes of regional cooperation and globalization, it must achieve economic integration, first within itself and then with other regions that abut it. SAARC as an institution of cooperation in the region is thus significant and indispensable. Though its potential has been belied, the adoption of the South Asian Free Trade Agreement (SAFTA) and the reiteration by the leaders of the need to strengthen the institution, at the Dhaka summit held in 2005, has given a new hope.
For its part, India is firmly committed to the SAARC process. Our growing economy can create a ripple effect in the region and our neighbours can and should participate in this process with a view to sharing in economic progress and prosperity. While these are choices that individual countries will have to make, we firmly believe that closer economic and developmental cooperation offers immense benefits to all sides.
A case in point has been our contribution to the development of war torn Afghanistan with nearly US $750 million of assistance to support economic rehabilitation and reconstruction. A sovereign, stable, democratic and prosperous Afghanistan is not only in our best interest but also essential for peace and stability in the region. Afghanistan’s participation in SAARC will also strengthen the traditional and historical linkages between South and Central Asia.
Indo–Bhutan co-operation in the hydro-electric sector is another model of economic partnership in South Asia. It has been a win-win proposition, creating employment, economic opportunity and contributing to sustainable development.
Similarly, the Free Trade Agreement (FTA) with Sri Lanka, signed in 1998 and operationalised in 2000, has resulted in a phenomenal increase in trade between the two countries. We are now moving towards a Comprehensive Economic Partnership with Sri Lanka. Our other trade agreements in the region, for instance, with Nepal and Bhutan, operate on the principle of non-reciprocity. We are also ready to offer unilateral tariff concessions to Bangladesh.
Mr. Chairman,
Economic security in the South Asian region cannot be defined merely in terms of investments, energy security or greater flow of goods and services. One must also examine the conditions for economic growth and development to maximize gains from trade and commerce for our people. Amongst these is our ability to tackle issues like terrorism, drug-trafficking, money laundering etc., which have assumed transnational dimensions. Countering them requires joint action through enhanced vigilance, information sharing, improvement of border infrastructure, capacity building and mutual legal assistance in criminal matters, besides extradition treaties.
International terrorism, particularly, can be dealt with much more effectively if nations cooperate honestly and transparently. Groups and individuals involved with organized crime and drug trafficking operate from both inside and outside the region. Often, they have linkages with terrorists groups and provide them with logistics support and funding. This relationship between organized crime and terrorism requires a thorough analysis to enable states to develop appropriate counter measures.
Counter terrorism was a major theme at the 13th SAARC Summit in Dhaka. There was strong condemnation of terrorism in the Summit Declaration and renewed commitment to eliminate this scourge, both from the region as well as from the world. There can be no double standards in tackling this collective challenge. The first meeting of SAARC Home Ministers, held in Dhaka on May 11, 2006, also called upon member states to provide enabling legislation for the Convention on Suppression of Terrorism. An effective implementation of this Convention and the Additional Protocol will help us to collectively tackle the problem of terrorism.
Mr. Chairman,
The establishment of adequate and efficient infrastructure is the key to economic development in the region and constitutes one of the foremost challenges before the South Asian states in achieving security and development. It is essential for all of us to create or upgrade infrastructure for world class connectivity, which would not only open us to each other but also to the world beyond.
For economic integration to succeed, such connectivity is essential. There are of course many forms of connectivity, but I would restrict myself to three. First is physical connectivity, through physical infrastructure in the areas of transport and energy; secondly, electronic connectivity; and, finally, knowledge connectivity.
At the Dhaka SAARC Summit, the Prime Minister of India, Dr. Manmohan Singh, had suggested that South Asian countries provide transit facilities to each other on a reciprocal basis. India, which borders each of the member countries, is willing to do so. In this regard, India’s proposal to hold the South Asian Car Rally in the run up to the next SAARC Summit is intended to draw attention to the need to improve SAARC transport infrastructure.
Related to this is the need to improve air connectivity between SAARC member States. The increased frequency of flights between India and Sri Lanka and the Maldives in recent times has led to a great increase in tourist flow. We believe that an Open Skies arrangement would benefit all of us in South Asia.
There is also need to improve rail and land connectivity in the region. There is a proposal for a land bridge to connect Rameshwaram in India with Talaimannar in Sri Lanka. In the area of virtual connectivity, an undersea optical fibre link has already been established between Tuticorin and Colombo. Within Sri Lanka, India is helping to refurbish the Colombo-Matra railway line under a US $100 million credit line. We are keen on obtaining transit facilities through Bangladesh, which will give a further fillip to India-Bangladesh trade and provide India a shorter, more efficient route to our North East region.
I also want to emphasize here that, over the years, we have closely worked with our neighbours, for example Nepal and Bhutan, to ensure that our natural linkages are translated into meaningful and mutually beneficial economic, commercial and cultural ties. Important initiatives are already under way to strengthen infrastructure on our borders with these countries. These include setting up of modern integrated check-posts, cross-border rail-links, access to roads, air-connectivity, waterways and up-gradation of our border road infrastructure. Modernization of infrastructure and greater connectivity – in the broadest sense – will no doubt promote freer flow of goods and services.
Development of tourism, sports and cultural links should be another priority. These are areas which can give instant returns. If people of South Asia are allowed easy travel for short visits within the region and even if a small proportion of the population starts to travel among South Asian countries, we are talking about millions of people contributing to tourism. We are then talking serious figures for new economic activity in the region that would unleash not only a tourism boom but also a construction boom in the countries of South Asia with the need for new hotels, shopping malls, recreational facilities, and transport facilities. I feel that if we loosen up now, within a few years regional tourism could be a huge industry, creating millions of new jobs in our countries.
Today’s economies are dominated by the knowledge-based industry. If South Asian countries are to integrate themselves with the emerging Asian economies, then they have to achieve certain indices in human resource development and to keep abreast of cutting edge technologies and scientific research. The suggestion to set up a South Asian University that could provide world-class facilities and professional faculty to students and researchers from every member country will be a major contribution to realization of this goal over the next two to three years. Naturally, one of the key issues in the future would be to devise modalities for including services under SAFTA.
Mr Chairman,
Civil society, electronic and print media are important pillars of any democratic framework. It is heartening to note that we have in the region a very active civil society and an alert media. They have a vital role to play in connecting people and to disperse ideas in the region.
In our view, democratic institutions and a culture of democracy, coupled with an independent judiciary, a vibrant civil society and a free media, provide the most appropriate platform that would allow South Asian states to nurture the aspirations of their diverse communities in a pluralistic milieu. This would also ensure long term peace and security.
Mr. Chairman,
Other major challenges that South Asian countries will have to face in years ahead are food security, energy security, disaster management and public health. Prime Minister Dr. Manmohan Singh had put forward some suggestions to address these challenges. These included establishing a Regional Food Bank to be used to meet shortages and losses caused by natural calamities in any of the member countries, initiating a South Asian Energy Dialogue involving experts, academics, environmentalists, officials and NGOs, to recommend measures to tap and promote regional cooperation for energy security. Moreover, we hope that the SAARC Development Fund, to which India has offered to contribute US $100 million, will help to address the problem of poverty alleviation and development in general. We also have to come up with practical, workable and affordable solutions to contain and handle the dangers posed by HIV/AIDS and Avian Flu, etc.
Mr. Chairman,
The stakes are indeed enormous for the citizens of South Asia. The peace dividend would run into billions of dollars, forever changing the lives of the citizens of South Asia. The goal of more than doubling the South Asian region’s per capita income can be easily achieved in a conducive environment and with cooperative action. This would, however, require that the leadership of South Asia accept the challenge of propelling South Asia into the 21st century as the fastest growing region of the world. We have an opportunity to actually make this subcontinent achieve its potential. On its part, India stands ready to go the extra mile for a better future of the region.
Thank you.
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