Experts finalise SAARC Development Fund charter

Kathmandu, October 2:

The financial experts of eight-member states of South Asian Association for Regional Cooperation (SAARC) has finalised the charter and other issues of $300 million regional development fund.

The fund was created as per decision of 2005 SAARC Summit to support projects for poverty alleviation and improving the status of 1.4 million people of the region.

The second inter-governmental group meeting of the SAARC Development Fund (SDF) held on September 25-26 in Kathmandu decided that everything related to the fund should be finalised before the council of ministers’ meeting scheduled to be held in Delhi in the first week of December.

A finance ministry source said experts took the decision so that the SAARC members could sign the necessary documents related to the operational issues of the SDF. The meeting also decided to finalise all pending issues in the next meeting of the forum on October 31-November 1, in Kathmandu.

The meeting also discussed the issue of capital structure, operations, organisation and management, decision-making, critical by-laws and charter, and also regulation of the regional development fund. The experts came to an agreement on the modalities of SDF’s operation through two tiers — a governing body and an executive body headed by a chief executive officer entrusted with looking after the day-to-day activities with a permanent secretariat.

On the decision-making of the fund, some member states felt that it should be operated like SAARC following its charter, which requires unanimous decision for eve-ry action, while others argued that it should be operated like other international financial institutions like ADB and IDB on the basis of majority or super-majority.

The proposed fund will have three windows — social, infrastructure and economic. The social window, with an initial amount of $300 million, is expected to fund poverty alleviation programmes.

The finance minister-level meet in New Delhi on September 14 had decided to set up of an experts group to finalise the charters and by-laws. The SDF, the first-ever umbrella fund under the regional bloc, did not come into effect due to the reservations of a member country.