South Asia is considered the least integrated region in the world due to lack of physical infrastructure and rigid policies to promote trade and investment in each others’ countries. The SAARC Chamber of Commerce and Industry has been playing an effective role for the economic integration of the region. Pushpa Raj Acharya and Sujan Dhungana of The Himalayan Times caught up with President of SAARC-CCI, Suraj Vaidya, to learn how the private sector is pushing the governments of member nations to liberalise trade and investment policies to attract regional investment and promote intra-regional trade. Excerpts:

After being nominated as president of the SAARC Chamber of Commerce and Industry you unveiled some programmes for deeper economic integration of the region. How will you like to appraise the progress on this front?

I was nominated the president of SAARC-CCI two years back but I have been involved in it since its inception about 25 years ago. When I took over the leadership, I had a six-point agenda. One was to strengthen the secretariat of SAARC-CCI; complete the construction of the building of SAARC-CCI; work on policy issues to make trade and investment easier within the region; increase youth involvement in SAARC; make women entrepreneurs more active; and create an environment to enhance the image of SAARC. Looking back, I think we have completed quite a few things. The Pakistani government had provided land for the secretariat of SAARC-CCI 20 years back and drawings of the building were completed 12 years ago and I am proud to say that we have completed the construction in two years. We also have the first woman secretary general in SAARC-CCI. During my tenure, we opened regional offices in Mumbai, the financial capital of India, Colombo of Sri Lanka and Dhaka of Bangladesh to strengthen our activities. Investment and creating jobs are the major issues for us. We have also launched a book titled ‘Unleashing South Asia’, which has 20 projects from each member country. We have also conducted roadshows within and beyond SAARC region to attract investment. Moreover, we have taken delegations to various countries to bring in investment to South Asia. Of the 20 projects we identified in each country, joint ventures have been signed for 12 projects across SAARC and some are in the negotiation stage. I must say that my two years at the helm have been a difficult period. Relation between SAARC countries has not been the best. SAARC summit was cancelled and commerce ministers have not met since the last four years. Many of the declarations made during the SAARC summit has not moved forward. Despite this, we conducted a business meet every quarter.

Establishing SAARC industrial parks in each country and developing 10,800 megawatt Karnali-Chisapani were identified as flagship projects of SAARC-CCI. Why have these projects not moved ahead?

Developing SAARC industrial parks has gathered momentum. In Pakistan, the government has provided 150 acres of land in Faisalabad and the governments of Bangladesh, Bhutan and Sri Lanka are also keen on providing land to develop industrial parks. As Nepal has a stable government now after a long transition, we hope the Nepali government will also buy this idea. Due to lack of physical infrastructure to unleash the economic potential of the region, SAARC-CCI had also identified some projects of energy, connectivity, and taking advantage of value addition in information technology sector. However, political situation remains very difficult in Afghanistan, Bangladesh, Maldives, Pakistan and Sri Lanka. Most member nations are at present focused on resolving political uncertainties and economic agenda has taken a back seat. Despite that we are trying to work in the area of energy and there will be one major project in three quadrangles we have identified — east, west and south. On the east, we have Bangladesh, Bhutan, India and Nepal. The government of Nepal is still keen on developing Karnali-Chisapani project. The previous minister for energy, Janardan Sharma, was committed in forming a special committee to promote it as a SAARC project. Nepal has a stable government now and the issue will be taken up as the country is passing through an acute crisis of energy. There is a similar situation in Bangladesh and India and power is the key component to accelerate economic growth. In the south, India and Sri Lanka are constructing transmission lines under the ocean for energy cooperation and on the western front there is gas pipeline from Iran to India which passes through Afghanistan and Pakistan. We are pushing for transmission of power among SAARC countries but we need tripartite commitment of India, Bangladesh and Nepal as Bangladesh is keen to buy power from Nepal but it needs to be transmitted through India.

The governments have been rigid in terms of promoting trade and investment in the region and the private sector should have provided the necessary push to relax the strict policies. However, the private sector has not done much.

I think we have built a strong network of the business community in South Asia. We have also worked on facilitating trade. In fact, we took a business delegation to Peshawar from Afghanistan. We met the governor of Peshawar, and the finance and commerce ministers of Pakistan and we talked about how we should not allow terrorism to make it difficult for businesses to move forward. When the rift between India and Pakistan was at a peak we held an executive meeting in Amritsar and we walked from the Wagah border to Lahore of Pakistan. We are citizens of South Asia and our job is to bring hope to the people but the final decision always lies with the political leaders. Our concern is that if we only focus on the issue of terrorism then 99.99 per cent of South Asia will not benefit from the regional initiative. What we are pushing for is free movement of people and investments across the SAARC region. On this front, the concept of BBIN motor vehicle agreement was also launched. Nepal, Bangladesh and India had strongly supported it but Bhutan had some reservations. As the SAARC-CCI president, I went to Bhutan and held meetings with the prime minister, transport minister and the Bhutanese private sector. We discussed on how we can ease the transit issue by proposing dry ports at the border of Bhutan and using Bhutanese transporters in the country. We hope Bhutan will give priority to BBIN motor vehicle agreement and ratify it. So, I would say that the private sector is doing what it can.

There are strong arguments for creating sub-regional cooperation due to the failure of SAARC. What do you have to say on that?

Ever since SAARC was formed, there has not been a major war in South Asia. We have had three major wars in South Asia, mainly between, India, Pakistan and Bangladesh. All of us agree that the biggest danger to people’s livelihoods and economic development and prosperity are wars. SAARC is the only platform where all eight member countries can sit and discuss on resolving issues. As long as we have discussions wars can be prevented. My point is SAARC has not succeeded in terms of providing investment opportunities like how the European Union or ASEAN have. SAARC is a platform, where people can sit and talk. They can agree or disagree on issues. Low investment in the region is not because of SAARC, it is due to the policies of individual countries. Nepalis and Bhutanese cannot invest out of their country and this is not a problem created by SAARC but by the respective governments. The countries in South Asia should liberalise a bit more and open up trade and investment. Sub-regional cooperation can be a compliment to the regional initiative. In fact, there is agreement in SAARC that if any three member countries wish to take anything forward they can and BBIN and SASEC are initiatives of cooperation as allowed by SAARC agreement. If Bhutan does not ratify BBIN motor vehicle agreement, the remaining three countries can take it forward as per the regional accord.

However, it is reported that India, which is a major power within SAARC, as well as a global power, has brought BIMSTEC forward to minimise the SAARC initiative. What is your take on this?

I do not believe that India is lessening its involvement in SAARC. There are many credible Indian leaders who understand the importance of SAARC. BIMSTEC was formed 30 years ago and it has its own importance. SAARC and BIMSTEC are not substitutes for each other. Both initiatives have their own importance. Meanwhile, the Chinese economic influence in South Asia is growing, which India clearly understands. Today the largest investors in Afghanistan are Chinese. Sri Lanka too has attracted Chinese investment in a considerable manner. Bangladesh has been provided assistance commitment of $20 billion by China. I think India understands the importance of South Asia and its political influence in South Asia. India is always in favour of working with small countries around it and finding ways to work with other South Asian countries and India knows that isolation is not the solution to any problem. Isolation gives the opportunity to others to be more active, which can create more problems in South Asia. India as largest democracy of the world will have to play an even more important role to strengthen regional initiative.