Kathmandu, August 15:

Finance ministers from the South Asian nations are scheduled to meet in New Delhi on September 14 for operationalising the $300 million SAARC Development Fund (SDF).

The fund was created because the members of the South Asian Association for Regional Cooperation (SAARC) had pledged to support projects to alleviate poverty and improve the status of the peoples of the region in 2005.

The Delhi meeting, to be preceded by a meeting of the finance secretaries of member nations on September 13, will mainly focus on finalising the recommendations on the charter and by-laws of the fund, financial issues related to the roadmap of the SAARC Economic Union and development of the regional capital market, the officials at the ministry of finance (MoF) said.

The SDF, the first-ever umbrella fund under the regional bloc, did not come into effect due to the reservations of a member country, which argued that it should not allow actors outside the region to be associated with the funding process.

Experts comprising officials of finance and foreign ministries as well as the concerned government agencies are meeting in Kathmandu on August 21-22 to finalise their recommendations on the SDF’s charter and by-laws.

A separate experts’ group is also scheduled to meet in Kathmandu on August 24-25 for the recommendations on greater economic integration that will help form the SAARC Economic Union, an official at the ministry of foreign affairs (MoFA) told The Himalayan Times.

SAARC Secretariat has already issued a circular inviting all member countries for the experts’ group meeting in order to kick-start the process of the fund, which has already been delayed due to dispute between ‘ the powerful member’ countries.

Meanwhile, a finance ministry official said that the August 24-25 meeting would come up with their recommendations on investment promotion, service sector development and formation of a regional customs union.

The least developed member countries have favoured the process of developing a capital market, arguing that the linkage of capital markets between them could mobilise funds for the domestic markets.

The proposed SAARC development fund will have three windows; social, infrastructural and economic.

The social window, with an initial amount of $300 million, is expected to fund poverty

alleviation programmes and projects among others.

Through the infrastructure window, funds will be mobilised from within and beyond the region to finance infrastructure projects, while the economic window will fund

other non-infrastructure commercial projects.

In 2005, the SAARC countries have decided to reconstitute the existing South Asian Development Fund (SADF) and establish a SAARC Development Fund (SDF), an umbrella organisation for all the SAARC countries’ development funding.