New Delhi, April 2:

It’s the season of South Asia here with hundreds of people from neighbouring countries, speaking diverse languages and professing different faiths, descending on the Indian capital in a celebration of shared cultural identity and interlinked destiny of the region that accounts for a fourth of humanity.

The 14th South Asian Association for Regional Cooperation (SAARC) summit that begins tomorrow will bring together leaders, officials and common people from India, Pakistan, Sri Lanka, Bangladesh, Nepal, Bhutan and the Maldives, to be joined by its newest and eighth member Afghanistan. It’s a landmark summit in many ways that sets it apart from previous ones - it is an expanded SAARC with a global focus that will be watched by the world’s leading powers.

Significantly, the presence of the US, China, Japan, South Korea and the EU, who would be participating as observers for the first time in the history of the regional grouping, raises the stakes for a stable and cohesive South Asian region that has the potential to become an economic dynamo. It is this precise potential that is drawing to it countries and powers that for years treated the region with lofty disdain. Iran is the latest country to seek observer status at the summit, with a presumed intention to join as a full-fledged member later, citing its geographical links.

Although most SAARC countries continue to be afflicted by endemic problems of poverty, illiteracy and inequity, economies in most countries are growing at the rate of five per cent and above, a fact pointed by Indian foreign secretary Shivshankar Menon recently. Economic integration and an across-the-board implementation of the South Asian Free Trade Area (SAFTA) holds the key to unlocking the economic potential of the region.

The broader idea behind all this is to convert the region into a single economic space, as articulated by the 11th SAARC summit in Kathmandu in 2002 and reiterated by subsequent summits to implement ‘a phased and planned process eventually leading to a South Asian Economic Union’.

The global stakes in peace and stability in South Asia are huge as the region is home to the world’s two nuclear-armed countries that do not enjoy the best of relations with each other on the one hand and are beset by terrorism and extremist ideologies on the other. In fact, some South Asian countries have some of the most persistent terrorist problems in the world.

“A stable and peaceful South Asia, free from the scourge of terrorism, is in the interests of the world’s leading powers,” K Subrahmanyam, a strategy expert, said. Peace means more economic opportunities. Which is what most big powers are interested in. The US and the EU are SAARC countries’ largest trade partners and have stakes in the success of economic integration in the region. The EU has offered to ‘share expertise and experience in all areas of interest to SAARC as well as in the implementation of the South Asia Free Trade Agreement (SAFTA).

SAARC, however, remains a work in progress with most of its potential unachieved. If the last 22 years of endless talking and producing documents are replaced by the next 22 years of action, South Asia could become the world’s economic hub and even a model of regional integration.

According to the World Bank, intra-regional trade is less than two per cent of GDP, compared to more than 20 per cent for East Asia. The cost of trading across borders in South Asia is one of the highest in the world, it points out.