Operationalisation of SDF, SAARC Bank in agenda

Kathmandu, August 15

The upcoming meeting of SAARC Finance Ministers will focus as to how to fully operationalise the moribund SAARC Development Fund (SDF), a financial mechanism, which is yet to be realised.

The meeting, being held in Kathmandu on August 20, is also expected to dwell on issue of establishing SAARC Bank, though officials hinted that an early decision on this matter is unlikely.

The SDF, headquartered in Thimphu, Bhutan, was set up in 1996 to support the entire socio-economic development in the SAARC region under its three funding channels: Social Window, Infrastructure Window and Economic Window.

The Social Window primarily focuses on poverty alleviation and social development projects; the Infrastructure Window covers projects in areas such as energy, power, transportation, telecommunications, environment, tourism etc; while the Economic Window is devoted to non-infrastructural funding related to trade, industrial development, and service sectors.

The Fund with $200 million as seed money has been largely unused due to lack of enthusiasm on the part of its member states because none of them has come up with project proposal for using the resources.

“So far, fund has been mobilised through its Social Window, while the other two windows are largely seen as dormant,” said an officer at the Ministry of Foreign Affairs. “We are optimistic that this ministerial meeting will come up with a solid idea of activating the other two windows as well.”

The Ministry of Finance (MoF) is coordinating the meeting. It will be preceded by the SAARC Finance Secretaries’ meeting on August 19. Madhu Marasini, who heads the International Economic Cooperation Coordination Division of MoF, said ministerial delegations from Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, and Pakistan will take part in the meeting while Sri Lanka will be represented by its Ambassador in Kathmandu.

Though the establishment of a SAARC Bank is on the agenda, any immediate decision is unlikely this time.