Regional Integration in South Asia: High Time for Implementation

Regional Integration can be understood as a process where countries in the nearby region opt for a regional agreement, of course with the prime motive of enhancing the regional cooperation and development guided by the regional level institutions and legislation at the regional level. We understand that whenever we talk about the development, even before 1990, development was only about the economic development. Though the legacy of the regional integration may go back to many decades, a distinct and developed form of regional integration was exhibited by the European region after the Second World War. Second World War proved devastating for Europe which then decided to integrate itself as a regional unit. Yes, it took long but now European Union (EU) is an example for others to follow in the world. There are stages of regional integration with a motive of economic development which can be illustrated as follows:

A Preferential Trade Area (PTA) is a trading coalition that gives privileged access to definite products among the partaking countries. Usually, the major approach is by reducing tariffs, not obliterating them completely. A PTA can be established through a trade agreement. It is the first stage of economic integration. Then comes the Free Trade Area (FTA). A FTA is a trade coalition whose member countries sign an agreement, which eliminates tariffs, import quotas, and preferences on most of the goods and services traded between them. If the mobility of the people is also made free within the partaking countries, in addition to FTA, it is considered an open border. It can be considered the second stage of economic integration.A customs union is a trade coalition composed of a FTA with a common external tariff. The partaking countries come up with a common external trade policy; meanwhile, import quotas are used in few cases. Establishing a customs union increases economic efficiency and establishes closer political and cultural ties among the member countries.It is the third stage of economic integration.A common market is a type of trade coalition composed of a FTA (for goods) with common guidelines on product regulation, and freedom of movement of the factors of production (capital and labor) and of enterprises and services. The physical, technical and fiscal barriers are best possible tried to remove for the higher economic welfare. An economic union is a trade coalition composed of a common market with a customs union. The participant countries have both common policies on product regulation, freedom of movement of goods, services and the factors of production (capital and labor) and common external trade policy. The countries often share a common currency. Previously the regional integration was undertaken to maintain the economic and political stability among the countries in the region, but now the concept has totally changed. The world is a global village now, people or countries do not need to integrate for the safety and security only but also to enhance the mobility and to learn new skills and technology transfers. Getting back to where we started, European Union is one of the best examples of economic integration which followed the basic notion which each of us studied since childhood – “United we stand, Divided we fall”.

South Asian Association for Regional Cooperation (SAARC) is not a new term for many of the people around the globe. SAARC was established in 1985 with a similar motive of the regional integration and political consensus by seven countries and Afghanistan joined the group in 2007 only. When the major objectives for the formation of the SAARC are looked into, they were: promoting the welfare of the people in the region; accelerating the economic growth, social and cultural progress in the region; contribute to mutual trust, understanding and helping to negotiate one another’s problems; strengthen the cooperation with other developing countries; to maintain peace in the region, etc. But what has happened, nothing much. The results would sound discouraging. We established South Asian Preferential Trade Area (SAPTA) first, we then upgraded to South Asian Free Trade Area (SAFTA), but the trade within the region did not flourish. Many political reasons and tussles are behind this situation of SAARC. So, are we not capable of doing anything and putting our hands on hands? Is this the fete?

World Bank says that SAARC region has 54.7 percent of its land as agricultural land and 48 percent of the total population is rural population in the region (World Bank, 2011). In case of rural population, the dominant occupation again is the Agriculture for which India is the only country which has specific policies and has made its remarkable presence in the agricultural sector in the world. Pakistan follows but still has a long way to go. Nepal also made a plan called Agriculture Perspective Plan (APP) but it was a failure plan as the implementation could not be done. APP is going to end in 2017, so the country is busy drafting Agriculture Development Strategy (ADS) which is supposed to be much more strategic than the APP and implementable too. In case of Nepal, around 65 percent of the people are involved in agriculture but only contribute around 35 percent to the GDP. The main reason behind is the subsistence agriculture. And this is not the problem of Nepal only; most of the countries in this region have subsistence agriculture which generates low value in the economy. When it is already identified that Agriculture is one of the major weapons of the region itself to conquer the objective of economic growth, through this write-up, I would like to conceptualize a step that could help agriculture develop its revenue, but with less people and those people not fully devoted to agriculture could invest their time in service sectors or others as wanted.

First of all, the region needs to have a Common Agricultural Policy (CAP) like European Union (EU) used to have in earlier days. Agricultural Integration should be one of the major aims of the region and steps should be taken to flourish the concept. The policy needs to have objectives of increasing agricultural production, assuring effective and efficient food supplies, ensuring a standard quality of life for farmers, soothing the market turmoil, and guaranteeing rational prices for consumers. The responsibility for such policy development should be taken by the Agriculture ministries of the respective countries and all the countries should ensure that the policy gets implemented. Needful and necessary modifications can be done time-to-time but it is high time the region starts thinking about the same.

Now, when the production is fragmented, no country in the region is being able to maximize the welfare out of it. But once such policy is developed and practiced, one can expect positive vibes towards the development of the region itself. I know, going into such policy would not be easy due to the lack of regular supervision and monitoring, therefore, a model of Information System can be developed. A simple sketch of such model can be: