SAARC or the South Asian Association for Regional Cooperation was established on December 1985. It is basically a political as well as economic organisation of eight countries . It had initially started with the seven countries of India, Pakistan, Bangladesh, Nepal, Bhutan and Maldives. Afganistan was added to the list in 2007 to become the eighth member country.
Historical Evolution of SAARC
In the 1970s, the President of Bangladesh Ziaur Rahman had put forward the idea of a trade bloc that would comprise the South Asian countries. This idea was accepted by India, Bangladesh, Pakistan and SriLanka in Colombo in 1981. In 1983 there was a summit in New Delhi whereby the declaration regarding the formation of the South Asian Regional Cooperation was adopted. Later three other countries of Nepal, Bhutan and Maldives joined in. There were mainly five areas in which these seven countries decided to cooperate:1. Human Resource Development 2. Transport 3. Health and Population Activities 4. Telecommunications, Science, Meteorology and Technology 5. Agriculture and Rural Development
Failure of SAARC
SAARC was conceived so that the South Asian countries could prosper from such an association. But political rivalries between countries like India and Pakistan went against this goal. Hence the status of SAARC is reduced to merely a platform where annual talks and meetings are held.
Free Trade Agreement
Initially the member countries in SAARC had refrained from agreeing to a free trade regime. Although India did have trade agreements with countries like Bhutan, Maldives, Nepal and Srilanka, it declined from doing so with Pakistan and Bangladesh due to political reasons. In 1993, all the member countries decided to lower their tariffs. The Free Trade Agreement was signed in Islamabad nine years later and was effective from July 1, 2006.
2005 Summit At Dhaka
The summit at Dhaka in 2005 conferred the observer's status to countries like China, Japan, South Korea and USA. It was decided that there would be a common fund store that would finance all kinds of programs that may be social , economic or infrastructural.
Official comments have injected volatility into the foreign exchange market. As we anticipated, Japanese officials pushed back against the seemingly free-fall in the yen sparked by the aggressive BOJ action and the diversification of the government pension funds. Finance Minister Aso expressed concern about the pace of the yen's decline. However, comments by Abe-adviser Hamada underscored that the direction was no objectionable and that JPY120 would be good for the Japanese economy. The dollar was pushed off a full yen to roughly JPY117.35 before finding a good bid.
Professor of Economics & Director of the Earth Institute at Columbia University. Special Adviser to the UN Secretary-General on the Millennium Development Goals. Founder & co-President of the Millennium Promise Alliance.
Mario I. Blejer is a former governor of the Central Bank of Argentina and former Director of the Center for Central Banking Studies at the Bank of England. Eduardo Levy Yeyati is Professor of Economics at Universidad Torcuato Di Tella and Senior Fellow at The Brookings Institution.
Vice President and Director of the Global Economy and Development Program at the Brookings Institution. Former Turkish Minister of State for Economic Affairs. Head of the United Nations Development Program (UNDP) from 2005-2009.