On a flourishing SAARC

In so far as transportation is concerned, the SAARC countries are very poorly served even by airlines, while the other modes of transportation such as road, rail, and water remain either non-existent or extremely limited across the regional countries. In so far as energy is concerned, this regional countries still depend on biomass fuel to a very large extent; and the consumption of commercial energy remains extremely limited, which is, of course, consistent with the low level economic development in the region. The following statistics are self-explanatory in this regard. As of 2001, per capita commercial energy consumption was 153 KgOE (Kilogram of oil equivalent) in Bangladesh, 357 KgOE in Nepal, 423 KgOE in Sri Lanka, 456 KgOE in Pakistan, and 515 KgOE in India. For a global perspective, one may note that the per capita commercial energy use, as of the same year, was 495 KgOE in Vietnam, 899 KgOE in Costa Rica, 2,168 KgOE in Malaysia, 3,127 KgOE in Spain, 3,982 KgOE in the UK, 5,740 KgOE in Sweden, and 7,996 KgOE in the United States (World Bank, World Development Indicators 2004, pp. 140-142).

Studies have been conducted by Track-II (by academics and experts outside the governments in the regional countries) on both of these issues, making purposeful and practical recommendations. One study published in 2000 jointly by Bangladesh Unnayan Parishad (BUP), Dhaka; Centre for Policy Research (CPR), New Delhi; and Institute for Integrated Development Studies (IIDS), Kathmandu dealt with both the issues elaborately. The group had earlier (1994) proposed the establishment of a regional power grid. There are also various other studies conducted by the same group as well as by other groups. It should not be difficult to develop doable proposals on the basis of the data and analyses already available, supplemented by further research as may be necessary.

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In so far as transportation is concerned, what is necessary for the authorities of the regional countries is to decide to connect the countries and act. While there are situations where one or the other mode of transport may be used to connect two or more countries, the eventual best approach would be to create integrated multi-modal linkages, which will make the system of transportation more efficient and cost effective, promoting movement of both people and goods. But, before such an integrated regional transport system can be meaningfully developed, it is essential that the SAARC countries act on decisions taken in several SAARC Summits that people to people contact is essential for the success of SAARC and should, therefore, be widely promoted. This calls for immediate easing of visa requirements, the aim being the withdrawal of visa requirements soon. Also, customs formalities must be simplified and standardised to facilitate movement of goods.

Despite the South Asian Preferential Trade Agreement (SAPTA) adopted in the 7th SAARC Summit in April 1993, the intra-SAARC trade remains just about four per cent of the total international trade of the regional countries. I would argue that one of reasons of this tardiness is the physical bottleneck in terms of lack of facilities and arrangements for easy movement of people and goods across the countries. Unless these issues are satisfactorily resolved, South Asian Free Trade Agreement (SAFTA), even if it comes into force, will remain severely constrained from operational point of view.

On the energy issue, South Asia has a huge hydroelectric potential in addition to other sources of energy. In the case of hydroelectricity, the theoretical potential in the countries of the region is an estimated 229,000 MW, of which only about 15 per cent is now exploited. The potentials in Bangladesh and Sri Lanka are extremely limited, which have already been mostly utilised. On the other hand, the potential is large in the other regional countries. For example, the theoretical potential in Nepal is over 83,000 MW, while in Bhutan it is 30,000 MW. The currently estimated economically feasible potentials in the two countries are respectively over 43,000 MW and 20,000 MW, while only about one per cent in Nepal and about three per cent in Bhutan have so far been harnessed. In Pakistan and India, also, much larger parts of the potentials remain unexploited. In Nepal and Bhutan, the existing hydropower potentials offer tremendous scope for boosting the economies of the two countries, which can be realised through exploitation of these potentials and exporting hydroelectricity.

India and Bangladesh, for example, would greatly benefit by importing hydropower from Bhutan and Nepal. In both India and Bangladesh, power supplies are very limited in relation to the demands and the situation will, unless addressed adequately, surely worsen in future in response to increasing population and expanding economic activity and social development. If the exploitation of hydropower potential in Nepal and Bhutan are taken up as a SAARC initiative, the regional countries will thus benefit hugely.

Will the 13th SAARC Summit act on so important a call made by the Indian Prime Minister in the context of boosting regional cooperation among SAARC countries? Indeed, cooperation in transportation and energy is an essential building block if the region has to move on, as suggested by Dr. Singh, to implement SAFTA and complement it by SAARC Investment Area and further deepen regional cooperation by moving on to SAARC Customs Union and then on to SAARC Economic Union.

Dr. Qazi Kholiquzzaman Ahmad is President, Bangladesh Economic Association (BEA).