Economic and Political Challenges of Regional Integration in South-Asian Countries

International Journal of Research and Innovation in Social Science (IJRISS) | Volume III, Issue IX, September 2019 | ISSN 2454–6186

Economic and Political Challenges of Regional Integration in South-Asian Countries

Ajith Dissanayaka
Department of Economics, University of Kelaniya, Sri Lanka

Abstract:-Economic and political integration in South Asian countries is said to be the major objective of SAARC. However, it is observed by many researchers that it is still far beyond the reality even after nearly 30 years from establishment of SAARC. Most of the studies on SAARC regional co-operation have highlighted more of the unsuccessful stories than successes. Changes in world economic order and changes in regional and domestic politics are blamed for it. This has lead variety of criticisms regarding the evolution of the SAARC to its present form. Criticisms range from the ides that it is a ‘talking shop’ to the critique that it is not a place for regional problems. Some commentators have gone to the extent that it is a “poor’s club”. In fact, these criticisms are not without reasons. This article examines political and economic factors behind the poor regional integration in SAARC.

Key words: SAARC, Regional Integration, South-Asian Countries, Economic and Political Challenges.

I. INTRODUCTION

South Asian Association for Regional Co-operation (SAARC) was formed in December 1985. This is considered by many as one of the major diplomatic breakthrough in South Asian region in its modern history. The SAARC comprises eight (8) countries Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. It has emerged as one of the youngest regional co-operations in the world. However, even nearly after 30 years and despite many common characteristics shared by its member countries, for many researchers, South Asia is still the least integrated region in the world.
Data available from World Bank (2007) and SAARC secretariat web page show that the economic integration in terms of trade is minimal between SAARC countries. For example, in recent past out of total trade initiated in SAARC only 4 percent has taken place between SAARC countries. The rest 96 percent of trade of SAARC is with rest of the world. Out of this minimum 4 percent trade among SAARC members 76 percent is with India. Comparing these statistics with European Union, Association of South-East Asian Nations (ASEAN) and Latin America shows that in European Union 67 percent of trade place among union members. In ASEAN, it is 26 percent and in Latin America it is 22 percent.

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