Euro 312 Presentation Is EU integration model suitable for the South Asian Association for Regional Co-operation (SAARC)? By William Lama 9 th June 2006

Outline  About SAARC  Why should South Asia Integrate?  Why EU model?  South Asian scenario: Vision towards South Asian Union (SAU)  Economic Integration  Political Integration  Key Challenges

About SAARC  Established in 1985  SAARC Charter was signed by 7 Countries

Observer

Charter  Objectives:  Improve Quality of life  Accelerate economic growth  Promote social progress, collective self reliance  cooperation among members in international forums.

Basis of cooperation  Principles:  Sovereign equality, territorial integrity, political independence.  Non-interference  General provisions:  Summit as the highest authority  Decision on unanimity  Bilateral and contentious issues excluded

South Asia Now  Massive poverty-46% of total population  Regional instability  Terrorism  Separatism  Kashmir issue  Low intra-regional trade  4.5 % of total trade of the region  Address common issues  Tsunami  Earthquake and other natural disasters

World Bank, 2005 South Asia 22% Rest of the World 78% South Asia 40% Rest of the World 60% Rest of the World 54% South Asia 46% Share of SAARC in World Population Share of SAARC in World illiteracy Share of South Asia in World poverty

Why South Asia should integrate? Economic benefits Cooperation and integration fosters  market expansion for goods and services  economies of scale  attract more foreign direct investment  benefits of technology and knowledge transfer  higher productivity  Economic development

Political benefits  Regional Stability  Security

Why EU model?  It has worked well for the EU  40+ years to form EU  An example of the highest form of integration in the world  Intra-EU trade 63-70%, Growth, FDI, growth in HDI  Example Ireland, Poland and Greece  Economic and political union  Integration with institutionalisation  Economic integration to creation of European Identity

 EU-SAARC bilateral relations  EU is likely to gain observer status of SAARC  EU willing to assist SAARC implement EU integration model  Expertise  Technical assistance

Will it Work for SAARC?  Economic integration  possible  Political integration  The South Asian Parliamentary Sovereignty  Inter-governmental or supranational  Political Integration difficult without the creation of South Asian identity.

The Formation of South Asian Union The steps and estimated time Free Trade Area2017 Custom Union2027 South Asian Parliament2027 Common Market2047 Economic and Monetary Union2059 SAARC to South Asian Union

Key challenges  Establishing South Asia as free trade area  Kashmir Issue and atomic nations  Implementation of SAARC agreements  Combating Corruption  Reducing Poverty, Inequality and Enhancing Human Security

Thank You