Dhaka for groundwork on Saarc economic union

Dhaka plans to push for an action plan to lay the groundwork for a Saarc economic union at the council of ministers' meeting on January 7-8, against the backdrop of little progress in a planned feasibility study on the union.

The council meeting just ahead of the January 9-11 summit in Dhaka would also set the agenda for discussion by Saarc leaders at the 13th summit.

Leaders at the 12th South Asian Association for Regional Cooperation (Saarc) summit in Islamabad had directed SaarcFinance to submit the study report by last July to the council of ministers meeting.

SaarcFinance comprising the finance secretaries and central bank governors of the member states, has missed the July deadline and is unlikely to submit the study report at the upcoming council of ministers (foreign minister-level) meeting as well, sources say.

Saarc leaders are expected to discuss the Saarc economic union during their talks on the day of retreat on January 10. It, however, depends on how the other members entertain the Dhaka proposal.

At the Islamabad summit last January India proposed a target of setting up the economic union by 2015 while on a different note, Pakistan suggested incorporation of political agendas in the union's agenda.

Despite the conflicting proposals from India and Pakistan, Saarc leaders unanimously endorsed the idea of a possible Saarc economic union. They said they would support any steps to that end.

Besides, on several occasions a proposal to set up an independent commission to facilitate formation of economic union has been raised but shunned due to ongoing Saarc trade negotiations.

Such a commission comprising experts and finance ministry officials from the member states is seen as the only tangible option by Saarc finance officials, as creating the union is a cumbersome task, sources said.

Officials of the SaarcFinance at Saarc meetings maintained that in addition to their domestic duties, the respective ministries are not adequately staffed or equipped to sketch out detailed study on Saarc economic union, sources say.

Earlier, Foreign Minister M Morshed Khan had told reporters that the idea of a Saarc economic union still exists in embryonic form. It would gain a good going only after the implementation of the South Asian Free Trade Area (Safta).

Morshed as well as several high-level foreign ministry officials have said that the economic union would be modelled on the European Union.

Safta is expected to be operational from January 2006, when trade barriers between Saarc countries would start to be lifted.