Context: Former Prime Minister of Sri Lanka has recently talked about regional economic integration in South Asia and talks between India and Pakistan. He has also proposed an Economic Integration Road Map (EIRM).
Important suggestions given by former Prime Minister of Sri Lanka:
Economic integration through SAARC: Former Sri Lankan Prime Minister has said that Economic Integration in the SAARC region has not progressed due to conflict between India and Pakistan after the Uri terrorist attack of September 2016. There has been no SAARC Summit after the postponement of SAARC Summit in 2017 in Kathmandu. He suggested that there is a need for more regional economic and security integration. Former President said that the formation of SAARC in 1985 led to the signing of South Asia Preferential Trade Agreement (SAPTA) in 1995 and South Asia Free Trade Agreement (SAFTA) in 2006. But, economic integration in the region has not grown and intra-regional trade is only 5% of the total trade.
BIMSTEC’s potential for Economic integration: Former Sri Lankan Prime Minister has also talked about the potential of BIMSTEC for regional integration. Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand are part of BIMSTEC. As per a report by the Federation of Indian Chambers of Commerce and Industry (FICCI), intra-regional trade by BIMSTEC countries can grow from US$ 40 billion to US$ 250 billion. Former Prime Minister of Sri Lanka has also suggested that efforts focused on smaller grouping of India, Sri Lanka, Bangladesh and Thailand will help in successful economic integration through BIMSTEC.
Economic Integration Road Map (EIRM): Former Sri Lankan Prime Minister has proposed EIRM for promoting integration in the region. The proposed EIRM is divided into four parts. They are Economic structural reforms, E-Commerce, an Economic sub-region, and tourism. As per the proposal, the Economic sub-region under EIRM should comprise of five Southern Indian states and Sri Lanka.
India and regional integration in South Asia: Recently, India has decided that it will not sign the Regional Comprehensive Economic Partnership Agreement of ASEAN. The government is focusing on bilateral relationships as multilateral trade agreements carry the threat of flooding of Indian markets by Chinese goods. There has been no SAARC Summit since 2014. In the past few years, the government has not given signs of resuming talks with Pakistan. Being the largest country and economy, Indian can play a leadership role in ensuring regional integration in South Asia.
In order to play a leadership role in increasing regional integration in South Asia, India will need to provide concessions to its neighbors as many of them are small and having trade deficits with India. However, the lack of India’s integration with its neighbors in South Asia may put a limit on its prominence in global geopolitics.
NEED TO KNOW FACTS:
South Asian Association for Regional Cooperation (SAARC):
Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC):