13TH SAARC SUMMIT CONCLUDES; AFGHANISTAN INVITED

UNCLAS SECTION 01 OF 03 DHAKA 005592

SIPDIS

E.O. 12958: N/A
TAGS: PREL ECON PTER BG SAARC AID
SUBJECT: 13TH SAARC SUMMIT CONCLUDES; AFGHANISTAN INVITED
TO JOIN

REF: DHAKA 5569


1. Summary: SAARC leaders concluded a successful 13th
summit on November 13 with decisions to admit Afghanistan to
membership, create a South Asia Poverty Alleviation Fund,
implement SAFTA on schedule and implement the additional
protocol on terrorism. Preparation paid off; the summit ran
smoothly with no reported security incidents. India will
host the next summit some time in 2007. End summary.


2. The 13th SAARC Summit concluded November 13 with
leaders adopting the Dhaka Declaration summarizing their
decisions on a range of issues including membership
expansion, poverty alleviation, closer economic integration,
counter-terrorism and regional cooperation on everything from
infrastructure to culture. The Declaration also set in
motion institutional reform of SAARC. The full text of the
Dhaka Declaration is available at
http://www.mofa.gov.bd/13saarcsummit/Dhaka(un derscore)summit
(underscore)declaration.html.


3. The Dhaka Declaration is above all a commitment to
focus on implementing the decisions taken during the first
two decades of SAARC and improving the functioning of the
organization. The major decisions taken at the 13th SAARC
Summit reflect this commitment.

Afghanistan SAARC's Newest Member
--------------


4. The leaders agreed to accept Afghanistan's request for
membership, subject to completion of formalities. Japan and
China's requests to become observers were also agreed to "in
principal." The Council of Ministers will have to determine
how this will occur at its July 2006 meeting, because the
SAARC agreement does not contain any provisions on expansion
or observer status.

Poverty Alleviation Key Priority
--------------


5. SAARC agreed to declare 2006-2015 the SAARC Decade of
Poverty Alleviation and took concrete steps to ensure
progress toward this goal. Leaders endorsed the SAARC
Development Goals recommended by the South Asian Commission
on Poverty Alleviation and called for implementation of the
Plan of Action on Poverty Alleviation, adopted by the 12th
SAARC Summit. SAARC Ministers and Secretaries were charged
with leading these programs.


6. More importantly, the leaders established the SAARC
Poverty Alleviation Fund (SPAF) and restructured the South
Asia Development Fund into a new SAARC Development Fund
(SDF),which will be an umbrella financial institution with
its own permanent secretariat. SDF will have three funding
windows: social, infrastructure, and economic. The SPAF will
fall under the SDF. Funding details for the SPAF, including
the crucial question whether contributions would be mandatory
or voluntary, were left to the Finance Ministers to sort out.


7. To improve financial and macro-economic coordination
and to monitor implementation of development goals, the
leaders agreed Finance Ministers would meet within three
months after each summit, and on the margins of the annual
World Bank and ADB meetings.

SAFTA Leads Economic Agenda
--------------


8. The leaders noted that launching SAFTA is an important
milestone toward the long-term goal of a South Asian Economic
Union. The Dhaka Declaration directs members to finalize all
of the annexes needed to bring SAFTA into force on schedule,
starting January 1, 2006. It contains no hint, however, of
political guidance presumably given to the Committee of
Experts for resolving the three key outstanding issues by the
end of November, as directed by the declaration. These
issues are: percentage of domestic content required to
satisfy rules of origin requirements, the scope of the
sensitive lists excluded from tariff liberalization, and the
nature, amount and timing of compensation to the LDC members
for revenue losses resulting from implementation of the SAFTA.


9. Looking ahead, leaders acknowledged the need to address
non-tariff trade barriers and para-tariffs. They urged swift
conclusion of agreements on mutual recognition of standards,
testing and measurements. Significantly, they called for
integration of trade in services into the SAFTA.

10. The leaders also signed three of the four trade
facilitation agreements under consideration:

-- Agreement on Mutual Administrative Assistance in Customs
Matters
-- Agreement on the Establishment of SAARC Arbitration Council
-- Limited Agreement on Avoidance of Double Taxation and
Mutual Administrative Assistance in Tax Matters.

A fourth agreement, on investment promotion, was not signed,
but no reason was given. Instead, leaders included hortatory
language encouraging trade-creating investment in member
states.


11. On infrastructure, the leaders agreed to establish the
SAARC Energy Center in Islamabad and endorsed a South Asian
Energy Dialogue process involving officials, experts,
academics, environmentalists and NGOs to make recommendations
on better energy cooperation and to support the Working Group
on Energy. Information and communications technology was
also identified as an area for closer regional cooperation.
Leaders also urged stronger transportation links to support
regional economic integration, and agreed to study aviation
proposals, including a proposal to extend fifth freedom
rights to designated airlines from member states.


12. Leaders called on the international community to meet
the commitments of the Millennium Summit and the Monterrey
consensus. They endorsed UN reform and urged WTO members to
work for a breakthrough at the Hong Kong ministerial.
Commerce Ministers were instructed to work together on common
positions for the ministerial.

Terrorism - First Step, Acknowledge the Problem
-------------- --


13. SAARC leaders condemned terrorism, calling it one of
the most critical threats to international peace and
security. They pledged to unite to prevent and combat
terrorism, noting the mandate of UNSCR 1373.


14. Referring to the "continued and recent attacks in the
region," the leaders acknowledged terrorism is a problem in
SAARC countries that requires a coordinated response. Noting
with satisfaction that all members have now adopted the
additional protocol to the SAARC Convention on Suppression of
Terrorism, the leaders called on members to put in place
effective implementation mechanisms. They also directed
secretaries and ministers from the Interior and Home

SIPDIS
ministries to meet annually.

Areas for Cooperation Abound
--------------


15. Nearly a third of the Declaration's 53 paragraphs
address cooperation on social, environmental, and cultural
issues and management of natural disasters.


16. Leaders rededicated themselves to support the SAARC
Social Charter. They agreed on annual meetings of the
National Coordinating Committees and noted proposals to
establish a Civil Society Resource Center. The Declaration
highlights the importance leaders place on addressing women's
and children's issues, including trafficking in persons.
Primary education was also singled out for specific mention.
The leaders agreed to launch a regional initiative on basic
healthcare services and sanitation in rural areas.


17. Leaders discussed improving regional responses to both
natural disasters and regional health emergencies. Noting
the threat posed by emerging diseases like avian influenza,
they proposed a SAARC Health Surveillance Center and a Rapid
Deployment Health Response System. They also called for
early implementation of the regional HIV/AIDS strategy.
Leaders acknowledged the need for a permanent regional
response mechanism for natural disasters, supported work on
an early warning and disaster management framework, but
mostly settled for encouraging closer coordination at the
national level.


18. Action on environmental cooperation was more robust.
The Declaration initiates discussion of a Regional
Environment Treaty. It endorses establishment of a SAARC
Forestry Center in Bhutan and proclaims 2007 the "Year of
Green South Asia," devoted to reforestation. Existing
centers on meteorological research and coastal zone
management will be enhanced, as will cooperation on water
conservation, sustainable development and arsenic
contamination.


19. On cultural issues, the leaders endorsed greater
people-to-people contacts, starting with SAARC speakers and
parliamentarians, promoted a SAARC Agenda for Culture, and
endorsed youth exchanges. They gave a nod to travel
facilitation, but avoided discussion in the Declaration of
implementing visa-free travel of citizens of SAARC members.
Tourism was highlighted; 2006 is the "South Asia Tourism
Year." India's offer to host a SAARC Museum of Textiles and
Handicrafts was noted.

Institutional Change Needed
--------------


20. Leaders agreed that they need stronger SAARC
institutions to implement the growing SAARC agenda.
Throughout the Declaration, leaders agreed to hold annual
meetings of relevant ministers to discuss progress in their
respective portfolios. Perhaps drawing inspiration from the
structure of EU ministerial meetings, the Declaration
expressly encourages a thematic focus concentrating on SAARC
objectives.


21. Most significant is the call in the Declaration for a
comprehensive review and reform of all SAARC institutions and
mechanisms, including the Secretariat and Regional Centers.
Experts nominated by each member state are to prepare a study
and recommendation for the next Council of Ministers meeting,
under terms of reference to be prepared within the next two
weeks by the chairman of the Council of Ministers and
circulated for approval by all foreign ministers.
CHAMMAS