Identifier
Created
Classification
Origin
10KATHMANDU72
2010-01-26 11:29:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Kathmandu
Cable title:  

SAARC: REGIONAL POLITICS LIMIT POTENTIAL

Tags:  PREL PGOV ECIN SAARC IN PK NP 
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UNCLAS SECTION 01 OF 03 KATHMANDU 000072 

SENSITIVE
SIPDIS

DEPT FOR SCA/INSB

E.O. 12958: N/A
TAGS: PREL PGOV ECIN SAARC IN PK NP
SUBJECT: SAARC: REGIONAL POLITICS LIMIT POTENTIAL

UNCLAS SECTION 01 OF 03 KATHMANDU 000072

SENSITIVE
SIPDIS

DEPT FOR SCA/INSB

E.O. 12958: N/A
TAGS: PREL PGOV ECIN SAARC IN PK NP
SUBJECT: SAARC: REGIONAL POLITICS LIMIT POTENTIAL


1. (SBU) Summary: The South Asian Association for Regional
Cooperation (SAARC) lacks clout among its member states,
preventing it from reaching its full potential. SAARC has
facilitated some regional economic and social cooperation,
but has little influence over regional geopolitical issues.
The SAARC Secretariat is very small, with only 30 staff
members. Member states are responsible for implementing
SAARC initiatives, many of which wallow for lack of capacity,
resources, and political backing. SAARC will hold its next
summit in Thimpu, Bhutan, April 28-29, 2010. End summary.


2. (SBU) This report draws on meetings with SAARC Secretary
General Sheel Kant Sharma, SAARC Indian Director Vinay
Kwatra, Tribhuvan University Professor Bishwambher Pyakuryal,
and Kathmandu-based Indian, Pakistani, and European diplomats.

SAARC: An Underutilized Institution
--------------

3. (U) The South Asian Association for Regional Cooperation
(SAARC),established in 1985, aims to foster economic and
social development in its eight member states. (Note:
Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri
Lanka are the original members; Afghanistan formalized
membership in 2007. Nine countries are observers:
Australia, China, the EU, Iran, Japan, Mauritius, Burma,
South Korea, and the United States. End note.) Sheel Kant
Sharma, the former Indian Ambassador to Austria and
international organizations in Vienna (2004-08),was
appointed the Secretary General of SAARC in March 2008 for a
three-year term. The position of Secretary General rotates
among member states in alphabetical order; the next Secretary
General will come from Maldives (after India in alphabetical
order),beginning in March 2011.


4. (U) The SAARC Secretariat, based in Kathmandu, coordinates
SAARC activities and serves as the channel of communication
between member states and international organizations. The
Secretariat is small (less than thirty people),with almost
no in-house capacity to implement programs; instead, SAARC
outsources technical work as needed. Indian Director Vinay
Kwatra compared SAARC's meager resources to the

comparitively-robust secretariat of the Association of
South-East Asian Nations (ASEAN),which has more than 150
staff members.


5. (SBU) Most regional and international observers believe
SAARC is an ineffective, underutilized institution. Rivalry
between India and Pakistan limits SAARC's ability to serve as
a regional forum, especially in the area of cross-border
trade. Individual members interact with neighboring regional
bodies such as the Shanghai Cooperation Organization, the
Association of South-East Asian Nations (ASEAN),and the Bay
of Bengal Initiative for Multi-Sectoral Technical and
Economic Cooperation (BIMSTEC),but SAARC itself has limited
involvement with these institutions. Secretary General
Sharma said he has been promoting expanded cooperation
between SAARC and other international organizations,
specifically the Asia Development Bank and the United Nations
Development Program.

Facilitator, Not Implementer
--------------

6. (SBU) Ambassador Sharma painted a pessimistic picture of
SAARC's ability to increase its regional influence. SAARC's
focuses on trade, economic, and cultural integration, not
political affairs. Its role is to facilitate meetings and
allow member governments, even those with politically "frosty
relations" like India and Pakistan, to work together on
larger thematic issues. Because most action lies in the
hands of individual governments, SAARC cannot do any more
than what member governments are willing to do -- and this is
where the potential for regional cooperation is wasted.
Sharma used SAARC's counterterrorism efforts as an example.
A number of regional instruments are in place, including a
mutual legal assistance treaty signed in Colombo in 2008, to

KATHMANDU 00000072 002 OF 003


encourage cooperation and information exchanges. The
governments have yet to implement these instruments, and
SAARC states continue to approach counterterrorism in a
disjointed, ad hoc, stove-piped manner.

Regional Vision?
--------------

7. (SBU) SAFTA's major accomplishment, according to SAARC
India Director Kwata, is the development of "concrete
regional perspectives" on a host of key issues, from
agriculture to health, disaster management to human
trafficking. SAARC's ten "regional centres" are developing
concrete plans to advance SAARC's regional action plans, but
Kwata admitted that implementation relies on member states,
many of which lack capacity. SAARC has two regional centres
in Bangladesh (agriculture and meteorological),two in India
(documentation and disaster management),two in Nepal
(tuberculosis and information),two in Pakistan (human
resources and energy),one in Sri Lanka (cultural),one in
Maldives (coastal zone management),and one in Bhutan
(forestry).


8. (SBU) Kwata also highlighted SAARC's three-year-old, USD
300 million regional development fund, which is financed
entirely with funds from member states (USD 200 million from
India; USD 100 million from other states). The development
fund is supporting three regional projects on women's rights,
maternal/child health, and teacher training. SAARC's
(largely Indian-funded) South Asia University is scheduled to
open in August 2010 in New Delhi, and will include students
and faculty from all SAARC member states, with the goal of
promoting a "regional vision."

SAFTA Minimal Impact
--------------

9. (SBU) On trade, SAARC India Director Kwata said that
implementation of the South Asia Free Trade Agreement (SAFTA)
is proceeding at a faster pace than planned, but its impact
on regional trade is minimal. The list of goods exempted
from SAFTA (the "negative list") is extensive, and in most
cases, the bilateral trade regimes are more preferential than
SAFTA. The one exception is Bangladesh-India trade, which
has grown under the SAFTA framework, according to Kwata.
Professor Bishwambher Pyakuryal, senior economics professor
at Tribhuvan University and former consultant to SAARC,
argued that the main impediment to regional trade is not
tariffs, but rather non-tariff barriers; SAARC has done
little to address that issue.


10. (SBU) Professor Pyakuryal suggested that South Asian
governments do not fully appreciate the advantages of
regional trade, which he believes are substantial. He noted
that South Asia does not have a history of regional trade, so
countries are largely unaware of their technical and
productive comparative advantages, and of regional demand for
products. Non-political, technical studies that highlights
the benefits of regional trade and investment could be useful
in building consensus on regional economic integration,
Pyakuryal said. He suggested that an economic study by
Pakistan Institute of Development Economics (PIDE) was a
significant factor in Pakistan's decision to sign SAFTA, in
part because it gave the Government of Pakistan "cover" to
sign the economic accord.

16th SAARC Summit
--------------

11. (SBU) The leaders of SAARC member states will convene at
the 16th SAARC Summit in Thimpu, Bhutan, April 28-29, 2010 to
discuss progress on agreements from the last summit (Colombo
2008) and prepare for the year ahead. This will be Bhutan's
first time hosting the summit, which rotates capitals each
year. (Note: There was no summit in 2009; the previously
chosen host, Maldives, declined to organize the summit
because of economic concerns. End note.) According to
Sharma, the overall summit theme will be climate change.

KATHMANDU 00000072 003 OF 003


Other agenda items will likely include SAFTA, expansion of
the SAARC development fund, food security, and energy.

Comment
--------------

12. (SBU) While regional politics limit SAARC's
effectiveness, SAARC remains a low-cost, low-risk platform
for promoting regional cooperation on cultural, economic and
technical issues. With time, this cooperation could spill
over into the political realm. SAARC also provides a
convenient forum for regional leaders to meet, even when
bilateral dialogue is politically-difficult. Post will
continue engage the SAARC Secretariat and seek opportunities
to support SAARC's ongoing regional work.
ORDWAY