BUSINESS & ECONOMY

'SAARC itself is caught up in rhetoric'

The South Asian for Regional Cooperation (SAARC), set up in 1985, is only fifteen years old. To expect the ‘teenager’ to keep up with more mature organisations which have been around for much longer is quite unrealistic. Its proposed trading bloc for the region, the South Asian Free Trade Area (SAFTA), is also seen as an idealistic and perhaps an unrealistic goal. Nihal Rodrigo, secretary general, SAARC, a career diplomat from the Sri Lankan foreign service, who took over as secretary general on January 1, 1999, spoke on issues which confront the multilateral body and the methods he has adopted to achieve a consensus.

What is holding up progress on SAFTA?

The goals set for the creation of SAFTA were unrealistic to begin with and SAARC itself is caught up in rhetoric. SAFTA was proposed at a time, in 1998, when relations between India and Pakistan were excellent. The time frame then set out was for it to be in place by 2001, was unrealistic. It is now getting down to ground realities, hitting the hard ground now.

The foreign ministers met in New York after Kargil and outlined an economic union for the region. Now, we have begun to look at steps that are needed to be taken to achieve this. We need data, which we are gathering from several sources, doing sectoral studies. We are also looking at the experiences of the European Union (EU) and the North American Free Trade Area (NAFTA).

Which issues top the agenda for SAFTA?

Among the issues which have to be sorted out are those of special relations, like those between India and Bhutan, India and Nepal or the free trade ties between India and Sri Lanka and how to integrate all these in SAFTA. We are looking at issues where broader cooperation is possible, for instance, energy, where the hydro power of Nepal and Bhutan can be tied up with gas from Bangladesh and technology from India and the US. We are taking one step at a time, insulating these issues from the political factor.

A step towards integration is the formation of professional associations, like that of master printers or cardiologists of the region, or of management education institutions. We have the SAARC Chamber of Commerce which provides relevant inputs from trade and industry, reflecting ground reality.

Political issues and SAFTA are like a pause button on a VCR: after all, 80 per cent of the issues are economic!

Which issues are the most contentious for SAFTA?

There is the issue of rules of origin, which India is doing, the status of Least Developed Countries (LDCs) in SAFTA, the new equation which will come into effect once the special relationships change, the loss of revenue for countries when tariff barriers are lowered and a time frame for the entire exercise.

Then, Sri Lanka would like to be considered in a separate category, as a small economy, since it is not an LDC and has a strong economy but being small has a limit to growth. Similarly, the loss of revenue through lowering of tariff barriers is important for Sri Lanka since it has already lower rates than, say, India.

What is the time-frame for SAFTA to come into being?

The SAARC secretariat experts to have a draft treaty ready by December 31, 2001. Some draft agreements on social issues, like the one on trafficking in women, are ready and will be signed in Kathmandu, when the summit is held. We have adopted the approach that whatever is unviable should be discarded, there is no point in retaining it. For instance, the proposed SAARC food security: it was notional since there is no central granary to implement it! So, why retain it? We have discarded it. I believe that we need to get on with whatever is possible, not hold one issue hostage to agreement on others. We cannot concentrate on one issue at the expense of all others: we have to move on all fronts.

Home Ministry assures security to industries

By a staff reporter

In response to the demands made by a delegation of Federation of Nepalese Chambers of Commerce and Industries (FNCCI) led by its president Pradeep Kumar Shrestha, the Home Ministry has assured the business community of effective security to all industries.

Following the series of bombing incidents targeted at multinational companies including Surya Tobacco Company and Colgate Palmolive Ltd., the apex body of business organizations had raised its serious concern over the deteriorating situation of law and order in the country.

While appraising about the damage done to these companies, the FNCCI delegation strongly demanded for the security of industries, failing to which would discourage the investment in the country.

According to sources, Home Minister Govinda Raj Joshi also proposed for further meeting with the business community regarding the effective management of security measures in the industries.

The FNCCI delegation is comprised of Third Vice President Binod Bahadur Shrestha, Chairperson of Export Promotion Committee Kishore Kumar Khanal, Chairperson of Foreign Investment Promotion Committee Narendra Kumar Basnyat, general secretary Badri Prasad Ojha. Representatives of joint venture companies including Surya Tobacco Company, Dabur Nepal, Nepal Lever Ltd., Colgate Palmolive Ltd. and Nepal Battery Company also participated in the delegation.