India and South Asia - 1 | PSIR Optional for UPSC (Notes) PDF Download

SAARC: South Asian Association for Regional Cooperation

SAARC Countries

SAARC, the South Asian Association for Regional Cooperation, is a regional organization comprising eight South Asian nations. Established in 1985, its primary objective is to promote peace and prosperity in the region. SAARC has been considered a poor example of regional integration, with South Asia being the least integrated region globally, except for the Middle East. The organization has been in deadlock since the 2016 Pathankot attack.

• South Asia is characterized by several challenges, including the largest number of people living in poverty, high vulnerability to natural disasters, and significant exposure to nuclear war and various security threats. The region is also strategically located within an arc of instability stretching from Eastern Africa to the Middle East and Southeast Asia. Therefore, regional integration is vital to transforming conflict-prone interrelations and creating interdependence in economic and security issues.
• SAARC was initially proposed by Bangladeshi President Zia-ur-Rehman and has since grown to include Afghanistan in 2007. The organization operates on the principles of Panchsheel, which emphasize respect for sovereignty and non-interference in domestic affairs. Decisions within SAARC are made by consensus.
• The achievements of SAARC can be viewed from two perspectives: a half-filled glass or a half-empty glass. In comparison to successful organizations like the EU and ASEAN, SAARC has not accomplished much. Intra-regional trade has stagnated, there is no progress towards the establishment of the South Asian Free Trade Area (SAFTA), and the idea of a South Asian community seems far-fetched.

However, SAARC has made some strides in various areas, including the launch of the SAARC satellite, the establishment of the South Asian University, the creation of a South Asian food bank, the organization of the South Asian Film Festival, the development of a South Asian milk grid, the founding of the South Asia agency for Disaster Management and Mitigation (DMM), and the hosting of the South Asia Federation Games. Despite the challenges and limitations, these accomplishments show that SAARC has made some progress towards fostering regional cooperation and integration.

Reasons of the failure of SAARC

1. Negative mindset and power imbalance: SAARC was formed with the intention to challenge India's regional hegemony, which led to a negative mindset from the beginning. Other regional organizations, such as the EU and ASEAN, were formed with a focus on cooperation. The power imbalance between India and its neighbors, especially Pakistan, has made it difficult for the organization to work efficiently.
2. Lack of external push factor: Unlike the EU and ASEAN, which had external push factors like the USA, SAARC did not have any such support. Instead, South Asia became a battleground for superpower rivalry, further hampering regional cooperation.
3. Inward-looking economies: South Asian economies have been predominantly inward-looking, with limited scope for economic interdependence. This has impeded the growth and effectiveness of SAARC as a regional organization.
4. Identity crisis and national sovereignty: The partition of the Indian subcontinent created new nations like India, Pakistan, and Bangladesh, which still grapple with their national identity. This makes it difficult for these countries to transfer any part of their sovereignty to a regional organization like SAARC.
5. Perception of India as a 'bullying big brother': India's foreign policy towards its smaller neighbors has often been seen as a continuation of British colonial policy. This has led to the perception of India as a 'bullying big brother,' which has hindered regional cooperation.
6. Lack of soft power: India has not been able to project its soft power effectively in the region, with its governance and human development indicators being similar or worse than its neighbors.
7. Consensus-based decision-making: SAARC's decision-making process is based on consensus, which has proven to be problematic. A switch to qualified voting might improve the organization's efficiency.
8. Connectivity and trust deficit: Connectivity is crucial for regional integration and trade promotion. However, the trust deficit between India and Pakistan has prevented SAARC from achieving a transit agreement, which is essential for regional connectivity.

Future prospects of SAARC

• Current Status of SAARC: The South Asian Association for Regional Cooperation (SAARC) is currently facing a bleak future due to the strained relationship between India and Pakistan. India has been following a policy of SAARC minus Pakistan, and the chances of regional integration seem poor. Pakistan is also focusing on the China-Pakistan Economic Corridor (CPEC), which will transform the geography of South Asia.
• China's Entry in SAARC: China has been seeking entry into SAARC, which could potentially revive the organization. However, India is not in favor of China's entry as it could weaken India's position in the region. India insists on the consolidation of SAARC before any expansion.
• Arguments for China's Entry in SAARC: Some scholars argue that China should be allowed in SAARC as it is already present in South Asia and its entry could boost investment for infrastructure development in the region. However, both India and Pakistan may not be willing to make SAARC successful due to their political differences.
• Focus on Connectivity and Development: There is a growing need for improving infrastructure and connectivity in South Asia, including roads, railways, and digital networks. SAARC could promote development projects that improve regional connectivity, essential for economic growth and integration. 
• Addressing Non Traditional Security Threats : South Asia faces common threats like climate change, natural disasters, and pandemics. SAARC has a unique opportunity to focus on disaster management, environmental sustainability, and public health cooperation. The COVID-19 pandemic highlighted the need for a collective regional response, which could define SAARC’s future role.
• Emerging Regional Alternative: With India's growing preference for BIMSTEC, which excludes Pakistan, SAARC’s relevance may diminish in the future. However, if SAARC revitalizes its agenda and addresses internal divisions, it could regain significance as a forum for regional cooperation.

Short Note on SAFTA: The South Asian Free Trade Area (SAFTA) was agreed upon in 2004 at the Islamabad summit, with the aim of becoming operational by 2016. However, it has not resulted in any significant increase in trade due to the concept of a positive list, which includes items that are not traded. SAFTA was pushed by the US to normalize relations between South Asian countries.

Features of SAFTA include:

• Sensitive List: A list of items that are exempted from tariff reductions.
• Dispute Settlement Body: A mechanism to resolve trade disputes among member countries.
• Liberal Rules of Origin: Criteria to determine the nationality of a product, which helps in promoting intra-regional trade.
• Common but Differentiated Responsibilities: The principle that acknowledges the different capabilities and levels of development among member countries.

Challenges in SAARC and Recommendations for Improvement

• Lack of Trust: Scholars like Sanjay Baru argue that there is a trust deficit among South Asian countries, which has hindered the formation of regional organizations. To improve relations, countries should focus on building trust through government-to-government (G2G), people-to-people (P2P), and business-to-business (B2B) interactions.
• India's Attitude Towards Neighbors: India's approach towards its neighbors has been criticized for being less than friendly. New Delhi should deal with tricky situations diplomatically and avoid meddling in domestic politics of neighboring countries.
• Following Up on Promises: India must ensure that it fulfills its promises to its neighbors, as it has a poor track record in this regard.
• Cooperation Instead of Competition: India should not compete with China in areas where China has an advantage, such as infrastructure projects. Instead, India should focus on institution building and using soft power, like the South Asia University, as a point of integration.

ASEAN 

The  Association of Southeast Asian Nations (ASEAN)  is a regional intergovernmental organization established on August 8, 1967, with the aim of promoting political, economic, and cultural cooperation and integration among its member states. Initially formed by five countries—Indonesia ,  Malaysia ,  Philippines ,  Singapore, and Thailand—ASEAN has since expanded to ten members, including Brunei ,  Vietnam ,  Laos ,  Myanmar , and  Cambodia.

ASEAN's core objectives include fostering regional stability, promoting economic growth, and ensuring the collective security of Southeast Asia. It works on principles of  non-interference , consensus-based decision-making, and  respect for sovereignty, aiming to create a peaceful and prosperous region. Over the years, ASEAN has grown into one of the world’s most successful regional organizations, playing a key role in global trade, diplomacy, and geopolitics.

ASEAN is also known for its engagement with external partners through platforms like the ASEAN Plus Three (China, Japan, South Korea) ,  East Asia Summit , and  ASEAN Regional Forum (ARF), positioning itself as a central player in promoting regional stability and economic integration in the Asia-Pacific region.

Milestones in ASEAN

• Bangkok Declaration 1967: The founding of ASEAN by five original member countries - Singapore, Malaysia, Thailand, Philippines, and Indonesia.
• Zone of Peace, Friendship, and Neutrality (ZOPFAN) 1971: ASEAN countries declared their region as a zone of peace, friendship, and neutrality to avoid arms race and promote peace.
• Treaty of Amity and Cooperation (TAC) 1976: ASEAN countries agreed to resolve disputes in a peaceful manner, and also entered into TAC treaties with partner countries like India.
• Bali Concord 1, 1976: ASEAN countries initiated a program for social development in the region.
• ASEAN Preferential Trading Arrangement 1977: ASEAN countries established a preferential trading arrangement which laid the foundation for the ASEAN Free Trade Agreement in 1992.
• ASEAN Regional Forum 1994: ASEAN countries established a security dialogue platform in Asia, which includes North and South Korea, India, and Pakistan.
• ASEAN Vision 2020: ASEAN countries adopted a vision to achieve economic, political, and social integration by the year 2020.
• ASEAN Charter 2007: ASEAN countries adopted a charter that formalized and strengthened the organization.
• ASEAN Community 2015: ASEAN declared itself as a community with three pillars - Economic, Political and Security, and Social and Cultural.

Comparison With EU

• The approaches of the European Union (EU) and the Association of Southeast Asian Nations (ASEAN) differ in several ways. The EU tends to be more intrusive, imposing many conditionalities on member countries, even in domestic matters. In contrast, ASEAN follows the "ASEAN way," which is based on the principles of non-interference in domestic affairs and respect for sovereignty and territorial integrity.
• While the EU is a supranational entity with powers that transcend national boundaries, ASEAN remains an international organization. The EU has implemented a qualified majority voting system, whereas ASEAN follows a consensus-based approach.
• Although both the EU and ASEAN are regional communities, ASEAN has not adopted a single currency model, opting instead for currency swap arrangements. In one aspect, ASEAN is more advanced than the EU, as it has its own charter, while the EU has yet to establish one. Both organizations have served as stabilizing forces within their respective regions.

Comparison With SAARC

Comparing ASEAN and the South Asian Association for Regional Cooperation (SAARC), both serve as examples of regional integration in the developing world. However, ASEAN is a more advanced example, whereas SAARC is considered one of the worst examples of regional integration. Former Indian Foreign Secretary S. Jaishankar has described SAARC as a "jammed vehicle," while Indian scholar C. Raja Mohan has likened Pakistan's role in SAARC to a camel in a caravan, slowing down progress.

Comparison with South Asia

ASEAN has been a more successful model of regional integration than South Asia, with intra-ASEAN trade reaching 25% of their total trade. In contrast, intra-SAARC trade has stagnated at 5% of the total trade. There is no treaty like TAC in South Asia, and no common program for social development.

Challenges to ASEAN

• US-China rivalry: The trade war between the US and China has global ramifications and poses a challenge to ASEAN solidarity.
• Governance challenges: ASEAN countries face issues related to corruption, red tapism, crony capitalism, and lack of inclusive growth.
• Rohingya issue: The Rohingya crisis has emerged as a significant challenge for ASEAN countries, especially in dealing with the humanitarian crisis and regional security.
• South China Sea dispute: The territorial disputes in the South China Sea remain unresolved, posing a threat to regional peace and stability.

India and ASEAN relations

India has successfully engaged with ASEAN countries through its Look East and Act East policies. India is well placed in the economic and security architecture of the region, and is in the process of negotiating the Regional Comprehensive Economic Partnership (RCEP). ASEAN is considered the nucleus of Asia Pacific and a gateway for India to the region, making it a significant ally for India in Asia Pacific.

Timeline of India ASEAN relations

• In 1967, when ASEAN was formed, India was invited to be a part of the initiative but declined the invitation. After the end of the Cold War, India lost the USSR as an ally and had to open up its economy. With no positive environment in the immediate neighborhood, India had to look towards its extended neighborhood, such as Southeast Asia and West Asia.

• In 1992, India became a sectoral dialogue partner of ASEAN, along with Pakistan. By 1996, India had become a full dialogue partner, and in 2002, its status was elevated to a summit-level partner. ASEAN invited India to participate in all its initiatives, such as the ASEAN Regional Forum, East Asia Summit, ADMM, and RCEP. In 2012, India and ASEAN became strategic partners, while Pakistan remains a sectoral dialogue partner.
• India entered into its first and only regional trading agreement with any bloc in 2010, the ASEAN India Free Trade Area (AIFTA). In 2015, India and ASEAN signed a free trade agreement in services. Although there is a significant trade imbalance between India and ASEAN, the inclusion of services in the agreement is expected to help balance trade between the two parties.
• In the 1990s, India-ASEAN trade was valued at $9.4 billion, but by 2014-15, it had grown to $76.53 billion. In 2017-18, bilateral trade reached $81.3 billion, with India exporting $34.2 billion and importing $47.13 billion worth of goods.
• India and ASEAN are also involved in sub-regional initiatives, such as the Mekong Ganga Cooperation. India and Thailand have been working together to advance the CLMV countries (Cambodia, Laos, Myanmar, Vietnam), the region's least developed countries. The Mekong Ganga initiative, formed in 2000, has been India's strategic effort to counter China's influence in the region. The initiative focuses on four pillars of cooperation: education, culture, tourism, and transport and communication.
• The Indian government, under Prime Minister Modi, has revitalized the platform. In 2016, a plan of action was adopted to expand cooperation in infrastructure, IT, pharmaceuticals, and intermediate goods. India has provided a $2 billion Line of Credit to the CLMV countries.
• Connectivity is a key focus area, with two major projects involving India: the Kaladan Multimodal Transit and Transport Project, and the India-Myanmar-Thailand Trilateral Highway, which will start in Moreh (Manipur), pass through Bagan (Myanmar), and end in Maesot (Thailand).

Recent Developments between India and ASEAN

The recent developments between  India and ASEAN  reflect a growing partnership focused on economic cooperation, strategic security, connectivity, and cultural ties. Key developments include:

• Strengthening of Economic Ties
  1. Review of India-ASEAN Free Trade Agreement (FTA): Both sides are currently reviewing the  ASEAN-India Trade in Goods Agreement (AITIGA) to make it more business-friendly and mutually beneficial. India seeks to balance trade, address market access issues, and reduce trade deficits with ASEAN countries.
  2. Digital and Financial Cooperation : India and ASEAN are exploring collaboration in  digital economy ,  fintech , and  startups , leveraging India’s strength in IT and digital infrastructure to enhance ASEAN’s digital capabilities.
• Indo-Pacific Engagement
  1. India's Indo-Pacific Strategy: India’s vision of a free, open, and inclusive  Indo-Pacific region aligns with ASEAN's  Outlook on the Indo-Pacific (AOIP) . Both have emphasized maritime security, freedom of navigation, and the rule of law, working together to ensure stability in the region.
  2. Defense and Security Cooperation: India has increased its defense ties with ASEAN through joint military exercises like  SIMBEX (Singapore-India Maritime Bilateral Exercise) and  ASEAN-India Maritime Exercise , as well as engagements in platforms like the ASEAN Defence Ministers' Meeting Plus (ADMM-Plus) .
• Connectivity and Infrastructure Projects
  1.   India-Myanmar-Thailand Trilateral Highway : This project aims to enhance road connectivity between India and Southeast Asia, creating a direct land link between India and ASEAN countries to facilitate trade and people-to-people exchanges.
  2. Digital and Physical Connectivity Initiatives: India has invested in enhancing both physical and digital connectivity with ASEAN, including projects related to  air connectivity, port development, and fiber-optic links  to improve communication.
• Strategic Dialogue and Summit-Level Engagements
  1. India-ASEAN Summit 2023: India actively participated in the 2023 ASEAN Summit, emphasizing the importance of the  Act East Policy  and reaffirming commitment to deepen strategic, economic, and cultural ties. Key areas of focus include energy security, sustainable development, and resilience in supply chains.
  2. Commemoration of 30 Years of ASEAN-India Relations : In 2022, India and ASEAN celebrated  30 years of partnership , which was designated as the  ASEAN-India Friendship Year, marking the significance of the growing strategic and economic ties between the two regions.
• Cultural and People-to-People Ties
  1.  Educational and Cultural Exchange : India and ASEAN have ramped up cultural diplomacy, including exchanges in education, scholarships, tourism, and youth programs to promote greater people-to-people connectivity. India's International Solar Alliance and projects like the  India-ASEAN Youth Summit  reflect efforts to strengthen socio-cultural relations.

Conclusion

In conclusion, the South Asian Association for Regional Cooperation (SAARC) has faced numerous challenges and has been less successful in fostering regional cooperation compared to organizations like the EU and ASEAN. However, some progress has been made in areas such as disaster management, education, and connectivity. The future of SAARC may depend on the resolution of conflicts between India and Pakistan and the potential entry of China into the organization. In contrast, ASEAN has been a more successful model of regional integration, with India actively engaging with ASEAN countries through its Look East and Act East policies. As the global economic landscape evolves, the importance of regional cooperation and integration will only grow in significance for both South Asia and Southeast Asia.