ISLAMABAD: Finance Minister Ishaq Dar has called for further liberalising the financial regimes by the governments in South Asian Association of Regional Coopera­tion (Saarc) to boost intra-regional capital flows.

Delivering country statement at the Seventh Saarc Finance Ministers’ Conference in Kathmandu on Thursday, Dar said that Pakistan offers one of the most liberal foreign exchange regimes in the region.

“Capital flows, especially foreign direct investment, across Saarc region can accelerate economic growth through technology transfer and skills acquisition,” he said while calling for simplifying visa requirements, liberalise banking procedures and fast-track customs clearance.

The finance minister stressed the need for gradual reduction and eventual elimination of tariffs, para-tariffs and non-tariff barriers so as to allow freer trade amongst the Saarc states.

“A good starting point for this could be the simplification of procedures for the issuance of Safta Certificates of Origin. Work on the sensitive lists should be aimed at gradually phasing out these lists,” Dar noted.

He said that global trade statistics revealed that while the volume of trade between Saarc states and the rest of the world is increasing, intra-regional trade remains far below its potential.

“We have to evolve a mechanism to incentivise formal trade among the Saarc member countries,” the finance minister said.

“Given the size of the population of Saarc countries and present standards of living, it is imperative that our policies promote inclusive growth,” he said, adding that promotion of peace in the region is equally important.

Pakistan, he said, is contributing to regional peace and the country has paid a high cost both in blood and treasure by sacrificing tens of thousands of precious human lives in the war on terror which has also resulted in economic losses to the tune of over $100 billion.

Talking about the energy crisis, he regretted that most of the Saarc member countries were facing power shortages despite the fact that the region has the potential to generate cheap and clean energy.

The finance minister said that Pakistan is very keen on building the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline which would be an example of affording enhanced proximity of the member states to natural resources of the region.

Yet another project of regional integration which has been undertaken relates to the transmission of electricity from Kyrgyzstan and Tajikistan to Afghanistan and Pakistan known as CASA-1000, which will provide 1300MW of electricity, he said.

In his statement, Ishaq Dar also mentioned the China-Pakistan Economic Corridor which would open up the Central Asian region by building roads, railways and consequently the enhanced trade potential of the region.

In his concluding remarks, Mr Dar emphasised the need for broader collaboration between the governments and people of Saarc countries.

Nepal’s Prime Minister, Sushil Koirala while inaugurating the conference said that despite remaining in proximity, South Asian countries did less than 5 per cent trade among them as lack of physical connectivity; political will and long list of products under sensitive list have remained stumbling block for enhanced trade and investment in the region.

At the conference, Saarc finance ministers discussed matters such as cooperation in financial sector, flow of financial capital and intra-regional long-term investment, currency swap arrangement, Saarc Development Fund and Saarc Agreement on Promotion and Protection of Investment.

Pakistan will host the eighth meeting of Saarc finance ministers’ conference in Islamabad next year to coincide with Saarc heads of state summit.

State Bank of Pakistan’s (SBP) Governor Ashraf Mahmood Wathra speaking on the occasion said the Saarc member countries can fight with growing global challenges by increasing cooperation and information sharing.

He highlighted some recent initiatives undertaken by the Saarc Finance, a network of central bank governors and finance secretaries of the region.

The network was established in 1998 to promote dialogue on macroeconomic policies of the region and sharing mutual experiences and ideas.

He said the initiatives taken by the network included availability of short-term liquidity for members under the Saarc Swap Arrangement; capacity building programmes for officials of members under the Saarc Finance Scholarship Scheme; the dialogue and exchange of knowledge on issues of mutual interest through Saarc Finance Portal; the creation of regional statistical database, and the recent initiative on collaborative research studies.

“These initiatives will help foster closer relationships and build human capability in practical fields of central banking amongst Saarc partners,” he added.

He also shared the decision of the 30th group meeting of the Saarc Finance, which identifies five areas for cooperation that would ultimately work as a roadmap for the network.

These five areas include reducing the transaction costs of cross-border remittances in the Saarc region; cross-border trade in the region; capacity building of officials of member countries; the creation of Saarc Finance statistical database; and undertaking of collaborative research studies to assess issues of common interest.

Published in Dawn, August 21st, 2015

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