“GEOGRAPHY determines fate,” said the 14th-century philosopher Ibn Khaldun, indicating that while humans are divided into several categories, geography is one of many factors responsible for unequal economic opportunities. South Asian geography was blessed in more ways than one. The Indus Valley Civilisation was not only known for its sophistication in city planning and grid structure, it was also one that didn’t end by conflict. Thousands of years later, South Asia, once home to peace and prosperity, is one of the world’s poorest and least integrated regions.

Home to 25 per cent of the world population, South Asia is least integrated in terms of trade and people-to-people links. Intra-regional trade amounts to only 5pc of total trade, which is tiny compared to Asean where intra-regional trade is around 25pc, and nothing compared to EU where it accounts for almost 70pc of the total trade. Trade barriers inhibit regional potential to the extent that it is 20pc cheaper for an Indian company to trade with Brazil than with Pakistan.

Attempts to improve integration were formalised in 1985 with Saarc’s creation, but that organisation is dead. While Saarc was able to build regional centres and a university, it could do little for trade — almost no trade of note occurs between its members outside of India. Bangladesh became India’s fourth biggest export destination but its trade with five other Saarc countries accounts for only 2pc. India is interested in trade with its neighbours but ignores Pakistan. The annual meetings which urged leaders to meet also came to an end post-Pulwama. The last summit took place in 2014 in Nepal while the next one planned in Pakistan never happened.

Organisations like Saarc must rework their goals.

This situation is costing the region a fortune. The World Bank estimates that unrestricted electricity trade could save the region $9 billion annually in supply costs and reduce emissions by producing renewable energy from Himalayan hydro sources. A study by the Indian Council for Research on International Economic Relations confirms trade potential to be between $11bn to $20bn for India and Pakistan alone; the World Bank places it at $37bn. Another estimate by the bank notes that the loss due to the regional trade deficit is $44bn annually. Clearly, it is not lack of potential which inhibits trade but lack of political will and vision on the part of the two biggest countries in the region. Saarc tried but couldn’t convince Pakistan and India of the positives of a better-integrated South Asia.

If all of economics can be summed up in a single sentence, it would be that prosperity does not take place in isolation. One reason why Saarc didn’t work was that its original design assumed equal interest on the part of its members in conducting business. India shows great interest in regional business through subregional organisations such as BIMSTEC and BBIN but avoids Pakistan.

The situation in Afghanistan does not make it any easier; however, a better-integrated South Asia is not wishful thinking on the part of a few, it is a necessity for regional stability. Evidence shows that climate change is especially unkind to the Global South which is heating faster than the rest of the world. Estimates show that the loss of the Himalayan glaciers will further jeopardise the lives and livelihoods of the 750 million people who depend on them. Agriculture, which still employs almost 60pc of South Asia, will be majorly impacted. One study confirms that climate change will cause a 30pc to 40pc drop in India’s agricultural output by 2080. The threat also extends to food and energy security, mass migration, and widespread poverty, making the need to integrate inevitable.

To improve regional integration, organisations like Saarc must rework their goals to a) harmonise and recalibrate the national interests of each country, instead of having a blanket goal of regional prosperity; b) highlight the potential damage of continued regional disintegration, given common future threats; and c) offer security and justice along with the promise of economic gains, which means taking into account issues such as immigration and crime prevention.

The region should also consider having technical associations in subgroups based on interests. Unless such an organisation addresses bad politics, tariffs and unnecessary regulations, the goal of integration will continue to fail.

The success of the EU, that had its roots in the European Coal and Steel Community, was based on the aim to make war between its members “not merely unthinkable, but materially impossible”. It is a good example to study. South Asia must work to lessen its populism, which is turbo-charged by social media, as good economics needs responsive politics. The citizens of this region do not deserve to bear the cost of disintegration brought on by the denial of the right to coexist and integrate.

The writer is a research fellow at the Centre for Business and Economic Research, IBA.
nizsara@gmail.comTwitter: @SarahNizamani

Published in Dawn, November 6th, 2022