Prime Minister of India - Dr. Manmohan Singh

PM's Inaugural address at SAARC Business Leaders Conclave

It is a pleasure to participate in the first SAARC Business Leaders Conclave. I welcome delegates from our neighbouring countries to this meeting. I trust this conclave will evolve concrete ideas for regional cooperation. For it is a fact that today, while the responsibility for expanding relations between nations is the primary task of Governments, people-to-people and business-to-business relations are also important elements in the overall architecture of interaction. I therefore commend this effort of the SAARC Chamber of Commerce and Industry, and their partners in the national chambers of commerce and industry of our region.

Ladies and Gentlemen,

An important part of the SAARC process has been the effort to build interlinkages between our nations at all levels. Typically such efforts have built on the outcomes of Summit meetings. Therefore, I think it is essential for industry and business to quickly utilize the opportunities emerging from this milestone Summit meeting.

I say that the Dhaka meeting was a milestone because it showed the continuing relevance of our group. This was underlined not only by the growing regional interest in it but also by the range of measures upon which we agreed at Dhaka. The decision to invite Afghanistan to join us, and the other new initiatives proposed at the Summit, will inject new dynamism into SAARC. At this twentieth anniversary of our group, India believes that it is an appropriate time for a strategic 'Partnership for Prosperity', which will meet the hopes and aspirations of the people of our ancient lands.

Apart from three important agreements concluded at Dhaka to solidify the framework for regional economic cooperation and trade, a number of new proposals were put forward. Most of these aimed at identifying areas of individual strength, to share competencies with each other. This is in keeping with the spirit of effective regional cooperation. For instance, keeping in view the magnitude of natural disasters that have affected our region in the past year through natural disasters, we have agreed to set up a disaster management centre in India. We also offered to set up a South Asian University, a Food Bank, a satellite based telemedicine link, and a museum of traditional handicrafts and textiles.

We have also been looking at other measures to increase intra-regional investment. Our businessmen must give priority to private sector cooperation in areas such as power generation; research and development in science and technology; and services like healthcare, education, IT and insurance. We must strive collectively, in a cooperative spirit, to remove the barriers to the free flow of goods, peoples and ideas within our own region.

Ladies and Gentlemen,

In this context, India strongly emphasizes the need to improve connectivity within our region, and between our region collectively and the nations beyond. This is the key to unlocking the potential of our people and our lands. Such connectivity is based on the inescapable logic of history and geography: we cannot undo what nature has made for us. We need to regenerate and revitalize traditional arteries of transport and communication in our region, as well as create new linkages.

In taking South Asia to the next level of intra-regional connectivity, considerable investment will be required to build the necessary infrastructure. As a first step, India has, on a reciprocal basis, announced measures to move towards an 'Open Skies" regime in our region. We are working for greater liberalization of visa regimes to benefit all areas of cooperative interaction. I am happy that we have decided to increase the number of SAARC visas issued to leading businessmen of our member states. We have also urged our partners in SAARC to reciprocally provide to each other transit facilities to third countries. These will not only link our nations, but more importantly, it will connect our region to the ongoing economic miracle in South East and East Asia. We will also link ourselves to the vast energy markets of West Asia and Central Asia. We can no longer afford the cost of seeing our region in isolation from the broader Asian context.

Ladies and Gentlemen,

We are standing today at the threshold of a new dawn in the history of SAARC. Member states realize the imperative of rejuvenating our group and infusing in it a new sense of hope and optimism. At the same time, we also need to learn from our shortcomings that have been apparent over the past two decades. One of these has been a failure to implement projects announced. We must move from the realm of ideas to the sphere of concrete action. We must focus on more concrete, collaborative and implementable projects. Some groundwork has already been done. Interactions of the various technical committees and working groups under SAARC have produced a wealth of region-wise data. This invaluable data-base can help in establishing collaborative projects.

Yet despite some successes on other fronts, SAARC has not succeeded in exploiting the immense economic potential of our region. Even after two decades, intra-SAARC exports are a mere 5% of the total exports of the region. By comparison, intra-EU exports are 55.2%; intra-NAFTA exports are 51.7% and intra-ASEAN exports are 20.4%. Hence, the need for implementing SAFTA cannot be overemphasized. It is expected that with the free flow of trade in the region, the current level of intra regional trade will rise from 6 billion to 14 billion dollars annually within two years of SAFTA's existence.

All SAARC member states are committed to an early resolution of the outstanding issues under SAFTA. We are hopeful that the ongoing negotiations will ensure that it is operationalized from the first of January next year. We now need to expand the ambit of SAFTA, to include trade in services, in addition to widening the scope of trade in goods. Only then will SAFTA emerge as an effective vehicle for growth and regional integration. We hope that the Free Trade Agreement will help us to move forward, towards the eventual goal of a South Asian Economic Union. I do believe that just as regional integration is not antithetical to globalization, it also does not hurt the broader interests of any member of a regional group.

I understand the sense of doubt and misgivings among many corporate entities in each of our countries. Change requires adaptation, and movement from the status quo. However, such concerns are not rooted in reality. For one, the fact that misgivings are generally spread out among businessmen in the entire region suggests that both positive and negative impact will be well distributed. Just as manufacturers in one country fear the lowering of barriers in one sector, there will be benefits to be derived in other sectors.

Furthermore, empirical evidence and experience within our own region points to the overall benefit derived by both sides in Free Trade Agreements. For instance, the India-Sri Lanka Free Trade Agreement has been a huge success for both countries. Sri Lanka's exports to India have grown by well over 100%, as have our exports to Sri Lanka. This has dispelled fears on both sides that free trade would hurt businesses in smaller countries. This FTA is a win-win agreement for both countries, and could be a model for similar agreements in the region. I therefore believe we must move rapidly to meet the deadline for SAFTA, and follow this up proactively with measures to widen and deepen coverage of the FTA.

Ladies and Gentlemen,

Business and trade flourish in an environment of security. Therefore, it is imperative to unitedly fight the spectre of terrorism that haunts our region. Terrorism, by whatever name, has no place in civilized societies. The basic goal of terrorism is to cause insecurity. We all know that in any interconnected region, and in our globalized world, the consequences of both poverty and insecurity are indivisible. No country in this region can be secure when others are insecure. No country can insulate itself from the consequences of poverty, disease and terrorism in any other country. Our lives are inter-linked, and so are our prosperity and our security.

This is something that business leaders understand very well. We have often seen how heightened tension and insecurity in one part of South Asia impacts upon the business environment elsewhere. No one can assume that when a neighbour is hurt by terrorism one can somehow remain insulated from the consequences. Every country in this region wants to attract more foreign investment from outside the region. We then have a collective stake in ensuring peace and security here because no investor will come to this region if there is no assurance of peace and security. To imagine that any one of us can pursue what economists call "beggar-thy-neighbour" policies and thereby prosper is to delude oneself.

For these reasons, our business community has a vital stake in regional security and in victory in the war against terror. It is only in peace and in stability that we can build the foundation necessary for social development and economic growth in the region. We must join hands to put our collective house in order. Peace in the region will benefit all. Terrorism anywhere will hurt us all.

Ladies and Gentlemen,

For centuries, the people of South Asia have engaged in commerce with each other and with the world. We must build on our ancient civilizational and commercial linkages by renewing and nurturing the economic, social and cultural ties that bind our region together. As envisioned at the thirteenth SAARC Summit, it is on the basis of renewed people-to-people ties that we will forge stronger links, to help us strengthen the basis for our region-wide partnership for prosperity. I wish your deliberations every success.

Thank you.