In a landmark deal towards greater regional integration in three decades of the South Asian Association of Regional Cooperation (SAARC), the regional countries are set to sign three framework agreements for establishing rail, road and electricity connectivity.
Reports say the negotiations on the three deals -- Agreement for the Regulation of Passenger and Cargo Vehicular Traffic among the member-states, Regional Agreement on Railways and SAARC Framework Agreement for Energy Cooperation (Electricity) -- are at the final stage.
These deals are expected to be signed by Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka during the 18th SAARC summit from November 26 to November 27 in presence of their heads of state and of government.
Land connectivity, climate change, poverty alleviation, energy sharing and development, and promotion of regional tourism and trade are some of the issues that are expected to figure prominently during the discussions among the South Asian leaders and officials.
The theme for the Kathmandu Summit is 'Deeper Integration for Peace, Progress and Prosperity'. The idea of the three deals came from the Declaration of the 16th Summit in Bhutan styled '2010-20, Decade of Intra-Regional Connectivity in SAARC'.
Once signed, the agreements are expected to pave the way for building direct connectivity and providing better access to economic activities among the SAARC states and people of the region. The electricity agreement will create a regional energy market aimed at enhancing cross-border electricity trade among the South Asian countries.
Under this framework agreement, a SAARC Market for Electricity (SAME) will be developed on a regional basis. It will explore a regional power market involving member countries that already have interconnection, as well as those that have planned interlinks.
It will set up a regional power exchange to maximise the potential for power transfers among the member nations and reduce power shortages and exploit relevant economic benefits. The SAARC countries may trade cross-border electricity voluntarily under the SAARC Framework Agreement for Energy Cooperation. The relevant firms of the countries will set the conditions for trade in energy through bargaining.
As per the draft agreement, the cross-border electricity trading will enjoy tax waiver. The transmission planning agencies of the member countries will help set up the cross border grid interconnection in their respective areas, and to Build, Own and Maintain (BoM) the cross border system.
The member-countries will jointly set up the electricity grid protection system and the system operation and settlement mechanism for cross-border electricity trade.
However, the SAARC advisory committee decided to recommend connectivity theme as it emphasises connection and linkages from energy grids to rail, road, water and air links, inter-cultural as well as people-to-people contacts in the entire region.
Energy analysts believe that the SAARC countries should make a tangible progress in tariff concessions and removal of other trade barriers faster to turn the regional grouping into an effective trade bloc.
Unless it's done, the dream of SAFTA (South Asia Free Trade Area) to be a free trade area will remain a far cry, they said.
Under the regional railways agreement, 13 routes connecting seven countries have been identified. The Maldives, an island nation, has been kept out of this link. Seven of the routes involve Bangladesh. However, routes for road connectivity are yet to be finalised. Duty, fees and commissions for transportation among the SAARC countries have not yet been fixed either.
The member-countries will have to take measures for maintaining trains and servicing locomotives at interchange points, providing immigration and visa facilities, and ensuring security for passenger and cargo transportation.
Transport analysts say the Bangladesh Railway may be turned into a commercially profitable organisation by carrying cargo on the long routes of the railway agreement is inked.
According to the draft motor vehicle agreement, cargo vehicles like trucks and trailers, passenger vehicles both for hire or reward, and personal vehicles can move across the region upon fulfilling the specified criteria and in accordance with the customs laws of the member states concerned. The member countries will decide on traffic volume through mutual negotiations, and all sorts of fees and charges will be levied at the entry points.
Highlighting the huge potential of SAARC nations, especially in enhancing trade and reducing poverty, the analysts say even after eight years of implementation of SAFTA, intra-SAARC trade remains still insignificant compared to other trade blocs. Listing the different barriers to trade in the region, they urged the member countries to come forward to remove those.
The member-states should also consider meaningful reduction of sensitive lists so that the products of export interest, especially those of the Least Developed Countries (LDCs), are removed from the sensitive lists.
However, there is a need for concerted efforts of all the member-countries for reaching the goal of economic integration of the South Asian region within the shortest possible time. In this context, increased connectivity will facilitate investment and trade activities, and ensure overall economic development in the region.
All member-states need to sort out their bilateral problems through mutual discussions so that cooperation in the areas of trade and investment, hydro-power and connectivity is otherwise enhanced.
szkhan@dhaka.net