Saarc economic union mooted

Pacts on arbitration council, Customs issues signed.

Shedding past inhibitions, South Asian Association of Regional Co-operation (Saarc) members today agreed that there could be no double standards in the fight against terrorism.

They also decided to make result-oriented efforts to translate pledges into commitments for accelerating economic growth and social progress in the region.

Saarc leaders also affirmed their commitment to realising the vision of a South Asian economic union in a phased manner. India will host the 14th Saarc summit in 2007. India, Pakistan, Bangladesh, Sri Lanka, Nepal, the Maldives and Bhutan are members of Saarc.

An eight-page Dhaka Declaration, adopted at the end of the two-day 13th Saarc summit, said the leaders resolved to make regional co-operation more responsive to the hopes and aspirations of the peoples of South Asia.

Describing the declaration a "forward-looking document", Prime Minister Manmohan Singh said at the concluding session it would add "new vigour" to the Saarc process.

The declaration welcomed Afghanistan's request for membership and invited it as a member subject to completion of formalities. It also welcomed and agreed in principle with the desire of China and Japan to be associated as observers. Saarc foreign ministers will decide modalities on July 27, 2006.

Expressing serious concerns over threats posed by terrorism, the Saarc leaders underlined that "there should be no double standards" in combating the scourge.

The leaders agreed to declare the 2006-15 decade as the Saarc decade of poverty alleviation and make endeavours at the national and regional level to rid South Asia of poverty.

The present three-tier mechanism on poverty alleviation would be replaced by a two-tier one, comprising ministers and secretaries dealing with this issue at the national level.

To take stock of macro-economic developments and outlook for South Asia, they agreed that Saarc finance ministers should meet within the first quarter after every summit and also on the sidelines of the World Bank and the Asian Development Bank annual meetings.

Merging different funds, it was decided to set up a Saarc development fund to serve as an umbrella financial institution for all Saarc projects and programmes covering social, infrastructure and economic issues. It will also have a permanent secretariat.

Noting the progress made in the negotiations on outstanding issues, the Saarc leaders stressed the importance of operationalisation of the South Asia Free Trade Area agreement on the scheduled date of January 1.

The differences that still need to be ironed out relate to rules of origin, the sensitive list and a revenue compensation mechanism for least developed countries.

Three agreements were signed in the presence of the leaders on co-operation in Customs matters, establishment of a Saarc arbitration council and avoidance of double taxation.

They agreed to undertake trade facilitation measures including transit among Saarc countries for enhancing intro-regional trade and other economic activities.

The Indian proposal for daily air service facility by designated airlines, on a reciprocal basis and without prejudice to existing rights, to all the Saarc member states would be studied, the document said.

Three agreements were signed in the presence of the leaders on co-operation in Customs matters, establishment of a Saarc arbitration council and avoidance of double taxation.

Winding up the deliberations, Bangladesh Prime Minister and Saarc chairperson Khaleda Zia expressed confidence that this summit would open a "new chapter in the history of South Asia".