Ahead of the SAARC summit, Vice President Hamid Ansari today pitched for creation of the South Asian Economic Union (SAEU) saying it will prove to be a milestone in regional cooperation efforts.
"Creation of SAEU would prove to be a milestone in regional cooperation efforts. Most regions in the world are moving towards greater economic integration, as South Asia lags behind," Ansari said at 7th South Asia Economic Summit, organised by Research and Information System for Developing Countries (RIS).
The logic of a economic union lies in re-distribution of common and shared resources within the region in an efficient and effective manner, he said, adding that it would enhance manifold the bargaining power of member countries in global arena and help in realising full potential of trade complementarities.
"There are definite advantages of moving towards an economic union but the road map has to be well thought out and a strategy has to be in place, which is ambitious but realistic," Ansari said.
The 18th SAARC Summit would be held in Nepal later this month with focus on "Deeper Integration for Peace and Prosperity".
The Vice President said the overall objective of SAEU was to ensure the transformation of South Asia into a peaceful, stable, and prosperous region.
"SAARC countries must consider the mutual benefits that could be derived from greater economic integration and thereby contribute to the furtherance of their common developmental agenda. They should, therefore, collectively address the challenges that confront them in the process of regional integration," he said.
While SAEU would require greater regional economic policy co-ordination, priority should also be laid on to undertake investment in regional infrastructure, especially transport connectivity that would facilitate ease of travel and trade and support the realisation of SAEU.
Regional trade facilitation projects such as coordinated border management, regional single window and regional transit might ease the way for an economic union, he said.
"Infrastructure development, capacity-building measures, removal of NTBs, and supportive policies and institutions that promote economic activities along identified transport corridors are essential to increase regional trade," he said.
Intra-regional trade in South Asia has doubled since the region implemented the Agreement on South Asian Free Trade Area (SAFTA).
The intra-regional exports have increased to about USD 22 billion in 2013 from USD 10 billion in 2006. The region is expected to achieve substantial tariff reduction by 2016 as SAFTA implementation makes further progress.
