"Over the years, SAARC's role in South Asia has been greatly diminished and is now used as a mere platform for annual talks and meetings between its members." This is the collective wisdom of Wikipedia. And if Wikipedia can be faulted, that would be for its suggestion that SAARC was important earlier. With a population of some 1.5 billion, the eight SAARC member countries make up the largest regional grouping in the world – and, together with the African Union, also the poorest.
According to the World Bank, the region is home to 47 percent of the world's poor, living on less than USD 1 a day. True, things have changed a bit since 1990. Growth has gone up almost everywhere in the region, particularly in India. Various indicators have improved – health in Bangladesh, Nepal and Sri Lanka, and education in India. But Southasia can do much better, and could try to emulate the China of the last 20 years and the East Asia of the two decades prior to that. More to the point, what role can SAARC play in this transformation? Perhaps much less than what many have suggested.
To say it as it is, the Agreement on the South Asian Free Trade Area (SAFTA) is not worth the paper on which it is written, for at least five reasons. First, it is only concerned with liberalising trade in manufactured goods, and will be undermined by the outcome of ongoing multilateral trade negotiations, unilateral trade liberalisation and sub-regional trade agreements. Second, SAFTA will be circumvented by 'sensitive' (also known as negative) lists, Rules of Origin requirements and non-tariff barriers. Third, an agreement such as SAFTA only makes sense if it includes agriculture, crossborder movements of labour and capital, free movement of services, cooperation in transport and so on.
Fourth, without China, Iran and Burma joining SAARC, such agendas cannot be pushed through SAFTA, the probability of which is remote. Hence, fifth, sub-regional cooperation will be pursued by India with Afghanistan, Bhutan, Nepal and Sri Lanka (the Maldives is in a slightly different situation). Meanwhile, the India-Bangladesh and India-Pakistan relationships remain stuck, but there is no reason to presume that these have a higher probability of being negotiated through SAARC than bilaterally.