For a senior Afghan diplomat sitting in India’s capital, it’s easy to explain how a region with a quarter of the world’s people can account for only five percent of global trade.
“India and Pakistan need to overcome their problems,” M. Ashraf Haidari, deputy chief of mission at Afghanistan’s embassy in New Delhi, said in an interview ahead of this week’s meeting of the South Asian Association for Regional Cooperation, or SAARC. “Summits happen, leaders come, there’s all this consensus and declarations announced. But unfortunately it doesn’t happen in reality.”
As leaders of eight SAARC countries meet in Nepal this week, Indian Prime Minister Narendra Modi has more reasons than ever to turn the bloc into a regional force to counter China’s growing influence in South Asia. Doing so will require him to overcome differences with Pakistani leader Nawaz Sharif.
So far, things aren’t looking good. Modi’s government scrapped talks with Pakistan in August, which was followed by the worst border fighting between the countries in a decade. At the same time, China has promised SAARC nations part of a $40 billion Silk Road fund to finance infrastructure investments.
“SAARC won’t be able to counter China’s influence,” said Nishan de Mel, executive director and head of research at Colombo-based Verite Research Pvt., a policy research group. “China tends to have an approach that isn’t too demanding and isn’t politically difficult for the partner country and where the partner country will tend to see benefits quite quickly. India’s approach tends to be more hard-nosed.”
Poor connectivity, cross-border conflicts and security concerns have contributed to South Asia being one the least integrated regions in the world, according to the World Bank. Besides the India-Pakistan conflict, Sri Lanka suffered a 26-year civil war that ended in 2009, Nepal was disrupted by a Maoist uprising that lasted for a decade until 2006 and Afghanistan continues to suffer from Taliban attacks.
Commerce between SAARC nations accounts for just 5 percent of total trade, compared with 25 percent in the 10-member Association of Southeast Asian Nations, according to the World Bank. Lack of trade ties within the region is limiting total commerce: India’s exports to its 15 biggest trading partners last year amounted to $188 billion, eight times less than China. That also fails to match Malaysia and Singapore’s overseas sales.
As leaders of eight SAARC countries meet in Nepal this week, Indian Prime Minister Narendra Modi has more reasons than ever to turn the bloc into a regional force to counter China’s growing influence in South Asia.
SAARC nations this week will seek to ratify agreements for free movement of cargo and passenger vehicles, as well as railways, across member countries. Cooperation in the power sector is also on the agenda, according to a statement on the website of India’s Press Information Bureau, which didn’t provide details.
Modi attempted to reinvigorate the SAARC grouping immediately after his election in May by inviting Pakistan’s Sharif and other regional leaders for his inauguration. The goodwill ended a few months later after India called off foreign secretary-level talks with Pakistan and border skirmishes between the nuclear-armed rivals in October.
“Modi is quite focused on shoring up relations with neighbors to balance China’s attempts at expanding its influence in South Asia,” said Richard M. Rossow, an analyst at the Center for Strategic and International Studies based in Washington. While it’d be best for India and China to collaboratively develop the region, now their actions are “being played out like a zero-sum game.”
Chinese President Xi Jinping toured through South Asia earlier this year to promote the Silk Road initiative. He became the first Chinese head of state to visit the Maldives and also stopped in Sri Lanka, where China is financing a $1.4 billion “Colombo Port City” and sending submarines to dock.
Xi called Afghan leader Mohammad Ashraf Ghani an “old friend” in welcoming him to Beijing last month, a visit that was followed a week later by Sharif. The Chinese president also met Bangladesh President Abdul Hamid this month to discuss economic cooperation on the sidelines of the APEC meetings.
Pakistan's Prime Minister Nawaz Sharif. Indian Prime Minister Narendra Modi’s government scrapped talks with Pakistan in August, which was followed by the worst border fighting between the countries in a decade.
As of now, Modi has no plans to meet Sharif at this week’s SAARC meetings. The Pakistani leader last week urged India to resume talks over the disputed region of Kashmir, the subject of three wars between the neighbors.
“Kashmir remains the core contention between both countries,” Sharif said in comments to an audience of leaders in Muzaffarabad, the capital of Pakistan-administered Kashmir on Nov. 20. “The international community needs to convince India to return to the table.”
Modi will consider how a meeting with Sharif will affect his party’s chances in Jammu and Kashmir state elections, according to Nikita Sud, an associate professor of development studies at the University of Oxford. Voting begins today, with all ballots counted on Dec. 23.
Talks between Sharif and Modi “will depend to a large extent on how such a dialogue will be perceived by their core constituencies back home,” Sud said. “I am pointing to the hard realities of politics and policy here, which are distinct from the pageantry of Mr. Modi’s oath-taking ceremony in New Delhi earlier this year.”