SAARC: The regional dream that South Asia never quite built – II

The South Asian Association for Regional Cooperation (SAARC) has struggled despite the substantial potential gains of regional cooperation. Nepal and Bhutan have abundant hydropower resources, while India faces significant energy demand; Bangladesh's energy needs are growing, Sri Lanka possesses renewable-energy and shipping potential, and Pakistan encounters serious energy challenges. A regional electricity market involving Bangladesh, Bhutan, India, and Nepal could save around $17 billion in capital costs.

However, the consequences of fragmentation extend far beyond diplomatic summits and trade statistics. Disconnected roads, railways, and communication systems, along with inefficient energy grids and restrictive visa arrangements, hinder trade and business activities. Tariffs, non-tariff barriers, investment restrictions, and inadequate transport infrastructure further compound the issue.

While signing a free trade agreement is not the same as creating free trade, a tariff reduction loses its value if a truck cannot cross a border efficiently.

Climate change adds urgency to the need for cooperation, as rivers connect countries, the Himalayas feed major river systems, and the monsoon crosses borders. Shared natural resources like water face threats from floods, glacial melt, water scarcity, cyclones, air pollution, food insecurity, and pandemics. The recent disasters in Nepal underscore the importance of regional cooperation. The involvement of young people, who constitute a significant portion of South Asia's population, heightens the urgency.

Notably, SAARC's failures have led to a normalization of non-cooperation, with each cancelled summit and border closure reinforcing the notion that regional cooperation is optional. The region risks becoming accustomed to non-cooperation, which could prove to be its most dangerous legacy. While alternatives like BIMSTEC and SASEC offer some opportunities for cooperation, they remain partial solutions. The underlying problems of infrastructure bottlenecks, protectionism, weak institutions, and political mistrust persist.

A more sensible approach involves variable geometry, allowing smaller groups to move forward without abandoning the broader regional framework. Inclusion of all eight South Asian countries is essential, as is providing a stronger institutional voice to countries like Bangladesh, Nepal, Bhutan, Sri Lanka, and Maldives. By fostering political equality and economic autonomy, genuine regionalism can unlock South Asia's immense potential and address the pressing challenges the region faces.