SUBMITTED TO:
UNIVERSITY OF MUMBAI
PROJECT ON:
SOUTH ASIAN ASSOCIATION FOR REGIONAL COOPERATION
SUBMITTED BY:
ROHIT MILIND TAMBE
ROLL NO: 74
MASTER OF COMMERCE (M.COM)
UNDER THE GUIDANCE OF:
PROF. R. A. JOSHI
P.T.V.A.’S
M.L.DAHANUKAR COLLEGE OF COMMERCE
VILE PARLE (EAST), MUMBAI
2014-2015
1
CERTIFICATE
I, PROF. R. A. JOSHI BY CERTIFY THAT
ROHIT MILIND TAMBE OF M.L.DAHANUKAR COLLEGE OF
COMMERCE OF M.COM (SEMESTER I) HAS COMPLETED PROJECT
ON SOUTH ASIAN ASSOCIATION FOR REGIONAL
COOPERATION IN THE ACADEMIC YEAR 2014-2015. THE
INFORMATION SUBMITTED IS TRUE AND ORIGINAL TO THE BEST
OF MY KNOWLEDGE.
SIGNATURE OF SIGNATURE OF
PROJECT GUIDE THE PRINCIPAL
2
DECLARATION
I, ROHIT MILIND TAMBE OF M.L.DAHANUKAR COLLEGE OF
COMMERCE OF M.COM (SEMESTER I) HERE BY DECLARE THAT I
HAVE COMPLETED PROJECT ON SOUTH ASIAN ASSOCIATION
FOR REGIONAL COOPERATION IN THE ACADEMIC YEAR 2014-
2015, AS PER THE REQUIREMENTS OF THE UNIVERSITY OF
MUMBAI AS A PART IN MASTER OF COMMERCE (M.COM). THE
INFORMATION SUBMITTED IS TRUE AND TO THE BEST OF MY
KNOWLEDGE.
Student signature
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ACKNOWLEDGEMENT
Any accomplishment requires the effort of many people and this is no different. I
would first and foremost like to thank the University of Mumbai for designing such
a precise and practical course and giving me an opportunity to present this project on
South Asian Association for Regional Cooperation which is a result of co-
operation and good wishes of many people.
This project would just not have been complete without the valuable contribution
from various people whom I have interacted with in the course of completion, whose
name if not mentioned would be inappropriate on my part.
It is with great affection and administration that I acknowledge my indebtedness to
my Project Guide, Prof. R. A. Joshi for assisting me in my project. Without her this
project would have remained just an idea, without form or consent. It was indeed
been a great experience working under their guidance during the entire course of this
project.
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SAARCSouth Asian Association for Regional
Cooperation
5
INDEX
SR. NO. PARTICULAR
6
1 INTRODUCTION
2 MEMBERS OF SAARC
3 OBSERVERS
4 Secretaries-General of SAARC
5 SAARC summits
6 Objectives of SAARC
7 Agreement for Establishment of SAARC Arbitration Council
8 South Asian Free Trade Area
9 Article-I TO ARTICLE VIII
10 Reducing barriers for export to SAARC countries
11 Political issues
12 SAARC Charter
13 SAARC Visa Exemption Scheme
14 Customs Cooperation
15 Standing Committee
16 Council of Ministers
17 The Seventh Meeting of the Sub-Group on Customs Cooperation
18 Secretariat
19 SAARC Summit
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INTRODUCTION
South Asian Association for Regional Cooperation
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The South Asian Association for Regional Cooperation (SAARC) is an organization of South
Asian nations, which was established on 8 December 1985 when the government
of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka formally adopted its
charter providing for the promotion of economic and social progress, cultural development
within the South Asia region and also for friendship and co-operation with other developing
countries. It is dedicated to economic, technological, social, and cultural development
emphasizing collective self-reliance. Its seven founding members are Sri Lanka,
Bhutan, India, Maldives, Nepal, Pakistan, and Bangladesh. Afghanistan joined the organization
in 2007. Meetings of heads of state are usually scheduled annually; meetings of foreign
secretaries, twice annually. It is headquartered in Kathmandu, Nepal.
Members of SAARC
Current members
Afghanistan
Bangladesh
Bhutan
India
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Maldives
Nepal
Pakistan
Sri Lanka
Observers
Australia
China
European Union
Japan
Iran
Mauritius
Myanmar
South Korea
United States
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Potential future members
China has expressed interest in upgrading its status from an observer to a full member of
SAARC. Supported by Pakistan, Bangladesh, Nepal, Maldives, Sri Lanka.
Burma has expressed interest in upgrading its status from an observer to a full member
of SAARC.
Russia has expressed interest in becoming an observer of SAARC. Supported By India.
Others
South Africa has participated in meetings.
Secretaries-General of SAARC
Abul Ahsan16 January 1985 to 15
October 1989
Kishore Kant Bhargava 17 October 1989 to 31
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December 1991
Ibrahim Hussain Zaki1 January 1992 to 31
December 1993
Yadav Kant Silwal1 January 1994 to 31
December 1995
Naeem U. Hasan1 January 1996 to 31
December 1998
Nihal Rodrigo1 January 1999 to 10
January 2002
Q.A.M.A. Rahim11 January 2002 to 28
February 2005
Lyonpo Chenkyab Dorji1 March 2005 to 29
February 2008
Sheel Kant Sharma1 March 2008 to 28
February 2011
Fathimath Dhiyana Saeed 1 March 2011 to 11
12
March 2012
Ahmed Saleem12 March 2012 to
present[25]
SAARC summits
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No Date Country Host Host leader
1st 7–8 December 1985 Bangladesh Dhaka Ataur Rahman Khan
2nd 16–17 November 1986 India Bangalore Rajiv Gandhi
3rd 2–4 November 1987 NepalKathmand
uMarich Man Singh Shrestha
4th 29–31 December 1988 Pakistan Islamabad Benazir Bhutto
5th 21–23 November 1990 Maldives Malé Maumoon Abdul Gayoom
6th 21 December 1991 Sri Lanka Colombo Ranasinghe Premadasa
7th 10–11 April 1993 Bangladesh Dhaka Khaleda Zia
8th 2–4 May 1995 India New Delhi P. V. Narasimha Rao
9th 12–14 May 1997 Maldives Malé Maumoon Abdul Gayoom
10th 29–31 July 1998 Sri Lanka Colombo Chandrika Kumaratunga
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11th 4–6 January 2002 NepalKathmand
uSher Bahadur Deuba
12th 2–6 January 2004 Pakistan Islamabad Zafarullah Khan Jamali
13th 12–13 November 2005 Bangladesh Dhaka Khaleda Zia
14th 3–4 April 2007 India New Delhi Manmohan Singh
15th 1–3 August 2008 Sri Lanka Colombo Mahinda Rajapaksa
16th 28–29 April 2010 Bhutan Thimphu Jigme Thinley
17th 10–11 November 2011[26] Maldives Addu Mohammed Nasheed
18th 2013[27] NepalKathmand
uKhil Raj Regmi
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Objectives of SAARC
to promote the welfare of the people of South Asia and to improve their quality of life;
to accelerate economic growth, social progress and cultural development in the region
and to provide all individuals the opportunity to live in dignity and to realize their full
potential ;
to promote and strengthen selective self-reliance among the countries of South Asia;
to contribute to mutual trust, understanding and appreciation of one another's problems;
to promote active collaboration and mutual assistance in the economic, social, cultural,
technical and scientific fields;
to strengthen co-operation with other developing countries;
to strengthen co-operation among themselves in international forums on matters of
common interest; and
to co-operate with international and regional organizations with similar aims and
purposes.
to maintain peace in the region
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Agreement for Establishment of SAARC Arbitration Council
The Governments of the South Asian Association for Regional Cooperation (SAARC) Member
States comprising the People’s Republic of Bangladesh, the Kingdom of Bhutan, the Republic of
India, the Republic of Maldives, the Kingdom of Nepal, the Islamic Republic of Pakistan and the
Democratic Socialist Republic of Sri Lanka;
Desirous of creating conditions favorable for fostering greater investment by investors of one
Member State in the territory of another Member State;
Desirous of providing a regional forum for settlement of commercial disputes by conciliation and
arbitration;
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Article-I
Establishment of the SAARC Arbitration Council
(1) There is hereby established a body to be known as the SAARC Arbitration Council
(hereinafter referred to as the “Council”).
(2) The Council shall have full legal personality.
(3) The legal capacity of the Council shall include:
(a) The capacity to contract;
(b) To sue and be sued in its name; and
(c) To acquire, hold and dispose of properties.
The location of the Council shall be decided.
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Article-II
Objectives and Functions of the Council
The objectives and functions of the Council are to:
(a) provide a legal framework within the region for fair and efficient settlement through
conciliation and arbitration of commercial, investment and such other disputes as may
be referred to the Council by agreement;
(b) Promote the growth and effective functioning of national arbitration institutions
within the region;
(c) Provide fair, inexpensive and expeditious arbitration in the region;
(d) Promote international conciliation and arbitration in the region;
(e) Provide facilities for conciliation and arbitration;
(f) Act as a co-coordinating agency in the SAARC dispute resolution system;
(g) Coordinate the activities of and assist existing institutions concerned with arbitration,
particularly those in the region;
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(h) Render assistance in the conduct of ad hoc arbitration proceedings;
(i) assist in the enforcement of arbitral awards;
(j) Maintain registers/panels of:
(i) Expert witnesses, and
(ii) Suitably qualified persons to act as arbitrators as and when required; and
(k) Carry out such other activities as are conducive or incidental to its functions.
The Council shall have the powers necessary to enable it to carry out its objectives and
functions.
Article-III
Organisational set-up of the Council
(1) There shall be for the Council a Director-General who shall:
(a) Be a citizen of a SAARC Member State; and
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(b) Be appointed, on the principle of alphabetical rotation among SAARC
Member States commencing from the Member State hosting the Council, by
the Secretary-General of SAARC with the approval of the Council of
Ministers.
(2) The Director-General shall hold office for a non-renewable period of three years on
such terms and conditions as may be determined by the Council of Ministers.
However, the tenure of the first Director-General will be for a period of four years.
(3) The Director-General shall be the chief executive of the Council and be responsible
for the day-to-day administration of the Council and will work under the supervision
of the Governing Board comprising a Member nominated by each Member State.
(4) The salary and allowances of the Director-General shall be determined by the Council
of Ministers.
(5) With regard to matters not covered in this Agreement, including the Service Rules,
Provisions relating to Financial and Administrative Matters, Financial Regulations,
Financial Rules and Procedures and Rules of Procedures for Governing Boards
applicable to the SAARC Regional Centres under the Harmonized Rules will be
applicable, mutatis-mutandis, to the Council.
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6. The Council, its Director-General and staff shall enjoy such immunities and privileges as are
essential for the effective functioning of the Council to be specified in the Headquarters Agreement
between the Council and the Host Member State.
Article-IV
Rules
(1) Subject to the Conciliation Rules to be agreed and annexed to this Agreement, the Governing
Board may make any additional rules for the administration of conciliation
proceedings conducted under the auspices of the Council, including the schedule of
fees to be charged.
(2) Subject to the Arbitration Rules to be agreed and annexed to this Agreement, the
Governing Board may make any additional rules for the administration of arbitrations
conducted under the auspices of the Council, including the schedule of fees to be
charged.
(3) The Rules made under sub-paras (1) & (2) of this Article shall be made public.
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ARTICLE VII
Reservations
1. This Agreement shall not be subject to reservations either at the time of signature or at the
time of notification to the SAARC Secretariat of the completion of formalities in terms of
Article V.
ARTICLE VIII
Amendment
1 This Agreement may be amended by consensus amongst the Member States. Any
Member State proposing amendment(s) shall notify the other Member States through the
SAARC Secretariat. Such amendment(s) shall become effective upon the notification
issued by the SAARC Secretariat on completion of formalities, including ratification, by all
Member States.
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Reducing barriers for export to SAARC countries
The Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL), the
Secretariat dealing with SAARC Chamber of Commerce and Industry (SCCI), wants to
minimize any trade barriers with other SAARC countries.
Hildon U. Hamangoda, Director, SAARC and International Affairs, FCCISL, said that
according to compiled data trade among SAARC countries is less than five percent of the
total trade of the region with the rest of the world. But other regional blocs are showing
much bigger volumes of intra-regional trade. For instance the North America Free Trade
Agreement intra-regional trade is over 50% and ASEAN countries have over 20% trade
among its member countries. The Intra-SAARC trade is dismally low as compared to
other regions. The trade and economic activity needs to be increased.
Hamangoda said, keeping in mind the current state of trade in SAARC member countries,
SCCI has decided to identify specific obstacles which are holding back and restricting
trade among SAARC countries in bilateral as well as regional trade e.g. “restrictions in
the cross-border movement of goods, lack of infrastructure, non-acceptability of
standards and certifications regime etc.”
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Political issues
The dispute over Kashmir’s accession to India has been standing in the way of the lasting peace
and prosperity of the Indian subcontinent.[15] While awarding the European Union with the 2012
Nobel Peace Prize, the Norwegian Nobel Committee stated that "...today war between Germany
and France is unthinkable. This shows how, through well-aimed efforts and by building up mutual
confidence, historical enemies can become close partners." Southern Asia can become unified just
as Europe has become unified as the European Union. Political dialogue is often conducted on the
margins of SAARC meetings which have refrained from interfering in the internal matters of its
member states. During the 12th and 13th SAARC summits, extreme emphasis was laid upon
greater co-operation between the SAARC members to fight terrorism.
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SAARC Charter
Desirous of promoting peace, stability, amity and progress in the region through strict adherence
to the principles of the UNITED NATIONS CHARTER and NON-ALIGNMENT, particularly
respect for the principles of sovereign equality, territorial integrity, national independence, non-
use of force and non-interference in the internal affairs of other States and peaceful settlement of
all disputes.
Conscious that in an increasingly interdependent world, the objectives of peace, freedom, social
justice and economic prosperity is best achieved in the SOUTH ASIAN region by fostering
mutual understanding, good neighborly relations and meaningful co-operation among the
Member States which are bound by ties of history and culture.
Aware of the common problems, interests and aspirations of the peoples of SOUTH ASIA and
the need for joint action and enhanced co-operation within their respective political and economic
systems and cultural traditions.
Convinced that regional co-operation among the countries of SOUTH ASIA is mutually
beneficial, desirable and necessary for promoting the welfare and improving the quality of life of
the peoples of the region.
Convinced further that economic, social and technical co-operation among the countries of
SOUTH ASIA would contribute significantly to national and collective self-reliance.
Recognizing that increased co-operation, contacts and exchanges among the countries of the
region will contribute to the promotion of friendship and understanding among their peoples.
Recalling the DECLARATION signed by their Foreign Ministers in NEW DELHI on 2 August
1983 and noting the progress achieved in regional co-operation.
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South Asian Free Trade Area
SAPTA was envisaged primarily as the first step towards the transition to a South Asian Free
Trade Area (SAFTA) leading subsequently towards a Customs Union, Common Market and
Economic Union. In 1995, the Sixteenth session of the Council of Ministers (New Delhi, 18–19
December 1995) agreed on the need to strive for the realisation of SAFTA and to this end an
Inter-Governmental Expert Group (IGEG) was set up in 1996 to identify the necessary steps for
progressing to a free trade area. The Tenth SAARC Summit (Colombo, 29–31 July 1998)
decided to set up a Committee of Experts (COE) to draft a comprehensive treaty framework for
creating a free trade area within the region, taking into consideration the asymmetries in
development within the region and bearing in mind the need to fix realistic and achievable
targets. The SAFTA Agreement was signed on 6 January 2004 during Twelfth SAARC Summit
held in Islamabad, Pakistan. The Agreement entered into force on 1 January 2006, and the Trade
Liberalization Programme commenced from 1 July 2006. Under this agreement, SAARC
members will bring their duties down to 20 per cent by 2009. Following the Agreement coming
into force the SAFTA Ministerial Council (SMC) has been established comprising the
Commerce Ministers of the Member States.
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SAARC Visa Exemption Scheme
The Twelfth Summit (Islamabad, January 2004) approved the institution of the SAARC Award
to honor and encourage outstanding individuals and organizations within the region. The main
objectives of the SAARC Award are:
To encourage individuals and organizations based in South Asia to undertake programmes
and activities complementing the efforts of SAARC
To encourage individuals and organizations in South Asia contributing to the improvement
of the conditions of women and children
To honor outstanding contributions and achievements of individuals and organisations within
the region in the fields of peace, development, poverty alleviation, environment protection
and regional co-operation making the SAARC Award the most prestigious Award in the
region; and
To honors any other outstanding contributions and achievements, not covered above, of
individuals and organizations in the region.
The SAARC Award comprises a gold medal, a letter of citation and cash prize of US $ 25,000.
Since institution of SAARC Award in 2004, it has been awarded only once and the Award was
posthumously conferred upon Late President Ziaur Rahman of Bangladesh.
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Council of Ministers
Council of Ministers consisting of the Foreign Ministers of the Member States established
with the following functions:
Formulation of the policies of the ASSOCIATION
Review of the progress of co-operation under the ASSOCIATION
Decision on new areas of co-operation
Establishment of additional mechanism under the ASSOCIATION as deemed necessary
Decision on other matters of general interest to the ASSOCIATION.
The Council of Ministers meets twice a year. Extraordinary session of the Council may be held
by agreement among the Member States.
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Standing Committee
The Standing Committee comprises of the Foreign Secretaries of the SAARC Member States. As
provided in Article V of the SAARC Charter, they take measures /decisions relating to: overall
monitoring and coordination of programme of cooepration under different areas; approval of
projects and programmes, including modalities of their financing; determination of inter-sectoral
priorities; mobilisation of regional and external resources; and identification of new areas of
cooperation based on appropriate studies.
Standing Committee is mandated to meet as often as necessary. Generally, they have met
preceding the sessions of the Council of Ministers i.e. both during the Summit as also as the
Council is convened in between two Summits. That way, the Committee would be meeting at its
thrity-seventh regular session in Thimphu on 25-26 April 2010 (preceding the Council of
Ministers and the Sixteenth Summit). Depending on special requirement, Standing Committee
has met at Special Sessions, on stand-alone basis: till date, the Committee had held five such
Special Sessions, the last (fifth) being in Dhaka on 12 April 2006.
The Committee reports to the Council of Ministers, on regular matters; and, as needed, asks for
specific decision on policy matters from the Council.
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Customs Cooperation
Cooperation in the field of Customs
The Group on Customs Cooperation, comprising heads of customs organisations of Member
States, administers and implements cooperation in the area of customs which has held five
Meetings so far.
The Fourth Meeting of the Group on Customs Cooperation (Faridabad, India, 12-13 August
2004) had decided to set up a Sub-Group to facilitate further discussion in the areas of (a) Draft
Agreement on Mutual Administrative Assistance in Customs Matters; (b) Harmonised System;
(c) Commercial Fraud; (d) Capacity Building.
During 2004 to 2009, the Sub-Group on Customs Cooperation held six Meetings to carry out the
above mandate during which discussion on Draft Agreement and on commercial fraud was
finalised and concluded successfully.
The Sub-Group has held seven Meetings so far since its inception. The Sixth Meeting of the Sub-
Group on Customs Cooperation (SAARC Secretariat, 14-15 January 2009) focused, inter-alia, on
issues relating to documentation and procedure and timeframe for their implementation. It
attempted Harmonization of Customs clearing procedures and documentation among the
SAARC Member States. In this context, it undertook detailed examination of basic export/import
documentation of the Member States, and procedures for their filing. It also focused on
harmonizing those 8-digit tariff lines which are being traded or have the potential of being traded
among the SAARC Member States.
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The Seventh Meeting of the Sub-Group on Customs
Cooperation
(i) focus on building infrastructure including roads and railways
networks near the Land Border Customs Stations (LCSs).
(ii) Customs Clearance procedures at LCSs also need to be smoothened;
(iii) Customs Administrations may consider a system of Customs
facilitation in which Export documentation of one Member State could be
considered by the Customs administration in the importing country for the
purposes of assessing and clearing the consignment.
(iv) As individual Customs Administrations in the SAARC countries
move towards automation in clearing trade consignments at the LCSs, the Sub-
Group on Customs Cooperation shall work towards developing an Electronic Data
Exchange System within the region, including at LCSs, with a view to ensure
better facilitation of trade in goods among the SAARC countries including
improved compliance.
(v) SAARC Secretariat may develop a regional/sub-regional project to set up
automated customs clearing mechanism at the designated LCSs. In this regard, the Member
32
States may indicate the name of the LCS in their respective country where the facility would
need to be established.
The Seventh Meeting of the Sub-Group on Customs Cooperation also discussed the matter of
harmonisation of 8-digit tariff lines in detail and felt that in order to make this task easier, all
Member States would further provide upto only 100 8-digit tariff lines with a trade potential of
75% (in value terms) in the region. It also agreed that on receipt of this information as per
agreed format from all the Member States, the Secretariat may outsource the job of carrying out
analysis of the differences in the descriptions of the 8-digit tariff lines submitted by the Member
States.
The Eighth Meeting of the Sub-Group on customs Cooperation was held on 22-23 August 2011
at the SAARC Secretariat.
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Secretariat
The SAARC Secretariat was established in Kathmandu on 16 January 1987 and was inaugurated
by Late King Birendra Bir Bikram Shah of Nepal.
It is headed by the Secretary General appointed by the Council of Ministers from Member
Countries in an alphabetical order for a three-year term. He is assisted by the Professional and
the General Service Staff, and also an appropriate number of functional units called Divisions
assigned to Directors on deputation from Member States. The Secretariat coordinates and
monitors implementation of activities, prepares for and services meetings, and serves as a
channel of communication between the Association and its Member States as well as other
regional organisations.
The Memorandum of Understanding on the establishment of the Secretariat which was signed by
Foreign Ministers of member countries on 17 November 1986 at Bangalore, India contains
various clauses concerning the role, structure and administration of the SAARC Secretariat as
well as the powers of the Secretary-General.
In several recent meetings the heads of state or government of member states of SAARC have
taken some important decisions and bold initiatives to strengthen the organization and to widen
and deepen regional co-operation.
The SAARC Secretariat and Member States observe 8 December as the SAARC Charter Day1.
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SAARC Summit
The Charter (Article III) provides that the Heads of State or Government "shall meet once a year
or more often as and when considered necessary by the Member States".
However, the Summit has generally been convened at an interval of one and half year or so. The
next i.e. Sixteenth Summit of the Heads of State or Government would be held at Thimphu on
28-29 April 2010.
Summit Declarations provide directives and mandate for regional co-operation. Following are
the past Summit Declarations:
First SAARC Summit, Dhaka, 1985
Second SAARC Summit, Bangalore, 1986
Third SAARC Summit, Kathmandu, 1987
Fourth Summit, Islambad, 1988
Fifth SAARC Summit, Male', 1990
Sixth SAARC Summit, Colombo, 1991
Seventh SAARC Summit. Dhaka, 1993
Eighth SAARC Summit, New Delhi 1995
Ninth SAARC Summit, Male', 1997
Tenth SAARC Summit, Colombo, 1998
Eleventh SAARC Summit, Kathmandu, 2002
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Twelfth SAARC Summit, Islamabad, 2004
Thirteenth SAARC Summit, Dhaka, 2005
Fourteenth SAARC Summit, New Delhi, 2007
Fifteenth SAARC Summit, Colombo, 2008
Sixteenth SAARC Summit, Thimphu, 2010
Seventeenth SAARC Summit, Addu City, 2011
36