In March, New Delhi hosted a virtual conference of South Asian Association for Regional Cooperation leaders on the challenges of the coronavirus pandemic and also proposed the creation of an emergency response fund. It was seen by many observers as a sign of new life in the regional cooperation project in South Asia, after years of inertia. However, within six months, ground realities have once again revealed the limitations of cooperation in the region.
Since its formation, the SAARC has remained a textbook example of the challenges of regional cooperation. While the hostile India-Pakistan bilateral relationship has been frequently cited for this “failure”, inherent structural challenges, including glaring geographic and demographic inequalities in terms of size and strengths of countries in the region, limiting the scope of wider cooperation needs to be acknowledged.
While many of the arguments rely on trade as an incentive for regional cooperation, they often ignore the necessary compatibilities for successful trade transactions. Unlike the European Union and Association of Southeast Asian Nations, countries in South Asia are relatively less industrialised and as a result, intra-regional trade is primarily either agri-commodities or relatively lower valued manufactured goods.
Stronger and sustainable trading relationship primarily depends on the essential element of complementarities of demand and supply, which lacks in case of SAARC and that dampens the potential for trade in the region.