The South Asian Association for Regional Co-operation: Part One – The Problems of SAARC

17 November 2016 Vikas Kumar, FDI Associate Download PDF

Key Points

  • Pakistan’s opposition to regional integration and its reliance on multilateral fora to raise bilateral disputes are the most visible obstacles to the proper functioning of SAARC.
  • A closer look, however, suggests that a combination of historical, geographical, ethno-religious, and political factors, some of which are independent of Pakistan and beyond India’s control, has gridlocked the regional organisation.
  • The sense of insecurity vis-à-vis India, coupled with the fact that the majority community in most of India’s neighbours is a minority in India, has made those countries domestically susceptible to anti-India mobilisation and internationally desirous of external intervention in bilateral conflicts.
  • In the absence of tangible and achievable shared regional goals, the SAARC countries lack an incentive to work together to overcome the aforementioned hurdles.


Pakistan may presently appear to be the most visible obstacle to the progress of the South Asian Association for Regional Co-operation (SAARC) as an effective regional body, but it is a combination of deeper historical, geographical, ethno-religious, and political factors – some of which are independent of Pakistan and beyond the control of India – that have gridlocked SAARC. Neither the creation of a sub-SAARC regional grouping that does not include Pakistan and/or India, nor unilateral concessions from India, the expansion of SAARC to include major powers from outside the Sub-continent, or the reform of the SAARC Charter, are likely to resolve the organisation’s problems. It is time that India stepped back and reassessed SAARC’s usefulness in the long term. An assessment of the alternatives suggests that the best course of action for India is to allow SAARC to die a natural death and not to rush into launching another formal all-purpose regional grouping. India should, however, continue to engage like-minded neighbours on issues of mutual interest. Those initiatives will hopefully coalesce into a more effective successor to SAARC.


The attack on an Indian Army camp in Uri on 18 September cast a shadow over the nineteenth summit of SAARC, which was to have been held in Islamabad on 15-16 November.

New Delhi pulled out of the Summit as part of its non- and sub-military responses to the growing incidence of cross-border attacks. Other responses have included the reviewing of water sharing arrangements and trade relations and strikes at suspected terror launch pads in Pakistan-occupied Kashmir.[1] Soon afterwards, three other SAARC countries decided against attending the Summit and it was postponed indefinitely. Now, however, it is time that India stepped back and reassessed the long-term usefulness of SAARC instead of looking at the regional body solely through the lens of terrorism and/or cross-border incidents.

SAARC was established in 1985 ‘to promote the welfare of the peoples of South Asia and to improve the quality of their lives’ and ‘to accelerate economic growth, social progress and cultural development’ (SAARC Charter, Article I.a-b). Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka were the founding members. Australia, China, the European Union, Iran, Japan, South Korea, Mauritius, Myanmar and the United States joined as observers between 2005 (the Dhaka Summit) and 2008 (the Colombo Summit). Afghanistan joined SAARC as a member at the 2007 New Delhi Summit), while Myanmar applied for membership in 2008 ahead of the Colombo Summit.[2] The expansion and growing international acceptance of the grouping raised hopes that SAARC, which represents the world’s most populous and least-integrated region, would eventually evolve into a vibrant regional body unhindered by the state of the Indo-Pakistani relationship. The 26 November 2008 Mumbai terror attack that took place just a few months after the Colombo Summit and subsequent developments belied those hopes.

Pakistan continues to use multilateral fora to raise bilateral issues[3] and remains committed to a Kashmir-first approach under which the full normalisation of Indo-Pakistani ties cannot occur until the Kashmir issue is settled. As a result, Pakistan does not support regional transport agreements that would provide India with overland access to Afghanistan and does not allow Indian humanitarian aid to Afghanistan to pass through its territory.[4] That Pakistan understands the importance of connectivity and regional co-operation is reflected in its eagerness to promote the China-Pakistan Economic Corridor (CPEC), the aspiration to develop overland corridors to Central Asia and enthusiasm to join the Shanghai Co-operation Organisation (SCO). As ever, though, the dysfunction of the Indo-Pakistani relationship hurts the two countries’ own and regional interests.

After new SAARC initiatives for regional connectivity were stalled by Pakistan at the 2014 Kathmandu Summit, India decided to go ahead with a sub-SAARC Motor Vehicle Agreement for the Regulation of Passenger, Personal and Cargo Vehicular Traffic with Bangladesh, Bhutan and Nepal. The BBIN (Bangladesh, Bhutan, India and Nepal) entity could be seen as a precursor to a possible formal sub-SAARC grouping. More recently, India approved a major project to improve road connectivity with the other three countries. India and Bangladesh have already been experimenting with international multimodal transport arrangements and are likely to co-develop ports. On the other hand, India has re-engaged Iran to access Afghanistan via Chabahar, bypassing Pakistan. India has also engaged Sri Lanka and the Maldives within a trilateral format.

A larger, but lesser known group, the South Asia Sub-Regional Economic Co-operation (SASEC) Programme brings together Bangladesh, Bhutan, India, the Maldives, Nepal and Sri Lanka. It was set up in 2001 and the Asian Development Bank serves as the SASEC Secretariat. This group dates back to 1996, when four SAARC countries (Bangladesh, Bhutan, India and Nepal) came together to form the South Asian Growth Quadrangle (SAGQ), a move that received the endorsement of SAARC at its 1997 Malé Summit. The Maldives and Sri Lanka joined SASEC in 2014 and Myanmar is slated to join in the near future.[5] In short, there is no dearth of ongoing experiments in sub/trans-regionalism. In fact, one could argue that there are too many competing and cross-cutting initiatives, which is diluting focus and wasting resources.[6]

India is also trying to promote regional integration through the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Co-operation (BIMSTEC), which provides a BBIN-plus platform. BIMSTEC includes SAARC and non-SAARC countries: Bangladesh, Bhutan, India, Nepal, Sri Lanka and two from south-east Asia, Myanmar and Thailand. The advantage of this group is that it includes Sri Lanka and Myanmar (whose SAARC membership application remains pending since 2008) in addition to the BBIN countries. A fortnight after it pulled out of the Islamabad Summit, India invited leaders of BIMSTEC countries to join the 2016 BRICS Summit held in Goa (15-16 October).

Looking Beyond the India-Pakistan Roadblock

While Pakistan’s opposition to regional economic and transport integration is forcing others to find alternatives to SAARC, its support to terror groups targeting Afghanistan, Bangladesh and India is a bigger challenge to SAARC’s unity. The latter three countries chose not send their ministers to a recent SAARC meeting of finance ministers in Islamabad and Bangladesh did not send its minister to an earlier meeting of SAARC home ministers. India’s Home Minister, who attended the latter meeting, was given an unusually hostile reception and faced massive protests in the Pakistani capital that were organised by terrorist organisations.

Soon after the Uri attack, India, Afghanistan, Bangladesh and Bhutan pulled out of the forthcoming SAARC Summit in Islamabad. That was not the first time a SAARC Summit has had to be postponed, however. In fact, SAARC has not been able to organise regular summits since 1988.[7] So far, thirteen out of thirty one summits could not be held as per schedule[8], although the Indo-Pakistani conflict has not been the only reason for the cancellations. In the late 1980s, for instance, a SAARC Summit had to be postponed due to differences between India and Sri Lanka.

In any case, it is increasingly obvious that a dysfunctional SAARC has no future, particularly when its older cousins – the European Union and the Association of South-East Asian Nations (ASEAN) – are struggling to stay together. The road ahead is not clear, though. Any search for alternatives to SAARC has to acknowledge that a combination of geographical, historical, political and ethno-religious factors has gridlocked the grouping. Kashmir is only one of those factors.

The Giant in SAARC

One of the key reasons for SAARC’s failure is that one of its members is much larger than all the others put together. India alone accounts for at least three-fifths of SAARC’s area, population, GDP (on a purchasing power parity basis), foreign exchange and gold reserves, foreign direct investment and armed forces. (The tables below give a snapshot based on the latest available information. Alternative comparisons using long run averages will not alter the basic inference drawn here.)


The enormous resource and power differentials engender a sense of insecurity in India’s neighbourhood. It has even been suggested that the smaller countries of the region supported the launch of SAARC to improve their bargaining power vis-à-vis India, while the latter was initially reluctant to join a grouping in which it might have to deal with its smaller neighbours as a consortium rather than separately.[9] (Incidentally, China faces similar material constraints in East and South-East Asia as India does in its neighbourhood.) In contrast, no single country dominates the EU and ASEAN, hitherto successful regional organisations. Equally importantly, post-1945 Germany unilaterally accepted a cap on its military capacity and adopted a low-key foreign policy. Germany’s stance may be changing, though, and that is likely to affect the cohesion of the EU.


India’s central location within SAARC accentuates the effect of its size. India shares a land and/or maritime boundary with all the other SAARC countries (other than Afghanistan).[10] Apart from Pakistan and Afghanistan, the other countries do not share boundaries with each other and have India as their sole neighbour. India is the only neighbour of Bangladesh, the Maldives and Sri Lanka, though the first shares a very short border with Myanmar. Bhutan and Nepal are largely bounded by India, apart from sharing a border with sparsely populated Tibet. No wonder some of these countries perceive themselves to be India-locked, rather than merely landlocked.

Moreover, not all the international borders in the region are settled beyond dispute. Afghanistan and Pakistan and India and Pakistan are locked in longstanding territorial disputes that fuel conventional conflicts. India and Bangladesh managed to resolve their land and maritime boundary disputes only very recently. The settlement of the border dispute, has not resolved, however, tensions with India due to alleged illegal immigration from Bangladesh. India does not have a boundary dispute with Sri Lanka, but the Indian state of Tamil Nadu continues to feel strongly about the uninhabited island of Katchatheevu, which was ceded to Sri Lanka in the 1970s and tensions over illegal fishing in each other’s waters continue to haunt the bilateral relationship. Only Bhutan, the Maldives and Afghanistan do not have any boundary dispute with India.

Water and Other Complications

The region is also divided over the distribution and management of river water. The Indus Water Treaty between India and Pakistan has come under enormous stress in recent times. India, Nepal, and Bangladesh have not yet managed to arrive at an equitable means of sharing international rivers. Once Afghanistan starts to build dams, that is bound to lead to disputes with water-hungry Pakistan.

Geography is not the only culprit, though. History compounds the intractability of regional disputes. The successor states of British India continue to define their relationships in terms of their unfortunate formative experiences and unresolved Partition disputes. Likewise, the colonial boundary between Afghanistan and Pakistan is a source of dispute.

Differences in political systems also hinder regional co-operation. Other than India, none of the SAARC countries is a stable, secular democracy. India’s strained relations with Abdulla Yameen’s Maldives, K.P. Oli’s Nepal and Mahinda Rajapakse’s Sri Lanka are recent cases in point (and, for a long time, India’s relationship with Myanmar remained stalled for similar reasons.) The more authoritarian the ruler, the more likely s/he is to whip up anti-India sentiments and play the Chinese card. The convergence of political systems is unlikely in the near future and will continue to affect relations even if India tones down its rhetoric. In any case, significant sections of the public and élites in all the smaller SAARC states rightly or wrongly believe that India interferes with their domestic politics.

Last but not least, the SAARC countries do not share a common goal, even if only in the form of a common enemy or threat.[11] For a long time, the EU and ASEAN countries were tied together by shared threat perceptions. Of course, both of these Cold War era regional groups are now struggling to stay together, partly because of the absence of shared threat perceptions. Except for perhaps Bhutan, none of India’s neighbours views China as a direct threat. In fact, China has emerged as one of the biggest, if not the biggest, source of arms and investment for almost all of India’s neighbours. The difference in threat perceptions is also reflected in the response of most SAARC countries to China’s proposed multinational overland and maritime transport corridors.[12] Only Afghanistan, Bangladesh and India view Pakistan as a potential threat. Sri Lanka, Nepal and the Maldives maintain normal relations with Pakistan, if only to balance against the purported hegemonic pressure exerted by India.

The reasons for the underperformance of SAARC are clearly numerous. The situation then becomes a question of where to next for the organisation. That question will be posed in Part Two of this paper, in which different methods of salvaging SAARC are examined.



[1] Promotion of cross-border terrorism violates Article II.1 of the SAARC Charter: ‘Co-operation within the framework of the Association shall be based on respect for the principles of sovereign equality, territorial integrity, political independence, non-interference in the internal affairs of other States and mutual benefit.’

[2] India had approached Myanmar for membership during the formative years of SAARC, but Myanmar preferred ASEAN, which it joined a decade later in 1997. Incidentally, Sri Lanka, one of the founding members of SAARC, was denied admission to ASEAN on geographic grounds in 1982 (three years before the formal inauguration of SAARC in Dhaka and a year before the meeting of Foreign Ministers in New Delhi that heralded the launch of SAARC.) Two decades later, Myanmar applied for SAARC membership when the grouping was already going downhill. The Mumbai attacks and Pakistan’s wish to extend membership to China combined to derail the further expansion of SAARC.

[3] Article X.2 of the SAARC Charter stipulates that ‘Bilateral and contentious issues shall be excluded from the deliberations.’

[4] Afghanistan has threatened to block Pakistan’s access to Central Asia if it continues to limit overland access to India.

[5] It bears noting that Pakistan is not excluded from the ADB’s sub-regional schemes. Pakistan is part of the Central Asia Regional Economic Co-operation (CAREC) Programme that includes Afghanistan, Azerbaijan, China, Georgia, Kazakhstan, Kyrgyz Republic, Mongolia, Tajikistan, Turkmenistan and Uzbekistan.

[6] An example is in order. India and Myanmar have engaged each other on developing multi-national transport infrastructure on a variety of platforms including SAARC, ASEAN, SASEC, BIMSTEC, Bangladesh-China-India-Myanmar (BCIM), India-Myanmar-Thailand (IMT), and Mekong Ganga Co-operation (MGC/Cambodia, Laos, Myanmar, Thailand and Vietnam). These are in addition to their bilateral engagements on the issue. However, one could as well argue that multiple and cross-cutting engagements are necessary to ensure that failure of one initiative does affect the overall objective and also to ensure that no country can afford to walkout of any initiative because it cannot avoid dealing with at least some of the partners on the same issue in other fora.

[7] This violates Article III of the SAARC Charter, which stipulates that ‘The Heads of State or Government shall meet once a year or more often as and when considered necessary by the Member States.’

[8] In contrast, ASEAN has not only been able to organise regular summits, it has also seen an increase in the frequency of those meetings.

[9] If this reading of the formative history of SAARC is correct, then the smaller neighbours of India seem to have overlooked both the general collective action problem as well as the absence of any substantive convergence of interests between them. In any case, while they came together to improve their bargaining power in bilateral disputes with India, the SAARC Charter explicitly committed itself to avoiding bilateral issues (Article X.2).

[10] The northern part of Jammu and Kashmir, which is presently controlled by Pakistan, shares a narrow stretch of border with Afghanistan.

[11] Poverty, climate change, ecological degradation and water scarcity, for example, do not make for attractive enemies.

[12] It is not the case that India is not engaging China in building transport corridors. Bangladesh-China-India-Myanmar (BCIM) is an example of issue-based co-operation between the two countries.

About the Author

Vikas Kumar is an assistant professor of economics at Azim Premji University, Bengaluru.
Any opinions or views expressed in this paper are those of the individual author, unless stated to be those of Future Directions International.

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