Pakistan and Changing

Regional Apparatus
By: Muntha Azhar (CSS-2020, PAS)
Geographic location of Pakistan-Significance

 Area of 881,913 km2 (340,509 sq mi), approximately equal to the combined land areas of France and
the United Kingdom.
 It is the 33rd-largest nation by total area.
 Pakistan has a 1,046 km (650 mi) coastline along the Arabian Sea and the Gulf of Oman in the south.
 Land borders of 6,774 km (4,209 mi) in total:
 2,430 km (1,510 mi) with Afghanistan
 523 km (325 mi) with China
 2,912 km (1,809 mi) with India
 909 km (565 mi) with Iran.
 It shares a marine border with Oman
 Separated from Tajikistan by the cold, narrow Wakhan Corridor.
 Pakistan occupies a geopolitically important location at the crossroads of South Asia, the Middle East,
and Central Asia.
 China
 Each player wanted to utilise this region to pursue its geopolitical and
geostrategic interests. The building of Gwadar port and the development of
Balochistan under the China Pakistan Economic Corridor (CPEC) is going to be
a game changer for Pakistan’s socio-economic development.
 Iran
 Iran’s approach towards Pakistan has seen multiple changes over time
because of the geopolitical shifts in the region
 Pakistan shares a tri-functional border with Iran; direct land border with
Iran’s Sistan province, maritime boundary of Makran Coast commencing from
Sindh, and through Nimruz province of Afghanistan
Changing Regional Apparatus

 Rising China
 US-China Power show in South Asia
 China-India rivalry in the region
 China as revisionist power in Indo-Pacific
 One Belt One Road (OBOR)
Belt & Road Initiative of China

 The launching of President Xi Jinping’s Belt and Road Initiative (BRI) in 2013
of USD 1.3 trillion of infrastructure construction and connectivity projects
aims to add USD 4 trillion in wealth to regional economies by 2030 AD.
 Two major components:
 1. Silk Road Economic Belt
 2. Maritime Silk Road
 China’s ties with the regional states have deepened, including influx of
Chinese capital into construction projects
 The revival of ancient land based Silk Route Economic Belt and building of the
21st century Maritime Silk Route holds immense potential for all the countries
Six Corridors of BRI (historically, the very concept of corridor has been a cause of
development)
 China-Mongolia-Russia Economic Corridor
 New-Eurasian Land Bridge
 China-Central and West Asia Economic Corridor
 China-Indo-China Peninsula Economic Corridor
 Bangladesh-China-India-Myanmar Economic Corridor
 CPEC
China-Pakistan Economic Corridor

 China Pakistan Economic Corridor (CPEC) – the latest mega venture between
the two nations – shall accomplish its politico-economic purposes via trade
and development and will be effective in generating constancy in South Asia.
 Subsequent to its completion, it will function as a crucial and focal point for
trade amongst China, Middle East and Africa.
 The corridor will shorten the 12,000 km long route that takes the Middle East
oil to the Chinese ports (Abid and Ashfaq, 2015).
 In May 2014, Pakistan and China signed a deal to commence a Metro Bus
project in Lahore and an Orange Line track would also be built. In April 2015,
51 memorandums of understandings (MOUs) were concluded, along with the
plan of the CPEC.
 With a planned portfolio of projects totaling around more than 62 billion dollars,
there are actually two kinds of projects: infrastructure and energy
 China and Pakistan signed a Memorandum of Understanding on CPEC that is a
3218km network of roads, railways, pipelines, economic free zones, and highways
between Pakistan and China
 China has grown in power, influence and economy over the past four decades, yet
the geographical location of Pakistan will always influence the strategic calculations
of China.
 Three phases of CPEC:
1. Short-term
2. Mid-term
3. Long-term
Benefits for China

 Shortest energy route of 2400km to energy rich Gulf countries (12,900 km long route to import extracted
oil from the Persian Gulf through Indian & Pacific Ocean. Strait of Lombok is also being ignored as a passage
in comparison to CPEC due to travel time and cost)
 Reduce the transportation cost of China by providing a shorter route for China’s trade to Persian Gulf and
with entire world
 Tackling Malacca Dilemma (currently, nearly 80% of China’s oil is transported via shipment through Strait of
Malacca. This oil is the life blood of $3.8 trillion economy and the biggest exporting status of China. Each
journey is affected by the most precarious checkpoints at Passage of Malacca.
 Access to new markets (improve interaction with Central Asia and access to Afghanistan’s large reserves.
Afghanistan has the abundant potential of hydroelectricity which Chinese companies can tap. China showed
active interest in Afghanistan particularly from the perspective of transport. For a landlocked country like
Afghanistan, CPEC and Gwadar are of vital importance in geostrategic sense as East Asian countries are
located in its east and Middle Eastern countries in its west. Afghanistan is reluctant and instead playing the
hands of India to sabotage CPEC which may undermine the fruition of BRI. Indian mission in Afghanistan has
paid handsome amounts to sub-nationalists under the garb of humanitarian assistance and projects.)
 Expanding global role
Benefits for Pakistan

 Bringing industrialization
 Energy generation plants (16,400MW of power projects. 61% of the investment, worth
38 billion dollar, is especially targeted at the energy infrastructure development.
Zonergy 900MW solar power plant is first solar energy one to be put into Pakistan’s
national grid. According to the Pakistan Economic Survey 2018-19, the installed
electricity generation capacity went to 34,282 megawatts in Jul-Mar 2019-20 compared
to 33,433MW in the corresponding period of previous year, registering a rise of a 2.5
percent growth as an outcome of CPEC power initiatives)
 Land routes & Infrastructure development
 Security Implications (Safe Cities Initiative was primarily designed to safeguard Chinese
workers, but it will also transform many of Pakistan’s cities. Fencing off selected areas
is a part of the Gwadar City Master Plan under the Safe City Project. Government is
building a large metal fence that would stretch from just north of the old airport and
extended westward.)
 Defense Cooperation (Deep rooted naval collaboration between Pakistan Navy
and PLA Navy has become ever more important)
 Can bring more FDI (it will have carry-over effects of benefits for Afghanistan
as well that can ultimately improve security situation for Pakistan with less
Indian involvement in Afghanistan)
 $25 billion investment into Pakistan’s roads, ports, power plants and fibre
optic cables.
 Easy access to Central Asia (The region is physically attached to Wakhan
Corridor, Pakistan can utilize its value)
 Gwadar has been a priority for Pakistan which has long thought the port had
the potential to give it an edge in its never-ending contest with India.
 The first proposal to develop Gwadar was put forward not by Beijing but by
then Pakistani president Gen Pervez Musharraf during his first visit to China in
January 2000
Progress so far

 As many as 32 early harvest projects of CPEC have been achieved during the
last five years out of 122 announced projects
 The completion of dozens of power, infrastructure, motorways and deep sea
port of Gwadar projects worth USD 22 billion
 CPEC has now entered its crucial Second Phase which envisages launching of
the industrialization, and relocation of industries
8 energy projects completed:
 Sahiwal 660MW Coal-fired Power Plant, Punjab
 660MW Coal-fired Power Plants at Port Qasim Karachi
 1320 HUBCO Coal Power Project, Hub Balochistan
 Engro 330MW Thar Coal Power Project
 Hydro China Dawood Wind Farm(Gharo, Thatta)
 UEP Wind Farm (Jhimpir, Thatta)
 Sachal Wind Farm (Jhimpir, Thatta)
 Three Gorges Second and Third Wind Power Project
2 land infrastructure projects completed:
 KKH Phase II (Thakot -Havelian Section)
 Peshawar-Karachi Motorway (Multan-Sukkur Section)
Concerns for Pakistan

Threatening Security
 The threatening security situation in Pakistan and the imminent existence of
India on both Pakistan and China’s borders
 DG ISPR Maj Gen Babar Iftikhar recently revealed that for sabotaging CPEC,
India had raised a militia of 700 militants to conduct terror activities in
Balochistan.
 A commission comprising 24 members was created which included 10 RAW
operatives
 $60 million dollars were dedicated for this force
 Brought in its own prisoners as a workforce rather than providing Pakistanis
with much-needed jobs
Repaying the Debt
 Repaying the debts it is amassing
 China may be a less sympathetic creditor than the West
Environmental Cost
 Nearly 40 percent of the planned generation capacity uses coal, despite
ongoing concerns about the high public health costs of pollution in Pakistan.
Internal Politics
 Nawaz Sharif wanted China to focus on the energy projects that had been a
key feature of his 2013 election manifesto. To some extent, this suited
Beijing too. After all, if it was to relocate factories to Pakistan, it would need
the energy to supply them.
 Whilst Nawaz Sharif was in power, many major projects were steered towards
his political heartland of Punjab province, Pakistan. Khyber Pakhtunkhwa
meanwhile missed out. This to some extent suited the Chinese who saw great
development potential in Punjab province, in part because it was cheaper to
work in a province with a road network of sorts already in place.
 In the face of Pakistani government pressure, China abandoned its preference
for the Hattar industrial park and agreed to develop Rashakai (Nowshera-
Mardan, KP) even though feasibility studies had not given the site a high
rating.
Way Forward

 At a time when Pakistan is entering into major economic relations with foreign countries in the
region as well as globally, it is imperative to pay attention to the cultural dimensions of
international relations
 Interdependencies can help change entrenched mindsets to sustain the advantage of an economic
upturn
 Pakistani policy planners now urgently need a paradigm shift with new policy initiatives to ensure
utilization of the energy of 220 million Pakistanis
 Including neighbors in the project
 Early consensus on route construction by using the platform of CCI
 Countering Indian threats as the peace-talks have become an unachievable goal in the short-run
due to the extremist policy and obduracy of BJP government
 Ensuring transparency in the execution of the projects
 Renegotiating with China on the projects where Pakistan’s national interest are jeopardized due
to unfavorable terms and conditions
How CPEC Phase II will galvanize
industrialization and employment in Pakistan?

 Introduction (Overview)
 Different Phases of CPEC
1. The CPEC projects in Pakistan are divided into three phases.
2. Pakistan has already set up projects like power production plants under
phase-I by 2020.
3. The country aspires to develop medium-term projects under phase-II by 2025
and long-term projects under Phase-III by 2030.
 Galvanizing Industrialization under CPEC Phase II
1. Under CPEC’s second phase, the industrial base of the country would be
expanded which would help in increasing the country’s exports.
2. As far as industrial development is concerned, productivity would be increased
and exports would see a big jump with a reduction in imports under CPECs
second phase.
3. Phase-II would redress the issue of the trade imbalance between Pakistan and
China.
4. As per a recent statement by Chief of Army Staff General Qamar Bajwa
Chinese companies were showing keen interest to invest in all three Special
Economic Zones (SEZs). He said that the process for relocation of the Chinese
industry in Pakistan was in progress.
1. Investment in the agriculture sector of both countries by establishing special
economic zones will boost cooperation in the Chinese and Pakistani agriculture
sectors.
2. Mango is Pakistan’s leading export and it is expected that the exported product
will be sold in supermarkets across China.
3. Joint venture in agriculture is the first step to reduce the price which can be
achieved through the introduction of technology and working with farmers and
exporters to set a reasonable price for imported fruits and vegetables.
4. Many products can be transported by road to China through the establishment of
a cold chain system that’s an initiative of CPEC. Up till now, the short shelf-life
products, like mango fisheries and other agricultural products, were exported by
air with increased prices. They would now be transported at a reasonable cost.
1. Pakistan produces a huge amount of cotton which can be exported to China as
Beijing has a vast number of textile industries. Balochistan is the only province
producing Onyx in the world and the Chinese have a specific inclination towards
the stone.
2. The gem was another area where Chinese joint ventures could help building
Pakistani industries especially exports of gold and copper to China. Pakistan has
abundant gems in northern areas but it lacks advanced technology to polish gems.
However, the Chinese could help the country to make beautiful jewelry products.
3. Moreover, Pakistan would be able to exchange skilled labor with China and other
countries of the region once the connectivity rail, road projects are completed.
4. Operations of the China-Pakistan Free Trade Agreement would decrease prices as
import duty would not apply to products.
1. The industrialization that is the main pillar of the second phase will provide required sources of economic
growth and help generate employment.
2. Furthermore, In Pakistan, cottage or household industries hold an important position in the rural set-up.
Most villages are self-sufficient in the basic necessities of life. They have their own carpenters, cobblers,
potters, craftsmen, and cotton weavers. Many families depend on cottage industries for income. There is
a great demand for hand-woven [carpet]s, embroidered work, brassware, rugs, and traditional bangles.
These are also considered important export items and are in good demand in international markets. CPEC
upon completion would give away to further the market outreach for cottage industry.
3. CPEC’s Special Economic Zones (SEZs) will play a pivotal role. SEZs would provide basic infrastructure and
impetus for industrialization. A special economic zone is an area in which the business and trade laws are
different from the rest of the country. These zones are located within a country’s national borders, and
their aims include increased trade balance, employment, increased investment, job creation, and
effective administration.
 Prime Minister of Pakistan Imran Khan has rightly pointed out in one of his speeches that KPK was
underdeveloped and it had to look towards Karachi and the Middle East for jobs due to lack of
opportunities but RSEZ is bringing a lot of industrialization in the province which will solve the issues.
 Reduction of Unemployment under CPEC Phase II
1. Pakistani officials anticipated that CPEC will enable the environment to create 2.3
million jobs between 2015 and 2030 and add 2-2.5% points to the country’s annual
economic (GDP) growth.
2. Connectivity with CARs would help Pakistan to access fuel rich regions of the world
that is likely to reduce the fuel crises alongside reducing the cost of fossil fuels in
Pakistan.
3. China-Pakistan Economic Corridor (CPEC) is a strategic economic project aiming at
increasing regional connectivity for the economic development of Pakistan and
China.
4. As many as 700,000 new job opportunities for local people are estimated to be
created by 2030 under the China Pakistan Economic Corridor (CPEC), according to
the report of The Express Tribune.
1. CPEC is not only expected to be beneficial for Pakistan and China but is also
expected to have positive spillover effects to other neighboring countries by
enhancing the geographical connectivity of Pakistan with landlocked Central
Asian states.
2. Investment in infrastructure undeniably increases and creates jobs in the service
sector.
3. About nine projects under CPEC have already been completed, producing
5,320MW electricity with an investment of $7.9 billion. The energy-generating
projects have provided jobs to 5,000 Pakistani citizens according to a report by
Business Standard.
4. CPEC Authority Chairman uttered that eight more energy projects are being
constructed to generate 4,470MW electricity with an investment of another $9.55
billion and would provide employment to over 15,000 Pakistanis.
1. As the main focus of the CPEC phase two is socio-economic development, trade promotion,
employment, and economic growth, so, the cause can only be fully served through special economic
zones (SEZs).
2. RSEZ in KPK is top precedence and is a flagship project of Khyber-Pakhtunkhwa Economic Zones
Development & Management Company (KPEZDMC) which will implement it with the collaboration of
the China Road and Bridge Corporation (CRBC). The zone is spread over almost 1,000 acres and
located near M-1 Nowshera. It will have international standards infrastructure and will be developed
in three phases with almost $128 million.
3. RSEZ will transform the transportation services of the province along with business and trade.  After
the start of its operations, it will become a hub of economic activity for the province. According to
stats shared on the eve of its groundbreaking ceremony, RSEZ will produce 200,000 jobs in
engineering industries and food processing along with boosting business activities in the province.
4. It will also provide multiple benefits to Pakistan like an increase in people-to-people contact and
foreign direct investment in the coming years. The special economic zone is likely to attract foreign
investors which will increase economic activities in Pakistan and this will spread its soft image to the
world.
1. Chinese companies shared advanced techniques and successful experience to 
help Pakistan modernise its human resources. They also sponsored thousands
of Pakistani students to study in China and sent hundreds of Pakistani
engineers and professionals to China for training on scholarships.
 Conclusion
Hegemonic aims of India
 Indo-Pak rivalry
 US-India bonhomie
 Indian influence on small states e.g Nepal, Sri Lanka , Bangladesh, Bhutan
 Kashmir Issue
Afghanistan Quagmire
 Increasing Indian influence
 US forces exit from Afghanistan
 Interests of Taliban
 Porous Af-Pak Border
 America’s Crushing Defeat

 America fought is Afghanistan for 20 years. It has spent more than two
trillion dollars on the war.
 Al-Qaeda, which sparked the war by allegedly planning the 9/11 attacks from
Afghanistan, is no longer much of a force in the country, although it has not
been eliminated entirely.
 Other anti-terror groups, including a branch of Islamic State, continue to
operate in Afghanistan
 The zealots of the Taliban, who harbored Osama bin Laden and were
overthrown, have made a horrifying comeback.
 America failed not only to create a strong, self-sufficient Afghan state, but
also to defeat a determined insurgency.
 Taliban Rule

 Brutal theocracy they imposed during their previous stint in power, when they
confined women to their homes
 Over 5,000 of the government troops fled from north-eastern province of
Badakhshan to neighboring Tajikistan
 Civil war is likely to intensify, as the Taliban press their advantage
 The lives of ordinary Afghans are more insecure than ever: civilian casualties
were almost 30% higher last year than in 2001, according to estimates from the
UN
 Countries -- China, India, Iran, Russia and Pakistan – will seek to fill the vacuum
left by America.
 Some will funnel money and weapons to friendly warlords. The result will be yet
more bloodshed
War Of Bombs & Bullets is Over. A War
Of Brains is Starting.
 1. America has miscalculated the biggest step it took 19 years ago. The step
of thinking that Afghanistan is a walk in the park to take over.
 2. And it again miscalculated its withdrawal. If anyone thinks that America
mistakenly has withdrew from Afghanistan is mistaken as well.
 3. America has three SELF CREATED enemies at this time: A. China.B. IranC
China’s ally, Pakistan.
 4. America wanted a civil war to ensue in Afghanistan that will spill over into
Pakistan, destabilise Chinese western border and put Iran at alert with Sunni
Taliban taking over its western borders.
 5. Civil war did not start. And that made the American plans upside down.
 6. The Shia dominated Northern Areas and its leaders supported Taliban and made peace
with them. That created havoc for the Americans and victory for Iran. No threat at its
eastern borders.
 7. China preemptively invited and started a dialogue with the Taliban and Peacefully
chalked out the future. No rifts there either.
 8. Pakistan fenced off its border months earlier with Afghanistan and absolutely stayed
away from its internal matters thus there was no conflict between the Taliban and
Pakistan. RESULT: No Civil War.
 9. The indian investment in Afghanistan of billions of dollars and the Indians fooling
Americans that they have a stronghold in Afghanistan and post American withdrawal the
Indians can handle everything:This narrative went to the dogs as well. Americans are more
angry With the Indians for misleading them than they are with the Afghans.
 10. Afghan government was a puppet to begin with and the Americans knew it because
they are the ones who IMPOSED them on the Afghan people.
NOW WHAT...?

 Now after America losing India falling on its face, Ghani regime about to run like
Forrest Gump...the entire war is going to be fought now in the news and with
narratives.
 12. No bombs, No bullets, No bunkers. A war of brains......
 13. So my Pakistan brethren and specially my pakistani youth..!! please get rest,
Get United, Get knowledgable, Get patient an......get ready to fight this Psy ops of
information warfare with a vigour.
 14. Indian RAW controlled accounts will bombard you with false information. They
will try to delude you with wrong narratives. They are a wounded Jackal,and a
wounded jackal is more DESPERATE than a healthy donkey.(Both are the same to me
at this time though).
 15. Stay focused and DO NOT believe a word of what you read without verifying it
by several reputable sources.
 16. Pakistan has won. Pakistan is Stronger than before. Pakistan is on a more
solid diplomatic ground than it has been in the past 19 years of this war.
 17. Stay focused and get ready for a peaceful region where China, Pakistan,
Iran and access to Central Asia through Afghanistan will define a new Chapter
in the future of CPEC. CPEC in my view only had one obstacle and that was
unhindered access to Central Asian countries, it is here now. And it being
here is the death of INDIA. A stronger region with Pakistan leading in it is a
nightmare for India.
 18. So this is India’s last breath in this region when it comes to its nefarious
designs
 Hear the screams of BLA, PTM and all other Afghan based indian supported
rogue elements. They will be dying along with Afghan puppet regime.
Consequences for Pakistan

 Afghan peace is more vital for Pakistan than any other country, says PM Imran
Khan.
 Pakistan's future economic policies depend on Afghan peace
 Spillover Effects
 Increased Terrorism
 Refugee Influx leading to economic crisis and political instability in Pakistan
Iran Dilemma
 US-Iran age old tensions
 Saudi Aarabia -Iran discord
 Pak-Iran border issues
 India Factor
CARs and Pakistan
 Energy resource
 Land locked
 Strategic importance of CARs
 Trade
 Eurasian powers remained divided for the most part of the last century while
their cooperation and jointly working for Eurasian Integration may ultimately
shift a big portion of global trade from the sea lines of communication to
continental trade corridors resulting from high-speed railways, pipelines and
highways.
 There is a realization in CARs to play an active positive role in ensuring
sustainable peace in Afghanistan.
 It is obvious that Iran will join CPEC creating a win-win situation as far as
regional commerce and trade is concerned. Beijing’s presence in Tehran will
substantially reduce Washington’s pressure on Iran.
Iran–China 25-year Cooperation Program

 Based on the agreement, China has agreed to inject $280 billion to $400
billion by foreign direct investment into the Iranian oil, gas and petrochemical
industries.
 The original plan for cooperation had been proposed by Chinese leader 
Xi Jinping during a 2016 visit to Iran.
 On 1 October 2020 President Rouhani sent a message to Xi Jinping about
signing off on the program.
 The Republic of China and the Imperial State of Iran officially established
diplomatic relations in 1937
Challenges for Pakistan in Changing Regional
Apparatus

 Security concerns at borders

 Internal security dilemma
 Expanding Indian influence in the region
 Nuclear security
 Trust deficit
 Kashmir issue
 Indian propaganda
 Creating balance b/w Pak-US & Pak-China relations
 Balancing Pak-Iran & Pak-Saudia relations
 Middle East Crisis
Middle East Crisis as a Challenge for
Pakistan
 Pakistan-Saudi relations since Foreign Minister Shah Mehmood Qureshi
obliquely criticised Riyadh’s foot-dragging on the Kashmir issue in the OIC
(Organisation of Islamic Cooperation).
 Pakistan has traditionally toed Riyadh’s line on many foreign policy issues.
 Saudi Arabia has also helped shore up Pakistan’s fledgling finances through an
oil credit facility and remittances from the Gulf account for nearly half of
total remittances to Pakistan.
 According to State Bank of Pakistan figures, remittances from Saudi Arabia
and UAE have shown an increase of 74.5 per cent and 26 per cent respectively
in July 2020 compared to the same period last year; this despite the
pandemic, shrinking coffers in host countries and an oil-price slump.
How Pakistan can play a pro-active
role in Changing South Asia?
 Trade
 Building national narrative against terrorism
 Exposing India on international platforms- lobbying
 Arranging table talks among Muslim countries-Role of OIC
 Strengthening border security
 Countering Propaganda- social media, electronic media, seminars, international
events
 Balancing relations with all neighbours
 Sponsoring students of south Asian countries
 Tourism
 Investment in developmental programs in South Asia
How Pakistan can improve its Tourism

 Proper infrastructural development

 Planning
 A vision for the tourism industry by the government
 The model of Malaysia, which is considered a hot tourism destination in the
world, should be followed.
 In 1999, Malaysia’s tourism board started a campaign called “Malaysia Truly
Asia”, that proved to be a success by bringing in over 7.9 million of tourists
into Malaysia.
 It led to the generation of around RM (Malaysian Ringget) 12.3 billion (466
billion rupees) in revenue.
South Asian Association for Regional Cooperation

 The South Asian Association for Regional Cooperation (SAARC) is the

regional intergovernmental organization and geopolitical union of states in 
South Asia.
 Its member states are Afghanistan, Bangladesh, Bhutan, India, the Maldives, 
Nepal, Pakistan and Sri Lanka.
 The SAARC comprises 3% of the world's area, 21% of the world's population
and 4.21% (US$3.67 trillion) of the global economy, as of 2019.
Establishment

 The idea of co-operation among South Asian Countries was discussed in three
conferences: the Asian Relations Conference held in New Delhi in April 1947;
the Baguio Conference in the Philippines in May 1950; and the Colombo
 Powers Conference held in Sri Lanka in April 1954.
 In the ending years of the 1970s, the seven inner South Asian nations that
included Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan, and 
Sri Lanka agreed upon the creation of a trade bloc and to provide a platform
for the people of South Asia to work together in a spirit of friendship, trust,
and understanding.
 President Ziaur Rahman later addressed official letters to the leaders of the
countries of the South Asia, presenting his vision for the future of the region
and the compelling arguments for region. 
 The officials of the foreign ministries of the seven countries met for the first
time in Colombo in April 1981.
  The Bangladeshi proposal was promptly endorsed by Nepal, Sri Lanka,
Bhutan, and the Maldives but India and Pakistan were sceptical initially.
  The Indian concern was the proposal's reference to the security matters in
South Asia and feared that Rahman's proposal for a regional organisation
might provide an opportunity for new smaller neighbours to re-
internationalize all bilateral issues and to join with each other to form an
opposition against India.
 Pakistan assumed that it might be an Indian strategy to organize the other South
Asian countries against Pakistan and ensure a regional market for Indian products,
thereby consolidating and further strengthening India's economic dominance in the
region.
 Series of diplomatic consultations headed by Bangladesh between South Asian U.N.
representatives at the UN headquarters in New York, from September 1979 to 1980,
it was agreed that Bangladesh would prepare the draft of a working paper for
discussion among the foreign secretaries of South Asian countries.
 In 1983, the international conference held in Dhaka by its Ministry of Foreign
Affairs, the foreign ministers of the inner seven countries adopted the Declaration on
South Asian Association Regional Cooperation (SAARC) and formally launched the
Integrated Programme of Action (IPA) initially in five agreed areas of cooperation
namely, Agriculture; Rural Development; Telecommunications; Meteorology; and
Health and Population Activities.
 The union was established in Dhaka with Kathmandu being the union's
secretariat-general.
 The first SAARC summit was held in Dhaka on 7–8 December 1985 and hosted
by the President of Bangladesh Hussain Ershad.
  The declaration signed by King of Bhutan Jigme Singye Wangchuk, President
of Pakistan Zia-ul-Haq, Prime Minister of India Rajiv Gandhi, King of Nepal 
Birendra Shah, President of Sri Lanka JR Jayewardene, and President of
Maldives Maumoon Gayoom.
Member States

 Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka

 Observer States
 Australia, China, the European Union, Iran, Japan, Mauritius, Myanmar, 
South Korea, and the United States
 Secretariat
 SAARC Secretariat was established in Kathmandu on 16 January 1987.
SAARC Conundrum

 Lasting peace and prosperity in South Asia has been elusive because of the
various ongoing conflicts in the region.
 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 cooperation between the SAARC members to fight terrorism.
 The 19th SAARC (15–16 November 2016 ) summit scheduled to be held in 
Pakistan was called off as India, Bangladesh, Bhutan and Afghanistan decided
to boycott it due to a terrorist attack on an army camp in Uri.
  It was for the first time that four countries boycotted a SAARC summit,
leading to its cancellation.
South Asian Free Trade Area (SAFTA)

 The SAFTA 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 the Economic Union.
 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
percent by 2009.
 In 2012 the SAARC exports increased substantially to $354.6 billion from $206.7
billion in 2009.
 Imports too increased from $330 billion to $602 billion over the same period. But
the intra-SAARC trade amounts to just a little over 1% of SAARC's GDP.
 In contrast to SAARC, in ASEAN (which is actually smaller than SAARC in terms of
the size of the economy) the intra-bloc trade stands at 10% of its GDP.
 The SAFTA was envisaged to gradually move towards the South Asian Economic
Union, but the current intra-regional trade and investment relation are not
encouraging and it may be difficult to achieve this target.
 The SAARC intra-regional trade stands at just five percent on the share of intra-
regional trade in overall trade in South Asia. Similarly, foreign direct investment is
also dismal. The intra-regional FDI flow stands at around four percent of the total
foreign investment.
 The Asian Development Bank has estimated that inter-regional trade in SAARC
region possessed the potential of shooting up agricultural exports by $14
billion per year from existing level of $8 billion to $22 billion. The study by
Asian Development Bank states that against the potential average SAARC
intra-regional trade of $22 billion per year, the actual trade in South Asia has
been only around $8 billion. The uncaptured potential for intra-regional trade
is therefore $14 billion per year.
SAARC & Role of Pakistan

 Increasing trade
 Bridging social gulf
 Connecting South Asia with CARs
 Boosting Tourism
 Enhanced activities under CPEC
Economic Cooperation Organization

 The Economic Cooperation Organization or ECO is an Asian political and economic

intergovernmental organization which was founded in 1985 in Tehran by the leaders of
Iran, Pakistan, and Turkey.
 The nature of the ECO is that it consists of predominantly Muslim-majority states as it is
a trade bloc for the Central Asian states connected to the Mediterranean through Turkey,
to the Persian Gulf via Iran, and to the Arabian sea via Pakistan.
 The current framework of the ECO expresses itself mostly in the form of bilateral
agreements and arbitration mechanisms between individual and fully sovereign member
states.
 This makes the ECO similar to ASEAN in that it is an organisation that has its own offices
and bureaucracy for implementation of trade amongst sovereign member states.
 The ECO's secretariat and cultural department are located in Iran, its economic bureau is
in Turkey and its scientific bureau is situated in Pakistan.
Objective

 It provides a platform to discuss ways to improve development and promote

trade and investment opportunities.
 The objective is to establish a single market for goods and services, much like
the European Union.
History

 The Economic Cooperation Organization was the successor organisation of

what was the Regional Cooperation for Development (RCD), founded in 1964,
which ended activities in 1979.
 In 1985 Iran, Pakistan and Turkey joined to form the ECO.
 By the fall of 1992, the ECO expanded to include seven new members; 
Afghanistan, Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan
 and Uzbekistan.
 The date of the expansion to its present strength, 28 November, is referred
to as "ECO Day". The status and power of the ECO is growing.
Challenges

 The member states are lacking appropriate infrastructure and institutions

which the Organization is primarily seeking to develop, to make full use of
the available resources in the region and provide sustainable development for
the member nations.