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Pros and cons of loans on lines of credit

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by Neville Ladduwahetty

An MP is reported to have claimed that several types of vegetables and yams have been imported at a cost of $293 million. Following this disclosure, Minister Mahinda Amaraweera has instructed the Department of Agriculture to investigate the allegation and submit a report.

The country from which vegetables and yams were imported has not been disclosed. Furthermore, although serious attempts have been made and continue to be made to restrict imports to ease pressure on the country’s foreign reserves, the fact remains that items listed in Agreements relating to Lines of Credit continue to be imported despite its impact on local production due to systemic shortcomings. This aspect is reflected with regard to items listed in the Lines of Credit extended by India.

INDIAN LINE of CREDIT

The document of the Ministry of Finance titled “Importation of Essential Items under Indian Credit Facility Operating Guidelines” prepared by the Indian Credit Facility Coordinating Unit (ICFCU) Ministry of Finance Sri Lanka 2022 in its Introduction states:

Introduction

1.” The Government of India has agreed to provide a USD 1,000,000,000 (United States Dollar one billion) credit to the GOSL. Accordingly, a credit facility agreement was signed with the State Bank of India (SBI) to obtain up to an aggregate sum of USD 1 billion for the purpose of importation of essential items from India. This facility will enable registered importers to import essential food items, essential pharmaceuticals and raw materials for local industries from India. The Ministry of Finance together with the Ministry of Trade will take necessary steps to implement this facility.

Once the importers are selected by the Ministry of Trade to import assigned quantities of selected items, they can place orders with the identified Indian suppliers. The importers are required to secure their order by placing a deposit at the General Treasury through their respective banks and once the imports are arrived and cleared by the customs, the Indian suppliers shall be paid with equal Indian Rupees through the SBI.

2. Objectives of the Facility 2.1.1 Cater the demand for essential items. 2.1.2 Supply of essential items in the market without a shortage. 2.1.3 Minimize the pressure on foreign exchange reserves.

SCOPE of ITEMS to be IMPORTED

It is evident from the foregoing that while the Finance Ministry expects to minimize the pressure on foreign exchange, it is the Trade Ministry that identifies the essential items and the supply of these to the market without shortage.

Referring to the Indian Credit Facility a report by the GLOBAL TRADE ALERT identifies the items to be imported and states:

“On 17 March 2022, the State Bank of India signed an agreement with the government of Sri Lanka to provide the latter with a credit facility of USD 1 billion. The credit will be used for the procurement of food, medicine, and other essential commodities. The Indian Finance Minister, Minister of External Affairs, and the Ministry of Finance shared this information on Twitter after the ministers had had a meeting with the Sri Lankan Finance Minister”.

According to some news reports, the credit will be used to procure the above goods from India (see related intervention). The State Bank of India is an Indian government-owned bank.

AGRICULTURAL PRODUCTS IMPORTED as per GLOBAL TRADE ALERT

Cereals; Vegetables; Fruits & nuts; Oilseeds & oleaginous fruits; 015Edible roots & tubers with high starch or inulin content; Stimulant, spice & aromatic crops; Pulses (dried leguminous vegetables); Sugar crops;

Raw milk; Eggs of hens or other birds in shell, fresh Meat & meat products

Prepared & preserved fish, crustaceans, molluscs; Prepared & preserved vegetables, pulses & potatoes; Prepared & preserved fruits & nuts; Animal fats; Vegetable oils; Margarine & similar preparations; Processed liquid milk, cream & whey; Other dairy products; Eggs, in shell, preserved or cooked; Grain mill products; Starches & starch products; sugars & sugar syrups n.e.c; Bakery products; Sugar & molasses; Cocoa, chocolate & sugar confectionery; Macaroni, noodles, couscous & similar farinaceous products; Food products n.e.c.

PROCEDURAL SHORTCOMINGS

Although the Introduction to the Indian Line of Credit states that it is to “import essential food items, essential pharmaceuticals and raw materials for local industries from India”, the task of identifying the items to be imported is left to the “Ministry of Finance together with the Ministry of Trade”.

However, it is the Ministry of Trade under Section 3.2 that “sets out the Committees Established under the Ministry of Trade for this facility a) Main Committee to select importers and Imports 3 b) Subcommittee to provide recommendations to the main committee on essential food items/ animal feed c) Subcommittee to provide recommendations to the main committee on essential pharmaceuticals d) Subcommittee to provide recommendations to the main committee on cement, apparel, special fertilizers and raw material for industries”.

The arrangement under Section 3.2 confirms that the task of identifying the items to be imported it left entirely to the Ministry of Trade. Furthermore, judging from the few sample items cited above by Global Trade Alert relating to Agriculture, it is clearly evident that Ministry of Trade has determined the items to be imported from India without consulting the interests of affected Ministries such as Agriculture, Health, Tourism etc.

In such a context the assurance given by the Minister of Agriculture to the Sri Lankan farmers that “the Government would not approve the import of any vegetables that can be grown in Sri Lanka”, should have been directed to the Ministry of Trade and not to the farmers. The unilateral action taken by the Ministry of Trade undermines not only the interests of local producers of agricultural products at a moment when Sri Lanka is desperately urging farmers to strengthen their efforts even further, but also sabotages efforts towards food security.

Under provisions of Section 4 “Implementation Mechanism”, once the ICFCU sends the supplier’s approved “Performa Invoice” to the Importer’s Bank, that Bank is expected to open an LC in INR with the Standard Bank of India (SBI). Therefore, according to the procedure stated above, if on arrival the goods fail quarantine clearance the Sri Lankan Importer would lose his deposit to secure his order according to the terms of the Line of Credit.

Had similar clearance criteria existed for items relating to pharmaceutical products that were supplied under the Indian Line of credit and diligently implemented, perhaps the deaths of some and for others to go blind could have been avoided; an issue that prompted the Medical Profession to protest against the quality of some of the medical products delivered under the Indian Line of Credit. Therefore, the agreement should contain provisions to check the quality of the products before they are shipped from India and deposits to secure orders to suppliers made refundable or for payment to the supplier to be withheld until quality assurance and clearance by Customs are completed.

IMPACT of LINES of CREDIT

There is no denying that goods imported from countries such as India and China are cheaper than what is produced locally. Furthermore, payment for goods imported is made in Indian rupees and dollars can be saved.

Their costs are low due to low costs of production, either due to lower wages or higher productivity or a combination of both. Whatever the reason may be, when goods from such countries are imported to countries with higher costs of production, the local producers are seriously disadvantaged because they lose their market share to low priced poorer quality imported products.

This is the case with Sri Lanka. Under such circumstances, the Lines of Credit become attractive mechanisms for countries with low production costs but whose product quality is such that meeting global competition is a challenge, to get rid of their products and win the gratitude and appreciation of countries such as Sri Lanka. This is no different to easing restrictions on imports of items such as tiles that are produced in Sri Lanka.

Therefore, when Lines of Credit on agricultural products that could be grown and processed in Sri Lanka become items to be imported under Lines of Credit from countries such as India, the development of the agricultural sector and its plans for expansion would be seriously impacted. On the other hand, if products that could be grown or produced locally are deleted from items to be imported under Lines of Credit, the government may not be in a position to not only meet the local consumer demands of the nation but to also to deal with the consequences of increase in the cost of living.

Notwithstanding such pros and cons inherent with Lines of Credit, the intention should be to treat them as interim measures with specified time bars, thus giving the local producers incentives and rewards to improve productivity. Therefore, since there is an urgent need to develop the agricultural sector, it is imperative that immediate measures be adopted by the committees and subcommittees appointed under Section 3.2 of the Indian Line of Credit to revise the agricultural products that were to be imported forthwith.

The need for such reviews and revisions apply to other products as well. The objective therefore should be that no item that could be grown, processed or produced in Sri Lanka should be imported from India if Sri Lanka is to not undermine the efforts of Sri Lankan farmers and the aspirations of entrepreneurs engaged in agriculture and overall economic development.

CONCLUSION

Lines of Credit such as those with India should be treated strictly as an interim measure to overcome a temporary crisis situation that Sri Lanka experienced if its long-term national interests are not to be undermined. On the other hand, if it is open ended as reflected with the 2022 Indian Line of Credit, it would be a fetter to ongoing and future economic growth and overall development. This is particularly so in the field of agriculture because it would not only dampen and discourage local efforts of nearly a third of Sri Lanka’s population engaged and committed to the field of agriculture, but also their very livelihoods. Furthermore, it is equally imperative that overall items to be imported under Lines of Credit be identified in a manner that does not hamper overall long-term growth plans.

Judging from the items listed by Global Trade Alert in respect of agricultural products to be imported as determined by the Committees and Subcommittees set up under Section 3.2 in the Indian Line of Credit, they appear to have been guided ONLY by the compulsion to meet demand without shortage. The fact that such narrow perspectives undermine the agendas of the Ministry of Agriculture does not appear to have occurred to the Ministry of Trade.

Equally, the Ministry of Finance has not realised any need for coordination between affected Ministries. What is starkly evident is the tendency for each Ministry to operate strictly within its respective domain regardless of the negative impact of such an attitude on the development plans of other Ministries.

Therefore, there is an urgent need to revisit the Indian Line of Credit developed in 2022 and to set up a coordinating body to identify the items to be imported including the relevant procedures if the national interests and development plans are to be protected. Such coordination should apply to other areas of economic activity as well. Failure to do so would amount to repaying another loan without an appropriate return to the country.



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The Truth will set us free – I

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Sri Lanka becoming a Macbethian sick state?

The traditional ritual of anointing medicinal oil (or ‘hisa thel gaema’ in Sinhalese, literally, applying oil to the head) is unique to the Sinhala Aluth Avurudda observances. This year, the ritual was performed at the auspicious moment of 9:04 a.m. (Sri Lanka time) on Wednesday April 16. It was observed at appointed venues across the country at the same time. The anointing was done, as usual, mostly by Buddhist monks in their monasteries.

Where they were not available for the purpose, a senior citizen would do the needful. The oil anointing ceremony was held to invoke blessings of good health on all the individuals who subjected themselves to the ritual. Prime Minister Harini Amarasuriya was shown participating in the oil anointing ceremony at the historic Kolonnawa Raja Maha Viharaya. There were many social media videos showing similar oil anointing scenes that included even elephants and hippos in a zoo receiving the compassionate treatment; this is not seen as going too far with traditions, for extending loving-kindness even to animals is taken for granted in the majority Buddhist Sri Lanka. Watching this ritual (that used to be so familiar for me in my childhood and youth) from abroad I couldn’t help my eyes filling with tears, feeling kind of homesick, in spite of me having spent more than forty-three years of my adult life living and working away from my Mother Country Sri Lanka.

Though usually Buddhist monks do the anointing, it is not considered a religious practice by the ordinary Buddhists. It is only a part of the completely secular Sinhala Aluth Avurudda festival. The most important annual religious festival for the Sinhalese (especially Sinhala Buddhists) is Vesak, which will be held next month. However, the oil anointing ceremony impresses on the Avurudu celebrants the great importance of maintaining their physical and mental health throughout the coming year, reflecting the high level of attention that our traditional culture pays to that objective.

Prof. Snyder

However, the actual discrepancy that is noticed between the ideal and the reality in the mundane world, as in other countries, is a different matter. Shining beacons like ideals of a long-evolved culture are important for what they are; their importance doesn’t go away because those ideals are only imperfectly realised by the people of that culture. But the values endure.

The news of this happy occasion and my awareness of a deepening political and cultural malaise in my beloved Motherland back home reminded me of a book I read during the Covid-19 lockdown period of 2020-2022: OUR MALADY by American historian and public intellectual, the Yale University professor Timothy D. Snyder published in 2020. The book, whose subtitle is ‘Liberty and Solidarity’, is about the weakness of the American healthcare system that he himself got a taste of, privately.

Professor Snyder came to know first-hand how America failed its citizens in the public healthcare sphere as an inmate of a hospital ward, where he was admitted to the emergency room at midnight on December 29, 2019. He was complaining of a condition of severe bodily ‘malaise’. Doctors later told him that he had an abscess the size of a baseball in his liver. The emergency operation to remove the abscess was done after seventeen hours of his having had to wait confined to a hospital bed!

‘Rage’ is the word he repeatedly uses to describe how he felt during his hospitalisation. He was not raging against God or any particular person or a group or the bacteria that caused his illness. ‘I raged against a world where I was not’, Snyder writes in the Prologue to the book (implying how much he was angry about there not being a healthy enough healthcare system to look after Americans who fell ill like himself. The book grew out of entries he made in a diary that he maintained while recuperating in hospital. Proficient in a number of European languages including English, French and Polish, he adopts a sort of poetic idiom to deal with his naturally dull subject.

He imagined he was not suffering in solitude, though. He thought about other Americans in his situation, and empathised with them. The absence of a sound healthcare system is America’s malady according to Snyder. Probably, the current situation in America is different, having changed for the better. We must remember that the time he is talking about was the last year of the first term (January 20, 2017-January 20, 2021) of the 45th US president Donald Trump of the Republican Party.

Currently, Trump is serving as the 47th US president. The ideas that professor Snyder develops in the book have global topical relevance, I think. They are organised into four Chapters or ‘Lessons’ as he dubs them, which in my opinion, have implications that could be utilised even by the citizens of the Macbethian ‘sick state’ that Sri Lanka has become today, complete with a Macbeth (though a muppet) and a shadowy but more determined Lady Macbeth.

Timothy Snyder offers the four Lessons for his fellow Americans, and by extension, to fellow humans around the world including us, Sri Lankans. Perhaps these are uniquely American issues, with little direct relevance to a small country like Sri Lanka with no stake in the international pharmaceutical industry. But then no country can escape from the implications of the following facts (taken from Wikipedia): In 2023, the global pharmaceutical industry earned revenues of US $ 1.48 trillion, whereas the top 10 arms manufacturing companies earned only US $ 632 billion. In the same year, the global life and health insurance carriers industry, which is the biggest industry in the world in terms of revenue, earned US $ 4.3 trillion.

Our own late medical professor Senake Bibile (1920-1977), a pharmacology expert and a rare philanthropist and compassionate social activist of the Trotskyite Sama Samaja party persuasion who always had the welfare of the suffering poor at heart, met his death allegedly in mysterious circumstances in Guyana where he was attending a UN conference, promoting the domestic drug policy that he had developed for Sri Lanka, as a model for use in other countries and by the World Health Organization (WHO), United Nations Conference on Trade and Development (UNCTAD), and the Non-Aligned Movement (NAM) for developing policies for ‘rational pharmaceutical use’.

It goes without saying that Sri Lankans are also highly vulnerable to the deleterious effects of the inhuman excesses of the purely profit oriented international Big Pharma; these harmful consequences get transferred to the innocent citizens magnified several times through the unholy alliance between the local corporate drugs mafiosi and corrupt politicians. Be that as it may, Snyder adds another three equally important related points, covering all four, each in a Lesson that must receive the utmost attention of all adult Sri Lankans: health care for children and children’s education, truth in politics, and the supremacy of the doctors’ role in a malady situation. We will look at these briefly, intermittently taking our eyes off America to reflect on our own country Sri Lanka.

Lesson 1 is ‘Health care is a human right’.

Despite its wealth, professor Snyder complains, America is a sick nation; life expectancy is falling for Americans. Moody’s Analytics suggests that US millennials will die younger than their parents or grandparents, though there is no lack of money spent. What is causing this decline in life expectancy? Snyder’s unsettling answer is that the American healthcare system prioritises profit over people’s lives. America still lacks a universal healthcare system, in spite of being a supporter of the Universal Declaration of Human Rights and this leads to unequal access to health care, as Snyder asserts.

Exorbitantly priced commercial medicine has a devastating effect on the protection of the health-care rights of the people. It has robbed the American citizens of their health, in Snyder’s view. The American health-care system’s profit-focussed approach and lack of investment in protective equipment for medical professionals jeopardised their safety during the Covid-19 pandemic. In America, 20 million people lost their jobs and over 150,000 died from pandemic. Health insurance became too expensive, and health care unaffordable. Without a diagnosis, many became dangerously ill or unknowingly infected others with the virus.

Though poor, Sri Lanka beats America in respect of looking after public health. It has a better record in providing satisfactory health care for the citizens. The state runs an almost 100% free medicare service for all the citizens. There is a (kind of) parallel paid private hospital system as well, that caters to the better off segment of the population that can resort to it if they prefer to do so. This potentially eases the burden on the free state medical services, which can then focus more on attending to the needs of the economically weaker section of the population.

The maintenance by the state of such a public welfare-based healthcare system is desired and supported by our dominant socio-cultural background that strongly resonates with the humanistic spirit of the Aluth Avurudda that prioritises health over all forms of wealth. This is embodied in the principle Arogya parama labha ‘Good health is the greatest wealth’, the antithesis of the American attitude towards citizens’ health.

Sri Lanka was among the handful of countries that contained the Covid-19 pandemic most efficiently, minimizing deaths, whereas in America, according to Snyder, flaws in the healthcare system were aggravated by the contagion. This led to more deaths in America than in other wealthy nations like Japan and Germany. But the not so well-to-do Sri Lanka escaped with a minimum number of Covid-caused fatalities amidst obstacles mounted by antinationalist ill-wishers as I saw it at the time. That is Professor Snyder’s Lesson 1, which is about the human right of easily accessible health care. Sri Lanka is actually ahead of America in this respect in spite of relative poverty.

by Rohana R. Wasala

(To be concluded.)

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Four-day work week; too much rigidity; respectful farewell  

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Large crowds attracted by the Dalada Vandana in Kandy. (Image Courtesy Hiru News)

I received a video that announced Japan was considering changing to a four-day work week. Suspicious of such news in my cell phone, I googled and found that certain countries had already opted for work weeks of four days and thus three-day weekends. This change too is a consequence of closedowns of work due to the Covid pandemic.

“Several countries are experimenting with or have implemented four-day work weeks, including Belgium, Iceland, Spain, the United Kingdom and Portugal. Other countries like Germany, Australia, Canada, the Netherlands and the US have also shown interest in, or have tested the four-day work week model.”

The video I got was about Japan changing its government work week to four days from mid-April with many projected objectives. One is to improve government employees’ work-life balance and to address the country’s declining birth rate. Also, the hours of the work day are to be reduced so parents can spend more time caring for their kids termed: ‘Childcare partial leave’. Flexible work hours for women to be implemented so choosing between careers and family will not be necessary.

In Germany experimental trials were carried out in 2023-24 involving 43 companies; 73% plan to continue with the new work structure. Noted for productivity and efficiency, Germany has in addition to one day less working, on average only 34 hours per week. A five-day week of 9 to 5 has 40 work hours per week. Fewer hours at work has been found to promote smarter and more focussed effort with employees happier and more engaged.

Long ago in the 1970s Cassandra shifted from employment in the private sector to a semi government job. She was shocked at the laissez faire attitude of her co-workers in an information centre. Most came to work at around 9.00 am: discussed the bus journey and home; had breakfast; read the morning newspapers; did a bit of work and were ready to have lunch by 12.00 noon. Two hours for this and half for a small snooze. Work till 3.30 pm or so when books/files were closed and grooming selves commenced, to depart at 4.30 pm sharp.

The work ethic in a remote government school and a private school in a city were as opposed to each other as the proverbial chalk to cheese. Do minimum against teaching; don’t care attitude to dedication and commitment; take leave to maximum vs hardly taking leave in consideration of the fact parents of students pay fees; non disciplining principals to dedicated pedagogues who set an example.

Cassandra supposes, and correctly, that with the change of government and a system change, even though many offices are overstaffed, employees put in a solid day’s work. The public is better served, most definitely.

Hence how would it be for Sri Lanka to lop off one work day a week? There will certainly be benefits, but aren’t many of us complaining about the presence of too many public holidays; we enjoy 24 to 30 a year including every full moon Poya Day. A travesty!

Pope Francis

The utter mayhem of Poya weekends

Those who lived through the period when the calendar in this overzealous Buddhist country went lunar (sic) and made the four Poya Days of a month and half the pre-Poya Day as the country’s weekend. It was a total mess since many a week had more than five week days in it till the moon changed from one phase to another. Ceylon was completely out of sync with the rest of the world. That was in 1966 with Dudley Senanayake as Prime Minister. Mercifully, in 1970, the Saturday Sunday weekend was reverted to, and sanity regained.

Conclusion is that making our week of four days’ work and weekend three days has to be carefully considered, tested and implemented, or kept as it is. Better it would be if government offices were pruned of excess staff recruited on politicians’ orders and genuinely legitimate officers made to work efficiently.

VVIP Mother in queue

A photograph made the rounds on social media of a frail looking, white haired lady in a queue in Kandy moving slowly to pay homage to the Sacred Tooth Relic. It was said to be President AKD’s mother who was hospitalised just a couple of months ago. Admired is her devotion as well as the fact she came incognito; not informing her son of her intended travel.

But Cass is censorious. Here was a genuine case of needing a bit of stretching of points and helping her to fulfil her desire to pay homage with ease. After all, he is working hard and very probably long hours to get this country on an even keel. He needs appreciation and if he refuses advantages, let a less able person benefit.

A truly honourable Pope

Roman Catholics across the globe mourn the death of the 266th Pope on the Monday after the Easter weekend; and the world respects and reveres him. People comment he must have willed himself to live through Easter, even presenting himself to crowds gathered in the huge grounds of St Peter’s Basilica.

Pope Francis was born Jorge Bergoglio on December 17, 1936, in Buenos Aires, Argentina. He was inspired to join the Society of Jesus or Jesuits in 1958 after a serious illness. Ordained a Catholic priest in 1969, he was the Jesuit provincial superior in Argentina from 1973 to 79. He became the Archbishop of Buenos Aires in 1998 and was created a cardinal in 2001 by Pope John Paul II. He was elected in the papal conclave following the resignation of Pope Benedict XVI as head of the Catholic Church and Sovereign of the Vatican City State in 1913, claiming many firsts: a Jesuit becoming Pope; first from America, from the Southern Hemisphere. He chose his papal name in honour of Saint Francis of Assisi, kind to all living beings. “Throughout his public life, Francis was noted for his humility, emphasis on God’s mercy, international visibility as pope, concern for the poor and commitment to interreligious dialogue. He was known for having a less formal approach to the papacy than his predecessors.”

We remember his visit to Sri Lanka from January 13 to 15, 2015, when he travelled to the Shrine of Our Lady of Madhu and canonized Sri Lanka’s first saint, Joseph Vaz. He conducted a Mass and bestowed blessings to the multitude at Galle Face Green. As he entered and left the Green, he placed his hands on the heads of infants, children, the very poor, the old and infirm; never mind oil and dirt on heads. A truly great and good person.

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Kashmir terror attack underscores need for South Asian stability and amity

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Security forces in India-administered Kashmir following the recent terror attack on tourists.

The most urgent need for the South Asian region right now, in the wake of the cold-blooded killing by gunmen of nearly 30 local tourists in Indian-administered Kashmir two days back, is the initiation of measures that could ensure regional stability and peace. The state actors that matter most in this situation are India and Pakistan and it would be in the best interests of the region for both countries to stringently refrain from succumbing to knee-jerk reactions in the face of any perceived provocations arising from the bloodshed.

The consequences for the countries concerned and the region could be grave if the terror incident leads to stepped-up friction and hostility between India and Pakistan. Some hardline elements in India, for instance, are on record in the international media as calling on the Indian state to initiate tough military action against Pakistan for the Kashmiri terror in question and a positive response to such urgings could even lead to a new India-Pakistan war.

Those wishing South Asia well are likely to advocate maximum restraint by both states and call for negotiations by them to avert any military stand-offs and conflicts that could prove counter-productive for all quarters concerned. This columnist lends his pen to such advocacy.

Right now in Sri Lanka, nationalistic elements in the country’s South in particular are splitting hairs over an MoU relating to security cooperation Sri Lanka has signed with India. Essentially, the main line of speculation among these sections is that Sri Lanka is coming under the suzerainty of India, so to speak, in the security sphere and would be under its dictates in the handling of its security interests. In the process, these nationalistic sections are giving fresh life to the deep-seated anti-India phobia among sections of the Sri Lankan public. The eventual result will be heightened, irrational hostility towards India among vulnerable, unenlightened Sri Lankans.

Nothing new will be said if the point is made that such irrational fears with respect to India are particularly marked among India’s smaller neighbouring states and their publics. Needless to say, collective fears of this kind only lead to perpetually strained relations between India and her neighbours, resulting in regional disunity, which, of course would not be in South Asia’s best interests.

SAARC is seen as ‘dead’ by some sections in South Asia and its present dysfunctional nature seems to give credence to this belief. Continued friction between India and Pakistan is seen as playing a major role in such inner paralysis and this is, no doubt, the main causative factor in SARRC’s current seeming ineffectiveness.

However, the widespread anti-India phobia referred to needs to be factored in as playing a role in SAARC’s lack of dynamism and ‘life’ as well. If democratic governments go some distance in exorcising such anti-Indianism from their people’s psyches, some progress could be made in restoring SAARC to ‘life’ and the latter could then play a constructive role in defusing India-Pakistan tensions.

It does not follow that if SAARC was ‘alive and well’, security related incidents of the kind that were witnessed in India-administered Kashmir recently would not occur. This is far from being the case, but if SAARC was fully operational, the states concerned would be in possession of the means and channels of resolving the issues that flow from such crises with greater amicability and mutual accommodation.

Accordingly, the South Asian Eight would be acting in their interests by seeking to restore SAARC back to ‘life’. An essential task in this process is the elimination of mutual fear and suspicion among the Eight and the states concerned need to do all that they could to eliminate any fixations and phobias that the countries have in relation to each other.

It does not follow from the foregoing that the SAARC Eight should not broad base their relations and pull back from fostering beneficial ties with extra-regional countries and groupings that have a bearing on their best interests. On the contrary, each SAARC country’s ties need to be wide-ranging and based on the principle that each such state would be a friend to all countries and an enemy of none as long as the latter are well-meaning.

The foregoing sharp focus on SAARC and its fortunes is necessitated by the consideration that the developmental issues in particular facing the region are best resolved by the region itself on the basis of its multiple material and intellectual resources. The grouping should not only be revived but a revisit should also be made to its past programs; particularly those which related to intra-regional conflict resolution. Thus, talking to each other under a new visionary commitment to SAARC collective wellbeing is crucially needed.

On the question of ties with India, it should be perceived by the latter’s smaller neighbours that there is no getting away from the need to foster increasingly closer relations with India, today a number one global power.

This should not amount to these smaller neighbours surrendering their rights and sovereignty to India. Far from it. On the contrary these smaller states should seek to craft mutually beneficial ties with India. It is a question of these small states following a truly Non-aligned foreign policy and using their best diplomatic and political skills to structure their ties with India in a way that would be mutually beneficial. It is up to these neighbours to cultivate the skills needed to meet these major challenges.

Going ahead, it will be in South Asia’s best interests to get SAARC back on its feet once again. If this aim is pursued with visionary zeal and if SAARC amity is sealed once and for all intra-regional friction and enmities could be put to rest. What smaller states should avoid scrupulously is the pitting of extra-regional powers against India and Pakistan in their squabbles with either of the latter. This practice has been pivotal in bringing strife and contention into South Asia and in dividing the region against itself.

Accordingly, the principal challenge facing South Asia is to be imbued once again with the SAARC spirit. The latter spirit’s healing powers need to be made real and enduring. Thus will we have a region truly united in brotherhood and peace.

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