Common Cause | South Asia Can Go the EU Way

Dec 23, 2003, 12.00am IST


Prime minister Vajpayee's reference to the European Union as a model for the future economic integration of South Asia with open borders and a common currency has led to questions being raised as to why the subcontinent's nations are not able to co-exist in amity as in Europe.


People have forgotten that the most revolutionary union of states came about with the Indian independence when over 500 princely states and nine provinces of British India merged on August 15, 1947.

On the previous day, five provinces and a few princely states seceded from India on the basis of what they called the two-nation theory or the clash of civilisations thesis. India became a multi-cultural, multi-religious, multi-lingual and multi-ethnic union of states long before the European Union.

While after two world wars and a prolonged Cold War, European nations are getting over their centuries-old national animosities, in India, animosity was introduced on the basis of the clash of civilisations thesis and has sought to be sustained since then.

Second, the European Union came about after Germany and Italy became democracies. Spain and Portugal could join the union only after they ceased to be authoritarian.

The Eastern European countries are being admitted into the union only after they demonstrated their democratic credentials. In the subcontinent, only Sri Lanka and India have been demo-cracies over the last 50 years.

All the EU countries shared a common security perception. Initially, it was the threat from the Soviet Union. After the end of the Cold War, they are all members of the Organisation of Security and Cooperation in Europe (OSCE).

When the common market was originally established as a result of the Treaty of Rome, it included Germany, France, Italy and other smaller nations. These three had an approximate balance.

In the subcontinent, India outweighs all other states combined in population, GDP, trade and professional skills. As the new European Union's constitution is being drawn, there is as yet no agreement on the voting weights of different countries.

The smaller nations are worried about the four bigger nations — Germany, France, the UK and Italy — dominating decision-making.

While the smaller countries in the subcontinent would be averse to India dominating decision-making, India, in turn, would not like other countries ganging up against it.

As described recently by former Sri Lankan foreign minister Lakshman Kadirgamar, while all other six members of SAARC share affinities of language, ethnicity and territorial contiguity with India, they are not each other's neighbours.

He compared it to a wheel with India as the hub and other countries as spokes. Many Pakistanis argue that a union on the model of the European Union would have been possible if India had not been united into such a giant entity.

The more appropriate comparison for the subcontinent is the North American free trade area and its proposed expansion to include other Latin American countries. Canada and the US have open borders.

Living close to a giant market, smaller nations find it to their advantage to access that market through a free trade agreement.

India is now convinced that it can grow at a rapid rate of seven to eight per cent only by integrating itself with the global economy and having free trade access to as many countries as possible.

India has proclaimed its determination to become a developed nation by 2020.

An article Beyond the Edge in the Pakistani paper The News International of December 14, 2003 by Masood Hasan enumerates the Indian achievements and quotes an Indian telling a Pakistani some years ago, "It is true we are both in the gutter. The difference is, we are looking at the stars. You are looking at the gutter".

It points out that 70 MNCs have set up R&D facilities in India and that 100 of the ‘Fortune 500' companies are now present in India vs 33 in China. While in India, poverty has declined, in Pakistan it has increased in the last decade.

The Indian per capita income has overtaken Pakistan's. In the previous 40 years, Pakistan had a higher per capita income than India.

There are, therefore, compelling economic interests for India's neighbours to join the free trade area arrangement. But irrespective of the glitches that will get in the way of a SAARC union, it is commendable that the prime minister spelt out his vision.

Even the Pakistanis, who would have been expected to object to it virulently, have said that it is not an unfeasible proposition in the long-run.

The engine for the formation of the European Union was the cooperation between France and Germany. In the subcontinent, it has to start with cooperation among India, Sri Lanka, Bhutan, Nepal and Maldives.

The Bangladeshis have some problems about providing transit rights for India and the sale of oil and gas. Pakistan does not even extend the routine most-favoured nation status to India — a mandated requirement under WTO.

India may have to be prepared for an incremental economic integration. In South Asia, the time has come for economics to dominate politics in the relations among nations. The initiative is very much in the hands of New Delhi and a lot depends on the speed of its own economic reforms.

K Subrahmanyam