South Asia Meet in Kathmandu, Seeks to Promote Goods Movement thru Rail and Road

Leaders of eight SAARC countries meet in Nepal this week for the first time since 2011, Prime Minister Narendra Modi is trying to get the neighbours together to counter China’s growing influence in South Asia. China has pumped in massive money into infrastructure in the South Asia.

China has promised SAARC nations part of a $40 billion Silk Road fund to finance infrastructure investments.

Poor connectivity, cross-border conflicts and security concerns have contributed to South Asia being one the least integrated regions in the world, according to the World Bank. Besides the India-Pakistan conflict, Sri Lanka suffered a 26-year civil war that ended in 2009, Nepal was disrupted by a Maoist uprising that lasted for a decade until 2006 both Afghanistan and Pakistan suffer from Taliban attacks.

Commerce between SAARC nations accounts for just 5 percent of total trade, compared with 25 percent in the 10-member Association of Southeast Asian Nations, according to the World Bank. Lack of trade ties within the region is limiting total commerce: India’s exports to its 15 biggest trading partners last year amounted to $188 billion, eight times less than China.

‘Key Priority’

SAARC nations this week will seek to ratify agreements for free movement of cargo and passenger vehicles, as well as railways, across member countries. Cooperation in the power sector is also on the agenda. Foreign ministers of the eight nations, including India and Pakistan, meet on 24 November, according to a Nepalese Foreign Ministry statement.

‘Zero-Sum Game’

Modi attempted to reinvigorate the SAARC grouping immediately after his election in May by inviting Pakistan’s Sharif and other regional leaders for his inauguration. The goodwill ended a few months later after India called off foreign secretary-level talks with Pakistan and border skirmishes between the nuclear-armed rivals in October.

China in South Asia

Chinese President Xi Jinping toured through South Asia earlier this year to promote the Silk Road initiative. He became the first Chinese head of state to visit the Maldives and also stopped in Sri Lanka, where China is financing a $1.4 billion “Colombo Port City” and sending submarines to dock.

Xi called Afghan leader Mohammad Ashraf Ghani an “old friend” in welcoming him to Beijing last month, a visit that was followed a week later by Sharif. The Chinese president also met Bangladesh President Abdul Hamid this month to discuss economic cooperation on the sidelines of the APEC meetings.

“Kashmir remains the core contention between both countries,” Sharif said in comments to an audience of leaders in Muzaffarabad, the capital of Pakistan-administered Kashmir on Nov. 20. “The international community needs to convince India to return to the table.”

Modi wave is sweeping Nepal. Even Muslim dominated Kashmir is looking towards Modi for help. The Indian PM represents hope and aspiration. The SAARC meeting will be special and may give India its due role as the prime leader in the region.