Unleashing Prosperity through Economic Integration

Welcoming Remarks by Dr. Ronald Meinardus at the 6th SAARC Business Leaders Conclave in Kathmandu, Nepal on March 16, 2018
6th SAARC business leaders conference nepal 2018

From the very beginning, the SAARC Chamber of Commerce and Industry (SCCI) has been the privileged and most important regional partner of the Friedrich Naumann Foundation for Freedom (FNF).  We support the aspirations and the vision of this organization and the many businessmen and businesswomen of South Asia.

We share the basic understanding and conviction that economic freedom and cooperation across borders hold the key to development and ultimately also peace. This is a perspective that the organizers of this great event have so eloquently put into the catch phrase: Unleashing shared prosperity through economic integration.

This sounds like a marketing slogan. Yes, I guess it is and should be. At the same time, it is a short and crisp summary of the aspirations of the region’s business community and, hopefully, all those represented in this room.

At the outset, allow me to emphasize the commitment of my Foundation to our continued support of the SAARC CCI. I wish to express my sincere gratitude to the outgoing president Mr. Suraj Vaidya for the close and always harmonious cooperation. This cooperation is built on a friendship that goes back many years, even decades. I am confident that in the future, for which we wish our dear friend all the best, we may work together.

Looking forward, I wish to congratulate the incoming President Mr. Ruwan Edirisinghe for assuming not long from now the position of President of SAARC CCI. We hope that under your leadership, we may continue the cooperation of the past. For us at the Foundation, Sri Lanka has a very special value. It was here that we started our project work in the region way back in 1968.

South Asia belongs to the fastest growing regions in the world. At the same time, trade and economic interaction among the members of SAARC are hardly well developed – hovering around five percent only. Again and again, at meetings of this sort I hear that South Asia is among the least integrated regions in the world.

It is high time this changes. It is up to the business people to be at the forefront of the efforts.

Internationally, the policy environment has changed – in a manner not to our liking. Protectionism, economic nationalism, tariffs and trade wars – this is the vocabulary that has returned to the global discourse.  For liberals and all those who believe that trading is a win-win-proposal, the nationalist rhetoric is bad news – with potentially dismal effects on the economies also in this part of the world.

“When goods don’t cross borders armies will.” Mr. Suraj Vaidya quoted this statement attributed to the 19th century French economist Frederic Bastiat in his key-note at the recent Asia Liberty Forum (ALF) in Jakarta, Indonesia. Few sentences highlight the positive political impact of economic cooperation better than these few words of the liberal French economist.

In South Asia – a region historically not void of conflicts and turmoil - the peace-promoting power of regional integration is at work:  “Ever since SAARC was formed, there has not been a major war in South Asia”. I read this sentence in a newspaper some days ago. It was an interview with – you may guess - Suraj Vaidya who during his successful tenure has become - like few others - a promoter of regional economic integration – and, thus, a peace maker.

In the coming three days we will discuss a long list of topics around the lead theme of how to promote economic cooperation and, ultimately, integration. Much of the challenges lie within the nation states themselves. Much remains to be done for the SAARC member countries to reform their economies and open up to international trade and competition.

South Asia – as I said earlier – is among the least integrated regions. The area is also stuck on low rankings in international surveys about economic freedom. In the recent report of the Fraser Institute of Canada about the state of economic freedom of 159 countries, from South Asia only Bhutan reached a slot in the first half of the listing on position 70.  The other countries are way back with particularly bad rankings in the chart “Freedom to trade internationally”.

“The success story of Asia was the success story of globalization”. This important statement  – by way of exception – is not attributed to Suraj Vaidya. It is from Indonesia’s former Finance Minister Chatib Basri, who – also at the recent Asia Liberty Forum – went on to tell the audience (most of them members of the Asian Freedom movement and free marketers) that the governments and also the liberals had failed to explain the benefits of free trade and economic cooperation to the public.

It is my wish and hope that this conclave will do better – and come out with a strong message that, ultimately, it is in all our interest to – let me say it one more time – unleash shared prosperity through economic integration.