SAARC Finance Ministers review group’s economic progress

The Finance Ministers of the South Asian Association for Regional Cooperation (SAARC) countries last week in New Delhi reviewed the progress made in the group since their first meeting held in Islamabad in July 2006.

At the second meeting, which was presided by Union Finance Minister P.Chidambaram, the ministers lauded the recent initiatives in SAARC, including SAFTA, increasing harmonisation of financial norms between member states that have led to increase in the growth of the South Asian economies.

Speaking at a press conference after the meeting, Chidambaram said that the ministers, in their country statements, informed about the domestic financial situation and the reforms being undertaken in their respective countries.

“In keeping with the spirit of the decisions taken at the 14th SAARC Summit to move SAARC from the declaratory to the implementation stage, the ministers had constructive and focused deliberations identifying specific areas for cooperation in the field of finance,” Chidambaram said.

He said that all member states agreed that early operationalisation of SAARC Development Fund (SDF) should be expedited by an urgent finalisation of its agreement to accelerate the implementation of sub-regional projects identified under its Social Window.

They approved the recommendation of the Finance Secretaries on identifying three areas, namely maternal and child health; women’s empowerment; and capacity building for enhancing the quality of education for project implementation under SDF.

The meeting recommended that the Sub-Group on investment and arbitration be directed to finalise the agreement, and submit it for the approval of the next session of the Standing Committee, which will meet in December 2007. The leaders directed the inter-governmental group on financial issues to develop a roadmap for achieving the South Asian Economic Union in a phased and gradual manner, he said.

Chidambaram added that in order to facilitate institutional cooperation aimed at development of capital markets in the region, the meeting recommended “harmonisation of securities market regulations; facilitation of cross-border transaction on the capital side; and formal agreements among regulators and ministries of finance of SAARC countries.”

They further recommended the establishment of an Expert Group on development of capital markets in South Asia.

Chidambaram said that India, as a current Chairman of SAARC, took a “lead role” in offering training programmes for the member countries, and identifying new areas of cooperation, like financial inclusion.

“India offered to provide relevant capacity building support for the development of capital markets in the region at the National Institute of Securities Market,” he added.

Maldives offered to host the third meeting of the SAARC Finance Ministers in Male in early 2009.

SAARC was founded in 1985 comprising India, Pakistan, Bangladesh, Maldives, Nepal, Bhutan and Sri Lanka. Afghanistan became its eighth member at the 13th summit in Dhaka (ANI)