The Hindu : Neighbourhood policy: the Yashwant Doctrine?

Online edition of India's National Newspaper
Monday, Jan 13, 2003

Opinion

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Neighbourhood policy: the Yashwant Doctrine?

By C. Raja Mohan

NEW DELHI Jan. 12. In outlining a new set of ideas on reviving the moribund economic regionalism in the sub-continent last week, the External Affairs Minister, Yashwant Sinha, has broken some fresh ground in India's policy towards the neighbourhood.

Addressing a group of enthusiasts from the region here last week, Mr. Sinha charted a way out of the current stalemate in India's relations with its South Asian neighbours. At the heart of it is a focus on regional trade, that will be advanced by India through unilateral measures, if necessary.

Mr. Sinha said the time has come to stop debating economic cooperation in South Asia and start acting on it. Arguing that the South Asian Association for Regional Cooperation (SAARC) had produced shamefully little on regional integration over the last two decades, Mr. Sinha put forward a package of proposals.

He suggested that the seven countries of the region discard further negotiations on the cautious South Asian preferential trading arrangement and move straight towards a bolder free trade agreement, which he said India would be ready to sign immediately.

Mr. Sinha also identified a more effective mechanism for trade negotiations. He called for junking the current approach in the SAARC, which exchanged "positive lists" of tradable items among member-states.

He called for negotiations on the basis of "negative lists" of items, which the seven nations might not want to trade on a preferential basis. Instead of avoiding discussion of items of specific concern, small negative lists would help address directly the specific fears in the region that they might be swamped by Indian goods under a free trade regime.

Mr. Sinha also proposed harmonisation of tariffs over a period of time across the region that will prevent unscrupulous traders from taking advantage of differences in taxation. That precisely is the source of current difficulties in the trade between India and Nepal. Mr. Sinha argued that a free trade regime in South Asia would not be complete without an agreement on free flow of capital and services across the region.

Even more boldly, Mr. Sinha has urged the region to begin talking about a South Asian Union. Yes, a political union! Mr. Sinha said India "will be interested in negotiating a new agreement which will create a South Asian Union... the SAU will not merely be an economic entity. It will acquire a political dimension in the same manner which the European Union has come to acquire a political and strategic dimension".

This is probably the first time in recent memory any leading functionary of the Indian Government has suggested a political union in South Asia. Mr. Sinha's bold framework comes amidst a darkening mood about the region in New Delhi.

The postponement of the SAARC summit in Pakistan, the political stalemate with Islamabad and increasing tensions with Bangladesh together seemed to suggest India's neighbourhood policy was being set back.

Mr. Sinha's comments suggest all is not lost, and that India is determined to lead the region towards a different future. The ideas put forward by the External Affairs Minister are very similar to the Gujral Doctrine of the mid 1990s.

Mr. Sinha not only acknowledged the debt to the former Prime Minister, I.K. Gujral, but also traced its roots to the "good neighbourhood policy" adopted by Atal Behari Vajpayee when he was External Affairs Minister during 1977-79.

India was not merely returning to the Gujral Doctrine. Mr. Sinha wants to inject significant economic content into it. In signalling a new direction to India's neighbourhood policy, Mr. Sinha is also emphasising two important political messages.

One, India's size and centrality to the region are realities that will not disappear by some of its neighbours bemoaning them. Two, in a clear message to Pakistan and Bangladesh, Mr. Sinha said, respect for the security concerns of each other is the key to the success of trade and prosperity in the region.

Despite Mr. Sinha's good intentions, it is unlikely that Pakistan will respond positively to his proposals on regional economic cooperation. To signal the seriousness of India's intent, Mr. Sinha must quickly implement his proposals with other nations.

An early expanded free trade agreement with Sri Lanka, upgradation of trade ties with Nepal, and the creation of significant market access for Bangladesh are all within the grasp of the Indian Government. India must demonstrate that it is ready to step up the pace of regional economic integration — with Pakistan if possible and without it, if necessary.

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