Financial Daily from THE HINDU group of publications
Saturday, Dec 13, 2003
Industry & Economy - Foreign Trade
PM visualises a single currency for S. Asia
New Delhi , Dec.12
A SINGLE currency for South Asia, mutual security co-operation and open borders could be the region's peace dividend, ushered in through the creation of hope and opportunity for its billion-and-a-half people, said the Prime Minister, Mr A.B. Vajpayee, while inaugurating a conference on `Peace dividend - Progress for India and South Asia' here. .
"The investment inputs required to reap this dividend are pragmatic politics, rational economics and popular participation," he said.
Cautioning against letting "outside powers" exploit the differences among the countries in the region, Mr Vajpayee noted that political disputes in other parts of the world had been "quietly deferred for tackling at a more opportune time."
Elaborating on his `ambitious and futuristic though plausible line of thinking,' Mr Vajpayee said: "As we develop greater economic stakes in each other, we can put aside mistrust and dispel unwarranted suspicions." In the post-Cold War context, he pointed out that other parts of the world were increasingly focusing on regional economics. Stating that "political disputes have been resolved diplomatically or quietly deferred... ," the Prime Minister said, "There is a clear recognition that hostility only stunts economics, inhibits trade and retards progress."
Mr Vajpayee called upon Pakistan to jointly respond to the desire for peace and "the imperative of forging a unity based on our commonalities," and felt that the payoffs could be mutual security co-operation, open borders and even a single currency. "If this seems unrealistic and utopian, perhaps we are being unnecessarily cynical," he said. And, driving home the point, the Prime Minister recalled the dramatic - and equally unforeseen - events such as the end of the Cold War and the collapse of the Berlin Wall.
In a persuasive argument of his case, Mr Vajpayee said such economic integration was the demand of the times. "The demands of globalisation and aspirations of our people provide the objective bases for our energetic pursuit of a harmoniously integrated South Asia," he said, while giving examples of such cooperation through NAFTA, APEC and ASEAN, which is nearer home.
In an effort to dispel the fears of the smaller countries in South Asia, Mr Vajpayee gave specific examples of India's free trade agreements with Nepal and Sri Lanka, which have resulted in narrowing the mutual trade deficits. "In fact, the success of the India-Sri Lanka Free Trade Agreement has inspired us to expand its scope to cover services and investment in a comprehensive economic partnership agreement," he said.
Coming to specifics, Mr Vajpayee said that energy was one area with the promise of mutually enriching partnerships. With Nepal and Bhutan having an estimated 100,000 MW of hydel power potential and Bangladesh endowed with similar promising reserves of natural gas, these countries, he said, need to sell these energy sources. "India is the only viable buyer and its energy demands are increasing exponentially. There is obvious scope of win-win arrangements," he said.
The Prime Minister regretted that "in spite of our geographical proximity, shared economic characteristics and similar development infrastructure, intra-South Asia trade is under 5 per cent of our total foreign trade."
The two-day conference, organised by the Hindustan Times Leadership Initiative, is a forum for key political and business leaders, strategists and leading minds from India and overseas to discuss and map the economic, strategic and geo-political future of India and South Asia.
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