US embassy cable - 05DHAKA3841

UNCLAS DHAKA 003841 
 
SIPDIS 
 
DEPT PASS ALL SOUTH ASIA COLLECTIVE 
 
E.O. 12958: N/A 
TAGS: PREL, PGOV, BG 
SUBJECT: PRE-SAARC THOUGHTS AT BANGLADESH THINK TANK SEMINAR 
 
 
1. Summary: At a pre-SAARC think tank seminar on transport, 
trade and poverty eradiciation, Foreign Affairs Advisor Reaz 
Rahman, Foreign Minister Khan, and Indian MP Arjun Sengupta 
expressed their views on South Asian issues.  End Summary. 
 
2. On August 3, the South Asia Centre for Policy Studies 
(SACEPS), along with the Bangaldesh think tank, Center for 
Policy Dialogue (CPD), sponsored a seminar entitled Promoting 
Regional Cooperation in South Asia: Issues for the Dhaka 
SAARC Summit.  The seminar focused on three issues: 
transport, trade and poverty eradication. 
 
3. Professor Rehman Sobhan, Chairman of CPD and Executive 
Director of SACEPS, said that the nations in South Asia were 
best described as "distant neighbors" who would be better off 
if they had united economies, with integrated energy and 
transportation sectors to better shape their shared future. 
He said these seminars would lay the groundwork for SAARC by 
examining transport integration which he desribed as a 
regional ability to belnd infrastructure; energy cooperation 
citing hoped-for Iran-Pakistan-India and 
Burma-Bangladesh-India gas pipelines; and looked forward to 
improved drafts of a South Asian Free Trade Agreement (SAFTA). 
 
4. PMO Foreign Affairs Advisor, Reaz Rahman, said that the 
planned SAARC summit will be a "litmus test" for regional 
cooperation and, after 20 years of talk of regional 
cooperation, action is expected.  He said that the region 
needs to improve transport linkages, but that the low volume 
of interregional trade make it hard to justify such 
improvements. He said that sources of funding must be 
identified but regional priorities may not be national 
priorities, and while there is a best practices data base to 
promote the use of the best local technologies, it would be 
better use of resources to monitor project implementation 
instead.  He criticized the low financing of the SAARC 
secretariat, said the the region's focus should be on 
 
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"followup and implementation," with the key challenge one of 
politics overcoming economics with a need to harmonize 
macroeconomic policies. 
 
5. Foreign Minister Khan said that South Asia is an emerging 
growth area but that poverty and natural disasters are 
challenges.  "Progress means tearing up the map" and getting 
the first building block of free trade, a free export list, 
developed.  However, the list must not be too limited, and 
questioned the ability of developing such a list while such 
issues like double taxation, non-tariff barriers, and customs 
clearance remain unresolved.  He said that SAFTA does not 
include services or investments, and therefore the nations 
need to expand the scope of SAFTA; that infrastructure needed 
for trade to take-off is an important issue, and hoped that a 
multi-modal study will be finished and can be implemented; 
that each member contributes based on its GDP to the poverty 
alleviation fund; and looked forward to sustained action and 
continued stakeholder involvement at SAARC. 
 
6. Professor Arjun K. Senguta, Chairman of the National 
Commission on Enterprises in the Informal Sector and Indian 
MP, noting that his party, which fought with Bangladesh in 
the independence war, is back in power and looked forward to 
improved relations with Bangladesh. Sengupta, perhaps taking 
issue with Rahman's statement about politics, said that that 
politics can not dominate economics for long but only in the 
short run, as problems develop if we do not appreciate our 
economic interdependence.  The lack of such appreciation can 
do great damage to individual countries.  Sengupta said that 
infrastructure interdependence is a second area where a 
relationship can be mutually beneficial especially in areas 
such as river transport and transit facilities.  He added 
that language and migration are other areas where there can 
be mutual benefits. 
 
CHAMMAS