US embassy cable - 05DHAKA5592

UNCLAS SECTION 01 OF 03 DHAKA 005592 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL, ECON, PTER, BG, SAARC, AID 
SUBJECT: 13TH SAARC SUMMIT CONCLUDES; AFGHANISTAN INVITED 
TO JOIN 
 
REF: DHAKA 5569 
 
1.    Summary:  SAARC leaders concluded a successful 13th 
summit on November 13 with decisions to admit Afghanistan to 
membership, create a South Asia Poverty Alleviation Fund, 
implement SAFTA on schedule and implement the additional 
protocol on terrorism.  Preparation paid off; the summit ran 
smoothly with no reported security incidents.  India will 
host the next summit some time in 2007.  End summary. 
 
2.    The 13th SAARC Summit concluded November 13 with 
leaders adopting the Dhaka Declaration summarizing their 
decisions on a range of issues including membership 
expansion, poverty alleviation, closer economic integration, 
counter-terrorism and regional cooperation on everything from 
infrastructure to culture.  The Declaration also set in 
motion institutional reform of SAARC.  The full text of the 
Dhaka Declaration is available at 
http://www.mofa.gov.bd/13saarcsummit/Dhaka(un derscore)summit 
(underscore)declaration.html. 
 
3.    The Dhaka Declaration is above all a commitment to 
focus on implementing the decisions taken during the first 
two decades of SAARC and improving the functioning of the 
organization.  The major decisions taken at the 13th SAARC 
Summit reflect this commitment. 
 
Afghanistan SAARC's Newest Member 
--------------------------------- 
 
4.    The leaders agreed to accept Afghanistan's request for 
membership, subject to completion of formalities.  Japan and 
China's requests to become observers were also agreed to "in 
principal."  The Council of Ministers will have to determine 
how this will occur at its July 2006 meeting, because the 
SAARC agreement does not contain any provisions on expansion 
or observer status. 
 
Poverty Alleviation Key Priority 
-------------------------------- 
 
5.    SAARC agreed to declare 2006-2015 the SAARC Decade of 
Poverty Alleviation and took concrete steps to ensure 
progress toward this goal.  Leaders endorsed the SAARC 
Development Goals recommended by the South Asian Commission 
on Poverty Alleviation and called for implementation of the 
Plan of Action on Poverty Alleviation, adopted by the 12th 
SAARC Summit.  SAARC Ministers and Secretaries were charged 
with leading these programs. 
 
6.    More importantly, the leaders established the SAARC 
Poverty Alleviation Fund (SPAF) and restructured the South 
Asia Development Fund into a new SAARC Development Fund 
(SDF), which will be an umbrella financial institution with 
its own permanent secretariat.  SDF will have three funding 
windows: social, infrastructure, and economic.  The SPAF will 
fall under the SDF.  Funding details for the SPAF, including 
the crucial question whether contributions would be mandatory 
or voluntary, were left to the Finance Ministers to sort out. 
 
7.    To improve financial and macro-economic coordination 
and to monitor implementation of development goals, the 
leaders agreed Finance Ministers would meet within three 
months after each summit, and on the margins of the annual 
World Bank and ADB meetings. 
 
SAFTA Leads Economic Agenda 
--------------------------- 
 
8.    The leaders noted that launching SAFTA is an important 
milestone toward the long-term goal of a South Asian Economic 
Union.  The Dhaka Declaration directs members to finalize all 
of the annexes needed to bring SAFTA into force on schedule, 
starting January 1, 2006.  It contains no hint, however, of 
political guidance presumably given to the Committee of 
Experts for resolving the three key outstanding issues by the 
end of November, as directed by the declaration.  These 
issues are: percentage of domestic content required to 
satisfy rules of origin requirements, the scope of the 
sensitive lists excluded from tariff liberalization, and the 
nature, amount and timing of compensation to the LDC members 
for revenue losses resulting from implementation of the SAFTA. 
 
9.    Looking ahead, leaders acknowledged the need to address 
non-tariff trade barriers and para-tariffs.  They urged swift 
conclusion of agreements on mutual recognition of standards, 
testing and measurements.  Significantly, they called for 
integration of trade in services into the SAFTA. 
10.   The leaders also signed three of the four trade 
facilitation agreements under consideration: 
 
-- Agreement on Mutual Administrative Assistance in Customs 
Matters 
-- Agreement on the Establishment of SAARC Arbitration Council 
-- Limited Agreement on Avoidance of Double Taxation and 
Mutual Administrative Assistance in Tax Matters. 
 
A fourth agreement, on investment promotion, was not signed, 
but no reason was given.  Instead, leaders included hortatory 
language encouraging trade-creating investment in member 
states. 
 
11.   On infrastructure, the leaders agreed to establish the 
SAARC Energy Center in Islamabad and endorsed a South Asian 
Energy Dialogue process involving officials, experts, 
academics, environmentalists and NGOs to make recommendations 
on better energy cooperation and to support the Working Group 
on Energy.  Information and communications technology was 
also identified as an area for closer regional cooperation. 
Leaders also urged stronger transportation links to support 
regional economic integration, and agreed to study aviation 
proposals, including a proposal to extend fifth freedom 
rights to designated airlines from member states. 
 
12.   Leaders called on the international community to meet 
the commitments of the Millennium Summit and the Monterrey 
consensus.  They endorsed UN reform and urged WTO members to 
work for a breakthrough at the Hong Kong ministerial. 
Commerce Ministers were instructed to work together on common 
positions for the ministerial. 
 
Terrorism - First Step, Acknowledge the Problem 
--------------------------------------------- -- 
 
13.   SAARC leaders condemned terrorism, calling it one of 
the most critical threats to international peace and 
security. They pledged to unite to prevent and combat 
terrorism, noting the mandate of UNSCR 1373. 
 
14.   Referring to the "continued and recent attacks in the 
region," the leaders acknowledged terrorism is a problem in 
SAARC countries that requires a coordinated response.  Noting 
with satisfaction that all members have now adopted the 
additional protocol to the SAARC Convention on Suppression of 
Terrorism, the leaders called on members to put in place 
effective implementation mechanisms.  They also directed 
secretaries and ministers from the Interior and Home 
 
SIPDIS 
ministries to meet annually. 
 
Areas for Cooperation Abound 
---------------------------- 
 
15.   Nearly a third of the Declaration's 53 paragraphs 
address cooperation on social, environmental, and cultural 
issues and management of natural disasters. 
 
16.   Leaders rededicated themselves to support the SAARC 
Social Charter.  They agreed on annual meetings of the 
National Coordinating Committees and noted proposals to 
establish a Civil Society Resource Center.  The Declaration 
highlights the importance leaders place on addressing women's 
and children's issues, including trafficking in persons. 
Primary education was also singled out for specific mention. 
The leaders agreed to launch a regional initiative on basic 
healthcare services and sanitation in rural areas. 
 
17.   Leaders discussed improving regional responses to both 
natural disasters and regional health emergencies.  Noting 
the threat posed by emerging diseases like avian influenza, 
they proposed a SAARC Health Surveillance Center and a Rapid 
Deployment Health Response System.  They also called for 
early implementation of the regional HIV/AIDS strategy. 
Leaders acknowledged the need for a permanent regional 
response mechanism for natural disasters, supported work on 
an early warning and disaster management framework, but 
mostly settled for encouraging closer coordination at the 
national level. 
 
18.   Action on environmental cooperation was more robust. 
The Declaration initiates discussion of a Regional 
Environment Treaty.  It endorses establishment of a SAARC 
Forestry Center in Bhutan and proclaims 2007 the "Year of 
Green South Asia," devoted to reforestation.  Existing 
centers on meteorological research and coastal zone 
management will be enhanced, as will cooperation on water 
conservation, sustainable development and arsenic 
contamination. 
 
19.   On cultural issues, the leaders endorsed greater 
people-to-people contacts, starting with SAARC speakers and 
parliamentarians, promoted a SAARC Agenda for Culture, and 
endorsed youth exchanges.  They gave a nod to travel 
facilitation, but avoided discussion in the Declaration of 
implementing visa-free travel of citizens of SAARC members. 
Tourism was highlighted; 2006 is the "South Asia Tourism 
Year."  India's offer to host a SAARC Museum of Textiles and 
Handicrafts was noted. 
 
Institutional Change Needed 
--------------------------- 
 
20.   Leaders agreed that they need stronger SAARC 
institutions to implement the growing SAARC agenda. 
Throughout the Declaration, leaders agreed to hold annual 
meetings of relevant ministers to discuss progress in their 
respective portfolios.  Perhaps drawing inspiration from the 
structure of EU ministerial meetings, the Declaration 
expressly encourages a thematic focus concentrating on SAARC 
objectives. 
 
21.   Most significant is the call in the Declaration for a 
comprehensive review and reform of all SAARC institutions and 
mechanisms, including the Secretariat and Regional Centers. 
Experts nominated by each member state are to prepare a study 
and recommendation for the next Council of Ministers meeting, 
under terms of reference to be prepared within the next two 
weeks by the chairman of the Council of Ministers and 
circulated for approval by all foreign ministers. 
CHAMMAS