Does Deeper Economic Integration of SAARC Be Possible?

Abstract

Economic integration is the result of non discrimination between the goods and services of different countries and territory. With the loose application of multilateralism, regional integration of economy was propelled in different nook and corner of the earth. European Union is the paragon of economic integration. However, Brexit depicted the shallow area of it. Yet, IMF, WB, GATT, and WTO have been creating universal economic integration scenario and NAFTA, SAFTA, and ACFTA etc are propelling regional trading integration. There are different stages of regional economic integration which are preferential trading area, free trade area, customs union, common market, economic union and complete economic integration. By converging more than a method, hybrid integration is also possible. Nevertheless, there are issues of monetary and fiscal integration. In the absence of one, economic integration cannot function well. If both are integrated in regional economic scenario, viable method of economic integration will be possible. Although SAARC was established to make mutual cooperation between South Asian Region in 1985, it has not able to make complete economic integration till this date despite the bounty opportunity of this region. However, it has established South Asian Free Trade Area and proposed to establish economic union. Yet, the center of South Asian economy is India because of the huge number of population and widespread coverage of geography. So, if each and every country of South Asia is able to develop high level growth rate, there is the possibility of complete economic integration because this area doesn’t have the problem of market creation for goods and services. Regional integration frees country to conclude bilateral agreement. However, even in regional integration, bilateral agreement can also be concluded.