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SAARC and the Sovereignty Bargain

by Pratap Bhanu Mehta, Himal, November/December 2005

The recent earthquake that caused such enormous devastation on both sides of the Line of Control adds poignancy to any reflection on the future of regional integration in Southasia. It was a grim reminder of the region’s shared vulnerabilities, and of the fact that we do not have even the beginnings of common institutions with which to respond. The natural geography of the region, so abruptly abridged by the processes of recent history and the designs of states, reasserted itself with a vengeance. It made so many of the boundaries we have constructed seem both brittle and hollow.

Where exactly did the earthquake occur? The short answer is easy: Kashmir. But even the naming of ‘Kashmir’ cannot be done without problems arising; the area cannot be identified in its wholeness, without various qualifiers. How does one most efficiently organise relief? Clearly, India and Pakistan had to use each other’s territories and resources. Fortunately, in this instance the leaders did take recourse to history to abridge the demands of humanitarianism; borders temporarily melted faster that anyone could have dared to hope. But can this experience be a catalyst to help with the recognition that, if the countries of Southasia fight regional interdependence, they are fighting against their own interests? Can we recognise that our borders and restrictions, our mutual mistrusts and fears, harm no one but the people in the states of the Subcontinent? Does greater regional integration have a future in the Subcontinent?

In examining the future prospects for the SAARC organisation, it is worth considering the conditions under which successful regional integration can take place in Southasia. If the SAARC process is to be successful, it will have to be based on hard-headed economic and political logic – not sentimentalism and rhetoric. What are the conditions that promote regional integration? Do these conditions exist here?

We must distinguish between regional cooperation and regional integration. The former refers simply to a type of cooperation between governments. Regional integration, on the other hand, is the unleashing of a process that binds the societies and economies of neighbouring countries much more closely together. On one level, any project of greater regional integration involves what are called ‘sovereignty tradeoffs’. Integration often requires the establishment and maintenance of structures of authority and institutions that surpass national boundaries. The European Union is a prominent example of an entity that possesses wide-ranging, supranational prerogatives. What are the reasons justifying sovereignty tradeoffs? Under what conditions can we expect these tradeoffs to take place?

Sovereignty obsession
The first condition that will make Southasian integration possible is a revolution in the understanding of ‘sovereignty’ itself. Although nationalists wave the flag of sovereignty as if it were a mystical, indivisible whole, in truth it is no such thing. Sovereignty actually has at least four separate components that pull in different directions: autonomy, control, legitimacy and identity. Autonomy refers to the independence a state has in making policy. Control refers to the actual ability of the state to produce the outcomes it desires. Legitimacy refers to its right to make rules in ways that are widely accepted and recognised internally and externally. Identity refers to the capacity of the state to endow people with an overriding sense of who they are as a collective group.

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The difficulty is that these components of sovereignty do not hang together particularly well. A state may be autonomous, but may be quite ineffective in bringing about the results it desires. It might also lack control. Meanwhile, we in Southasia tend to confuse sovereignty with just one of its components – autonomy. Arguably, the postcolonial opposition to free trade that still marks most countries in the region (with the exception of Sri Lanka and now, increasingly, India) is rooted in just such a confusion. Bangladesh may nominally assert its auton that still marks most countries in the region (with the exception of Sri Lanka and now, increasingly, India) is rooted in just such a confusion. Bangladesh may nominally assert its autonomy regarding India by refusing to sell it natural gas; but by doing so it is diminishing its own power. Paradoxical as it may sound, sacrificing autonomy can sometimes enhance power. The crucial starting point for regional integration is when states begin to realise that autonomy does not necessarily create either control or power; that committing to forms of interdependence can enhance power, even though it may at first seem to diminish autonomy.

Almost all of Southasia was thus caught in a postcolonial syndrome, wherein that particular, narrow understanding of sovereignty became a mark of self-respect and identity. After all, colonialism was seen to have violated just this most-cherished aspect of political identity. An obsession with sovereignty, initially the result of the colonial experience, evolved on the part of the neighbouring states into a defensive claim against possible Indian domination of the region. India’s political difficulties in the region have stemmed mainly from its relative size and power. In the interests of regional integration or the creation of free trade zones, one of two conditions must be met. Either most of the countries have to be of comparable size, or the economy of a dominant country has to be so attractive that others cannot resist the allure of integration. Neither condition currently exists in our region. With India’s economy currently in the process of acquiring a new standing, however, this could offer a dynamic to pull the region together.

Even if New Delhi does not act threateningly, the mere possibility of its regional domination elicits a defensive response from the neighbours. Arguably, if India sins against its neighbours, it is more a sin of condescension than a naked desire for domination. But for fragile states with insecure identities struggling to establish themselves, condescension might appear to be even worse that overt hostility. The result is that India finds it very difficult to overcome the fears and anxieties of countries like Bangladesh and Nepal, which is necessary in order to stabilise relations. As a whole, the regional countries have never felt secure enough, as states, to engage in sovereignty bargains that would be in their interest. Perhaps regional integration depends upon individual countries coming into their own as classic, full-fledged states that feel confident enough to consider transcending their own limitations. But with many not yet having achieved that status, the ruling establishments tend to become defensive at the mention of regional cooperation or integration.

Liberal economy
The second prerequisite condition for regional integration is a commitment by states of the region to liberal economic policies – ‘liberal’ in this case not in its strongly theoretical sense, but simply implying the promotion of free trade, greater mobility of citizens, and so on. Will the Southasian states recognise the benefits of an integrated common market? Certainly, all would see the benefits in the long run. In the short term, however, entrenched interests fear the consequences of opening up their economies; as such, they artfully disguise their immediate interests as the long-term welfare of their larger societies. The commitment to economic liberalism is still very thin in Southasia, and there is simply no example of successful regional integration amongst sovereign states that is not founded on a commitment to economic liberalism.

Here, two factors might turn out to be crucial. First, India has now clearly emerged as a dynamic economy – one that has sufficient power to carry the region with it. Sri Lanka, always a pioneer in this respect, has realised that it can piggyback on India’s economic success. Not only has Colombo signed a free trade agreement and relaxed its visa regime for all arrivals; it is also negotiating a comprehensive economic agreement with New Delhi and openly discussing the possibility of a currency union.

The second factor is, in some ways, the opposite of the first. It could be argued that, precisely because India is becoming a powerful economy, its smaller neighbours will fear it even more and become more defensive. But while this fear is often exaggerated (if the Pakistani market were to open to Bollywood, the allure of 100 million-strong consumers would transform Bollywood cinema more than it would impact Pakistan!), India will still need to prepare to make unilateral concessions in order to avert those fears. When it comes to economic integration with its neighbours, India must move away from a paradigm of cyclical bilateral diplomacy, where each tariff concession depends on some reciprocal gesture from the other side. New Delhi can now easily afford to give preferential treatment to goods and services produced in the neighbourhood. This would create a long-term constituency for regional cooperation and defuse much of this fear.

If one looks beyond strictly Southasia, regional economic integration is already on the move, and the momentum is substantial. In some ways, India’s strategy to look beyond SAARC and negotiate free trade agreements with ASEAN, Thailand and Singapore, and possibly the BIMSTEC grouping that brings together some South and Southeast Asian states, was a clever move. As far as India is concerned, the possible free trade zone now stretches from Kabul to Manila, in which only Pakistan and Bangladesh would be left out if they did not come on board. In the long run, they will have to join the party or pay a heavy economic price. But there is also this: politically, Dhaka and Islamabad might find it convenient to join a larger grouping than SAARC, which always carries the taint of being dominated by India.

Empowering the hinterlands
The third condition for the emergence of greater regional integration would be the acceptance by regional states of what might be called a ‘simultaneous dialectic’ of greater regional integration and subregional power. Imagine if there were a free flow of goods and services throughout Southasia. Sri Lanka would likely develop extensive links with Tamil Nadu. The two Punjabs would come to a greater interdependence, as might West Bengal and Bangladesh or parts of Rajasthan and Sindh. It would also mean the greater development of the border regions of current states, where growth has been deliberately slowed.

Would the region’s states look upon this kind of subregional integration without suspicion? On the ground, regional cooperation can gather momentum only when it is based on organic links between different subregions of the Subcontinent – not on links enforced from the centre of each country. None of these subregional linkages are likely to create any serious problem of secession from existing political units – though they will lead to a rediscovery of some old cultural identities. The allure of ‘Punjabiyat’, which has marked the recent thaw in relations between India and Pakistan, is one such instance. Regional integration will require future Southasian states to have ‘strong’ centers but ‘weak’ circumferences. The fears that regional integration would somehow swallow existing states are exaggerated; these states would emerge even more strongly, just with different definitions.

In a curious way, as has been shown by the experience of the European Union, regional integration can also help to solve identity conflicts. First, when states get habituated to unbundling sovereignty into its different components, they are less susceptible to seeing that sovereignty as an all-or-nothing affair – the outcome should not be seen as a zero-sum game. States used to sovereignty tradeoffs have a structure of domestic politics in which such arguments and bargains are more acceptable. These are states that have begun to understand that, just as in areas of trade, sovereignty tradeoffs can bring benefits; they can, in principle, do so in other areas as well.

Second, regional integration can help in identity conflicts because subregional devolutions undertaken in the context of wider regional settlements are generally easier to sell politically. As part of a larger process of restructuring, they are not seen as concessions to a demanding party, but rather as an innovation. Third, the parent state itself can begin to redefine its own core stakes in the subregional conflict. If, for instance, its interests in trade, free movement, human rights or rights of minorities can be secured, then it might be more willing to concede some of its other powers. In fact, because both the subregional units and the parent state are encased in a larger, international set of institutions, both have credible assurances that their interests in these areas will not be undermined.

Fourth, as regions come together, the major laws of all countries, together with the values that they protect, begin to look more and more alike. Thus, the state itself is no longer the site where national differences need to be articulated and defended. Fifth, in cases of subregional issues that involve interstate conflict, the two states in question can acquire greater experience of working together within interlocking institutions. Sixth, states are also more attuned to accepting outside mediation.

Ideological convergence
Whether or not any of the mechanisms described above will lead to desired outcomes will depend on a variety of other factors; it would be unwise to believe in economic or political over-determination. But if the experience of the European Union is any guide, regional integration in Southasia under these mechanisms is certainly plausible. In fact, the one case that particularly bears this out is Great Britain – in reference to Scotland and Wales, but more importantly, Northern Ireland. It is noteworthy that the devolution to Scotland and Wales that took place was facilitated by Britain’s integration into the European Union. That process provided assurances to the core British interests: a local assembly could not expropriate the English or pass legislation that discriminated against outsiders.

One of the fears of greater devolution in places like Kashmir – and one of the arguments against it – is that it is not clear what a new power structure might look like. But if power is devolved to regions within the context of a broader regional framework – where the larger region as a whole is committed to certain, specific values – these anxieties can become less pressing.

But the most crucial aspect of regional integration is ideological convergence across the member states. This does not mean that all politics would begin to look alike, but it would necessitate a set of commitments that all states would abide by and incorporate into their own laws. These requirements would include a commitment to basic liberal values, a respect for minority rights, a commitment to the rule of law, and so forth. Unfortunately, for the moment, the domestic politics throughout most of Southasia often disallows pledges on these core values.

On the face of it, the prospects for SAARC would look very grim. There is no ideological convergence on the Subcontinent; no deep commitment to trade as an engine of growth; and none of the states are willing to acknowledge that any solution to their problems might be found regionally, outside of their own national boundaries. On the other hand, insecurities abound in our individual states. Rather than transcending identities, the region’s governments use identity politics to keep their populations hostage and to bait their neighbours. No country is serious enough or willing enough to make a definitive break from the historical agreements and compromises that, in the final analysis, are to blame for the current impasse. Thus, we have absurd situations where SAARC’s countries do not collaborate on energy and hesitate from facilitating bilateral trade, even when their own populations would benefit. Meanwhile, every possible economic, geographical or cultural link is reduced. The result is that Southasia is one of the world’s most militarised areas, with states needing to protect themselves against their own region.

Lankan paradox
At the end of it all, is there hope for SAARC? This question is best answered indirectly, by asking why one country in the region, Sri Lanka, is less afraid of regional cooperation and integration than are others, including big India. Modern Sri Lanka has always been something of a paradox. On one level, Sri Lanka has been an extraordinarily vibrant and cosmopolitan country – the first true democracy in Southasia. Of all of the region’s nation states, for much of the 20th century it was the most open. Even at modest levels of economic growth, Sri Lanka’s human development indicators put the rest of Southasia to shame. At the same time, this country, like so many others in the region, has also borne the deepest scars of modernity: a potent combination of Sinhala and Tamil nationalisms have fed off of one another to produce one of the century’s most brutal and stubborn ethnic conflicts. The civil war diminished the lustre of Sri Lanka’s other achievements and cast a long shadow on its economy.

Yet even today, the country remains the source of immense hope. Anyone following Sri Lankan politics and economic policy is struck by how it is positioning itself to take advantage of the process of economic globalisation. Of all of the region’s countries, it has found it easiest to overcome the legacy of strained relations with its neighbours. After India’s controversial late-1980s intervention in Sri Lanka with the ‘IPKF’, the Colombo-New Delhi relationship had hit a low point from which few thought it would ever emerge. Yet within a decade, relations between these two countries acquired an extraordinary momentum. Today, not only do they have a free trade agreement and allow unhindered movement of nationals; as stated above, there is also discussion in Colombo already of a currency union with India. Sri Lanka already has a free trade agreement with Pakistan. In short, it has emerged as the one country that is determined to integrate its economy as fast as possible with the rest of Southasia.

There is a good deal of farsighted prudence behind Sri Lanka’s drive towards regional economic integration. First, Colombo has realised that the country can benefit from the general dynamism of the region. Indeed, growth all across the world seems to follow regional rather than national patterns; regions often sink or swim together. Sri Lanka has therefore had few second thoughts in aligning itself with the region’s larger economies. Second, Lankan leaders have realised that national strength comes from creating economic interdependence, not by standing aloof. If a significant constituency in the large country comes to depend upon trade with a smaller country, that constituency then becomes a champion of the interests of the latter. To repeat: interdependence enhances power rather than curtails it. This is perhaps understood better in Colombo than in any other Southasian capital, including New Delhi.

Third, opening-up has also been a partial solution to some of Sri Lanka’s domestic challenges. The government is under serious fiscal pressure and Sri Lanka needs all the investment it can muster. The process of capital formation will only be bolstered through trade and openness, something that government intervention can never achieve. Although they will not openly admit it, many Colombo politicians are of the view that greater regional integration will help to ease the brutal internal conflict that continues to drag Sri Lanka down despite best efforts.

Here the Sri Lankans take the cue from the experience of the European Union. Once a country gets used to making beneficial sovereignty bargains in areas like trade and currency, it opens up the path to sharing sovereignty in many other areas. Sovereignty was supposed to be a means to stability, peace and prosperity. Instead, our states have turned a narrow conception of sovereignty into an end itself. Instead of an instrument of well being, obsessive concern with sovereignty and boundaries becomes a shackle on peace and prosperity. From the European Union to ASEAN, those countries that have chosen the path of credible regional integration have not given up on sovereignty. But they have put its claims into proper perspective.

The requirements for integration into a wider region and global economy also necessitate a different kind of politics and conception of the state in Southasia. Contrary to the fears of so many, regional interdependence does not swallow up the identities of nations. Instead, the process provides opportunities to shape the new identities of the future. Consider what might happen to Tamil identity in both India and Sri Lanka if the economies of south India and Sri Lanka were to be integrated. By itself, regional integration will not solve the violence that has become entrenched in Sri Lanka; but imperceptibly, it could help to reduce the allure of entrenched identities. Somewhere in the rapid steps being taken by Sri Lanka towards regional integration is a powerful understanding: that economic integration is an opportunity to create new prosperity, to define new identities. Above all, it is not in the least a threat.

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