Vol. 4 Num 213 Wed. December 31, 2003  

India's South Asian currency plan to take years to achieve

India's proposed single South Asian currency would foster trade and economic growth but it could be a long time before the region of 1.4 billion people gets its version of the euro, experts say.

"The experience in Europe shows several stages of economic cooperation have to be successfully implemented before we can think of a common currency," said Manmohan Singh, the architect of India's free-market reforms a decade ago.

Europe's single currency was adopted in 1999 after decades of effort. In South Asia, one of the world's poorest and most politically troubled regions, "it could take years before it can be achieved," Singh told AFP.

Talk about a single currency among the seven-member South Asian Association for Regional Cooperation (SAARC) which groups Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka has surfaced from time to time amid the push toward global economic integration.

But Indian Prime Minister Atal Behari Vajpayee gave it new life ahead of the SAARC summit to be held in Islamabad on January 4 to 6.

He said with closer economic ties, the nations could tackle problems such as drug trafficking, money laundering and smuggling. "Once we reach that stage, we would not be too far from mutual security cooperation, open borders and even a single currency," he told a forum.

Chief among the hurdles is a need to end decades of hostility between the two biggest nations in South Asia, India and Pakistan, which came close to their fourth war in 2002.

Then, there is also a need to forge a free trade pact among the seven countries in the region.

Singh said a single currency was desirable. "But it will require prolonged periods of economic cooperation, cooperation in matters relating to trade, investments, flow of people and it is only then we hope to move towards a common currency," he said.