SAARC, from its inception, has been most unfortunately a victim of distrust, suspicion and intra-regional tensions. This has in turn affected the evolution of the concept of regional cooperation in South Asia. Some of the inbuilt, crippling limitations have contributed to this situation. Requirements like the presence of all seven members in all meetings, particularly the Summit, taking of decisions on the basis of unanimity and not consensus and exclusion of bilateral and contentious issues have all led to the stunted and slow growth of SAARC. The fact that the initially agreed areas of cooperation were peripheral and did not include the vital areas of trade, joint ventures, investments and harmonisation of fiscal and social policies also hampered integration within the membership.

More than one report and several seminars in the recent past have pointed out that South Asia has failed to share the economic dynamism of the rest of Asia. The average growth rate for South Asia in the past 25 years, ending 2003, has been only 4.6 percent compared to 8.8 percent in South East Asia. In the aggregate, other Asian countries have increased their share of world trade by about 180 percent between 1970-1990s but South Asian share has declined by slightly over 25 percent. The relatively slower economic growth along with faster demographic growth in South Asia has, in addition, sharply increased income differentials between it and other regions.

The compulsions of globali-sation, the reduction in aid, the mounting debt burden, the deteriorating terms of trade, the regulatory process being evolved in the WTO have also placed marginalised South Asia under further stress and strains.

The asymmetry within South Asia has assumed further seriousness when we realise that India today accounts for 73 percent of the region's population, 77 percent of its GNP and nearly 66 percent of its export trade.

In view of the slow progress in promoting regional cooperation, the resultant development has been the shift in focus to sub-regional approach and to bilateral trade agreements between SAARC countries. Implication of such an approach has however become the source of debate. Many have pointed out that promoting economic cooperation in a sub-regional context has not worked very well in ASEAN and will also face similar difficulties. In addition, others have expressed fear that bilateral trade agreements among SAARC countries is likely to lead to further fragmentation of the common South Asian goal towards regional integration.

It is against this background that several members of SAARC, in the recent past, have expressed their intention to expand relations not only within themselves but also with the neighbours including China.

China is about two and a half times bigger than South Asia. It borders four SAARC countries -- Pakistan, Nepal, India and Bhutan. At present there is little commercially viable overland communication or direct shipping links between the two areas. This situation could change appreciably, however, according to experts, once improvements underway through the Greater Mekong River Sub-regional Project (dredging of the upper reaches of the Mekong) are completed and building of roads (connecting Kunming with Laos and Myanmar) are finished with the support of the Asian Development Bank.

In the last decade, the views of the Chinese leadership have evolved. They are now positively interested in promoting closer cooperation with South Asia in general and not just with some countries of this region in particular. The ongoing Kunming initiative of China at Track-II level reflects the earnest desire of that country to project itself in South Asia. It is also clear from the statements coming out of China that they favour, in this context, the realisation of BIMST-EC. Like most inhabitants of South Asia, China today understands that establishment of communication network in the area will help cooperation in trade, industry, investment and tourism. They are beginning to appreciate that it would only be logical to foster links with South Asia through an institutional framework that would be beneficial for both sides.

It is time that SAARC carefully looks around and sees what is happening in the region. Several key processes are already in place for resolving tension, enhancing security and promoting trade.

The ASEM process initiated between the European Union and member states of ASEAN and South Korea, China and Japan is already paying rich dividends. The EU has special Summit exchanges separately with Japan and China. They do the same with India. The ASEM process ensures that continuous and intensive discussion take place between the EU and the other countries of South East Asia and the Far East.

On the other hand, although the EU has signed a Memorandum of Understanding with SAARC, nothing fruitful has taken place in this area. Regular annual meetings even do not take place. The net result is that the rest of South Asia other than India remain marginalised.

This evolving scenario is not helped by the fact that ASEAN and China are strengthening their mutual interests through dialogue aimed at intensifying cooperation. This is a major development. One may recall that till very recently, most founding members of ASEAN had serious differences with China on vital political and security matters. On-going territorial disputes also sharply separated China from Cambodia, Laos, Vietnam and Myanmar. These sensitivities have been overcome. This has been facilitated by the end of the Cold War and subsequent global events. The two parties now have Joint Committees on co-operation in economic, trade, science and technology fields. The ASEAN-China Business Council holds regular discussions at government, private and academic levels. Annual Summits between them are now convened regularly. This welcome inter-action has led to the Framework Agreement on Economic Cooperation which will facilitate China joining the ASEAN Free Trade Area shortly. This will lead to China extending special trade concessions. These are valuable lessons which SAARC should try to emulate.

In my view, given the sensitivities of the area, any new direction from SAARC will require caution. There has been a change of government in India, the major power in South Asia. Nevertheless, the current scenario demands that SAARC should undertake extensive consultation between all involved on how ties can be further consolidated with China. Initial dialogue and discussion could start within the private sector, civil society and academic levels. Such a model can eventually ensure a future viable cooperation arrangement.

The imperative of good neighbourhood and challenges and opportunities of this century with regard to peace, cooperation and development dictate the needs for a bold and speedy action to move forward in this direction.

As in the case of other areas, we will also need to have a Track II initiative to prepare grounds for promoting and complementing any official level discussion that might be required for this purpose.

We must not forget that China's closer association with SAARC members will have wider significance and far reaching implications. It can, and will contribute in pro-moting the comparative advantage in several trade commodities and other industrial products in this region. I believe that China's fast paced economic development, its accession to WTO and its growing state-of-the art technology can also positively help the forward movement of South Asian states.

Such inter-regional development will enable South Asia to compete effectively with others in ASEAN.

It is in this context that Bangladesh as well as the other countries of South Asia should take the upcoming third Ministerial meeting of the Asian Cooperation Dialogue (21-22 June in Qingdao, China) very seriously. Last year, its focus resulted in the development of the billion-dollar Asian Bond Fund and greater cooperation among the region's monetary authorities and capital markets.

One can only hope that SAARC states will be able to catch this train and its potential for greater inter-action at the wider regional level.

Muhammad Zamir is a former Secretary and Ambassador.