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Download PDF Senior officials of Saarc countries have agreed to meet in New Delhi late this month to discuss ways to stop terror-funding as the grouping decided to operationalise the proposed regional Development Fund as soon as possible and set up an expert group for the development of capital markets in South Asia.
The issue of measures to counter terror-funding came up for discussion at the meeting of Saarc finance secretaries in the Indian capital on Friday.
A working group of the eight-nation association will meet on September 24 or 26 to suggest more concrete ways to tackle the problem, Indian Financial Sector Secretary Vinod Rai told the media yesterday.
However, the issue was not discussed at the meeting of the Saarc finance ministers, Indian Finance Minister Palaniappan Chidambaram told reporters separately.
The issue of stopping terror-funding in South Asia assumes significance as the Saarc summit held here in April had called for urgent conclusion of a comprehensive convention on international terrorism.
The ministerial meeting discussed issues relating to Saarc Development Fund, which has already collected $300 million. It also discussed enhancing collaborations between capital market regulators in the countries of the region, South Asian Economic Union and South Asian Customs Union, Chidambaram said.
He said since the last Saarc summit this year in Delhi had decided to operationalise the Development Fund without any further delay, it was necessary for the member countries to come to an agreement on the terms of reference so that the fund can be utilised for activities that support the development goals of other countries.
The fund has three windows–economic, social and infrastructure–and Chidambaram stressed on the social window in order to use the money for schemes, programmes and projects “in our region that are aimed at the disadvantaged and vulnerable” sections of society.
Addressing the meeting, the Indian finance minister said a Saarc network of researchers has been set up to identify and analyse and help the countries of the region face the current global financial and economic developments affecting the region.
He drew attention of the meeting to the situation where securities markets, particularly those in the emerging economies, are susceptible to the effects of cross-border financial flows and activities.
On collaboration between capital market regulators in Saarc countries, Chidambaram said there was recognition now that capital markets in each member-country would require some kind of coordination and integration.
The ministerial meeting recommended establishment of a group of experts on development of capital markets in the Saarc region, he added.
Asked about a common capital market for Saarc or cross-border listings, Chidambaram said these were “for the distant future” and what the Saarc countries are looking at right now is whether capital market regulators can work together, share information and cooperate with each other through memorandum of understanding (MoU).
Addressing the ministerial meeting, he suggested enhanced collaboration among Saarc capital market regulators through MoUs and other bilateral agreements that allow flexibility in networking, coordination, cooperation and exchange of information as well as establishment of associations and bodies with specific purpose of removing barriers to capital market integration in the region.
Chidambaram also proposed harmonisation of laws, accounting and governance standards and development of a regulatory framework with regard to enforcement, compliance, investor protection and information-sharing.
Concerted efforts would be essential to pre-empt financial crises and regulatory failures, he added.
Chidambaram called on the Saarc countries to work together to develop regional cooperation so that the adverse effect of cyclical fluctuations on economies of the region “is reduced to a large extent”.
“An economic union envisages full and complete integration of our economies for which hassle-free procedures at the border is the first step,” he said, adding that this “is essential before we move on to the greater goal of having a barrier-free flow of trade in goods and services that is the first stepping stone for the integration of the regional economies”.
He asked the Saarc Group on Customs Cooperation to expeditiously complete the task on hand so that the countries can take the next steps to forge a South Asian Economic Union. “It is important that we are able to report progress in the next two years,” he said.
Chidambaram said economic growth has to be inclusive and every citizen must enjoy the fruits of high growth and Saarc countries should work towards achieving the goal of a broad-based and inclusive growth.
He said financial inclusion–delivery of banking and other financial services at affordable costs to low-income groups and the disadvantaged sections of society–is a core issue in national development.
Chidambaram emphasised development of infrastructure in Saarc region saying it offered a “huge opportunity for investment and creation of jobs and expansion of our economies”.
Pointing out that the last informal meeting of the Saarc finance ministers had reached a consensus on greater connectivity among countries of the region and that the recent Saarc transport ministers’ conference in Delhi had outlined the way forward to implement this resolve, he said connectivity is heavily dependent on development of infrastructure.
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