Why does the EU flourish while SAARC stagnates?

Chief Adviser Muhammad Yunus called for the revival of SAARC in a meeting with the Pakistan High Commissioner in Dhaka Syed Ahmed Maroof. Photo: PID

Regional alliances have often been hailed as the future of geopolitical and economic stability. By fostering cooperation among neighbouring countries, these organisations have the potential to boost trade, resolve conflicts and encourage shared development. 

However, while some regional organisations have thrived, others have stagnated. 

Two such examples are the South Asian Association for Regional Cooperation (SAARC) and the European Union (EU). SAARC, established in 1985, has struggled to achieve its goals, while the EU has emerged as a global power. But why though? 

SAARC recently gained attention when Muhammad Yunus, Chief Advisor of Bangladesh's interim government, called for its revival in a PTI interview in Dhaka. 

He highlighted SAARC's stagnation compared to the EU's success and plans to meet Indian PM Narendra Modi at the UN General Assembly, also aiming to organise a SAARC leaders' photo op.

SAARC and the EU were both established with the vision of creating unity, stability and economic growth in their respective regions. The EU, born out of the European Economic Community (EEC) in 1957, gradually evolved into a political and economic union with 27 member states. 

It not only became a major global economy but also set an example of how regional cooperation can transcend historical animosities

On the other hand, SAARC, comprising eight South Asian countries (Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka), aimed to enhance economic and regional integration. However, the organisation's progress has been painfully slow, and it has failed to realise its potential as a force for regional cooperation.

A key reason for the EU's success lies in its solid economic foundation, established through a common market enabling free movement of goods, services, people and capital, fostering economic growth and making Europe a powerful trading bloc.

While the EU prospers through economic integration, SAARC has barely begun. 

Intra-SAARC trade is alarmingly low at just 5%, compared to 60% in the EU. Efforts like SAFTA are hindered by political conflicts and protectionist policies, stalling regional economic growth.

The EU's founders recognised that true peace required both economic and political unity. The 1992 Maastricht Treaty formalised political integration, introducing common foreign and security policies while the EU has since harmonised policies in education, immigration and sustainability.

SAARC has been severely hindered by geopolitical tensions, especially between India and Pakistan. Their rivalry has repeatedly disrupted regional initiatives, including annual summits. 

In 2016, India, Afghanistan, Bangladesh, Bhutan boycotted the Islamabad summit, citing terrorism concerns, paralysing meaningful cooperation.

The EU's most notable achievement in fostering peace has been how the continent has enjoyed unprecedented stability among its members after being ravaged by two world wars. Its diplomatic and legal frameworks have resolved conflicts, proving that cooperation can overcome historical animosities.

Meanwhile, SAARC faces another challenge. The vast disparity between its members' size and influence – for instance, India, as the dominant power, wields disproportionate control, leaving smaller nations like Nepal, Bhutan and Maldives sidelined. 

In contrast, the EU balances interests through its institutional framework and decision-making processes. The EU has established strong institutions like the European Parliament, Commission and Court of Justice.

These bodies offer platforms for dialogue and dispute resolution. The EU's adaptability, including expansion to Eastern Europe, reinforces its power and relevance.

However, SAARC lacks strong institutions. The absence of any formal mechanism for resolving disputes hinders consensus-building, slowing decision-making. 

Without supranational bodies like the European Commission or Parliament, SAARC struggles to drive reforms or ensure compliance. If SAARC wishes to emulate the success of the EU, it must address both its structural and political shortcomings. 

The first and most crucial step is resolving the political disputes that have paralysed the organisation. Without peace between India and Pakistan, SAARC is unlikely to make any substantial progress.

Second, SAARC must focus on economic integration. By lowering trade barriers and facilitating the free movement of goods and services. A focus on trade, investment and infrastructure development could help lift millions out of poverty and bring stability to the region.

Lastly, SAARC needs institutions with the authority to implement decisions and mediate conflicts. Consensus-based decision-making may ensure that every member has a voice but it also means that the organisation can be easily derailed by a single country's veto.

While SAARC remains hindered by political conflicts and weak cooperation, the EU exemplifies how unity brings peace, prosperity and influence. SAARC's future depends on whether its member states are willing to walk the talk and that remains to be seen.

Molla Mehedi Hasan is a former research assistant at Islamic Relief Bangladesh and a postgraduate student at Khulna university.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.