Answer

Introduction

SAARC remains largely inactive today despite four decades of existence, mainly due to unresolved political tensions, especially between India and Pakistan. Yet the region’s shared economic and security challenges make cooperation increasingly necessary. Assessing the costs of SAARC’s stagnation highlights how South Asia loses by remaining divided.

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Economic Costs

• Low trade integration: SAARC inactivity keeps South Asia among the least integrated regions.
  Eg: Intra-regional trade is only 5%, compared to ASEAN’s 25%.
• High tariff and logistics hurdles: Weak cooperation maintains costly borders and bureaucratic delays.
• SAFTA underperformance: Limited commitment to SAFTA blocks supply-chain linkages and reduced trade costs.
  Eg: SAFTA (2006) still struggles to remove major tariff and non-tariff barriers.
• Slow poverty reduction: Lack of economic integration delays growth that could lift millions from poverty.
  Eg: Nearly 736 million South Asians continue to live in extreme poverty.
• Missed regional market synergy: Absence of coordinated planning prevents leveraging the region’s large consumer base.

Strategic Costs

• Weak response to shared threats: Terrorism, pandemics, climate risks and cybercrime require cooperation that SAARC cannot offer.
• Space for external influence: Institutional paralysis increases dependence on non-regional powers.
• Loss of trust-building platforms: Without SAARC-level dialogue, political confidence remains low.
  Eg: India-Pakistan hostility continues to block SAARC summits.
• Fragmented security coordination: No SAARC-wide mechanism for intelligence-sharing or counter-terrorism.
  Eg: The success of SCO’s RATS shows what SAARC lacks institutionally.
• Wasted youth potential: No regional frameworks for skilling, mobility or academic exchange.
  Eg: UNICEF projects over half of South Asian youth may lack employment-ready skills by 2030.

Conclusion

The stagnation of SAARC carries significant economic losses and strategic vulnerabilities for all member-states. Reviving functional cooperation, even outside full political consensus can unlock trade, development and security gains. A pragmatic shift toward connectivity, climate resilience and digital public goods is essential for South Asia’s shared future.

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