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Department of Public Information . News and Media Division . New York

29 September 1999

The creation of a South Asian Economic Union was on the works, Lakshman Kadirgamar, Sri Lanka’s Foreign Minister and Chairman of the Council of Ministers of the South Asian Association for Regional Cooperation (SAARC) told correspondents at a press conference at Headquarters this afternoon. The agreement for creating such a Union had been decided at a SAARC informal meeting of Foreign Ministers which took place yesterday in New York. The Union would foster economic, social, cultural and technical cooperation. However, many prior steps still needed to be followed in order to accomplish that task. Through its ability to look ahead, SAARC had demonstrated its “institutional vitality”.

A great deal of detail remained to be done in creating the South Asian Union, Foreign Minister Kadirgamar said. It was important to keep in mind that among the seven SAARC countries, there were enormous disparities. On the one hand there was India with almost 1 billion people and, on the other, the Maldives with a population of only 250,000. “The pace would have to be adjusted to accommodate the economies of all the countries concerned”, he added.

A group of experts from the different member countries had been appointed to create a free trade area, he said. Work on a customs union would be soon initiated, as well as work on standardization and various aspects necessary for the Union to work effectively. “It will go in stages”, he added.

During the New York informal meeting, Foreign Ministers had also reviewed SAARC’s evolving cooperation with the European Union as well as with the Association of South-East Asian Nations (ASEAN), Foreign Minister Kadirgamar said. In addition, preparations for the next summit at Kathmandu, Nepal, to take place at the end of November this year, had also been discussed. Action to be taken by the Association on the report on the Group of Eminent Persons -– which recommended a course of action for SAARC for the next century -- had also been discussed. However, since the session had been informal, the consensus reached on that document was ad-referendum. Any Member State could amend or add its position until the document was finalized at the Kathmandu Summit in November, he went on. “We have worked on an action plan for regional cooperation in South Asia for at least the first quarter of the next century”, Foreign Minister Kadirgamar added.

The Group of Eminent Persons, had been created because there had been a concern within SAARC whether South-East Asia was equipping itself adequately to cope with the rapid changes in the international scene especially in the spheres of commerce and finance, he explained. In 1997, a group of persons were appointed to make recommendations as to how the region should maximize the available opportunities, while also meeting the challenges. The persons selected had been from different disciplines and were all eminent persons. Their report had been made available within one year. The recommendations covered by the report were in the commercial and economic areas as well as social, gender and health issues. There were also sections on cultural cooperation. The report had been reviewed by the Foreign Ministers who would in turn make recommendations on its implementation to Heads of State and Government.

A correspondent asked whether the South Asia Economic Union would discuss the possibilities of creating a South Asian military force. Foreign Minister Kadirgamar replied that the Union was solely economic and social in nature. There were no military plans at all.

Had political problems been set aside by that Union? A correspondent asked. Prime Minister Kadirgamar replied that no such decision had been made. However, the Union was entirely economic in nature and regional cooperation was very high on the agenda. The charter clearly defined that “contentious bilateral matters” would not be discussed.

In reply to a correspondent’s question, Foreign Minister Kadirgamar said if there were no tensions between the two largest countries in the South Asian region, India and Pakistan, economic cooperation would advance very rapidly. Given those circumstances, it was remarkable that economic cooperation initiatives were taking place and were moving in a positive direction. The establishment of a South Asian Economic Union, which included all seven countries with no reservations, was a positive step forward. It was a situation that gave considerable hope for the future.

Responding to another question, Foreign Minister Kadirgamar said there was no room for consideration of political issues in SAARC. It was a body for regional cooperation of various kinds, but not political. Political issues needed to remain aside.

What was the status of the rebel movement within his country? A correspondent asked. Foreign Minister Kadirgamar explained there was on-going fighting in certain parts of the country which was likely to continue until settlement of some kind was reached. At the present moment, the prospects of a political settlement were not that evident. His Government had made it very clear that it remained open at all times for discussions with the Liberation Tigers of Tamil Eclam (LTTE) and other concerned parties.

What would it take for a peace process to speed up? A correspondent asked. The Foreign Minister explained that meaningful indication from the LTTE that it was prepared to consider a political solution of the problem could speed up the process. However, the latter would have to be outside or short of a separate state, which was not a matter of negotiation at all as far as his Government was concerned. His Government had many times expressed its readiness to discuss a solution to the problem, he added.

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