SAARC as South Asian Economic Union (SAEU)- Interdependence with China

Abstract

This dissertation presents evaluation and validation of South Asian Association of Regional Cooperation (SAARC)‟s transformation into a South Asian Economic Union/Association (SAEU/SAEA) due to the catalytic project of China Pakistan Economic Corridor (CPEC) as a function of interdependence. The dissertation is the outcome of historical and Case Studies‟ analyses whereby prospects of SAARC‟s transition into SAEU/SAEA are affirmed through both the qualitative as well as quantitative regression analysis of the primary data, collected through extensive surveys and invaluable interviews with subject specialists. Contrary to the normally held view, the study reveals that a high level of regional economic interdependence by way of intraregional trade and commerce activities was existing in the subcontinent especially; prior to the arrival of the British. The volume and character of the trade is indicated in 7:34 ratio of agriculture versus manufactured goods. The viability and productivity of the South Asian intra-regional trade and positive scope of economic integration was also confirmed in multiple Case Studies using regression analysis. This study draws few stark lessons through comparison of SAARC with contemporary models of European Union (EU) and Association of South East Asian Nations (ASEAN) to identify bright prospects of forming SAEU/SAEA due mainly to China’s CPEC. Few Case Studies on the inclusion of China in SAARC or prospective SAEU/SAEA, based upon Game Theoretical and Gravity Modelling techniques also vindicate the dissertation’s claim. The study concludes that a mix of endogenous socioeconomic compulsions together with exogenous politico-strategic considerations is most likely to produce an enabling environment of cooperation between China and India. As a spin-off, the CPEC may also have positive implication for South Asia by providing a forum in the shape of SAEU/SAEA to resolve the perennial Kashmir conundrum. This construct is visualised through Complex Interdependence (CXI) lens, currently witnessed in China-SAARC exponentially growing trade and economic relations, thus causing Spill over in other sectors of political and social life of SAEU/SAEA. Other than Introduction, which includes research proposal, the dissertation has Six Chapters. Chapter One highlights the contemporary developments in regionalism, cooperation and integration. Chapter Two provides the Conceptual Framework, while Chapter Three digs out the state of economic integration prior to the arrival of the British and assesses the Impact of Historical Legacies in South Asia. Chapter Four discerns the lessons from comparative study of the EU and ASEAN with SAARC suggesting an institutional framework like the ASEAN. Chapter Five offers the Prospects and Challenges of SAEU/SAEA through Game Theoretical Modelling, while Chapter Six verifies the Study Hypothesis and gives Summary of Surveys, Interviews and Statistical Analysis by quantitatively vindicating the hypothesis. The final part of the study gives conclusions and implications of China’s CPEC and the growing economic interdependence of Pakistan and South Asia.