ASEAN vs.

SAARC
Why ASEAN is successful & SAARC has been unsuccessful

VS.

Presented by,
Ved prakash mishra
 What is ASEAN
• The Association of Southeast Asian Nations (ASEAN) was
founded on Aug. 8, 1967 with the signing of the Bangkok
Declaration by Indonesia, Malaysia, the Philippines, Singapore,
and Thailand, the five founding nations. In 1984, Brunei joined
the Association.
• In the early years, ASEAN countries focused on dealing with
external threats in the region, for example the Vietnam War and
China's cultural revolution. 
• However, since the late 1970s, ASEAN had shifted its emphasis
from a purely political one to an economic focus. ASEAN nations in
the intervening years have established various preferential trading
arrangements, including tariff reductions, incentives to expand trade
and investment in member countries, and liberalization of nontariff
barriers.
Objective of ASEAN
• To assist ASEAN Member Countries in adopting effective
and enforceable legislation for CITES {CONVENTION ON
INTERNATIONAL TRADE IN ENDANGERED SPECIES OF
WILD FAUNA AND FLORA}implementation
• To promote networking amongst relevant law
enforcement authorities in ASEAN countries to curb
illegal trade in wild fauna and flora
• To promote research, monitoring and information
exchange on CITES-related issues
• To encourage industry groups, trade associations/traders
and local communities to comply with legality and
sustainability
• To seek sufficient technical and financial assistance
through collaborative initiatives
 What is SAARC
• The South Asian Association for Regional Cooperation (SAARC) is
an economic and political organization of eight countries in
Southern Asia. It was established on December 8, 1985 by
Bangladesh, Bhutan, Maldives, Nepal, Pakistan, India and Sri
Lanka. In April 2007, at the Association's 14th summit, Afghanistan
became its eighth member. 
• Objective- To promote the welfare of south Asia and improve their
quality of life.
• To develop culture, economy, social progress with active
collaboration & mutual cooperation.
• give all individuals the potential to live in dignity.
• To cooperate with regional & international organization with the
similar aim & objective.
• To get hold with the development country.
Member country
ASEAN SAARC
• Brunei Darussalam • Afghanistan
• Cambodia • Bangladesh
• Indonesia • Bhutan
• Laos • India
• Malaysia • Maldives
• Myanmar • Nepal
• Philippines • Pakistan
• Singapore • Sri Lanka
• Thailand
• Vietnam
Why ASEAN get success
• The total area of the ASEAN region is 4.44 million square kilometers
with a current population of about 584 million. The objectives of the
Association are to accelerate regional economic, social and cultural
development and to establish peace and stability through justice
amongst its member nations. In 2008, total regional GDP for ASEAN
was USD 1.5 trillion, with per capita regional GDP of USD 2,580.6
and regional GDP growth of 4.4%. The highest GDP for a
participating member was Indonesia (USD 511 billion), followed by
Thailand (USD 273 billion) and Malaysia (USD 222 billion). The
highest per capita GDP was achieved by Singapore ($ 36,046),
followed by Brunei Darussalam ($ 35,622) and Malaysia ($
7,969).Out of the ten member countries, seven members achieved per
capita GDP higher than $ 1000, while four members attained 6% or
higher GDP growth rate. Lao PDR attained the highest GDP growth
in the region (8.4%). Total ASEAN trade for the year was about USD
1.7 trillion (ASEAN Secretariat, 2008a, ASEAN Secretariat, 2008b).
 Cont…
• ASEAN has made significant progress in developing intra-regional
economic relationships. The Preferential Trading Arrangement (PTA),
the Enhanced PTA Program and the ASEAN Free Trade Area (AFTA)
are remarkable examples of the economic cooperation. AFTA was
introduced in 1992 with the objective to develop a regional competitive
advantage including the economic efficiency and productivity of its
member nations. AFTA removed tariff and non-tariff barriers within the
region. As a result, exports among ASEAN countries increased from
43.26 billion USD in 1993 to almost 80 billion USD in 1996. The
average yearly growth was 28.3 percent. ASEAN intra-regional trade
increased from 20 percent to almost 25 percent of total regional trade
(ASEAN Secretariat, 2009). Besides AFTA, ASEAN members have
developed some free trade areas outside the region. These areas include
ASEAN - Republic of Korea Free Trade Area, ASEAN - Japan Free
Trade Area, ASEAN -India Free Trade Area, ASEAN - China Free
Trade Area and ASEAN - Australia New Zealand Free Trade Area.
 Con..
• The vision of ASEAN leaders reflects the aspiration for
greater regional cooperation.
• Establishment of powerful regional cooperation is attainable
through strong economic harmonization among the
members.
• Successful harmonization results in a monetary policy that
provides a stronger base for economic integration.
• The analysis would focus on three main questions: 1) how
much trade would occur among ASEAN members if their
trade elasticity with respect to economic and geographic
variables were same as those achieved in the Euro-model
(This amount has been considered as potential trade) 2)
What is the pattern of the gap between actual trade and
potential trade 3) What is the growth potentiality for
ASEAN intra-regional trade
 Cont..
• They uses gravity model to measure the pattern of intra-regional trade
enhancement through regional economic integration for EU and to
apply it for ASEAN.
• This process provides better opportunity to measure the success of
ASEAN’s regional integration of intraregional trade, considering their
process of regional cooperation and integration as similar to EU.
• Like EU, ASEAN start their journey with an objective of fostering
regional economic, social and cultural development, proceed through
intra-regional trade agreements to reduce trade barriers and reach at
the stage of expanding extra-regional trade agreements with major
trade partners.
• In addition, estimation of their success level at this stage would
provide scope for further study on their journey towards currency
union and its impact on trade integration.
 Why SAARC get unsuccessful
• In most other parts of the world, regionalization has been
accepted as the fastest route to prosperity, for promoting
collective interests, ensuring protection against the
negative fall-out of globalization, and enhancing security
through intra-regional interdependent relationships.
• Within SAARC, there has been little progress even in
respect of intra-regional trade, which accounts for barely
5% as compared to 62% for the EU and 55% for NAFTA.
• less than 1% of the share of global trade, just 1.5% of the
World Gross Product, even as we count 450 million among
the world’s poorest people and 50% of the world’s
illiterates within our seven nations.
 Cont..
• Many reasons exist for the uneven progress of SAARC:
most have to do with intra-regional political tensions, and
most involve India. The chronic tension, occasional conflict,
and perennial absence of trust between India and Pakistan;
the periodic hiccups in relations between India and her other
neighbors –Sri Lanka, Nepal and Bangladesh; and so on.
• SAARC was established in 1985 with neither a sincere,
collective and grand vision, nor a strong political will
among its member states to subsume short term nationalist
objectives for the long term national and regional good. “It
was a top-down concept, foisted on us without any
preparation” is the common sentiment certainly of former
Indian diplomats.