Introduction

This study analyzes the socioeconomic development of the South Asian Association for Regional
Cooperation (SAARC) in comparison to the Association of Southeast Asian Nations (ASEAN).
Established on December 8, 1985, in Dhaka, Bangladesh, SAARC was founded to foster
regional cooperation focused on peace, stability, sovereignty, and economic growth. According
to Article 1 of the SAARC Charter, the association’s primary objectives include:

• Promoting the welfare of South Asia’s people and enhancing their quality of life.
• Contributing to mutual trust, understanding, and appreciation of one another’s
challenges.
• Encouraging active collaboration and mutual assistance across economic, social,
cultural, technical, and scientific domains.

The Cold War era underscored the importance of regional cooperation and mutual
respect among similarly positioned economies. The success of ASEAN provided an
example that spurred regional cooperation globally, serving as a partial model for
SAARC (Bhalla, 1990). ASEAN was founded on August 8, 1967, in Bangkok, Thailand,
by Indonesia, Malaysia, the Philippines, Singapore, and Thailand, with Brunei,
Vietnam, Myanmar, Laos, and Cambodia joining later to expand the bloc. ASEAN’s
purpose was to ensure both intra-regional and external political solidarity among its
member nations (Acharya, 1998).

South Asia, home to over 1.5 billion people, is a significant market for the global economy and is
renowned for its rich social, religious, geographical, and cultural diversity. Despite its abundant
natural resources, the region has faced significant development challenges. Even with efforts
towards free trade, the region has yet to fully implement free movement of people within
SAARC. Moreover, SAARC has not launched any major development projects and has not
matched the economic progress achieved by ASEAN. ASEAN nations have established open
borders and trade agreements similar to the European Union’s model. ASEAN’s achievements in
regional security and order far exceed SAARC’s efforts (Sridharan, 2008, p. 3).

Economic Progress and Challenges

While ASEAN experienced underdevelopment and instability during its initial years, it has
evolved into a global economic powerhouse exemplifying regional cooperation and stability.
Intra-ASEAN trade increased from 17.9% in 1980 to 26.9% in 2007 (Rahman, 2011). By
contrast, SAARC’s net FDI flows are below 4%, compared to ASEAN’s 16.7%. Furthermore,
SAARC's literacy rate stands at around 54%, significantly lower than ASEAN’s rate of 94.9% in
2016 (ASEAN Statistics Highlights, 2018). Despite progress, poverty and inequality remain
prevalent in SAARC, trailing behind Africa's Sub-Saharan region and Latin America.

SAARC’s main aim has been to promote regionalism and cooperation. The association has been
linked to mid-level triangular relationships involving states, civil society, and private enterprises
(Soderbaum, 2003). Over the decades, SAARC's effectiveness has been questioned, primarily
due to regional geopolitics, especially tensions between India and Pakistan. India’s economic
size, military power, and political influence have made it the focal point of SAARC.
Nevertheless, cooperation remains critical for economic growth, a fact evidenced by ASEAN’s
success. Pragmatic economic regionalism could drive confidence and cooperation similar to the
European Union or ASEAN (Alagappa, 1995). The question remains: Why has SAARC
struggled to become more effective? This paper seeks to answer this by analyzing secondary
literature from published documents, books, and journal articles on SAARC and ASEAN.

Discussion

Economic Disparities and Unemployment

Despite recent strides in economic and infrastructure development, SAARC still faces high
unemployment rates. India prioritizes infrastructure development and is the 17th largest export
economy globally as of 2017, followed by Bangladesh (54th), Pakistan (68th), and Sri Lanka
(70th), with Bhutan ranking at 176th. Nepal, a landlocked nation, has made modest progress in
social development over the past decade but lags in infrastructure improvements. In terms of
GDP per capita, SAARC’s average is significantly lower than ASEAN’s, with a fourfold
difference.

Sociocultural Perspectives

SAARC countries share a deep-rooted cultural and economic history, with many major
religions—Hinduism, Buddhism, and Jainism—originating in the region. Islam predominates in
countries like Pakistan, Bangladesh, Afghanistan, and the Maldives, while Christianity has
integrated into the regional culture over time. Despite religious diversity, the region has
experienced communal violence driven by political issues. Nonetheless, the coexistence and
cooperation among different faiths remain noteworthy. Cultural values are integral to society,
and scholars like Adams (2001) have noted the significant impact of culture on economic
development in SAARC. Max Weber’s perspective on ethics suggests that traditional beliefs
might hinder the emergence of a modern economic system. However, this mindset could change
as development progresses.

Urbanization and Population Challenges

The socioeconomic gap in SAARC is widening, with significant poverty evident across the
region. Subsistence agriculture and livestock remain predominant occupations, although
urbanization is increasing rapidly, accompanied by rural-to-urban migration. Poor health,
sanitation, and infrastructure are major concerns. Unplanned urban growth, driven by population
pressure, exacerbates congestion (Ellis and Robers, 2016). The rapid rise in population and
density poses significant challenges for many SAARC countries.

Connectivity and Free Trade

Implementing seamless connectivity and free trade within SAARC has been difficult due to
security concerns. For instance, Bhutan's National Council rejected a free trade agreement for
motor vehicles in November 2016, stalling regional integration efforts. The emergence of
BIMSTEC, comprising Bangladesh, India, Myanmar, Sri Lanka, and Thailand, suggests that
SAARC’s limitations have led regional actors to pursue alternatives. BIMSTEC aims to
strengthen cooperation among South and Southeast Asian nations, indicating a potential shift
away from SAARC’s framework. ASEAN’s success with policy reforms that enabled free
movement highlights the need for similar changes within SAARC. Bilateral agreements, such as
the Indo-Sri Lankan and Indo-Nepal Free Trade Agreements, have outperformed SAARC’s
broader initiatives.

Conflict Resolution

SAARC has struggled to become an effective conflict resolution platform due to the region's
enduring internal and interstate conflicts (Mukherjee, 2014). Notably, the India-Pakistan conflict,
two nuclear-armed nations, overshadows SAARC’s efforts. Scholars argue that SAARC’s
activities have been overshadowed by these tensions. ASEAN, on the other hand, has avoided
military force in resolving disputes and has evolved into a stable diplomatic community (Leifer,
1983:106). While ASEAN members have maintained peace, issues like Myanmar’s treatment of
the Rohingya and ethnic conflicts in Indonesia highlight that challenges remain within the
ASEAN framework as well (Hamal, 2014).

Challenges and Implications

Persistent issues such as poverty, unemployment, population growth, and socioeconomic inequality
hinder SAARC’s progress and investment climate. The region continues to grapple with infrastructural
deficits and low technology adoption. Illiteracy and superstition are common, particularly in rural areas,
with access to quality education and healthcare still limited for most people. The high population growth
rate is a significant concern, impacting economic development. FDI inflows are stifled due to
sociocultural complexity, security concerns, restrictive tax policies, and bureaucratic
[Link], slum proliferation, and unplanned urbanization exacerbate inequality in the
region.

The gender gap remains wide in patriarchal societies, and the rise of religious fundamentalism and
extremism poses new challenges. Only through economic development and modernization can such
challenges be mitigated, as seen in Muslim-majority countries like Malaysia and Indonesia.

Colonial legacies, disputed borders, and competition for natural resources contribute to tensions.
Unresolved disputes, such as those between Bangladesh and India, and India’s open but ambiguous
border with Nepal, contribute to regional instability. Development in border regions, critical for reducing
crime and smuggling, has been neglected due to historical security concerns. Practical measures, like
digital identity cards, could improve monitoring and reduce crime.

Agriculture, climate change, infrastructure, security, investment, and tourism require renewed attention
from SAARC. Economic development and technological modernization are vital to poverty reduction,
demanding strategic investment and tax policy reforms. Trust, a core component of cooperation, remains
a major challenge for SAARC. ASEAN’s emphasis on mutual respect for sovereignty and its
consultative, consensus-driven approach has fostered trust and development. SAARC could benefit from
adopting these practices to establish a stable, cooperative regional order.

Conclusion
While SAARC accounts for 3.8% of the global economy and 22% of the world’s population, it holds
potential for growth. Lessons from ASEAN’s success can inform SAARC’s path toward effective
regionalism, aiming to reduce conflict and encourage development cooperation.