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Indian Officials to Focus on Economic Cooperation at SAARC - 2003-12-31

Indian officials will be pushing for greater regional economic cooperation at a coming summit meeting of South Asian leaders. But much of the world will be watching the Islamabad gathering to see if the leaders of India and Pakistan continue their recent overtures toward peace.

India's Foreign Secretary Shashank says South Asia has the potential to become an economic powerhouse like the European Union. The region will take a major step towards that goal, Mr. Shashank says, if the region's leaders sign a proposed free trade agreement at the summit meeting of the South Asian Association for Regional Cooperation, or SAARC.

"We have a vision whereby the SAARC countries will be able to move forward in the same way as the countries in other parts of Asia have been doing, or countries in other regions like Europe and America are moving towards closer economic cooperation," says Mr. Shashank. "That is a vision."

That is New Delhi's major hope for the summit, which opens Sunday in Islamabad. However, coming this close to achieving regional economic cooperation has not been easy. There have been four rounds of talks on the free trade agreement, known as SAFTA, since 1993. The agreement would serve as framework for lowering tariffs among SAARC member states.

Leaders are expected to determine exactly which goods will fall under the agreement over the next 12 to 18 months. But analysts say the summit could produce more. It could help bring South Asia's nuclear-armed rivals, India and Pakistan, closer together. The two have been hostile to each other since their independence in 1947. They have fought three wars, two of them over Kashmir, the divided border region that each side claims in its entirety. A fourth war, also over Kashmir, was narrowly averted last year.

Tension between the two has marred previous SAARC summits, and resulted in the cancellation of the 2003 gathering. Mahesh Rangarajan, an independent political analyst, says the situation this time is different. "This time one expects it to have a positive spin-off, because there is a mood both in Pakistan and in India for talks between the two countries, for a positive atmosphere between the two," he says.

The two have already agreed to a resumption of bus, rail and air links, and to a cease-fire along the Line of Control that separates the Indian and Pakistani portions of Kashmir.

Pakistani President Pervez Musharraf recently suggested a new concession, saying Islamabad might drop its long-standing demand for a United Nations-approved plebiscite to solve the Kashmir dispute.

Samina Ahmed is the South Asia director of the International Crisis Group in Islamabad. She says the question is whether such gestures will translate into a private meeting at the SAARC summit between President Musharraf and Indian Prime Minister Atal Behari Vajpayee. "Will there be any talks held at all between Vajpayee and Musharraf? The interaction between these two sides, the levels in which they're going to be willing to talk to each other, all of this is where attention will be focused," says Ms. Ahmed.

New Delhi, however, says the major goal of the summit is the signing of SAFTA. India has scheduled bilateral meetings with Bangladesh, Sri Lanka and Nepal, but has said repeatedly that Mr. Vajpayee has no plans to meet Mr. Musharraf.

Officials say there may be occasions when the two leaders will "be together" during the conference - but they have not elaborated on what that might mean.