Your Excellency Prime Minister Sheikh Hasina,
Your Excellency Prime Minister Nawaz Sharif,
Distinguished Delegates and Friends.

This is a truly historic occasion. For the first time, the leaders of Bangladesh, Pakistan and India have come together on a common platform. What is more, we have come together on a common platform with captains of trade and industry to see how we can jointly work together to usher in a new era of cooperation and prosperity for our peoples.

Madam Prime Minister, I would like to express my deep appreciation for the bold and far-sighted initiative that you have taken in bringing us all here together today. Our presence here is a tribute to your statesmanship and the esteem and affection in which all of us hold you. I thank you for the excellent arrangements that your government has made for this meeting and for the warm hospitality extended to me and members of my delegation.

Our countries are inheritors of an ancient and highly developed civilisation. From the sophisticated urban design of Mohenjo Daro and Harappa and the technological wizardry of the Ashokan Pillars, to the amazing fineness of the Dhaka Muslims, our peoples have been known through much of human history for their creativity and productive skills. Our growth, however, was stunted by colonisation, which left us impoverished, even as Europe and North America were making the transition to industrialised societies. Today, we have a unique opportunity to work together to overcome poverty and accelerate economic growth for the shared benefit of our people.

In this age of globalisation, nations in different parts of the world have discovered the advantages of regional economic cooperation and the development of a common, regional economic space. At the end of World War II, who would have imagined that France and Germany, who had bought three bitter wars in the preceding 80 years, would come together to create the European Community which has now become the European Union. Nearer to us, the countries of South East Asia have been able to achieve commendable success in development with regional cooperation through ASEAN playing a key role. In America, both NAFTA and Mercosur reflect the same economic imperative.

The prospects of forging closer ties of economic cooperation in our own region have improved perceptibly. There is, today, an increasing convergence in our macro-economic policies, with an emphasis on deregulation and a greater role for the private sector. All of us are seeking to unleash the creative energies of our entrepreneurs and workers and bring about improvements in efficiency so that we can compete more effectively in the new globalised economy. In the last few years, we have seen a quickening of growth in our individual economies with increases in GNP ranging from five to seven percent. There is no reason why we cannot sustain and accelerate this pace of growth, given sound economic management and capitalising on regional synergies.

Economic Cooperation is now high on the SAARC Agenda. The goal of achieving a Free Trade Area in South Asia has been accepted, and the time frame for achieving it advanced to the year 2001. Let us, today, reaffirm our commitment to work jointly to achieve this goal. This would involve progressive acceleration of trade liberalisation in the SAPTA negotiations in terms of the products covered the depth of the tariff cuts and lifting of non-tariff barriers. In concrete terms, we would have to liberalise at least 25% of trade each year to usher in a Free Trade Area in South Asia by the first year of the next century.

Under the first two rounds of SAPTA, India offered the maximum concessions covering around 1000 tariff lines. We also offered the deepest tariff cuts with special concessions for the Least Developed Countries. The impact of these openings will take some time to be assessed as they came into effect only between March and July last year. I understand that Pakistan is still to issue the Consolidated National Schedule giving effect to the Second SAPTA Agreement. I would suggest to them to do so, and to ensure that this is on a non-discriminatory basis in conformity with the provisions of SAPTA. I would also ask them to trade with India in line with their international commitments and obligations.

The Third round of SAPTA negotiations made a promising start in July this year, with all delegations agreeing to follow an across-the-board or sectoral approach to speed up trade liberalisation. There have, however, been delays in scheduling the next meeting. It is time that we collectively ensure that the momentum is maintained.

India remains committed to fast forward SAPTA liberalisation. I make this opportunity to offer that, as a special gesture. India will be prepared to lift quantitative restrictions on agreed items of interest for Bangladesh and other Least Developed SAARC Countries. Our negotiators will also have the requisite mandate to reduce tariffs significantly with deeper cuts for Bangladesh and the Least Developed SAARC Countries as part of the latest round of trade preference talks. This should impart the required momentum in the SAPTA liberalisation process. Our SAARC partners, particularly Bangladesh, will also have an added opportunity to access our market and enhance their exports to India.

The achievement of a Free Trade Area in South Asia will not only provide a stimulus to trade and investment within the region, but would also make the region a more attractive destination for foreign investors. With an enlarged regional market of more than one billion people, the SAARC partners would acquire a greater weight and significance in their global and regional strategies. I am glad that SAARC has recently commenced discussions on promoting investment in the region. We must move to quickly put into place a Regional Taxation and for settlement of commercial disputes. This would significantly enhance investor confidence and create an enabling environment for greater investment flows. To encourage Indian entrepreneurs to invest in South Asia, I am glad to announce that the Indian government has decided to double the ceiling for overseas Indian Investment under the Fast Track in this region.

Today, trade liberalisation alone is not sufficient for expansion of trade and investment. We have to speed up our arrangements for trade facilitation. I am glad that meaningful initiatives have been taken by SAARC in this direction. Given our common administrative background, it should be possible to quickly work out conformance and harmonisation arrangements in areas such as Customs Procedures, Standards and Quality, and Electronic Data Exchange leading to paperless trade. This will help reduce transaction costs and make intra-SAARC trade more efficient and prosperous for our business.

Limitations in physical infrastructure also act as brake on the growth of trade. Intra-Regional Transportation and Communication links remain weak. Improvements in these sectors are critical if we are to derive the full benefits of geographical proximity. We need to identify additional routes by road and rail, augment air links and look at ways to reduce freight costs by sea. Port infrastructure also needs upgradation and development. India is prepared to work with its neighbours in identifying and undertaking joint projects, both short-term and long-term, to improve and upgrade transport facilities. We must develop the capacity to not only handle the anticipated expansion of trade within the region but also connect t the proposed trans-Asian transport networks. Our region is strategically situated at the crossroads of Asia, between the oil rich countries in West and Central Asia and the dynamic economies of South East Asia. We should derive full benefit from this advantage.

As an immediate measure, India is prepared to double the number of freight trains from India to Pakistan from the existing level of 10-15 trains a month to one every day. We also offer to increase the frequency of the Samjhauta Express, which presently runs twice a week from India to Pakistan, to six times a week. This would not only be in keeping with our commitment to make travel easy within the region and promote greater contact between our peoples, but would also signal our resolve to move forward in practical ways.

Regional cooperation, today, is no longer driven only by exchange of commodities and manufactures. We should, therefore, establish tradability of some key resources that our region is richly endowed with, so that true complementarities are brought into play. Only then will South Asian economic cooperation have a significant trade creating and growth generating impact. This is a rich seam that has remained unexploited to our collective loss. Let us, at this Summit, pledge that we will make up for lost time and opportunity and work to establish arrangements on a bilateral or trilateral basis to enable and facilitate such exchanges in key resources like electricity, natural gas, etc. We will find that our private sectors will be very interested, as will be international funding agencies and foreign investors. India, for one, provides a large and virtually inexhaustible market for many of these resources. I offer to optimally harness these resources through concrete projects involving Joint Ventures, both at Government and Private Sector levels, and buy these from our neighbours for mutual benefit. This too will augment the exports of our SAARC neighbours to India. As a first step towards regional cooperation in the field of energy, I propose that SAARC undertake a study on the possibility of a Regional Electricity Grid.

On international trade issues, there is so much that our countries can do together, because we have common concerns and expectations from the existing WTO regime. Even on new issues, there is a striking convergence in our views and approaches. So let us use the SAARC mechanism to become an interest group within the group of developing countries, pressing for a development friendly orientation to the International Trading System. Trade and Industry should also coordinate their thinking and provide inputs to help us evolve a South Asian view on the WTO.

The private sector has played at important role in the common endeavour to expand trade and commercial links and accelerate economic growth in our region. We commend the work done by the SAARC Chamber of Commerce and Industry in throwing up ideas, posing ambitious targets and forging a consensus. It is heartening that we can count on the full support of our business communities in building the framework for economic cooperation in our region. Indeed, they must take the lead in evolving concrete proposals for mutually beneficial business cooperation, looking beyond a Free Trade Area towards a South Asian Economic Community with the free movement of capital, goods and services within the region.

Excellencies,

Ladies & Gentlemen.

We stand at the threshold of a new century. This century has seen us attain political independence, an epoch-making event that triggered the end of the colonial era across the world. I am confident that, in the next century our region will successfully overcome poverty and usher in an era of prosperity. Our products will once again be recognised for their excellence, even as our workers will be prized for their skill and ingenuity. We require statesmanship, vision and perseverance in fully harnessing the synergies that would flow from regional economic cooperation if we are to fulfill this promise.

I am reminded here of a verse from the Rig Veda, one of the oldest treaties of the Indian subcontinent. It says, and I quote;

"May you walk in step together,

May you speak in one voice,

May your minds unite in knowledge".

Unquote.

I hope we can keep these simple words in the backs of our minds, even as we strive together for a brighter tomorrow for our peoples.

Thank you.