From rivalry to regionalism: Overcoming the India–Pakistan divide for the revival of the South Asian Association for Regional Cooperation

Abstract

The South Asian Association for Regional Cooperation (SAARC), established in 1985 to promote regional economic integration, peace, and development, has consistently underperformed compared to other regional blocs like the EU and ASEAN. This paper examines the root causes of SAARC’s stagnation, focusing on the protracted rivalry between Pakistan and India, which together constitute 87% of the region’s population and 90% of its land area. Historical grievances, territorial disputes—notably over Kashmir—and mutual distrust have perpetuated a security dilemma, diverting resources from development to militarization and rendering initiatives like the South Asian Free Trade Area (SAFTA) ineffective. Drawing on structural realist and liberal institutionalist theories, this study argues that SAARC’s failure stems from an inability to reconcile security competition with economic interdependence. While nuclear deterrence has paradoxically enabled limited engagement, the absence of robust institutional mechanisms and political will has hindered deeper cooperation. The paper proposes a phased framework for revitalizing SAARC, emphasizing economic diplomacy as a trust-building tool. Lessons from the EU’s Franco-German reconciliation and ASEAN’s functional cooperation underscore the potential of trade normalization, sectoral agreements, and soft power tools (e.g., cultural exchanges, multilateral summits) to mitigate tensions. A three-phase model—bilateral trade normalization, multilateral engagement, and institutional reforms—is proposed, alongside soft power tools like SCO-mediated dialogues. Empirical findings reveal that intra-regional trade remains at just 5% of its potential, with 87% of SAARC summit deadlocks linked to India-Pakistan disputes. However, pilot projects like the Karachi-Mumbai shipping corridor and SCO-mediated dialogues demonstrate the viability of incremental integration. The study concludes that SAARC’s revival hinges on depoliticizing economic collaboration, addressing power asymmetries, and fostering civil society engagement. By rebalancing from security rivalry to shared prosperity, SAARC could emulate the EU’s transformative trajectory, unlocking the region’s untapped potential. The choice for South Asia is clear: persist in stagnation or harness interdependence as a catalyst for peace.