Hon. Prime Minister of Pakistan Mir Zafarullah Khan Jamali
Excellencies,
Heads of State and Government,
Distinguished Delegates,
Ladies & Gentlemen,

It gives me great pleasure to be present here, in this beautiful city of Islamabad, to attend the 12th SAARC Summit. I avail myself of this opportunity to thank His Excellency President Pervez Musharraf, Prime Minister Jamali and the Government of Pakistan for the warm welcome and the generous hospitality that my delegation and I have been privileged to receive. The excellent arrangements made for this Summit would, I am assured, contribute to the success of this meeting.

On behalf of my Government and my own behalf, I wish to extend to you, Prime Minister Jamali, our congratulations and good wishes on your assumption of the Chairmanship of our Association. We are confident Excellency, that under your wise and committed guidance, SAARC will make positive progress on its long journey towards the achievement of our common objectives.

Mr. Chairman, I feel encouraged by the deep commitment you have expressed towards the SAARC process. I am personally aware of Your Excellency's abiding interest in the progress of SAARC.
The thought provoking and constructive ideas expressed by you today, would prove to be immensely useful in our deliberations in the next few days.

I take this opportunity to pay tribute to His Excellency the Prime Minister of Nepal, Rt. Hon. Surya Bahadur Thapa, for his wise leadership of SAARC under difficult circumstances. Your Excellency, the SAARC process has indeed been enriched under your guidance.

I wish to express our deep appreciation to Secretary General Mr. Raheem, for the significant role he has played in the implementation of the decisions taken at the last SAARC Summit in Kathmandu. I wish him further success in his stewardship of our Association.

Mr. Chairman, Excellencies,

SAARC has during its relatively short existence traversed a difficult path, seeking its way through the thickets of intra-regional and bilateral tensions. Yet, I have always believed that the aspirations of our peoples of South Asia, coupled with the necessity for an integrated regional co-operation amongst our member States will triumph over all obstacles. Our presence here, today, for the convening of this Summit here in Islamabad, is proof enough of the commitment of all member States to make SAARC a living and dynamic force, despite the challenges that we are called upon to face from time to time.

The vision and courage demonstrated recently by the leaders of India and Pakistan in their efforts to resolve bilateral issues, have infused this Summit, as well as the process of SAARC, with a renewed sense of purpose and vigour. Our prayers and good wishes will be with you during this historic moment in Indo-Pakistan relations.

Our Summit takes place at a moment in the history of international relations when regional co-operation seems to demand center stage, as an effective means of attaining the benefits of economic co-operation and for the protection of the rights and interests of States particularly of developing States. Several regional organizations of North America, Europe, East Asia and the Pacific are surging ahead, achieving great successes for their member States.

We, in South Asia, face the danger of marginalization in the global economy and thus, even the risk of regression in the spheres of economic and social development. But recent developments in our region have given us great cause for hope for the future of SAARC. The reduction of tensions between the two largest member States of our Association gives rise to much confidence. The singularly significant statements made by His Excellency Prime Minister Vajpayee recently in New Delhi, at a symposium titled the "Peace Dividends-Progress for India and South Asia", is an expression of the clarity of his vision and his courage with regard to the promotion of co-operation in our region.

Prime Minister Vajpayee explained there, how we could put aside mistrust and dispel suspicions in each other, through the development of greater economic co-operation and how we could jointly resolve the problems of arms smuggling, drug trafficking, money laundering and other crimes.

Excellency, you went on to make a historic statement that "once we reach that stage we would not be far from mutual security co-operation, open borders, and even a single currency". Let us then, resolve to move forward without further delay along the path of our chosen collective objective of faster economic integration in the region.

Mr. Chairman, the spirit of co-operation that recently prevailed in the region has brought us tangible benefits.

(1) South Asia Free Trade Agreement (SAFTA)

The efforts made by all our countries to conclude SAFTA have finally secured the finalizing of the agreement. Sri Lanka is particularly pleased that this Summit will see the signing of the Framework Treaty on SAFTA. This is indeed a historic step for regional economic co-operation. We must now ensure that we finalize the annexure in order to operationalise the treaty by 2006.

Accommodation and compromise will be required wherever economic asymmetries exist. It is necessary that we keep in mind that short-term losses would be compensated by the opportunities gained from trade expansion under SAFTA.

As the pioneer South Asian State to undertake economic liberalization, Sri Lanka welcomes the conclusion of SAFTA, even though ours is a small and vulnerable economy. We are pleased to have made a significant contribution to the process of trade liberalization in our region, through the processes of SAPTA and SAFTA.

I would like to caution fellow member States that as the Secretary General states in his report, SAFTA may not automatically lead to enhancement of intra-regional trade. We need a number of trade facilitation measures in order that we achieve the benefits of SAFTA. Let us never forget that despite our geographic proximity and certain similarities of economic infrastructure, intra-SAARC trade still remains at an extremely unsatisfactory 5%, compared for instance, with 38% within ASEAN.

Today, we conclude the SAFTA arrangement at a moment when the world has arrived at the realization of some of the disadvantages of the present multilateral trade processes, such as the WTO. This situation has given a new relevance to regional co-operation. We believe that SAARC could provide valuable options for South Asia.

I wish to place before this Summit that at this historic moment when SAARC has reached the point when, with the signing of SAFTA, we have the possibility of accelerating our progress towards social and economic development. We would need to formulate a clear vision and a plan of action to situate the economies of South Asia within the global economy. We must strengthen the present arrangements between SAARC members for consultation on WTO issues. Regular consultations on strategies to be adopted by member States, regarding all WTO policies and issues has become essential.

Needless to say, that we have to take into account our own specific civilizational ethos, our cultural traditions and value systems, when aligning our economies with the rest of the world. It is important to note that globalization does not mean the continued hegemony of the richer nations imposed upon the poorer ones. Globalization should afford the space and freedom to developing nations, in order that they become active partners of the globalised economy, while recognizing the specific conditions and thereby the needs of developing countries and their right to make their own economic policy choices.

In this context, may I venture to propose that :

- We may have to consider the re-negotiation of the World Trade Agenda.

- The principles that underlie decisions in trade must attempt to create a level playing field for developing and developed nations. For instance, policies regarding subsidies and competitive markets must be the same for all States. We cannot be called upon to abandon vulnerable sectors of our economy such as the farmers and small industrialists to the whims of the global markets, while developed nations operate extensive protectionist policies for these sectors in their countries.

- We may also need to consider a collective approach to the concept of debt forgiveness to be adopted as an international policy, if we are to win the war against poverty in our region.

(2) Poverty Alleviation

This brings us to the all important issue of poverty alleviation. This subject has long remained on the SAARC agenda without much progress. Although our region boasts of rich human resources and vast technological advances, a rich diversity of bio-resources and unexploited energy resources coupled with a comparatively young population, South Asia continues to have the highest number of people in the world living below the poverty line.

A few laudable initiatives relating to poverty alleviation have been undertaken by SAARC since the last Summit. The South Asian Commission on Poverty Alleviation has been re-constituted with the objective of formulating and implementing measures for alleviation of poverty in the region. "The Regional Poverty Profile" has also been completed and will serve as an important database on poverty. An Action Plan has been formulated by our ministers of Finance and Planning. We now need to streamline these positive initiatives and to undertake early implementation of the Plan of Action. The ISACPA report underlines the advantages of exchanging the experiences of successful programmes within the region. The report makes special mention of some of Sri Lanka's successes in this field. We could discuss these issues in further detail in Colombo when Sri Lanka hosts the third round of Ministerial meetings.

(3) The Social Charter

We are also particularly pleased with the conclusion of the SAARC Social Charter, which will be signed at this Summit. The concept of a Social Charter was proposed at the Colombo Summit in 1998 and I am pleased that Sri Lanka had the privilege of guiding the initial steps towards the conclusion of the Charter. We must congratulate Nepal for the efforts that went into the conclusion of the Charter.

This Charter is an important landmark in the SAARC process. It encapsulates a vision that was formulated through an open, inclusive process, which obtained the participation of a broad spectrum of civil society. This Charter adopts broad goals and objectives for national action in a variety of spheres ranging from poverty alleviation to health, education, women, youth and children.

(4) SAARC Convention on Suppression of Terrorism

At the last Kathmandu Summit we recognized that terrorism with its ever-increasing linkages to drugs, arms trafficking, and money laundering, constitutes one of the most serious threats to international peace and security in the 21st century. The events of September 11, 2001, marked a watershed in the global security environment and the commitment of the international community to combat the phenomenon of terrorism.

We have seen the strengthening of the UN legal network relating to the suppression of terrorism in particular financing of terrorism, through the adoption of several conventions and resolutions in the last three years. Sri Lanka's proposal to the Kathmandu Summit to draft an Additional Protocol to the SAARC Convention on Suppression of Terrorism, with the purpose of incorporating these new obligations will be realized with the adoption of the Additional Protocol at this Summit. We greatly welcome this development, which will strengthen the SAARC Convention concluded 16 years ago and bring our organization in line with international efforts at combating terrorism.

I had occasion to state at our Kathmandu Summit that in the past decades, terrorism has become the one, single most, terrifying factor in national and international politics.

I also observed that an important corollary to combating terrorism is the identification and resolution of root causes through courageous and bold approaches.

In Sri Lanka, we are beginning to witness the benefits of such an endeavour. The initiative undertaken by my government in 1994 to resolve the ethnic question and the subsequent armed conflict, through a process of dialogue and negotiations, was revived two years ago by the present government. The process is a complex and an intricate one. We are attempting to deal with the core issues of the ethnic question within the framework of sovereignty, territorial integrity and national security of the State. The situation is further compounded by the delicate balance required for cohabitation within the government between the two major political parties. I believe that we are all firmly resolved to move the process of peaceful resolution of the conflict forward despite differences of opinion and style. The Ceasefire Agreement between the Government and the LTTE has continued for two years now. The Government, the Prime Minister and I are resolved to see the Peace Process move forward overcoming the various obstacles we confront today.

(5) Autonomous Advocacy Group of Women Personalities (AAGWP)

The constitution of the Autonomous Advocacy Group of Women Personalities (AAGWP) is another SAARC initiative, which I have followed with interest. This will be an effective measure in formulating gender responsive policies in the region.

(6) Child Welfare & Trafficking in Women and Children for Prostitution

Two important Regional Conventions relating to Child Welfare and Trafficking in Women and Children for Prostitution were concluded at the 11th Summit. Sri Lanka has ratified the former Convention and the latter will be ratified this year.

(7) People to People Contact in the Region

The true measure of the success of regional co-operation does not lie in the frequency of official meetings or even in Summit level interaction, but in the frequency and depth of people to people contact in the region. I am of the opinion that we need to further strengthen interaction between the official SAARC activities and the non-official linkages. In order to remain relevant, SAARC should expand beyond its official ceremonial activities to involve its intended beneficiaries - the people.

This requires primarily the removal of barriers to intra-regional interaction. Some of these barriers are physical, such as inadequate channels of access and information, while others are intangible results of political insecurity vis-à-vis our neighbours. We need to make further efforts to improve air travel as well as other modes of transport between our countries. Ironically, many SAARC countries remain better connected to extra regional destinations than to others in the SAARC region.

Sri Lanka has also taken the initiative in exempting SAARC nationals from visa requirements for purposes of tourism and business. The common historical and cultural heritage of the region also needs to be recognized as a linkage that fosters greater regional interaction and identity.

I must also refer to the growing importance of the role played by intellectuals, professionals and eminent persons is an important complimentary process, which brings together the peoples of our region. Sri Lankans are taking lead roles in the Sri Lanka chapters of the APEX bodies of SAARC such as SAARC Chambers of Commerce and Industry (SCCI), SAARCLAW and South Asian Federation of Accountants (SAFA).

(8) SAARC Cultural Centre

In this context, I have taken personal interest in the establishment of a SAARC Cultural Centre in Sri Lanka. Our vision for South Asia runs contrary to the contemporary interpretation prevalent in some quarters, where culture is seen as a dividing influence. Our ancient and rich South Asian cultures have been enriched by many civilizations, and the SAARC Cultural Centre will symbolize the potential for unity in such diversity.

Mr. Chairman and Excellencies,

I truly believe that today SAARC has arrived at the threshold of effective action for the realization of the dreams and aspirations of our peoples for collective action towards achieving freedom from poverty, from ignorance, underdevelopment and perhaps from constant conflict. The new sense of revival, together with the continued commitment of us all to SAARC, I am certain, will ensure positive progress under the able guidance and the committed leadership of Prime Minister Mir Zafarullah Khan Jamali.

I wish you, Mr. Chairman, the Government and people of Pakistan all success in discharging the challenging tasks that lie ahead of you.

Assalamu Allaikkum,
May the Triple Gem Bless You
And
God Bless You.