ISLAMABAD, Jan 3: The signing of SAFTA framework treaty will send out a loud message to the world that countries of the region are now serious about economic cooperation despite political and other differences.

President, Federation of Indian Chambers of Commerce and Industry (FICCI), Yogendra K. Modi told Dawn following his speech at a symposium on Saarc cooperation the other day, that the experience of other successful trading bloc like North American Free Trade Authority (NAFTA), European Union (EU) world over in raising the income levels and living standards reveal the imperative need for South Asian leaders to give top priority to economic issues at Islamabad Summit. The symposium was organized by Saarc Chambers of Commerce and Industry.

"The entire world is looking with interest and shall be observing the development at Islamabad carefully," the president said.

He said that he was optimistic that this Saarc Summit would mark historic turning point and lay the foundation of economic integration in South Asia.

Mr Modi said that even regional blocs were possible for countries with diverse cultures, currencies, political system and varied resources to come together to provide a much stronger and larger economic base to spur growth- like NAFTA, EU and Asean.

Contrary to this, the FICCI president said that the countries of the South Asia share very close geographical, cultural and socio-economic affinities. "There is no reason why we cannot have active cooperation between our economies and emerge as a larger integrated South Asia," he added.

"The Asean is a more encouraging example for us as they came together when their individual economies were not so strong, he said adding, but all of them emerged stronger after the formation of Asean.

Citing examples, Mr. Modi said the intra-regional trade for NAFTA was 51.7 per cent; for EU it was 55.2 per cent; for MERCASUR it was 25.1 per cent; for ASEAN 25.4 per cent and for SAARC it was only 5.3 per cent.

There was the possibility that the intra-trade in case of Saarc might go to 20-25 per cent following the realization of the treaty, he said.

The president of the FICCI made some suggestion for South Asia Economic Union including signing of SAFTA; capital account convertibility with Saarc; integration of central banks of Saarc countries; common institutions for South Asian governance and common currency.

FPCCI: Expressing approval and satisfaction on the agreement of Council of Ministers of Saarc for creation of Saarc Free Trade Area, Riaz Ahmed Tata, President FPCCI stated that the year 2004 could well be a year of greatly enhanced Regional Trade in the South Asian Region, adds PPI.

According to Tata, since the creation of Saarc in 1985, the 11 Saarc Summits held, but it achieved absolutely no socio-economic gains for the very important region of South Asia which has 20pc of the global population and physical resources.

The President, FPCCI, was very optimistic that the 12th Saarc Summit scheduled could prove a breakthrough for the region's trade, which has stagnated around 5pc as against 68pc of EU, 55pc of NAFTA, 22pc of Asean and 11pc of SADC.

According to Tata, the spontaneous outburst of goodwill and positive orientation of all Saarc Ministers had resulted in important decisions beyond every ones expectation as a result of which important and far reaching decisions could be expected in the Saarc Summit for the greater good of this vast and important region.

The president FPCCI hoped that the ambitious undertaking of the creation of free trade area amongst the Saarc countries would bring about enormous socio-economic development in the region which, remains poverty stricken, despite huge potential and resources.

He was confident that SAFTA would bring about revolutionary changes in the member states as a result of enhancement of trade in important socio-economic areas of poverty reduction, communications, transport, education, health, agriculture, industry and tourism. Tata urged the Saarc Head of States, relevant Ministers and private sector representatives not to lose the current momentum and continue with the thrust of positive developments, so that Saarc becomes the indispensable instrument of growth and development in the region.

President FPCCI emphasised the need for continuous coordination, cooperation and consultations between the representatives of government and private sector even after the Summit to effectively and efficiently implement the important decision taken by the leaders.