Business · Sri Lanka Bureau
SAARC's Unfulfilled Promise: Why Regional Cooperation Remains Elusive
South Asia possesses vast untapped potential for economic integration through energy cooperation and regional trade, yet political tensions and divergent national interests have prevented SAARC from achieving meaningful progress that peer regional bodies have realised.
LSN Sri Lanka ·
The South Asian Association for Regional Cooperation (SAARC) has consistently fallen short of its collaborative potential, particularly in harnessing the region's substantial energy resources for mutual benefit. Nepal and Bhutan sit atop enormous hydroelectric reserves, while Bangladesh faces mounting energy demands and India requires significant power imports to fuel its economy. Pakistan confronts critical energy shortages, and Sri Lanka possesses considerable renewable energy capacity and strategic shipping advantages—yet these complementary strengths remain largely unexploited through regional frameworks.
A coordinated electricity market connecting Bangladesh, Bhutan, India and Pakistan could theoretically address acute energy deficits across the region while generating substantial economic returns. Cross-border power transmission infrastructure would enable resource-rich nations to monetise their hydroelectric and renewable capacity whilst supplying affordable energy to neighbouring countries. Similar regional cooperation models have succeeded elsewhere globally, demonstrating the viability of such arrangements when political will exists.
SAARC's inability to translate these economic opportunities into concrete initiatives reflects deeper structural challenges within the eight-member organisation. Bilateral tensions between major powers, inconsistent commitment levels, and protectionist trade policies have repeatedly derailed ambitious collective projects. Unlike comparable regional bodies that have achieved measurable integration, SAARC remains constrained by geopolitical friction and competing national priorities that override broader South Asian interests.
Experts contend that unlocking SAARC's dormant potential requires political leadership willing to subordinate immediate bilateral disputes to long-term regional prosperity. Successful models from other continents suggest that energy cooperation frequently serves as a catalyst for broader economic integration and confidence-building. For South Asia's citizens, the cost of continued stalemate—foregone development, elevated energy costs, and missed prosperity—continues mounting.