"I join my other colleagues in congratulating the Prime Minister of Pakistan on his taking over asChairman of SAARC. I would like to convey our sincere appreciation to the Government of Pakistan for theexcellent arrangements made for this Summit, and for the warm hospitality extended to our delegation.

I also join other delegations in commending the immediate past Chairman – Nepal – for the energy anddedication with which it guided SAARC activities during these last two years. This was in spite of the manyimportant domestic preoccupations of His Majesty’s Government of Nepal. The spadework for many of today’ssuccessful outcomes was done in the various meetings of Ministers and officials in Kathmandu.

At the last Summit in Kathmandu, I had said that, at sixteen years of age, SAARC needed a dose of economic andsocial realism to move from adolescence to adulthood. Our organization is now 18 years old. I think we canlook back with considerable satisfaction over what we have achieved since the last Summit. We have finalized aSocial Charter. We have moved forward on Preferential Trading arrangements and have concluded a frameworkagreement for SAFTA.

We have agreed on an additional protocol, which significantly updates our 1987 Convention against Terrorism.Our Independent Commission on Poverty Alleviation has done sterling work in putting together a set ofsubstantive recommendations for a regional approach to poverty alleviation.

Much more remains to be done. In its 18 years of existence, SAARC has created high expectations amongst thepeople of the region. We should be candid in accepting that these expectations have not been fulfilled in themeasure of the potential. The benefits of SAARC have not yet touched the lives of ordinary people.

A Group of Eminent Persons, which we set up after the Male Summit, had reviewed the strengths and weaknessesof SAARC and made certain recommendations for its improvement. We are still debating how to make progress onmany of these recommendations. We need to move from the realm of ideas to plans of action. Our statements ofgood intentions have to be translated into programmes for implementation.

The work of our Independent Commission on Poverty Alleviation illustrates this point. The Commission has notedthat in spite of the endemic and widespread poverty in all our countries, South Asia has a rich tapestry ofbest practices, cutting across sectors and regions. Many of these practices have attracted global renown.

Yet we have done almost nothing to document them systematically, to disseminate the lessons from them and toexpand their application to regional poverty alleviation programmes.

I would urge all our fellow South Asian countries that we should now act with purpose and focus to implementthe Commission’s recommendations.

Let us set up a dedicated Task Force – with representatives from each of our countries – to carryforward this implementation work. This Task Force can be set up either under the umbrella of the SAARCSecretariat, or independently. In the latter event, India is willing to host the task force. In either case,we are willing to fund the establishment and logistical costs of establishing and running such a task force.

I would propose, in addition, a Poverty Alleviation Fund, which can be professionally managed and can fundspecific poverty alleviation programmes and projects in our countries. Once we have agreed on the modalitiesof creation of such a fund, and on its charter, India would be willing to make an initial contribution of US $100 million to this Fund, on the understanding that this money would be used entirely on projects within SAARC,but outside India.

Once we have agreed on the modalities of creation of such a fund, and on its charter, India would be willingto make an initial contribution of US $ 100 million to this Fund, on the understanding that this money wouldbe used entirely on projects within SAARC, but outside India.

The Poverty Alleviation Commission has proposed that before 2010 South Asia could reduce poverty by half, andalso reduce by half the number of people without safe drinking water and sanitation.

The UN Millennium Development Goals aim to achieve these targets by 2015. With our rich natural resources, ourtechnical manpower base, and our recent economic resurgence, South Asia can – and should – achieve thesetargets faster.

Let us now resolve that we will try to achieve all the Millennium Development Goals by 2010.

Again, India is willing to support the establishment of a SAARC Group, which could draw up strategies toensure this, and would specially support those countries which are falling behind this schedule.

Any joint endeavour needs mutual trust and confidence. For many decades, South Asian countries – which havea complex and troubled colonial legacy – have been unable to forge an integrated economic understanding,circumventing political differences.

Mutual suspicions and petty rivalries have continued to haunt us. As a result, the peace dividend has bypassedour region.

History can remind us, guide us, teach us or warn us; it should not shackle us. We have to look forward now,with a collective approach in mind.

Not very long ago, I had visited the Andaman Islands, where during our colonial days, political prisoners werekept in confinement. On the inscriptions in the Cellular Jail there, I found many names of brave martyrs andfreedom fighters from what are today three South Asian countries.

Our forefathers fought side by side, transcending religious, regional and linguistic differences against acommon colonial oppressor in our first war of Independence in 1857. It reminds us that many of us have ashared history, which pre-dates our more recent divisions.

In two years’ time, we will enter the 150th Anniversary of that stirring uprising. Perhaps India, Pakistanand Bangladesh can together celebrate that anniversary, in remembrance of our joint struggle against a commonadversary.

We have to learn appropriate lessons from the experience of other countries. After centuries of fratricidalconflicts and wars, Europe is now uniting to emerge as the world’s most powerful economic grouping. Closerhome, the ASEAN countries have found it possible not to allow their political problems to come in the way ofeconomic cooperation.

Examples of ever deepening regional cooperation can be seen in Africa, Latin America and the Caribbean regionwhere also countries have a long history of bitter hostility towards each other. All these examples remind usthat rational economics should triumph over political prejudice in South Asia.

We should undoubtedly encourage free movement of people across the SAARC region. At the same time, we needsufficiently strong controls so that illegal migration is prevented.

We have to create more opportunities for free commercial interaction between us. This also requires jointlytackling smuggling, drug trafficking, money laundering and gun running, all of which today flourish across ourborders because of our mutual rivalries and inadequate coordination.

The development of greater economic stakes in each other would naturally result in greater sensitivity to theconcerns of each other. This would pave the way for the more ambitious – but entirely achievable – goalssuch as a Free Trade Area, an Economic Union, open borders and a common currency for our region.

In this context, I would like to draw attention to the courageous action taken by His Majesty the King ofBhutan and his government against insurgent groups, which were trying to use Bhutanese territory to launchterrorist activities in India. It is an outstanding example of sensitivity to the security concerns of aneighbour, which is at the same time in the direct long-term security interest of Bhutan itself.

World-class connectivity is key to faster development. The establishment of a modern Multi-modal TransportInfrastructure of road, rail, air, waterways and sea-links should be one of our priority objectives.

Again, a SAARC Task Force can be formed, with representatives from all our countries, which could commissionor prepare techno-economic feasibility studies of major transportation links. India would be willing to fullysupport this venture; we would also be ready to make a substantial contribution to actually creating theviable infrastructure links recommended by the Task Force.

Development is increasingly dependent on free information flows. An information society is emerging all overthe world. A digital divide between and within SAARC countries could retard development and raise socialtensions.

SAARC countries have to transform their societies into "knowledge economies". India is prepared to shareits recent experiences with other SAARC countries in this regard. We are willing to contribute to the widestpossible cooperation in the use of IT, bio-technology and other S&T inputs for achieving our prioritygoals in socio-economic development.

Regional water and energy cooperation projects merit high priority. Our common rivers are a valuableresource for energy, irrigation and transportation. We have vast untapped hydro-carbon resources. A rationalexploitation of these shared resources, with equal benefit to all stakeholders, can take us a long way towardsreal integration of South Asian economies.

When I landed in Islamabad yesterday, a hoarding near the airport caught my attention. It said, "Together westand a better chance in the world". This is not a mere slogan. It aptly expresses a profound truth, whichsouth Asia is still to grasp fully.

We have to change South Asia’s image and standing in the world. We must make the bold transition frommistrust to trust, from discord to concord, and from tension to peace.

The bonds of religion, language, ethnicity and culture which hold us together as a South Asian family are farmore enduring than the relatively recent barriers of political prejudice that we have erected. We should renewthese bonds to jointly overcome poverty, disease and hunger.

Our region is blessed with rich and varied human resources, a young population, vast markets forintra-regional trade, large energy resources and a rich biodiversity.

In other words, we have the potential, talent and resources to make south Asia an economic powerhouse of theworld. We only need the necessary political will to make this happen. This is the agenda which we leaders ofSAARC should strive to advance in the coming years."