The security outlook for South Asia and the broader Asia-Pacific region is generally positive and stable. However, situation in Afghanistan and Middle East is clouded with uncertainty. International terrorism remains a major challenge. Relations among the major powers continue to improve while regional states are occupied with economic cooperation and development. Pakistan and India, continue to promote political and security dialogue and cooperation towards consolidating trust and confidence. These countries - the largest economies in South Asia are experiencing significant socio-economic transformation.

The issue of regional cooperation has to be seen in the context of regional history, geopolitical heritage, and economic structure, including the infrastructural and political barriers to regional integration. The concept that collective regional economic prospects of the countries exceed the total sum of their individual prospects provides sound economic reasoning of regional cooperation. WTO in the context of globalisation allows such agreements providing they don’t create trade barriers for countries not falling under these groups. The Pakistan Vision 2030 looks for closer cooperation with SAARC and ECO and charts a new direction towards partnership with ASEAN and Shanghai group etc. Vibrant, socially cohesive and caring regional organisational arrangements could be seen where hunger, deprivation and poverty are no longer basic problems. The civil society is empowered and gives special attention to vulnerable groups. And social justice and rule of law reigns. The regional countries should commit themselves to narrow the gap in the level of development, ensuring that multilateral trading remains fair and open while achieving global competitiveness.

The regional cooperation arrangements, the SAARC and the ECO, since their existence, have not achieved the desired results. On economic front, even intra regional trade of member countries with respect to their GDP, hardly exceeds the pre-existence level. Therefore to foster economic development and welfare of the people of the cooperating countries, benefits of economic complementarities, large markets, economies of scale, specialisation and optimal utilisation of human, physical, natural and technological resources are to be reaped.

Economic integration with SAARC and ECO has to be strengthened and expanded through all embracing collective efforts based on dynamic comparative advantage. Deepening and broadening of economic integration has to be accomplished by undertaking the following measures:

(1) Implement the SAARC-South Asian Free Trade Area Agreement by accelerating liberalisation of trade in agriculture, energy, textile and tourism. Broaden liberalisation commitments to encompass non-tariff barriers, promote inter-regional investment and services, and strengthen trade facilitation. ECO-Transit Trade Agreement and Transit Transport Framework Agreement on implementation with public-private partnership will not only provide efficient transit system in the region but would also integrate geographically landlocked regions with the global market.

(2) Promote a modern and competitive small and medium enterprises (SMEs) sector in SAARC/ECO which will contribute to the industrial development and efficiency of the region.

(3) Accelerate the development of science and technology including information technology by establishing a regional information technology network and centres of excellence for dissemination of and easy access to data and information.

(4) Promote financial sector liberalisation and closer cooperation in money and capital markets, tax, insurance and customs matters as well as closer consultations in macroeconomic and financial policies.

(5) Establish interconnecting arrangements in the field of energy and utilities for electricity, natural gas and water within SAARC/ECO through trade and energy corridors. Specifically regional connectivity have to be enhanced through trade links/ energy & transport corridors with China, Central Asian Republics, Afghanistan and Iran.

(6) Enhance human resource development in all sectors of the economy through quality education, upgrading of skills and capabilities and training.

(7) Work towards a world class standards and conformance system that will provide a harmonised system to facilitate the free flow of SAARC/ECO trade while meeting health, safety and environmental needs.

(8) Use the SAARC forum as one of the instruments to address issues of development and poverty.

(9) Promote the SAARC/ECO customs partnership for world class standards and excellence in efficiency, professionalism and service, and uniformity through harmonised procedures, to promote trade and investment.

(10)Collaborate to counter terrorism and other translational crimes in relation to illicit drugs, human trafficking and cyber crime.