NEW DELHI, SEPT 12: Rupee could well be the new common currency of the SAARC Economic Monetary Union to be set up in 2020. Muchkund Dubey, former foreign secretary and a member of the group, said that the group deliberated on the issue and was close to concluding the common currency would be the rupee. However, the subject was not discussed further as the group had to take up other important matters, he said.The group was set up by the ninth SAARC summit held at Male in 1997 to identify measures including mechanisms to further vitalise and enhance the effectiveness of the association in achieving its objectives. The group has submitted its report to SAARC and the association would make a statement on it at a meeting in Kathmandu in November.The group decided on the rupee as the common SAARC currency as it (or a variant) was the currency in four member states. It is different only in Bangladesh and Bhutan - it is called taka in Bangladesh and ngultrum in Bhutan. The 12-member body suggested establishingof a SAARC economic union, which will include the monetary union as well, by 2020, in phases. Before setting up of the economic union other bodies like South Asian Free Trade Area (SAFTA) and customs union should be established.The group recommended that SAARC should approach the issue of setting up SAFTA in a phased manner. Small nations are apprehensive that their interests would be harmed if SAFTA is established and hence are demanding concessions from the big countries of the association, Dubey said. However, there is no arrangement for concession, he said.Dubey said given the impracticality of establishing SAFTA by 2002, the group suggested setting up of the free trade area by 2008 by prosperous nations of the bloc and by 2010 by the least developed nations. However, the work should begin by the turn of the century itself, he said. In the meantime, the committee on economic cooperation should continue and so should the inter-governmental expert group (IGEG) on the transition toSAFTA.Inter-governmental group should complete its work under SAFTA for facilitating trade negotiations after which its work should be taken over by IGEG. The committee of participants constituted under the SAPTA process should be abolished and its work should be transferred to the CEC.In the second stage, a South Asian Customs Union should be created, preferably by 2015. Before Economic Union comes into existence, relatively more developed countries of South Asia should permit partial convertibility of their respective currencies on capital account for the limited purpose of investment in the least developed and small economies of the region.
