Last week’s South Asia Association for Regional Cooperation (SAARC) summit in Nepal proved another disappointment as leaders of the eight nation grouping only managed to sign one agreement, the creation of a regional electricity grid. Pakistan was blamed for blocking the other two agreements that were on the table, covering road and rail links. There was also no progress in agreeing on how to fight terrorism which was regarded as a top priority of SARRC leaders.

The summit did agree on a declaration setting a 15 year target for developing a regional economic community. It contained several lofty aims to promote cooperation on cyber, culture, health, food security and so on but it is doubtful if any of the aims will be realised given the poor state of relations between the members.

Most media attention focused on the leaders of the two main countries in SAARC, India and Pakistan. A brief handshake for the cameras between India’s Prime Minister Narendra Modi and Pakistani Prime Minister Nawaz Sharif was described as another summit ‘success’.

Modi had made developing relations with his South Asian neighbours a priority of his foreign policy and had also talked of revitalising SAARC. The historic rivalry between India and Pakistan, however, is one of the main reasons for the failure to achieve much progress with SAARC. Despite a 2006 free trade agreement, high tariffs and many non-tariff barriers are a major handicap to regional trade. Pakistan is also wary of India seeking to increase ties with Afghanistan.

China, which has observer status in SAARC, has not been slow to take advantage of the poor relations between SAARC members. Attracted by the size of the market, in recent years it has significantly boosted its presence in South Asia, providing loans, boosting trade and investing in infrastructure. At the summit it offered further loans for infrastructure as well as 10,000 scholarships for South Asians. Beijing would like to upgrade its status in SAARC to a full member or dialogue partner but India views China as a rival in its own backyard and is ready to block such a move.