Economic Cooperation Organization, Exploring new horizons of connectivity for regional prosperity

Economic Cooperation Organization

Since 1964 when Iran, Pakistan and Turkey created a platform for regional cooperation, the so-called “Regional Cooperation for Development (RCD)” and its revival as “Economic Cooperation Organization (ECO)” in 1985, the Organization has come a long way by identifying areas for regional cooperation, coordination and harmonization. The 13th ECO Summit in Islamabad marked the 25th anniversary of ECO enlargement to a 10-country organization, which took place in 1992 resulting in a unique regional intergovernmental organization in this part of the world. Despite all regional cooperative frameworks and networks formed over the three decades, it is an undeniable reality that the ECO has not yet realized regional integration and institutionalization. This attests to both the imperative of continued intra-regional cooperation and interactions, and to the need for a carefully designed architecture for regional integration.

The 13th ECO summit was held on March 01, 2017, in Islamabad under the theme “Connectivity for Regional Prosperity,” which assumed special significance in the backdrop of monumental project of China-Pakistan Economic Corridor. Representatives from all the ten member states — Afghanistan, Azerbaijan, Kazakhstan, Kyrgyzstan, Iran, Tajikistan, Turkey, Turkmenistan and Uzbekistan — besides a special representative from China, participated in the summit. The successful hosting of the summit in Pakistan has created new hopes to expand trade and economic relations, aimed at enhancing intra- and inter-regional connectivity in energy, infrastructure, transport and trade sectors. The Summit’s entire focus on ‘increased connectivity’ among the member states remained the key highlight.

The ECO Summit ended with the adoption of the ECO Vision 2025 and the Islamabad Declaration. The Vision 2025 envisions that “ECO will pave the way to a territory of integrated and sustainable economies as well as free trade area achieved by highly educated societies and improved governance through enhanced cooperation” while through the Islamabad Declaration, the leaders of the ECO countries have resolved “to work together, including by positioning the ECO to effectively address these challenges and to seize the opportunities for the collective benefit of the Region and its people.”

Taken together, these significant documents reiterated the desire of the member states to promote economic integration within the ECO region through doubling the intra-regional trade within the next 3-5 years and enhancing regional connectivity. There is no doubt about the desirability of these laudable objectives. The crucial question, however, is whether the member states, especially their leaders and senior officials, have the political resolve to achieve them through appropriate policy measures and sustained efforts on the ground. Unfortunately, the past performance of the ECO, despite its suitability as a regional economic organization, does not provide the basis for much optimism.

The ECO Vision 2015, adopted at the 15th session of the Council of Ministers of the ECO countries held in Astana on 1 October, 2005, had similarly proposed that the intra-regional trade be increased from 6% to 20% of the global ECO trade by 2015. According to the latest ECO documents, the total intra-ECO trade was estimated to be $58 billion in 2015, which was just 9 % of the global ECO trade amounting to $648 billion in the same year. The ECO Trade Agreement (ECOTA) signed in 2003, which was to be the main vehicle for the increase in intra-regional trade through the lowering of tariffs and the removal of para and non-tariff barriers, has not been operationalized as yet because half the member states are still to accede to it. The Transit Transport Framework Agreement (TTFA), which was adopted at the ECO Summit held in Almaty in 1998 to facilitate transport and trade among the member states, has still not been fully implemented. Unless the member states take urgent steps to fully operationalize ECOTA and TTFA, the goal of doubling the intra-regional trade within the ECO region will remain a pipe dream.

Recent experience also does not provide any evidence that the ECO, despite its obvious advantages for regional economic integration, enjoys high priority on the part of the leaders and senior officials of the member states. The ECO Vision 2025 and the Islamabad Declaration make high sounding claims about the seriousness of the member states in achieving the targets set in these documents. The discouraging reality, however, is that the 13th ECO Summit, which was due in 2015, was held in Islamabad after a delay of two years. The ECO Vision 2025, which was to follow the ECO Vision 2015, should have been adopted two years ago. An evidence of the lack of commitment to the ECO goals and objectives on the part of its member states is the rule under which the ECO Summit is held at three-year intervals rather than annually, which would have the effect of providing an added impetus to the working of the organization.

Finally, the continuing armed conflict in Afghanistan, which sits across the north-south trade and transport corridors within the ECO region, has been a major impediment to the promotion of intra-regional trade and connectivity. The civil war in Afghanistan also has the unfortunate effect of destabilizing the ECO region and creating tensions and bitterness among its members. The current tensions between Pakistan and Afghanistan are the offshoot of the Afghan civil war. The negative repercussions of the armed conflict in Afghanistan were driven home by its representation at the Summit i.e., the Afghan ambassador in Islamabad, rather than the Afghan President or another high level representative. There are no signs yet of the early resolution of this problem and the restoration of durable peace and stability in Afghanistan, casting further doubts on the realization of the targets set in the ECO Vision and the Islamabad Declaration.

This is not to make a case for assigning a low priority to the ECO. To the contrary, the need of the hour for Pakistan and other member states is to make all possible efforts for the success of this organization leading to the economic integration of the whole region to the benefit of all of its members. The ECO has all the prerequisites for the success of a regional economic organization. The ECO region with an area of eight million square kilometres and a population of about 460 million, in a marked contrast with the situation in the SAARC, is ripe for the promotion of intra-regional trade and regional economic integration, provided the governments of the member states show the necessary resolve to that effect.

The evolution of the European Union (EU) into a dynamic association of European states cooperating for common economic, political, and security goals from the modest start of the European Coal and Steel Community in 1952 and the peace and economic prosperity that Europe has enjoyed since then, despite the recent hiccups in the form of Brexit and the slowing down of economic growth, have encouraged the growth of regional cooperation organizations in other parts of the world. The ECO and the SAARC are examples of such organizations in our region. While regional cooperation, per se, is desirable, it is a mistake to assume that any regional association of states can evolve on the lines of the EU. Nothing could be further from the truth. In fact, the challenges and the potential of regional organizations vary according to their economic conditions, cultural and historical background, geographical location, intra-regional political relations, world outlook, and the vision of the future. Pakistan, therefore, must take a careful look at all the relevant political, strategic, economic, and cultural factors in assessing the relative benefits for it of the ECO and the SAARC.

Pakistan is geographically in South Asia, but its history, culture, political orientation and the world view set it apart from India, the biggest and the dominant country in the subcontinent. In fact, Pakistan for historical, cultural, political, strategic and economic reasons is closely linked to countries in West Asia including Iran, Afghanistan, Turkey, Central Asian Republics, and Azerbaijan. The countries in the ECO region enjoy almost all the prerequisites of regional cooperation leading to regional economic integration. For instance, the ECO region has the advantages of economic complementarities, common cultural heritage, geographical proximity and the absence of serious disputes and hegemonic designs among its members. These factors provide the potential for the community of interests, that is, the feeling of a common destiny and a shared vision of the future among the member states of the ECO. Economic complementarities hold the promise of an enormous expansion of intra-regional trade and cooperation within the framework of the ECO to the benefit of all the member states. These advantages are not available in the case of the SAARC which suffers from several handicaps, especially the serious Pakistan-India disputes and the Indian hegemonic designs in the region. For Pakistan, therefore, the ECO should be the obvious organization of choice for regional economic integration while the SAARC can provide avenues for more limited regional cooperation in economic, commercial and other fields on a mutually beneficial basis.

Realistically speaking, for Pakistan, it is the ECO which holds the promise for regional economic integration through the formation of a customs union leading ultimately to an economic union. This promise can be fully realised if Pakistan and other member states demonstrate seriousness of purpose in promoting regional cooperation and urgent steps are taken for the restoration of durable peace and stability in Afghanistan. Unless these conditions are fulfilled, the dream of economic integration within the ECO region will just remain a dream.

ECO: Top Facts

ECO is the successor organization of Regional Cooperation for Development (RCD) – a trilateral organization of Iran, Pakistan and Turkey – which remained in existence since 1964 up to 1979.

It was established in 1985 to promote multi dimensional regional cooperation.

Following the amendment in the Treaty of Izmir, which was signed in 1977, the ECO was fully launched in early 1991.

In 1992, the Organization was expanded to include seven new members, namely: Islamic Republic of Afghanistan, Republic of Azerbaijan, Republic of Kazakhstan, Kyrgyz Republic, Republic of Tajikistan, Turkmenistan and Republic of Uzbekistan.

The date of the Organization’s expansion to its present strength, 28th November, is being observed as the ECO Day.

The ECO is an ad hoc organisation under the United Nations Charter (Chap. VIII)

ECO’s secretariat and cultural department are located in Iran, its economic bureau is in Turkey and its scientific bureau is situated in Pakistan.

Motto: “Sustainable socioeconomic development for the people of the region”

Member States: 10

Observer: 1 (Northern Cyprus)

Headquarters: Tehran, Iran

Finance Source: Member contributions.

Official Language: English

Key Executive: Secretary General

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