DHAKA, 1 August 2006 — Following Japanese Premier Junichiro Koizumi’s stress on development of South Asia as indispensable for Asia’s prosperity, Bangladesh Foreign Minister Morshed Khan said Japan and China as SAARC observers and being vast economies could contribute to the SAARC Development Fund.

“Operation of the SAARC Development Fund (SDF) is important in so far as observers are concerned, as this fund can pave the way for a much broader engagement between SAARC and the observers in the future,” Khan said while inaugurating an international conference on Japan-SAARC Cooperation in here yesterday.

He said the Council of Ministers, which meet in Dhaka today would consider how the observers could collaborate with SAARC in undertaking joint programs and projects under the SDF in the areas of infrastructure, communication, social development and small and medium enterprises (SMEs).

The SAARC finance ministers at a meeting in Islamabad earlier in July decided to launch the SDF with initial capital of $300 million of which India already committed $100 million.

Mechanisms would be evolved for each member state’s contribution to the SDF, Khan said. Chaired by Dhaka University Vice-Chancellor professor SMA Faiz, the inaugural session was also addressed by Foreign Affairs Adviser Reaz Rahman, Charge d’ Affaires of Japan Yonezo Fukuda and director of Japan Study Center Dr. Ataur Rahman.

Japanese Prime Minister Koizumi in a message to the conference that was read out by Fukuda said Japan’s observer participation agreed at the 13th SAARC summit in Dhaka is a testimony to the deepening of relationship between Japan and the SAARC member states.

He said the development of South Asia is indispensable for the prosperity of Asia in its entirety. The activities of SAARC throughout the last 20 years for the improvement of welfare and quality of life are truly valuable, he added.

“It is with such recognition that Japan has supported SAARC through the Japan-SAARC Special Fund,” Koizumi said.

Morshed Khan termed the inclusion of Japan and China as observers of SAARC as a timely decision, saying that more countries and organizations like USA, South Korea and EU have formally sought SAARC observer status. France also has expressed its willingness to get involved with the forum.

Stressing the need for unity of Asian countries, the minister said: “We’ve always looked at the West for our economic development, but today we feel the West has very little to offer for economic development. In economy we can offer much if Asian countries get united.”

Khan, who appeared upbeat about Asia’s economic prospect, said that if the Asian countries from Turkey to Tokyo contribute 2 percent of their GDP, a larger fund than the IMF could be raised for development.

Disagreeing with the notion that trade has no relation with politics, he wondered whether trade embargo on Iraq and North Korea was imposed out of trade consideration. He said the tendency of the developed countries is that they can take any decision for their interests, but the poor countries cannot take such decision.

Terming it as a global double standard, Khan said one could avoid political consideration from trade. On Japan’s past policy, he said Japan being the second largest global economy without hinterland the way EU, Organization of African Unity (OAU) and NAFTA have, but Asian countries were ignored by Japan.

“We are now happy that Japan is showing keen interest in regional and sub-regional cooperation,” the minister said, adding that Japan is providing $200,000 annually to SAARC through the Japan Special Fund.

Reaz Rahman mentioned various challenges before SAARC, saying that the forum could not make desired progress due to negative legacy and political differences. He admitted that SAARC could not implement any single project in past two decades.

He mentioned that the 12th and the 13th summit made some substantial progress and observed that the membership of Afghanistan and the observer status to Japan and China brought dynamism to SAARC.

He, however, said unless SAARC puts its house in order, engagement of external actors would not make any difference.