INTRODUCTION

Both ASEAN and the South Asian Association for Regional Cooperation (SAARC) have a diverse array of economies at different levels of development and contain a wide range of cultural, religious, and ethnic and linguistic communities. Territorial disputes whether on land or at sea are also a facet of both regions. War has erupted between India and Pakistan on three occasions and there have been almost continuous skirmishes along the Line of Control (LOC), which dissects Kashmir into Pakistani and Indian-held territories. ASEAN too has its share of insurgency and separatist conflicts along some of its common borders. The main difference with regards to security problems between the regions is that India and Pakistan are declared nuclear weapons states, which magnify the political tensions in South Asia manifold compared to those in ASEAN. Both regions also display different characteristics as economic groups. The founding of ASEAN was with the participation and blessings of the biggest and most influential member of the group, Indonesia. In contrast, the founding of SAARC in 1985 was largely the initiative of smaller economies such as Bangladesh and Nepal. The late President of Bangladesh Ziaur Rahman was the main instigator for SAARC's formation. Together with the support of smaller countries such as the Maldives, he sought consensus from the leaders of India and Pakistan. Other impediments to greater intra-SAARC trade are structural because there is also a lack of transportation (land, sea and air) and information dissemination to promote intra-regional trade. SAARC members have to focus on mobilizing their resources to build up their infrastructure to enable greater economic activities. However, the lack of political will and prevailing political differences are the biggest obstacle to creating trade complementarities within the SAARC region.

Unlike SAARC, ASEAN has largely managed to keep problematic bilateral issues between its members from derailing regional initiatives. SAARC's regional initiatives have been sidelined when bilateral disputes flared up in the region. This paper argues that SAARC could move ahead by using economic benefits to marginalize the “ghosts of the past”. Kashmir has become the symbol that has divided India and Pakistan for over 50 years, much like the Berlin Wall divided East and West Germany.