Paper short abstract:

Despite a South Asia Association for Regional Cooperation, regional trade preferences and a regional free trade, neighbouring states rarely enjoy good relations. The reason for the sorry state of relations to quite an extent is a matter of economics and natural resources.

Paper long abstract:

Despite a South Asia Association for Regional Cooperation, regional trade preferences and a regional free trade, neighbouring states in the region rarely enjoy good relations. The reason for the sorry state of affairs to quite an extent is a matter of economics and natural resources. Partition of 1947 not only meant establishing two new states and a painful exchange of population, it created also two economies that became more and more separated. Easily overlooked is the impact of and on natural resources: As a lower riparian Pakistan depends on water that is controlled by its neighbours (India and Afghanistan). The upper riparians not only control the flow of water (in the case of India within the framework of the Indus Water Treaty), they also enjoy first access to hydro-electric power. Kashmir, therefore is as much about control of natural resources, as it is about people and territory. Pakistan, on the other side, controls the transport ways to West and Central Asia; in the case of Central Asia, however, only together with Afghanistan. Similarly the relations between Bangladesh and India are overshadowed by the dispute of the waters of the Ganges and other rivers and India's demand of transit rights. Transit rights is most important for Nepal and Bhutan; for Sri Lanka and the Maldives it is fishing rights. When it comes to discussing socio-economic cooperation in South Asia, economic and ecological relations have to be taken in consideration.