Introduction

The globalization of the world economy is leading countries in the Middle East and Central Asia to create common frameworks for coordination of economic development both among themselves and vis-à-vis development worldwide.  The Economic Cooperation Organization (ECO) is a significant component of regional development in the Middle East and Central Asia.  The ECO provides a framework for resolving issues not only common to the member states and other countries in the region but also issues faced by the world in the coming century such as the preservation of the environment in light of extensive economic development.

I. The Economic Cooperation Organization

The Economic Cooperation Organization (ECO) is a preferential trade arrangement between 10 countries: Iran, Turkey, Pakistan, Azerbaijan, Kazakstan, Turkmenistan, Kyrgyzstan, Uzbekistan, Tajikistan, and Afghanistan. Encompassing an area of over 7 million square kilometers and with a combined population of over 300 million people, the ECO region is an enormous market comprised of energy-abundant member states bridging the energy-dependent nations of East Asia and Europe.  The Middle East and Central Asia are currently in the midst of a time of change and opportunity.

The primary objectives of the ECO are sustainable economic development of member states; progressive removal of trade barriers and promotion of intra-regional trade; development of transport and communications infrastructure linking member states with each other and with neighboring states; economic liberalization and privatization; mobilization and utilization of the region’s energy, industrial, and agricultural resources; regional cooperation for controlling the international transportation of drugs; ecological and environmental protection; and the strengthening of historical and cultural ties among the people of the ECO region.  A long-term objective is the ultimate elimination of all tariff and non-tariff barriers together with all subsidies on exports and the establishment of a Free Trade Area among member states.

II. The Regional Cooperation for Development and the Resuscitation of ECO

The precursor to the ECO was the Regional Cooperation for Development (RCD).  Established in July 1964 by Iran, Turkey, and Pakistan, its purpose was to liberalize and promote trade between the three countries. The legal basis for the RCD was embodied in the 1977 Treaty of Izmir.

The RCD remained in operation up to the end of 1978 but then lapsed into dormancy from 1979 to 1984.  The organization’s objective to liberalize intra-regional trade failed due to its inability to provide a workable format for the expansion of trade and its inability to provide a mechanism for the mobilization of resources from within the region.  Undoubtedly, the political and economic instability in Iran following the 1979 revolution and ensuing war with Iraq were major factors in the demise of the regional organization.

Recognizing that the facilitation of intra-regional trade is the cornerstone to regional economic self-reliance and independence, Iran, Turkey and Pakistan revitalized the organization with a modified institutional structure in January 1985.  However, the new organization, renamed the Economic Cooperation Organization, did not begin to function in its present capacity until the 1990 amendments to the Treaty of Izmir.  The changed circumstances of the region, mainly the postwar reconstruction of Iran and the emergence of the newly independent states of Central Asia and the Caucasus, added  impetus to the revitalization of the regional organization.

III.  Organizational Structure of ECO

The ECO is composed of 5 primary institutions involved in the planning and implementation of regional policy.  In September 1996, the Implementation Plan for the Reorganization and Restructuring of the ECO was signed by all Member States.  The Plan marked the completion of groundwork for the reorganization of the ECO and the restructuring of its organs.

A. Council of Ministers

The Council of Ministers is the principal policy and decision-making body of the ECO.  It is composed of the Ministers of Foreign Affairs or other representatives of ministerial rank as may be designated by their governments.  The Council of Ministers is to meet at least once a year by rotation in each member country.

B. Council of Permanent Representatives

The Council of Permanent Representatives is a permanent body based in Teheran comprised of the Permanent Representatives/Ambassadors accredited to the ECO.  The Council meets regularly to formulate issues requiring decisions by member states and is responsible for the implementation of policy devised by the Council of Ministers.

C. Regional Planning Council

The purpose of the Regional Planning Council is to coordinate national plans with the ECO objectives. Also, the Regional Planning Council is to propose programs of action and to review and evaluate past programs of action.  Proposed programs of action are to be submitted to the Council of Ministers for approval.  The Regional Planning Council is composed of the Heads of the Planning Organizations of the Member States and/or other representatives of corresponding authority.  The Regional Planning Council is to meet at least once a year in Tehran.

D. Technical Committees and Regional Institutions

All activities of the ECO are carried out by eight Technical Committees.  The Technical Committees have also evolved as sources of ECO policies.  The reports of the Committees are  submitted to the Regional Planning Council for review.  After review, the reports are sent to the Council of Ministers for further consideration and approval.  The eight Technical Committees include: (i) Committee for Economic and Commercial Cooperation; (ii) Committee for Transportation and Communication; (iii) Committee for Technical and Industrial Cooperation; (iv) Committee for Agricultural Cooperation; (v) Committee for Educational, Scientific, and Cultural Cooperation; (vi) Committee for Infrastructure and Public Works; (vii) Committee for Cooperation in the Field of Energy; and (viii) Committee for Narcotics Abuse Control. The Technical Committees are subdivided into Expert Groups which conduct regular meetings on various topics pertaining to the Committee.  The Committees are to meet as often as necessary.

The ECO has six regional institutions (ECO Trade and Development Bank, ECO Reinsurance Company, ECO Shipping Company, ECO Air, ECO Chamber of Commerce, and ECO College of Insurance) and two specialized agencies (ECO Cultural Institute and ECO Science Foundation).

E. Secretariat

The Secretariat is the staff, located in Tehran, Iran, which carries out the day-to-day administrative functions of the ECO. The Secretariat is headed by a Secretary General who is appointed on a rotational basis from each Member State for a tenure of four years. The Secretariat is also comprised of three Deputy Secretaries General and six Directors.

The functions of the Secretariat include:  initiating plans of action for submission to members states; maintaining contacts with the governments of member states through appropriate channels with a view to following up the progress of the implementation of the decisions of the Council of Ministers and for other matters relating to the ECO; acting as the information agency for ECO activities; acting as a clearing house for all matters relating to the ECO, preparing an annual report on ECO activities for submission to the Council of Ministers; maintaining close contact with all institutions and specialized agencies of the ECO; acting as a liaison with international and other regional bodies; providing drafts, reports and communiques of the Councils, Committees and other bodies of the ECO; functioning as custodian for documents, studies and reports of the ECO; and carrying out functions assigned to it by the Council of Ministers.

Ali Reza Salari, the first Secretary General, was in office until 1992.  He was succeeded by Shamsad Ahmand, the former Ambassador of Pakistan to Iran from 1992 to 1996.  Ondar Ozal is the current Secretary General of the ECO he assumed the post in August 1996.

IV. The Progression of ECO

A. Economic and Commercial Cooperation

The main catalyst behind the formation of the ECO was the need to intensify and deepen existing economic relations on a sustained basis between member states.  In the formative years of the ECO, the three founding member states - Iran, Turkey, and Pakistan - maintained a very low level of intra-regional trade.  Turkey’s total trade with Iran in 1990 was not more than $1 billion.  Trade between Pakistan and Iran in 1990-1991 totaled $250 million.  By 1995, the volume of exports among the ECO members accounted for less than 5% of their total export volume. The low level of trade between member states indicates a vast potential for diverting trade from non-regional sources to sources within the region. The creation of the ECO thus provides the necessary framework for the stimulation of regional trade.

1.Tariff Reduction

In its first meeting in May 1991 in Tehran, the Council of Ministers, pursuant to Article III of the Treaty of Izmir, drafted and signed the Protocol on Preferential Tariff Arrangement along with Annexes containing a List of Commodities and Rules of Origin. The Protocol identifies goods which receive a 10% tariff reduction in Iran, Turkey and Pakistan.  The Protocol represented the first step in achieving the ECO’s objective of ultimately eliminating all tariff and non-tariff barriers together with all subsidies on exports and the establishment of a free trade area among member states.

In 1993, during the third meeting of the ECO Council of Ministers, the Quetta Plan of Action was adopted which, among other things, requested a study into the feasibility of expanding the preferential tariff system to include the new ECO Member States and, furthermore, enlarged the list of commodities to which preferential tariffs applied.  The Protocol on Preferential Tariffs became effective on May 2, 1993.

During the fourth meeting of the ECO Council of Ministers in 1994, the Council of Ministers proposed a further reduction in tariffs from 10% to 20%, for the goods listed in the Annexes to the Protocol for Preferential Treatment.

Beginning in 1996, the ECO Secretariat began discussing the implications of the World Trade Organization (WTO) for the ECO region.  The ECO Secretariat’s approach to multilateral trade liberalization as opposed to discriminatory regionalism is consistent with Article III of the Treaty of Izmir which requires member states to “examine . . . the possibility of ensuring the fullest possible reduction of trade barriers in the ECO area at an appropriate time . . . without prejudice to other international commitments undertaken by the member states.”

Currently, only Turkey and Pakistan are members of the WTO. However, Azerbaijan, Kazakstan, Kyrgyzstan, and Uzbekistan have been given observer status and have all formally submitted applications for membership.

WTO membership for all ECO members would promote trade liberalization and a framework for reciprocal negotiation of market access within a system of nondiscriminatory principles and rules that secure the trade interests of all members.  The purpose underlying the General Agreement on Tariffs and Trade (GATT) is to constrain governments from imposing or continuing a variety of measures which restrain or distort international trade.

As stated above, the ECO is a preferential trading arrangement. The GATT forbids preferential arrangements because they protect inefficient producers of a few products in the member countries at the expense of producers of the products in nonmember countries.  Preferential trade arrangements are considered shelters for inefficient industries in the member countries and are viewed as harming nonmember countries because these nations suffer economic loss when parties to the agreement divert trade to themselves and exclude outsiders.

However, a two-thirds majority of the GATT contracting parties can approve regional trade arrangements that do not comply fully with GATT requirements by waiving the requirements.  Since the formation of GATT, no regional arrangement has completely conformed to GATT requirements.  Moreover, the GATT contracting parties have never rejected a regional arrangement.

2. ECO Bank

In May 1991 in Tehran, the Council of Ministers accepted the proposal of the Committee for Economic and Commercial Cooperation for the establishment of the ECO Investment and Development Bank (ECO Bank) in pursuance of Article V of the Treaty of Izmir.  Plans for the establishment of the main ECO Bank in Istanbul, Turkey were finalized at the third ECO summit in March 1995 in Islamabad.

The purpose of the Bank is to contribute to the acceleration of the process of economic development of ECO countries by initiating, promoting, and providing investment facilities for the implementation of common ECO projects.  New Members are admitted to the ECO Bank subject to the condition that Iran, Turkey, and Pakistan remain the majority shareholders.  The authorized capital of the ECO Bank is 300 million ECO units, each unit being equal to one Special Drawing Right (SDR) of the International Monetary Fund.  The ECO Bank will operate one branch in each Member State.

In 1997, the three founding members of the ECO declared their intent to capitalize the ECO Bank in Istanbul at $300 million, with each country contributing $100 million. In the first stage of contributions, each country will contribute $30 million.

3. ECO Reinsurance Company

In May 1991 in Tehran, the Committee for Economic and Commercial Cooperation, pursuant to Article VI of the Treaty of Izmir, planned for the conversion of the ECO Reinsurance Pool into the ECO Reinsurance Company.  The plans for the permanent establishment of the ECO Reinsurance Company in Karachi, Pakistan were finalized in 1995.

The objective of the Company is to reduce the foreign exchange outflow on insurance and reinsurance services and to improve the standard of insurance services in Member States.  The estimated premium of the Pool increased from $4.09 million in 1984 to $15 million in 1992.

In 1997, the three founding members agreed to each contribute $30 million to the ECO Reinsurance Company.  One Pakistani national will be appointed as the chief executive while Iran and Turkey will each have a deputy managing director on a 10-member board of directors.

4. ECO Chamber of Commerce and Industry

In 1991, the Committee For Economic and Commercial Cooperation proposed to establish the ECO Chamber of Commerce and Industry.  The purpose of the Chamber is to contribute to the preparation of development programs and to promote economic cooperation primarily in trade and industry, but also including agriculture, tourism, contracting, engineering, and banking services between Member States.  The ECO Chamber of Commerce also serves as a platform for the interaction and dialogue of the business community of the ECO region.

5. ECO Customs

At the 1995 Islamabad summit, the ECO Transit Trade Agreement, an agreement which standardizes customs procedures and facilitates on intra-regional trade, was signed by eight ECO Member States.  The Agreement on the Simplification of Visa Procedures for the Businessmen of ECO Member States was also finalized.  Both agreements further ECO goals of facilitating trade by reducing trade barriers among Member States.

In late 1997, the heads of customs services from the ECO Member States met in Almaty, Kazakstan to discuss methods of enhancing the effectiveness of control over transit cargo and the acceleration of transit cargo passage through checkpoints between member states.  Special attention was given towards standardizing technical standards for rail transport in the ECO region, coordinating efforts to reduce cross-border smuggling and harmonizing member state legislation in regards to customs laws.

6. Free Trade Zones

During the ECO summits of 1995 and 1996,  member states called for the establishment of free trade zones in the ECO region to promote intra-regional trade. Free trade zones stimulate trade by increasing export-oriented investment and production in the country in which it is based; accelerating the entry of foreign capital and technology; procuring the inputs of the economy in an economic and orderly fashion; and increasing the utilization of external finance and trade possibilities.

7. ECO International Trade Exhibition

The annual ECO International Trade Exhibition provides a platform for the expansion of regional trade and integration of regional industry.  The second ECO Exhibition, held in late 1997 in Bishkek, Kyrgyzstan,  attracted 53 companies from five ECO Member States.  The annual exhibitions also further the goals of Article IV of the Treaty of Izmir which calls for closer industrial collaboration among member states through the establishment of regional joint ventures and interindustry cooperation and specialization in the production of goods.

b. Transportation and Communication

In order to fulfill the ECO’s objectives of facilitating intra-regional trade, encouraging the export of goods to international markets, linking landlocked member states to international ports, and increasing regional tourism, the ECO has placed a high priority on the development of the region’s transportation and communications infrastructure.

Development of the region’s transportation system constitutes a major step towards closer integration.  The Quetta Plan of Action was the first ECO plan adopted envisioning the development of an intra-regional transportation and communications infrastructure.  The 1995 summit meeting in Islamabad produced the Islamabad Declaration which, among other things, declared that the years 1995-2004 are to be called “the Decade of Transport and Communication in the ECO Region.”  The Fourth Summit produced the Ashgabat Declaration which established an overriding priority for the development of the Transport and Communication sector of ECO.  The Declaration determined that regional cooperation can only be achieved if the ECO region is properly linked through railways, roads and communications lines.

1. ECO Air

Article XI of the Treaty of Izmir calls on member states to establish closer cooperation among their national airlines in order to facilitate and expand air travel and air cargo.  In 1991, pursuant to Article XI, the Committee for Transportation and Communication proposed the creation of the ECO Airline.

The 1993 Quetta Plan of Action, which was primarily concerned with the development of the regional transportation and communications infrastructure, envisioned the expansion of regional air connections so that one direct air connection between capitals and major cities exist at least once a week.

In 1994 the heads of national airlines met to recommend the establishment of a Joint Airline Company in furtherance of ECO Air. The 1995 summit meeting in Islamabad finalized the establishment of ECO Air with its headquarters located in Tehran, Iran.

2. ECO Shipping Company

Article X of the Treaty of Izmir states:  “ the member states shall take all appropriate measures in order to ensure adequate shipping services amongst them.  To this end the member states shall form an ECO Shipping Company as early as possible.”

In 1991, the Committee for Transportation and Communication proposed the creation of the ECO Shipping Company which was subsequently reinforced by the 1993 Quetta Plan of Action.  The Islamabad Declaration finalized the establishment of the ECO Shipping Company in 1995 with its headquarters located in Tehran, Iran.  By 1996, Iran, Pakistan, Kazakstan, Kyrgyzstan, Turkmenistan, and Afghanistan had each invested $1 million in the ECO Shipping Company.

3. ECO Highway

Article IX of the Treaty of Izmir states that “Member states shall make provision for an efficient transport system in the region and shall give priority to the construction, completion, and improvement of the highways and railways connecting member states.”

In 1991 in Tehran, the Committee for Transportation and Communication proposed the establishment of the ECO Highway. The 1993 Quetta Plan of Action called for the development of an intra-regional road infrastructure at internationally acceptable standards.

Ground breaking for the ECO Highway’s Naukundi-Dalbandin section in Pakistan’s Baluchistan province began in April 1994.  The project would make all-weather traffic between Pakistan and Iran possible.

The 1997 Ashgabad Declaration declared the interconnection of the region with strong road links a top priority.  Leaders from Turkmenistan, Afghanistan and Pakistan jointly proposed the construction and upgrade of road links from Central Asia to the Arabian Sea.  Pakistan also announced a plan for the modernization of the port of Gwadar on the Arabian Sea and the improvement of road access.

4. ECO Railway Network

In 1991, pursuant to Article IX of the Treaty of Izmir, the Committee for Transportation and Communication proposed the construction of the ECO Railway Network.  The 1993 Quetta Plan of Action declared the goal of expanding and integrating national railway networks to permit transportation by rail from one end of the region to the other.

The fourth ECO summit meeting in May 1996 in Ashgabat witnessed the inauguration of the Mashad-Saraks-Tejen Railway. Hailed by former Iranian president Ali Akbar Hashemi Rafsanjani as “a turning point in the history of the region’s development,” the railway links the landlocked member states of Central Asia with the ports of the Persian Gulf.  For the member states of Central Asia, the “New Silk Road” represents an opportunity to reduce their economic dependence on Russia by developing new trade relationships with Iran  and gaining access to new international markets through Iranian ports on the Persian Gulf.  The railway is eventually expected to carry 8 million tons of cargo and 1 million passengers annually.

The 1997 the Ashgabad Declaration furthered the goals of Article IX by declaring the interconnection of the region with strong railway links a top priority.  The Ashgabad Declaration urged member states to promote manufacturing and repairing of locomotives, passenger carriages, freight cars, containers, and other railway equipment, using member states’ own resources.  Furthermore, the Ashgabad Declaration required concrete steps to be taken to expedite the development and operation of a Trans-Asian railway which would connect Istanbul, Turkey to Almaty, Kazakstan via Iran, Turkmenistan, and Uzbekistan.

5. South West Asia Postal Union (“SWAPU”)

In 1991, pursuant to Article VIII of the Treaty of Izmir, the Committee for Transportation and Communication created SWAPU to extend, facilitate and improve postal relations and services among the member states.  The 1993 Quetta Plan of Action called for the improvement of the region’s postal system so that mail from one ECO country can be delivered to another within one weeks time.

6. Communications

Article VIII of the Treaty of Izmir states that “Member States shall take all necessary steps with a view to providing efficient post, telephone, telegraph and telex services within the region.”  In its initial meeting in May 1991 in Tehran, the Committee for Transportation and Communication called for the establishment of a fiber optic line linking Ankara, Tehran and Islamabad.  The Quetta Plan of Action envisioned the creation of at least 40 telephone/telefax channels between each ECO Member State by 1995 and the creation of satellite links between all the ECO Member States for telecommunications and radio broadcasts.

C. Energy

In consideration of the enormous amounts of oil and gas reserves of the ECO member states, the 1993 Quetta Plan of Action envisions the construction of a network of pipelines and the interconnection of power grids to meet the entire region’s energy requirements and provide outlets, including seaports, for access to international markets.

In May of 1997, the heads of state of all ten ECO member states gathered in Ashgabad, Turkmenistan and approved the Ashgabad Declaration which, among other things, called for the acceleration of the development of a regional network of oil and gas pipelines. The Ashgabad Declaration also provided for the establishment of an “experts task group” to recommend measures for the prompt implementation of agreed projects and to consider the possibility of creating regional consortiums to construct regional oil and gas pipelines.  Four memoranda of understanding regarding oil and gas pipelines were signed and approved by member states.  Iranian, Turkish and Turkmen leaders signed an agreement to export up to 30 billion cubic meters of natural gas per year from Turkmenistan to Turkey via Iran.  Kazakstan and Iran signed a memorandum for the establishment of an oil pipeline from Kazakstan to the Persian Gulf.  An understanding was reached between the leaders of Kazakstan, Uzbekistan, Turkmenistan, Afghanistan, and Pakistan for both an oil and gas pipeline from Central Asia to the Arabian Sea.  A special committee was formed to consider a gas pipeline to East Asia via Uzbekistan, Kyrgyzstan and Kazakstan and an oil pipeline from Azerbaijan to Turkey.

In regards to the construction of an oil and gas pipeline across Afghanistan, the ECO, while not an political organization, could prove useful in dealing with the complicated political-military situation within Afghanistan.  Economic development through the construction of pipelines could help stabilize the turmoil in Afghanistan.

The ECO Member States have also agreed to coordinate regional power grids.  In November 1997, Turkmenistan and Iran agreed to connect power grids and supply Turkey and Armenia with electricity.  In 1997, Turkmenistan also agreed to supply Pakistan electricity via Afghanistan.

D. Scientific and Cultural Cooperation

Article XVI of the Treaty of Izmir calls on member states to “take all necessary measures to promote cultural cooperation amongst them.”  Pursuant to Article XVI, the ECO Cultural Institute was endorsed during the second ECO summit in 1993.

Article XIV of the Treaty of Izmir proposes the establishment of the ECO Science Foundation in Islamabad, Pakistan “with a view to building up a reservoir of highly skilled, scientific and technical manpower and strengthening the scientific and research institutions in the member states.”  The ECO Science Foundation was established in 1995 during the summit meeting in Islamabad.

E. ECO Cooperation with Regional Organizations

Article XXXV of the Treaty of Izmir requires the ECO to expand contacts with international and regional organizations.  Since the expansion of the ECO to ten member states, the organization has ambitiously attempted to establish cooperative links with regional and international organizations.

1. United Nations

In October 13, 1993, the ECO was officially granted observer status in the General Assembly of the United Nations.  Two years later, on October 12, 1995, the UN General Assembly unanimously adopted Resolution 50/1 calling for the strengthening of relations between the ECO and the UN.  The ECO participated in the 51st General Assembly.  Another resolution was adopted on November 27, 1996 which furthered cooperation between the UN and ECO.

The 1993 Istanbul Declaration adopted a memorandum of understanding with the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).  Under the terms of the memorandum of understanding, the ECO and ESCAP agreed to collaborate on development issues and concerns of mutual interest; to develop and implement, as appropriate, joint projects, including organizing workshops, seminars and meetings on mutually identified areas of concern; to exchange analytical reports and technical publications on relevant economic and social development issues; to establish links through exchange of information; and to cooperate in providing inputs to their respective technical committees.  In the transport sector, ESCAP participated in a meeting of transport ministers of the ECO member states in Almaty, Kazakstan in 1993 and adopted an outline plan for the development of the transport sector in the ECO region.  ESCAP also completed three studies involving the ECO in 1995:  (a) land transport linkages from Kazakstan, Turkmenistan, and Uzbekistan to seaports in Iran, Pakistan, and China; (b) development of a highway network in the Central Asian republics; and (c) development of the Trans-Asian Railway in the southern corridor of Asian-European routes.

A memorandum of understanding was signed between the UN Development Program and the ECO in March 1995.  Cooperation has centered around studies concerning the reorganization of the Secretariat of the ECO and on the complementarities of  the member states’ economies.  The UN Development Program and the UN Conference on Trade and Development are enabling the ECO to benefit from the Advanced Cargo Information System and the Automated System for Customs Data and Management.

Since their 1994 memorandum of understanding, the ECO and the United Nations Children’s Fund have held joint workshops on iodine deficiency disorder, breast-feeding and oral rehydration therapy; and immunization. They are also cooperating on a program of action.

The memorandum of understanding between the ECO and the UN Population Fund in October 1994 has led to conferences on women’s status and health and the International Conference on Population and Development Program of Action.  The UN Population Fund also planned a conference on male involvement in reproductive health and family planning in mid-1997.

In March 1995, the ECO and the UN International Drug Control Program signed a memorandum of understanding where the UN will offer technical assistance for the ECO’s Plan on Drug Control.  The organization has also signed memoranda of understanding on cooperation with the UN Industrial Development Organization and UNESCO.  A draft memorandum of understanding has been forwarded to the Food and Agricultural Organization.

2. ASEAN and Other Regional Organizations

In an example of the continued efforts to establish cooperative links with regional and international organizations, the Secretary General of the Association of Southeast Asian Nations (ASEAN) visited the Secretariat of the ECO in Tehran in April 1995 to examine the possibility of developing cooperation in areas of trade and investment, transport and communications, energy, human resource development, tourism, and narcotics control.  A meeting between the foreign ministers of ASEAN and the ECO states was held in New York in 1995.  Since 1995, the two organizations have agreed to increase the kind and scope of mutual cooperation through regular contacts and exchange of views between the two organizations’ officials.  Furthermore, the ECO and ASEAN have emphasized cooperation in the fields of trade, investment, transport, communication, energy, expansion of human resources, tourism, and drug interdiction.

Since 1995, the ECO and the South Asia Association for Regional Cooperation have agreed to expand relations and cooperation.  SAARC groups the subcontinent countries of Pakistan, India, Nepal, Bhutan, Bangladesh, and Sri Lanka.

In late 1997, during a meeting between the foreign ministers of Iran and South Africa, the ministers declared their intent to link the trading activities of the South African Development Community and the ECO.  SADC groups the Southern African countries of South Africa, Swaziland, Namibia, Lesotho, and Botswana.

With the 1993 Istanbul Declaration, the ECO adopted a memoranda of understanding with the Islamic Development Bank.  Also in 1993, the Islamic Development Bank and the ECO, along with ESCAP and UNCTAD, finalized an agreement for the funding of an international transport project.

V. Conclusion

As the foregoing demonstrates, the ECO offers a framework for countries in the region to focus on common interests rather than each country’s individual interest. Preservation of the environment is merely one example of an important issue requiring not only regional but also worldwide cooperation.  Increased cooperation within the region in the areas of economics, security, and the environment will assist the ECO in becoming a key player in the global economy.

The ECO, as an organization encompassing an energy-abundant region bridging the energy-dependent nations of  East Asia and Europe, has the potential, if managed properly and patiently, to become an active, potent, and prosperous regional organization.

Intra-regional trade will increase specialization and trade, creating additional sources of employment and investment opportunities, and stimulating economic growth as the region uses its resources more efficiently.  Cooperation in joint economic projects, particularly in the development of natural resources, transportation, communications, and pipeline infrastructure, will provide the necessary foundations for economic, political, and social development within the region.

As the ECO develops into a major regional preferential trading block, neighboring countries with similar economic goals or common interests will find integration into the ECO beneficial.  To the south, the Gulf Cooperation Council states of Saudi Arabia, Kuwait, Qatar, Bahrain, United Arab Emirates, and Oman and to the east, Jordan, Syria, Lebanon, Egypt and Israel, will find integration into the ECO not only a useful platform to improve the regional economy, but also a mechanism to share concerns regarding security and natural resources.

With time, the ECO can prove itself to be a reliable platform for multilateral cooperation among member states as an active and comprehensive network for more widespread communication, and as a strong touchstone for economic stability. The ECO can act as a means of fruitful cooperation with neighboring countries, groupings, and organizations, and will make a substantial contribution to prosperity in the region.  While the ECO is only in its infancy, because of strong historical ties and economic potential, and given the current attitude of optimism, one can foresee the organization maturing into a fully developed political and economic union.