Belying most pessimistic expectations, the South Asian Association for Regional Cooperation (SAARC) recently completed its first decade in existence and held its ninth summit meeting in Male in May 1997, where it reaffirmed its determination to hasten the pace of regional economic cooperation. Officially inaugurated in December 1985, SAARC which presently involves seven countries in the region, represents 1.2 billion people, a fifth of humanity.1 In its second decade in existence, the organisation has not only come to stay, but the mood among member countries is distinctly optimistic. There is a growing conviction among these countries that the benefits of weaving a closer economic community can be bolstered by the possibility of opening a second track of a harmonious regional relationship, which, in turn, would help overcome enormous political and security problems in the region. This optimism stems from the present role of SAARC in fulfilling an important task of allowing for the forum to provide a platform for formal contact between countries in the region.2