The Summit was inaugurated by Indian Prime Minister Manmohan Singh after Sri Lankan President Mahinda Rajapakse handed over the presidency of the regional body to Bhutanese Prime Minister Jigme Y Thinley. [break]
Addressing the inaugural ceremony, Prime Minister Madhav Nepal called for concerted actions at national, regional and international levels to tackle the multi-dimensional effect of climate change on humanity.
"If we fail to act fast and act now on the burning issue of global warming, posterity will squarely blame on us for our failure to protect their precious lives, rare biodiversities, animal species and plants. To avert such unthinkable consequences, we in SAARC, must come forward more vocally for urgent international action to save the planet earth from the effects of climate change," he said.
From the high Himalayas to the low lying regions in the Indian Ocean faced imminent dangers of climate change impacts and environmental degradation, he said.
The prime minister identified wide-spread poverty and economic deprivation as another critical challenge in the region. He said the surest ways for a prosperous SAARC is through increased intra-SAARC regional trade.
"When we speak about the roadmap of SAARC, the most common denominator is that SAARC is all about regional integration - economically, culturally, and socially. It is about inclusive growth and development of the region. It is about greater connectivity and easier movement of goods and people in the region. It is about eventually an economic union, with a common market and common currency for optimum utilization of resources in the region and for their shared benefits to our people," he said.
The prime minister said the establishment of the SAARC Development Fund (SDF) has given hopes and expectations among the people in the region for qualitative transformation in their lives. "I am fully confident that SDF, sooner than later, will embark on social and infrastructure projects at regional or sub-regional level for greater economic benefits to our people," he said.
Earlier on the sidelines of the Summit, the prime minister held talks with Afghan president Hamid Karzai and shared experiences conflict resolution.
He also met with Bangladesh´s Prime Minister Sheikh Hasina and discussed issues of bilateral interests including Nepal-Bangladesh trade.
Also on Wednesday, DPM and Foreign Minister Sujata Koirala held talks with Chinese deputy foreign minister Wang Guangya in Thimpu. They discussed the regional issues, Nepal-China ties and Nepal´s peace process.
Koirala also held talks with Pakistani Prime Minister Syed Yousaf Raza Gillani.
$300m fund set up
THIMPU (AP): India´s prime minister Manmohan Singh warned South Asian leaders on Wednesday that they must work in unison to quicken the pace of their development or risk being left behind, as a $300 million fund to reduce poverty in the region was unveiled.
Singh said the eight nations that make up SAARC had to more fully integrate themselves into the global economy.
"If we do not, we run the risk of marginalization and stagnation," Singh said on the first day of a SAARC summit. "The 21st century cannot be an Asian century unless South Asia marches together."
One-fifth of the world´s population - and many of its most impoverished - live in the countries that make up the grouping, and it was set up to promote economic cooperation, but it has often been criticized as little more than a talk shop since its founding in 1985. Even the host, Bhutanese Prime Minister Jigmi Y Thinley said the group´s priorities must be reset if it is to achieve any success.
During the two-day summit, the leaders are expected to sign an agreement on the environment encouraging the exchange of eco-friendly technologies and knowledge about climate change and wildlife conservation.
The $300 million fund, which would comprise financial contributions by regional countries, will offer loans and grants to member countries for projects to help reduce poverty.
An agreement on trade will cover services in areas such as health, hospitality, communications, computers and air transport.
Indian Foreign Minister SM Krishna said South Asian nations must grab the opportunity to enhance trade, open borders and facilitate economic integration as the world emerges from a period of unprecedented global recession.
Bhutan chose to focus much of the summit on climate change because South Asia is highly vulnerable to its effects, said Bhutanese Foreign Secretary Daw Penjo. The Himalayan country has seen the global warming-linked flooding of lakes caused by melting glaciers.
The tiny Himalayan kingdom of Bhutan, which ended more than a century of royal rule in 2008 with its first parliamentary elections, is hosting the SAARC summit for the first time since the grouping was set up 25 years ago. Lack of resources and infrastructure prevented the tiny nation from playing host to SAARC leaders until now, said Penjo.
Trade among the eight nations reached $688 million in 2009 - within three years of the gradual introduction of a free trade regime in the region, said Sheel Kant Sharma, the SAARC secretary-general.
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