The first meeting of the finance ministers of the South Asian Association for Regional Cooperation (SAARC) held in Islamabad has agreed on a framework for the SAARC Development Fund (SDF).

SAARC leaders at the 13th SAARC Summit had decided to create the SDF to serve as the umbrella organisation for development funding for SAARC projects and programmes.

A press statement issued by the SAARC secretariat said, “The SDF would be professionally managed by a parliament secretariat and would have three windows —- social, economic and infrastructure.”

The finance ministers approved mobilisation of an initial corpus of $300 million for the social window from the assessed contributions of the member states. Likewise the economic window of the fund would start with $6.5 million and deal with viable non-infrastructural funding. The infrastructure window would commence its operation later.

The first board meeting is expected to be held around December 2006.

The meeting also recommended setting up of an inter-governmental expert group (IGEG) on financial issues, which would provide inputs to the SAARC finance ministers process.

The IGEG would have focus on the macro-economic development and outlook for South Asia, achievement of SAARC development goals as correlated to the Millennium Development Goals (MDGs), investment climate, foreign capital inflows, financial sector and other areas of cooperation, the statement adds.