Frustrated by delays in even getting summits off the ground, the five smaller members of the grouping -- Bangladesh, Bhutan, Maldives, Nepal and Sri Lanka -- are taking the bilateral route to boost trade.

The South Asian Association for Regional Cooperation (Saarc) opens its 12th summit Sunday in the Pakistani capital Islamabad with a poor report card on progress since the group was initiated by Bangladesh and launched in 1985.

"We have not even completed a South Asian Preferential Trade Agreement (Sapta) although we are talking about a free trade agreement," a trade ministry official in Colombo said.

A full regional free trade agreement was to be in place by 2001 as agreed by Saarc leaders in 1998. However, the slow movement of Saarc prompted Sri Lanka to use the "fast-track" bilateral route to boost trade.

Sri Lanka's 1998 free trade agreement with India is seen as a catalyst for similar trade deals which are under negotiation with Pakistan and Bangladesh, trade officials here said.

However, with a thaw in relations between nuclear-armed India and Pakistan, Saarc initiator Bangladesh hopes the bloc can now sit down to the serious business of improving the living standards of impoverished South Asians.

"We will try to focus on Sapta as we feel a boost in regional trade would benefit the people of the region," the official looking over Dhaka's agenda for the summit told AFP in Dhaka.

He said warming ties between India and Pakistan have always been welcomed by Bangladesh, which wants to see the region move forward with its economic agenda.

"Indo-Pakistan squabbling has been the bane of Saarc," a Maldivian official said. "When giants fight, we get squashed."

Nepal which hosts the Saarc secretariat is hoping that the latest summit taking place one year behind schedule will focus on trade.

"We hope there will be a breakthrough in a number of issues in the area of trade liberalisation," Nepal's Special Envoy Bekh Bahadur Thapa told AFP in Kathmandu.

"We hope there will be at least a successful adoption of a visionary approach to the Safta and some resolutions."

The previous summit in Kathmandu saw Saarc leader after leader castigating the regional body for failing their 1.4 billion population which includes half the world's poor.

President Maumoon Abdul Gayoom, of the low-lying Indian Ocean atoll nation of Maldives, who has attended all previous 11 summits and is due to attend the Islamabad meet too, has called for a frank assessment of progress.

"I believe that we are going through a traumatic phase in regional cooperation," Gayoom said at the last summit. "It will take a great deal of energy, persistence and commitment, indeed a Himalayan effort, to restart what has become a stalled process."

Since his remarks, there had been little progress towards boosting regional ties.

However, both India and Pakistan have been competing with each other to speak about the need for greater economic integration and even adopting a single South Asian currency following the EU model.

Gayoom poured cold water on a similar suggestion in 1997 when asked for his thoughts on a single currency.

"We already have a single currency," Gayoom said. "All the Saarc countries accept the American dollar."