(Adds Amnesty International comments) NEW DELHI, April 2 (Reuters) - South Asian nations need to cut defence spending and increase funding for women and children's welfare, healthcare and education to curb poverty in one of the world's poorest regions, activists said on Monday. The call by a coalition of about 200 voluntary groups -- representing women, tribal people, trade unions and refugees -- came on the eve of a summit in New Delhi of a regional grouping which aims to boost trade and development. The group, the South Asian Association for Regional Cooperation, or SAARC, includes Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. Afghanistan is set to join as the eighth member during the April 3-4 conference. The People's SAARC, as the coalition is called, urged the governments to cut defence spending by 10 percent. "We realise that the lavish spending on weapons by poor South Asian countries is one of the major causes of rampant poverty in the region," Arjun Karki, a coordinator of the coalition, told a news conference. "We also demand that India and Pakistan stop the arms race and give up nuclear weapons, which pose a great threat to the 1.5 billion inhabitants of this peaceful region." India raised its defence budget by nearly 8 percent to $22 billion this year while its traditional rival Pakistan increased it by nearly 4 percent to $4.2 billion in 2006 despite their new moves to make peace. Activists said money spent on arms not only fuelled tensions in the region but also diverted crucial funds meant for development. "It helps to accentuate tensions within SAARC nations and it takes away food from the children and employment from the unemployed ... it is a senseless expenditure," said Kamal Mitra Chenoy, who teaches at New Delhi's Jawaharlal Nehru University. Activists said Nepal spent $260 million on defence last year, compared to about $29,000 on agriculture despite the fact that 80 percent of the population depended on farming for its livelihood. Separately, Amnesty International urged South Asian governments to evolve a regional system to address issues such as security, the death penalty, violence against women and corporate accountability. Tough anti-terrorism laws in the region had led to large scale violation of rights it said at the end of a two-day rights conference in the Indian capital. "These laws seek to promote security but curtailment of enjoyment of rights erodes people's sense of security," said Purna Sen, Amnesty's Asia-Pacific director. (Additional reporting by Manjusha Chatterjee)
