ISSN 2330-717X

BIMSTEC: Many Potentials, But Slow Realization – Analysis

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By Rupak Bhattacharjee*

The issue of terrorism dominated the proceedings of the recently concluded Bay of Bengal Initiative for Multi-Sectoral and Economic Cooperation (BIMSTEC) Outreach Summit in Goa. India in its bids to diplomatically isolate Pakistan in the wake of fidayen attack in Uri sought the cooperation of the BIMSTEC members to fight the menace of terrorism. The BIMSTEC leaders extended full support to India’s call and agreed to enhance counter-terrorism cooperation at the regional level.

The Goa summit assumes significance after the cancellation of the South Asian Association for Regional Cooperation (SAARC) Summit, which was scheduled to be held in Islamabad in November this year. All the South Asian nations joined India in boycotting the SAARC Summit after Pakistan-based jihadi outfit Jaish-e-Mohammad’s (JeM) attack on Uri army base on September 18, 2016. BIMSTEC, which includes all the SAARC nations barring Afghanistan, Pakistan and Maldives, has filled the void. Unlike SAARC, the BIMSTEC member nations are not having intractable political problems among themselves. During the Goa summit, the member nations agreed on early ratification of the BIMSTEC convention on cooperation in combating international terrorism, transnational organised crime and illicit drug trafficking.

BIMSTEC is a sub-regional grouping comprising seven geographically contiguous-littoral and peripheral South and Southeast Asian nations, namely, Bangladesh, India, Sri Lanka, Nepal, Bhutan, Myanmar and Thailand. The primary objective of BIMSTEC, which acts as a land bridge between SAARC and Association of Southeast Asian Nations (ASEAN), is to promote regional cooperation and economic integration in the area around the Bay of Bengal. The BIMSTEC region is home to 22% of the global population with a total gross domestic product (GDP) of USD 2.7 trillion. The priority areas of this regional forum include trade, economic cooperation, connectivity, agriculture, tourism, people-to-people contacts and technical and human resource development. The theme of the Goa outreach summit was “a partnership in opportunities”.

In their efforts to promote regional integration, the BIMSTEC leaders pledged to expedite the process of building multimodal physical connectivity in the region during the Goa summit on October 16. They expressed their satisfaction with the progress achieved in implementation of the recommendations of the BIMSTEC Transport Infrastructure and Logistics Study (BTILS) and agreed to explore the possibility of signing a BIMSTEC Motor Vehicle Agreement. Under the BTILS adopted in December 2013, the grouping has decided to finalise a short list of priority projects for regional connectivity for implementation. The Asian Development Bank has agreed to provide financial assistance to some of the projects.

BIMSTEC offers excellent opportunities for India to connect its Northeast with the economic power houses of ASEAN. New Delhi has been pitching for expanding sea and port connectivity in the Bay of Bengal region to make the movement of goods faster and cost-effective. Access to nearby ports for transportation of goods is urgently required for North East since the region is landlocked. Bangladesh, a key member of BIMSTEC, has already decided to allow transit facilities to the Northeastern states through its territory.

To overcome the geographical constraints a number of infrastructure projects are also underway to augment connectivity between the Northeastern region and Southeast Asian countries through Myanmar. The Kaladan Multimodal Transit Transport Project is one such vital initiative that seeks to connect Indian ports in the eastern coast with Sittwe port of Myanmar and then through riverine transport and by road to Mizoram providing an alternative route for transportation of goods to North East. India has attached priority to the up gradation of Sittwe port following the discovery of about 10 trillion cubic feet of gas in two blocks of Shwe field 60 km off shore from the port.

Another key connectivity project, the 3200 km-long India-Myanmar-Thailand Trilateral Highway from Moreh in Manipur to Moe Sot in Thailand via Mandalay in Myanmar, is essential for increasing people-to-people relations among the BIMSTEC members and accelerate India’s economic integration with ASEAN. New Delhi wants to extend the highway further eastward to ports in Cambodia and Vietnam and has urged the ASEAN members to expedite the project. Efforts are on to make the road operational by 2018. In order to gain access to the larger ASEAN market through seamless movement of passenger and cargo, New Delhi has been pushing for a Bangladesh, Bhutan, India and Nepal (BBIN) Motor Vehicle Agreement (MVA)-like pact with Myanmar and Thailand.

BIMSTEC has the potential to generate trade worth USD 43-49 million under a proposed Free Trade Area (FTA). A framework agreement to set up a FTA was signed in February 2014 to increase the flow of goods and services in the BIMSTEC region. An early conclusion of FTA is necessary fort enhancing trade and investment in the region. During the outreach summit in Goa, the member nations renewed their commitment to the speedy completion of FTA negotiations. They agreed to initiate concrete measures to boost trade facilitation and offer special and differential treatment for least developed nations (LDCs) for their integration into the regional economy.

BIMSTEC has also made some progress in the arena of energy sector. In the wake of growing energy cooperation among the BIMSTEC member states, the leaders of the seven nations decided to accelerate the process of signing of the BIMSTEC Memorandum of Understanding on Grid Interconnection. They also called for early operationalisation of the BIMSTEC Energy Centre.

Considering the vast potential of the development of the blue economy in the region, the members resolved to deepen cooperation in areas such as aquaculture (both inland and coastal), hydrography, seabed mineral exploration, coastal shipping, eco-tourism and renewable ocean energy with the aim of promoting sustainable development of the Bay region.

Despite all efforts, there still exist a gap between the region’s immense potentialities and optimum utilisation. The sub-regional grouping has not made much headway in terms of implementation of its various schemes. The intra-regional trade and commerce have not grown substantially over the years and regional integration has also remained unfulfilled as infrastructural bottlenecks continue to persist. Studies have identified several impediments to India-Southeast Asia trade, including absence of common currency in border trade, restrictive visa regime, complex border crossing formalities and procedures and restrictions on the entry of motor vehicles.

Dissimilar economic credentials of the BIMSTEC member nations are also partly responsible for the slow progress of the regional forum. The economies of BIMSTEC vary in terms of resource base, size of market, level of industrial development and economic performance. BIMSTEC accommodates a fast-growing economy like Thailand as well as LDCs such as Nepal, Bhutan and Myanmar. Besides, domestic political instability in some of the member countries has delayed the proceedings of the grouping.

*Dr. Rupak Bhattacharjee is an independent analyst on India’s Northeast and Southeast Asia. Comments and suggestions on this article can be sent on: [email protected])


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