Financial Express, India
BIMSTEC meet to positively impact India’s northeast region
By Prabir De
4 November 2008
The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) comprising Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand established in 1997 is a $810 billion economy, sharing about 22% of world population and 3.64% of surface area. After a gap of three years, India is going to host the second BIMSTEC summit during November 11-13, 2008 at New Delhi. The last summit was held in Bangkok in 2004. The summit-level meeting in BIMSTEC was delayed mainly due to political reasons and non-cooperation of some of the member countries.
BIMSTEC is largely free from any security or political baggage of the past like South Asia Association of Regional Cooperation (Saarc). On the contrary, it gives an excellent opportunity to provide a bridge between SAARC and Association of South East Asian Nations (Asean). The progress in BIMSTEC has great positive implications for development of India’s northeastern region transforming it from a security dilemma to India’s gateway to the East. India needs to take lead in making BIMSTEC a prosperous region by promoting integration within the region and thus having a greater say, both regionally and globally.
There is no denying that what it has achieved in just 11 years of its existence since 1997 has not been inconsiderable. Actions germinate from ideas, and BIMSTEC stands out as a great idea, a natural idea that is shared by each of the seven member nations who have seen their history, existence and ethos spun around one of the most beautiful water bodies of the world, the Bay of Bengal. The very fact that the bloc is having a second summit within four years of the first indicates a sense of purpose, a feeling of urgency, and the constant hammering of overarching common aspirations.
The BIMSTEC members have listed 13 priority areas, mostly economic, each closely related to the other. The joint statement of the 10th BIMSTEC ministerial meeting on August 29, 2008 laid stress on poverty alleviation, which it felt has to be supported by programmes such as the creation of a food bank for the region, flood control, and checking climate change which could spell mass destruction over large tracts in the region, which even otherwise remains vulnerable to nature’s fury like floods, typhoons and tsunamis, excess or deficient rainfall.
But much of that agenda has not been addressed so far. The current volume of intra-regional trade in BIMSTEC is not large ($ 18.14 billion in 2007), compared to Asean, EU and Nafta. Unlike Saarc, least developed countries (LDCs) and landlocked countries are having higher share in intra-regional trade in BIMSTEC. For example, intra-regional export shares of Myanmar and Nepal have gone up substantially. Trade integration of large economies like Thailand with BIMSTEC has also increased in recent years. However, a large trade potential is yet to be exploited.
While BIMSTEC has made significant progress in integrating with the global economy, integration within the region has remained limited. The BIMSTEC countries have maintained a higher level of prot-ection within the region than with the rest of the world. There is little of cross-border investment and connectivity within the region. The flow of ideas, normally measured by the cross-border movement of services, is all low for BIMSTEC.
The region is yet to finalise the FTA, although the framework agreement was signed in 2004. Therefore, restrictive policies have neutralised the beneficial effects of common cultural affinity, adjacency, and the geographical advantage that the common access to the Bay of Bengal that could have yielded.
Unless some of the basic facilities are developed, the connectivity among the BIMSTEC members will remain at a low level and the full potential of intra-regional trading will remain unutilised. But one immediate task for the forthcoming summit in November 2008 is to devise ways and means on how to fill the glaring gaps that exist in connectivity, transport and infrastructure, and integration software like harmonisation of customs and standards. The good thing is that the regional leaders are now seized of the issues, and are pushing forward action plans to create better physical connectivity and easier transport and trade flows by 2020. They would like selected priority projects to be completed earlier, by 2014.
Many issues other than transport and logistics are equally important for promoting trade within the region and with other regions. However, the region faces a new threat of a slowdown in growth in the wake of the global financial crisis. BIMSTEC can face the new challenges more effectively if it could achieve deeper regional integration.
The good thing is that unlike the Saarc which all the time is called upon to contend with bilateral political conflicts, BIMSTEC does not have such skeletons in the cupboard. But, misgivings over India’s big brother image remain and often show up in bloc deliberations. The Delhi Summit will be another opportunity for India to sell its commonness and another occasion for the other members to convince themselves that it has no intention to stand out as an awkward swollen thumb. A stronger BIMSTEC would also mean a more stable and prosperous Asia.
The author is a fellow at Research and Information System for Developing Countries, New Delhi. The views expressed are personal.