Context: Intra-regional trade amid the pandemic, technology, innovation and finalizing of the BIMSTEC free trade agreement is likely to be on the agenda, nearly two years after the body’s last meet in Kathmandu.
- BIMSTEC Secretariat was opened in Dhaka, Bangladesh.
- The BIMSTEC region is hometo roughly 22 per cent of the global population with a combined GDP of over $2.7 trillion.
- It aims to accelerate economic growth and social progress among members across multiplesectors — trade, technology, energy, transport, tourism and fisheries, agriculture, public health, poverty alleviation, counter-terrorism, environment, culture, people to people contact and climate change.
- The grouping holdsannual meetings hosted by member states based on alphabetical rotation. Sri Lanka is the host nation this time.
- Initially, the economic bloc was formed with four countries with the acronym ‘BIST-EC’ (Bangladesh, India, Sri Lanka and Thailand Economic Cooperation). With the entrance of Myanmar in 1997, the grouping was renamed ‘BIMST-EC’ (Bangladesh, India, Myanmar, Sri Lanka and Thailand Economic Cooperation).
- Finally, with the entrance of Nepal and Bhutan at the 6th Ministerial Meeting in 2004, the grouping was named Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC).
- BIMSTEC includes the countries of the Bay of Bengal region: five countries from South Asia and two from ASEAN. The organisation is a bridge between South Asia and South East Asia.
- It includes all the major countries of South Asia, except Maldives, Afghanistan and Pakistan. Given this composition, BIMSTEC has emerged as a natural platform to test regional cooperation in the South Asian region.
- BIMSTEC’s primary focus is on economic and technical cooperation among the countries of South Asia and South East Asia. So far, 14 sectors have been identified for enhancing regional cooperation among the member countries. Each sector has a lead country responsible for it.
- BIMSTEC’s major strength comes from the fact that it includes two influential regional powers: Thailand and India. This adds to the comfort of smaller neighbors by reducing the fear of dominance by one big power.
- Not much headway after the formation of BIMSTEC and literally it is on paper for all practical purposes. Only three summits were held in the first 20 years.
- However, in 2016, BIMSTEC received considerable international limelight because of BIMSTEC Leaders Retreat, followed by their Outreach Summit with BRICS leaders in Goa in 2016.
- The renewed focus and enthusiasm of the regional leaders to rejuvenate BIMSTEC, after two decades of its existence, is a welcome opportunity to boost effective cooperation.
- Founding Principles of BIMSTEC
- Cooperation within BIMSTEC will constitute an addition to and not be a substitute for bilateral, regional or multilateral cooperation involving the Member States.
- It is a bridge between South and South East Asia and a platform for intra-regional cooperation between SAARC and ASEAN Members.
IMPORTANT DEVELOPMENTS DURING THE PAST FEW YEARS
- In the Kathmandu Summit, it took the important decision to craft a Charter to provide BIMSTEC with a more formal and stronger foundation. The Foreign Ministers cleared the draft for the BIMSTEC Charter, recommending its early adoption.
- The shared goal is now to head towards “a Peaceful, Prosperous and Sustainable Bay of Bengal Region”.
- At the swearing-in of the Prime Minister during May 2019, the leaders of BIMSTEC, not SAARC, were invited as honoured guests.
- Members also conveyed their support for the Master Plan for Transport Connectivity.
- Three agreements are also on there way:
- Mutual legal assistance in criminal matters
- Cooperation between diplomatic academies, and
- The establishment of a technology transfer facility in Colombo.
- Permanent Working Committee will be setup to provide direction during the period between the two Summits and also to prepare the rules of procedure.
- Secretariat has been promised additional financial and human resources and enhancing its role to coordinate, monitor and facilitate the grouping’s activities
- The decision to establish BIMSTEC Development Fund is one positive development.
- It recognised that 16 areas of cooperation represents too wide a spectrum and the BIMSTEC Govts will make a serious endeavour to review, restructure and rationalise various sectors, identifying a few core areas.
- Plans to revitalize the Business Forum and the Economic Forum.
- A meeting of Home Ministers is planned; this will be in addition to the annual meetings of NSAs & meeting of army chiefs.
- It also planned to establish forums for parliamentarians, universities, cultural organisations and the media community.
BIMSTEC A BIG OPPORTUNITY
- Due to setbacks to the South Asian Association of Regional Cooperation (SAARC), BIMSTEC has emerged as the “preferred platform” for regional cooperation in South Asia.
- India was motivated to join BIMSTEC as it wanted to enhance its connectivity with ASEAN countries: a major component of its Look East Policy, now rechristened ‘Act East’ policy.
- BIMSTEC also helps smaller countries such as Bangladesh, Nepal and Bhutan to develop connectivity with ASEAN countries, the hub of major economic activities globally.
- As a trade bloc, BIMSTEC provides many opportunities. The region has countries with the fastest-growing economies in the world. The combined GDP in the region is around US$2 trillion and will likely grow further. Trade among the BIMSTEC member countries reached six percent in just a decade, while in SAARC, it has remained around five percent since its inception.
- Regional body is progressing well mainly because member countries do not have major border disputes. “Any small scuffles, like the Nepal-India map row, can be resolved bilaterally,”
- Small nations in the Bay of Bengal, Indian Ocean and Pacific Ocean are turning to regional blocs like BIMSTEC as they gain higher economic dividends from regional blocks than fragmented multilateralism promoted by the World Trade Organization (WTO).
- The Bay of Bengal has grown in strategic significance within the Indo-Pacific, especially due to the contest between India and China.
- NATURAL DISASTERS-
- The BIMSTEC region comprises 22% of global population. It is exposed to ever increasing threats from natural disasters. Regular disasters in the sub-region continue to cause trans-boundary impacts, damaging the lives, livelihoods and assets.
- BIMSTEC has the opportunity to enable paradigm shift from traditional approach of reactive towards a proactive holistic approach, which encompasses disaster preparedness, prevention, mitigation and risk reduction among the member countries.
- Much has been achieved in Humanitarian Assistance and Disaster Relief and security including counterterrorism, cyber security and coastal security cooperation.
- The academic and strategic community has shown ample enthusiasm through the BIMSTEC Network of Policy Think Tanks and other fora.
- India’s initiatives have resulted in some important developments, including the setting up of the BIMSTEC Energy Centre in Bengaluru and the BIMSTEC Business Council, a forum for business organisations to promote regional trade.
- Various committees have been formed to oversee developments in various sectors, e.g. the BIMSTEC Transport Connectivity Working Group, which held its inception meeting in Bangkok in 2016.
- Some key agreements signed by BIMSTEC members include aconvention for combating terrorism, transnational organised crime and illicit drug trafficking. However, this awaits ratification.
- Another is the BIMSTEC Grid Interconnection, signed during the BIMSTEC Summit in Kathmandu, Nepal, in 2018, which aimsto promote an optimal power transmission in the BIMSTEC region.
- Later in 2016, India held a joint BRICS-BIMSTEC Summit in Goa for the latter’s regional outreach. After this, the support for BIMSTEC gained further momentum.
FAILURES OF THE BODY
- At least, six legal instruments are awaiting finalization, only one i.e. Memorandum of Understanding on grid interconnection could be signed.
- Framework agreement on Free Trade Area was signed 16 years ago which signed in 2004 but, there is no commitment to early conclusion of FTA.
- Energy Centre was established in 2009, but, it is still struggling for the operationalization.
- It talked about various connectivity measures like trade connectivity, economic connectivity, transport connectivity, digital connectivity etc.
- BIMSTEC is also one of the least integrated regions of the world. Lack of connectivity and timely availability of business information as the greater hindrance for closer economic engagement. But, Motor Vehicle Agreement and the Coastal Shipping Agreement hasn’t came to force yet.
- There is no decision on holding the annual summits.
- Body’s inadequate response towards issues like the Rohingya crisis which involves three of its member countries — Myanmar, India and Bangladesh.
CHALLENGES FACED BY BIMSTEC
- BIMSTEC didn’t have an official head office and meetingswere held at the Thai foreign ministry in Bangkok until it was given headquarters in Dhaka in 2011.
- A landmark achievement for BIMSTEC was the establishment of a permanent secretariat in Dhaka. However, the secretariat faces a severe resource crunch, both in terms of money and manpower, which has adversely affected its performance.
- the lack of leadership as the major drawback. In the past few years, this concern has been addressed as India has shown increased interest in the grouping.
- BIMSTEC presupposes cordial and tension-free bilateral relations, but this has not been the case, given the trajectory of India-Nepal, India-Sri Lanka, and Bangladesh-Myanmar ties in recent years.
- There are perceptible differences as Nepal and Sri Lanka want SAARC Summit revived, even as they cooperate within BIMSTEC, though on a low key.
- China’s decisive intrusion in the South-Southeast Asian space is casting dark shadows. Some argued that BIMSTEC would make progress, if China is accepted as its principal interlocutor and partner, but there are few takers for this in India.
- Military coup in Myanmar, brutal crackdown on the protestors is major challenges. If at all BIMSTEC Summit is held, then the Commander-in-Chief of Myanmar, may create lot of unease in the Summit.
- BIMSTEC has been slow on the come-up because unlike bodies like the EU or ASEAN, it is based on consensus-building which takes time.
- Other countries in the Bay of Bengal like Malaysia, Singapore and Indonesia have not been involved even as dialogue partners have also been a point of contention.
- In 2018, India aggressively pushed for the conclusion of a long-pending FTA among BIMSTEC nations but differencesbetween India and Thailand over market access for professionals, duty cuts on traded goods and policy relaxation stalled the process.
- A “paradigm-shift” is required in raising the level of cooperation and regional integration. The grouping needs to reinvent itself, possibly renaming itself as the “Bay of Bengal Community”.
- Improving the capacity of the secretariat, both in terms of manpower and funding;
- Ensuring tangible results/benefits, which will add to the motivation of the countries to concentrate on BIMSTEC (projects in the areas of tourism, digital connectivity, energy connectivity and humanitarian assistance in disaster relief should be considered); and
- Empowering BIMSTEC to be a platform for dispute resolution among member countries. This will require debates and discussions among the BIMSTEC countries to reach consensus.
- Regular annual summits should be held. Only then, its leaders convince the region about their strong commitment to the new vision.
- There is a need for setting up of regional institutional capacity for threat assessment and designing response strategies.
- It is also essential to address the knowledge gaps among the member countries.
- There is a need for setting up of research task force on various climate change and environment risks, so as to create a common understanding of the threats, create standards for emergency management and come up with cost effective solutions.
- India must make the best of this opportunity by translating the learning from the Disaster Management experiences of SAARC and ASEAN. The countries must realise that the security of the States in sub-region is contingent upon each other and therefore, ‘Environment and Natural Disaster Management’ would need to be prioritised as their common security agenda.
- As per FICCI study, there is a need for comprehensive Free Trade Agreement. It can become a real game changer. Ideally, it should cover trade in goods, services and investment. It should eliminate non-tariff barriers.
- IMPROVE CONNECTIVITY- Multimodal connectivity and speedy conclusion of BIMSTECFTA along with an effective energy sharing mechanism would have a multiplier effect on trade and investment.
- CREATE REGIONAL VALUE CHAINS
- There is a need to create regional value chains that could feed into Global Value Chains, which ultimately would help BIMSTEC member states take advantage of their collective capabilities.
- The prospects of MSMEs in Global Value Chains are also colossal.
- The process can augment MSME competitiveness, generate employment and encourage inclusive growth in BIMSTEC Countries.
- INTEGRATION OF WOMEN ENTREPRENEURS- Integration of women entrepreneurs into supply chains and building innovative business models for women is also the need of the hour.
The two organisations—SAARC and BIMSTEC—focus on geographically overlapping regions. However, this does not make them equal alternatives. SAARC is a purely regional organisation, whereas BIMSTEC is interregional and connects both South Asia and ASEAN. SAARC and BIMSTEC complement each other in terms of functions and goals. BIMSTEC provides SAARC countries a unique opportunity to connect with ASEAN. Since the SAARC summit has only been postponed, not cancelled, the possibility of revival remains. The success of BIMSTEC does not render SAARC pointless; it only adds a new chapter in regional cooperation in South Asia.
|A regional organization looking into South Asia||Interregional organization connecting South Asia and southeast Asia.|
|Established in 1985; a product of the Cold War era||Established in 1997 in the post-Cold War.|
|Member countries suffer for mistrust and suspicion||Members maintain reasonably friendly relations|
|Suffers from regional politics||Core objective is the improvement of economic cooperation among countries|
|Asymmetric power balance||Balancing of power with the presence of Thailand and India on the bloc.|
|Intra-regional trade only 5 percent||Intra-regional trade has increased around 6 percent in a decade|