BIMSTEC – An Alternative Regional Grouping
The major achievement of the fourth BIMSTEC Summit held at Kathmandu from 30 -31 August, was that it took place so soon after the previous one. Since its establishment in 1997, there have been only four BIMSTEC summits – the first in Bangkok in 2004, New Delhi at 2008, at Naypyidaw in 2014 and now at Kathmandu. In its two decades of existence it has been virtually stagnant for the past 18 years and has received sudden impetus only in the past two years or so.
The Bay of Bengal Initiative for Multi Sectoral Technical and Economic Cooperation began in 1997 as BIST- EC or the Bangladesh, India, Sri Lanka, Thailand - Economic Cooperation acronymedafter its founding members. It began with the relatively simple goal of enhancing economic cooperation amongst its members. Myanmar joined later and the designation changed to BIMST-EC to incorporate it. Both the name and the charter were changed when Nepal and Bhutan joined in 2004 and it took on its present form. Today, as a regional grouping of nations adjoining the Bay of Bengal, it has the potential to be an engine of economic growth and is also the cornerstone of India’s ‘Neighborhood First’ and ‘Act East’ policies.
The virtual collapse of SAARC has provided the need for South Asian nations to come together in another forum shorn of Indo-Pak differences. BIMSTEC now seems to have taken over the agenda of political, economic and social cooperation which had been jettisoned by Pakistan’s repeated intransigence at SAARC.
SAARC has not achieved any of its objectives for multilateral cooperation amongst South Asian nations. The last SAARC summit at Islamabad in November 16 wasboycotted by India because of Pakistani involvement in the Uri attacks. Afghanistan, Bhutan, Bangladesh, Sri Lanka and Maldives too stayed away.The next SAARC summit, to be held later this year, seems to be heading to be a non-starter as well.BIMSTEC is gradually taking over the space vacated by SAARC and would perhaps deliver more effectively because it would not become an arena of Indo-Pak differences.Its seven nations- India, Bangladesh, Myanmar, Sri Lanka, Thailand, Nepal and Bhutan comprise of 22% of the world’s population and have a combined GDP of $2.7 Trillion. If it manages to enhance trade between its members and achieves its goal of ‘becoming a Free Trade Zone by 2021’ it could well become the world’s largest economic grouping after the European Union.
The BIMSTEC meet at Kathmandu with its theme of ‘Peaceful, prosperous and sustainable Bay of Bengal’ did provide forward movement in that direction. The most important achievement was the signing of the MoU between its members on the BIMSTEC Grid Connectivity which will promote connectivity amongst its members as a driver for economic integration. A Permanent Working Committee was established to upgrade the BIMSTEC Secretariat at Dhaka. A security framework was established for the first time, which will incorporate annual meetings of the NSAs and joint military and counter terrorism exercises. The BIMSTEC Development Fund was also established, which would act as a corpus of infrastructural development and in which India with its $2.3 Trillion economy is expected to be the major contributor.
Although it was not formally discussed, China was the elephant in the room. Through BIMSTEC, India can counter China’s growing inroads into the region, especially through its Belt and Road Initiatives. Most BIMSTEC nations are part of BRI projects – and many, like Sri Lanka, have already burnt their fingers through its exorbitant costs. If BIMSTEC can offer viable alternatives by providing connectivity amongst its members it would help enhance their economies with direct trade without any of the hidden costs associated with BRI.
Yet BIMSTEC cannot be an alternative to BRI. We cannot match China’s chequebook to provide the infrastructure for it. Whether we like it or not, BIMSTEC and BRI would have to go together. India can use its geography to good effect by acting as a land bridge to connect South and South East Asia. Many of BRI projects need India’s cooperation to succeed. For example,China has developed rail and road infrastructure to Nepal, and also provided it access to its ports. Yet, Chinese ports are 3700 kilometers from Kathmandu, while Calcutta and Vishakhapatnam are just around 700 and 900 respectively from the Nepal frontier. From there it is a short haul to the South East Asian Markets. If India can help develop the road links from Nepal to Indian ports it would provide easier, faster and cheaper routes for its imports and exports.
Similarly, if the land corridor between Nepal – India- Bangladesh- Myanmar and Thailand is developed with free overland transit for its members, the economies will become integrated with each other and also provide access to the ASEAN economies beyond. It is this kind of connectivity that should be provided for its memberto attain economic integration.
As BIMSTEC evolves, will it replace SAARC? By all accounts it should. Barring Pakistan, Maldives and Afghanistan, all other SAARC members are already part of it, and Maldives and Afghanistan would be gradually amalgamated, first as observers and then as full-fledged members. Many SAARC initiatives such as the Motor Vehicles Agreement (which proposed free movement of vehicles across its nations) and the Coastal Shipping Agreement had been blocked by Pakistan. It could also never be on the same page on the issue of countering terrorism. These measures can now be instituted amongst BIMSTEC members. Easing of visa restrictions and unfettered travel on the lines of the Economic Union can also be implemented. The SAARC vision could thus perhaps be better realized by BIMSTEC.
There would be challenges of course, and already there are internal rumblings. Nepal has protested against the dilution of SAARC and views BIMSTEC as a parallel, rather than an alternative to it. Nepal has also chosen to stay away from the BIMSTEC MILEX 18 –the first joint military exercise held at Pune in which all its members participated. It sent just three officers as observers instead. To add insult to injury a Nepali contingent was sent to participate in a joint 12 day ‘Sagar Matha Friendship’ exercise in China.
Nepal’s stance is undoubtedly caused by its growing closeness to China, but coming so soon after hosting the BIMSTEC Summit at Kathmandu, is surprising. It is however an indicator of the resistance India will encounter at each stage with the looming economic presence of China in the region. India’s challenge will be to provide viable alternatives which enhances connectivity in the region and would be shorn of the debt burden which accompanies BRI projects.
Prime Minister Modi identified five areas of connectivity which need to be developed – trade connectivity, economic connectivity, transport connectivity, digital connectivity and people-to-people connectivity. If this can be achieved, true economic integration will follow. Cooperation in security will also help counter the threat of fundamentalist terror that faces most of its nations.
BIMSTEC holds the promise to provide the nations in the periphery of the Bay of Bengal with an economic and security framework which could act as an engine of growth and stability. It just remains to be seen how much of the promise is actually realized.
Tailpiece: - Just as we go in to print, the BIMSTEC Transport Connectivity Master Plan has been announced. This plan envisages a India- Myanmar- Thailand trilateral highway; a Kolkata-Kathmandu road link; a Kolkata-Dhaka-Chittagong corridor and a Kandy–Colombo link. It is the first concrete step to enhance cargo movement across the region and a sign that perhaps BIMSTEC is truly on its way.