25 years of BIMSTEC
Anniversaries are great occasions to review the journey traversed so far and share collective memories. The year 2022 marks 25 years of establishment of BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation). Twenty five years of BIMSTEC shows several time-tested achievements, which are important for Bay of Bengal communities coming together and have had a huge collective impact on community building.
The region shares strong history and civilizational links having similarities in climate, food, cuisine, language, music, scripts, spirituality, clothing and textiles, and so on. Unlike the EU, the BIMSTEC is well-knitted by strong colourful cultural threads. A sense of common public goods (e.g. shared natural resources, security, education, cuisine, music) is quite distinctly visible among the countries in the region. In Tagore's words, "Amar Sonar Bangla" resonate the Bay of Bengal, rises beyond cultural, religious, political differences as well as borders.
Baby steps 25 years ago transformed the region as a golden heartland of Asia. Today, the BIMSTEC region is home to around 1.6 billion people, which constitute around 23 percent of the world population and 4percent of the world GDP and 4.5 percent of the world trade. This seven-nation organization of Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand enjoys a strategic location in Bay of Bengal that others cannot match. No other region can beat the BIMSTEC in terms of geographical contiguity and access to the ocean: it contains the world's best mountains, blue deep sea and desert.
Three Bay of Bengal countries, namely, Bangladesh, Myanmar and Nepal, are likely to gain developing country status a few years from now. New market access is crucial for Bangladesh and others. Here, the BIMSTEC provides a unique opportunity for its members from South Asia and Southeast Asia to collaborate for mutual benefit.
Bay of Bengal countries are at different levels of development with different income levels. It has three developing countries (India, Sri Lanka and Thailand) and four least developed countries (LDCs) (Bangladesh, Bhutan, Nepal and Myanmar). The last 25 years came out highly rewarding in terms of growth in the Bay of Bengal region. Smaller economies in the Bay of Bengal region managed to grow faster than bigger economies, which is a positive sign of regional prosperity and inclusivity. In terms of growth, Nepal comes next. Such a spectacular expansion of economic size was accompanied by higher openness to trade, strong global growth and a powerful regional partnership in the Bay of Bengal region.
Another vital aspect of the Bay of Bengal region is that it has two relatively large middle-income economies, namely India and Thailand, which generously provide higher market access to the remaining Bay of Bengal countries, thus pulling up the regional demand and supply on a continuous basis.
The rising intra-regional trade is another manifestation of growing regional integration in the Bay of Bengal region- increased to 8 per cent in 2021 from 4.5 per cent in 1997. Bhutan and Nepal heavily depend on the Bay of Bengal region for their trade. Short term future trade scenario looks grim in view of several global uncertainties including a prolonged Russia-Ukraine war and rising trade restrictions worldwide. An economic recession, if prolonged, can lead to long-term damage to the regional economy, particularly output and productivity growth. Under such an unfolding scenario, a comprehensive regional strategy addressing the impact of the current crisis focusing on growth supportive reforms may put the BIMSTEC region back on higher regional trade and strengthen the regional integration. Countries need to leverage regional cooperation through the BIMSTEC process in order to combat the adverse effects of the pandemic.
One can see a rejuvenated momentum to the BIMSTEC process at present due mainly to political directions as it has received at the BRICS-BIMSTEC Outreach Summit, held at Goa in 2016. Thereafter, the 4th BIMSTEC Summit, held at Kathmandu in 2018, has recommended three key measures: (i) strengthening BIMSTEC Secretariat; (ii) activating the BIMSTEC institutions; and (iii) setting up BIMSTEC Development Fund. Substantial progress has been made thereafter in terms of taking steps to energise the BIMSTEC integration. BIMSTEC has gained further momentum at the recently held 5th BIMSTEC summit in Colombo.
Achievements are many in the last 25 years, of which three deserve mention: First, BIMSTEC countries have set up the Secretariat and gradually put in place the BIMSTEC Charter, along with rationalization of the sectors of cooperation from 14 to 7.
Second, BIMSTEC has introduced the Master Plan for BIMSTEC Transport Connectivity, which has identified 141 "flagship" projects to enhance connectivity in the region at an estimated investment of US$ 47 billion.
Third, some important instruments were implemented such as the BIMSTEC Agreement of Grid Inter-connection; BIMSTEC Convention on Mutual Legal Assistance in Criminal Matters; Memorandum of Understanding (MoU) on Mutual Cooperation between Diplomatic Academies/Training Institutions of BIMSTEC Member States, among others. The ongoing BIMSTEC Coastal Shipping Agreement and BIMSTEC Motor Vehicle Agreement, when completed, are likely to scale up the connectivity and integration of the region. With Charter in place, the successful implementation of these agreements can pave the way for the hugely aspired greater integration in the region.
Potentials are high and the BIMSTEC can do more. For a start, there is the long-standing unfinished agenda item of concluding a BIMSTEC Free Trade Area (FTA) which has been under negotiation since 2004.
A comprehensive BIMSTEC FTA can help to reduce barriers to trade and investment and assist the business to join global supply chains. At the 5th Summit, all the heads of the BIMSTEC Governments/States expressed a strong desire to conclude the BIMSTEC FTA negotiation. Therefore, we must bring the BIMSTEC FTA to a successful conclusion within a reasonable time. Besides, moving to a regional single window in customs and a paperless trade regime can help to reduce trade costs and facilitate cross-border business.
Trade facilitation measures such as simplification of customs procedures and mutual recognition of standards will be important to further build up and strengthen the supply chain in the region. In fact, the Indian Prime Minister in his speech at the 5th BIMSTEC summit has called for a high level trade facilitation arrangement for the region.
Nonetheless, significant work is needed to prepare BIMSTEC members to embrace the potential of the fast-moving digital economy. This means investment in digital technologies and related infrastructure, a business-friendly regulatory approach to e-commerce and investing in digital skills.
The Secretariat needs to be adequately resourced and has sufficient delegated powers to fulfil its role as a coordinator of activities across BIMSTEC members. BIMSTEC Secretariat has been entrusted to come out with the Pans of Action (POA) for the region in view of reorganisation of priority areas of cooperation. With the increased resources, there is now a need to develop a roadmap for the capacity building of the BIMSTEC Secretariat.
Way forward, the Bay of Bengal countries should give renewed focus to public health management. Collective action in public health will pave the way in effectively controlling the health-related uncertainties within and beyond boundaries. Here, ASEAN offers many important lessons to the Bay of Bengal region. Regional connectivity is at the core of BIMSTEC cooperation. Under the chairmanship of Thailand (both for region and connectivity cooperation), some of the projects need to be rolled out quickly. Thailand's experience in building connectivity ASEAN and CLMV-T may offer important leads while implementing the BIMSTEC connectivity master plan. The Tri-lateral Highway (TH) is getting ready. Bangladesh has shown interest to join the TH project. The iconic Padma Bridge will be opened to the public later this month, which would better facilitate trade and transportation in the region.
BIMSTEC countries may negotiate a BIMSTEC Railway Agreement. Along with it, a regional air transportation agreement in cargo and passenger services will lead to promote faster mobility of goods and services like tourism, health and education. Maritime connectivity in BIMSTEC is another area which requires our utmost attention. BIMSTEC countries have made relatively good progress in border infrastructure, and time is ripe for the BIMSTEC nations to work towards a shared border.
Quality of electricity is critical to fuel the growth. Exchange of energy requires better attention. The region is going to face many new challenges in the next 25 years including those that are part of climate and biodiversity. BIMSTEC countries should work together on emission reduction, energy efficiency, and renewable energy targets.
Bay of Bengal countries also need development partners like Japan who can provide the investment, technology and infrastructure.
Thailand, the current Chair of BIMSTEC, is in the driving seat till the 6th BIMSTEC Summit to be in early 2024 as per the latest charter. The last 25 years have been a time of unprecedented peace and prosperity. BIMSTEC countries must keep on adding further momentum to regional cooperation and integration leaving aside divisive narrow differences.
The author is Professor, ASEAN-India Centre (AIC), Research and Information System for Developing Countries (RIS), New Delhi. Views are the author's own.