COLOMBO: It is well recognized that the integration of the economies of South and South East Asia will greatly benefit countries in the region and the world at large. But if the experience of the South Asian Association for Regional Cooperation (SAARC) is any indication, cooperation is hard to achieve in the Asian region, particularly in South Asia.
However, there is light at the end of the tunnel. The emergence of ASEAN showed the way to regional integration in South East Asia some years ago. Now, BIMSTEC (the Bay of Bengal Initiative for Multi-Sectoral Technical Cooperation) is performing a similar function in South Asia.
BIMSTEC initially brought together India, Sri Lanka, Bangladesh, and Thailand. Later, it embraced Bhutan, Nepal, and Myanmar also.
Indeed, SAARC has many functioning programs and a fully functioning Secretariat too. But it has not realized even a fraction of its potential because of intra-SAARC political conflicts (mainly between India and Pakistan); fears among the smaller states about losing their economic and political sovereignty to the regional “hegemon”, namely, India; and India’s fears of being hemmed in by a group of hostile neighbours plotting its destruction.
However, this does not mean that trade between SAARC countries is insignificant. In 2013, intra-SAARC trade stood at US$ 45 billion, up from US$ 16.64 billion in 2005. But it is taking place bilaterally, outside the SAARC framework. The potential is greater if trade takes place within the SAARC framework.
The failure of SAARC led to India’s enthusiastically welcoming Thailand’s proposal for a “Bay of Bengal Initiative for Multi-Sectoral Technical Cooperation (BIMSTEC)” in 1997.
“BIMSTEC stemmed from India’s Look East policy and Thailand’s Look West policy,” Sumith Nakandala, the current and the first Secretary General of BIMSTEC based in Dhaka, told Express. .
India wanted to be part of East Asia’s growing economy and Thailand wanted free access to the growing Indian market,” added Mostafa Abid Khan of the Bangladesh Foreign Trade Institute.
Other countries joined apparently because of India’s diplomatic initiatives, but only after realizing the enormous gains to be had through cooperation. A paper prepared by theJaipur-based Consumer Unity and Trust Society (CUTS) says that BIMSTEC may succeed where SAARC has failed because “its members are primarily guided by their economic rather than by political interests.”
The absence of Pakistan in BIMSTEC (because it is not a Bay of Bengal littoral state), is a significant factor in generating hopes about the organization’s success. Unlike SAARC, BIMSTEC is not hostage to any perennial conflict such as the Indo-Pak one.
The BIMSTEC region offers a market of 1.6 billion people, about a fifth of the global population. In 2013, intra-BIMSTEC trade was US$ 74.63 billion, up from US$ 25.16 billion in 2005. If the BIMSTEC Free Trade Agreement is put in place, trade within BIMSTEC could go up by US$ 43 to 59 billion, Nakandala pointed out.
But to realize this goal, the woefully inadequate transport and infrastructural facilities in the member countries will have to be enhanced significantly, he cautioned.
An Asian Development Bank (ADB) study (referred to as BTILS) submitted in 2014, identified a number of projects and divided then into a Long List and a Short List enhancing connectivity in the region. The Long List had 116 projects costing around US$ 45-50 billion and the Short List had 65 projects costing around US$ 15 billion, Nakandala said.
The ADB’s Short List, to be implemented between 2014 and 2020, mentions 16 projects in Bangladesh, 4 in Bhutan, 17 in India, 9 in Myanmar, 6 in Nepal, 5 in Sri Lanka and 8 in Thailand.
However, these projects will have to be implemented by the respective national governments either by themselves or with donor money.
“BIMSTEC acts only as a pressure group to make member state prioritize projects and urge their early implementation. It is not a funding agency nor is it an implanting agency. Therefore its influence over implementation of projects is limited,” Nakandala said.
Priority For Infrastructure
Roads are a priority in the BIMSTEC region as 70 percent of trade here moves by road and the roads are bad. For the railways to be useful, they should be standardized because, some countries have meter gauge (like Bangladesh) and others (like India and Sri Lanka) have broad gauge. To facilitate trade by sea, deep waters ports will have to be constructed.
Under the South Asia Sub-Regional Economic Cooperation (SASEC) program funded by the ADB, Chittagong port in Bangladesh has improved its container handling facility, and freight movement to Kolkata and Haldia ports in West Bengal, have been eased. Air transport, made cheaper by low cost airlines, is being given a boost with a US$ 100 million SASEC assistance to improve airports.
“BIMSTEC is trying hard to facilitate trade by urging reduction or elimination of non-tariff barriers such as lengthy administrative procedures, unnecessary documentation requirements, lack of automation, and lack of harmonization in trade regulations. Taking intra-South Asia trade alone, there could be a 60 per cent increase if trade facilitation, including infrastructure improvement, is brought about. And South Asia’s trade with the rest of the globe could go up by 30 percent,” Nakandala said.
Beehive of Activity
After the establishment of a Secretariat with a Secretary General in September 2014, BIMSTEC has become a beehive of activity.
“Progress was slow for many years because of the lack of a Secretariat. But since its establishment, there has been enormous cooperation, especially in the areas of counter terrorism and transnational crime. This year, there had been three sub group meetings on narcotics trafficking, financing of terrorism and intelligence sharing. There was a Task Force on Grid Connection which met this year. We have almost finalized the BIMSTEC Convention on Legal Assistance in Criminal Matters. And Sri Lanka has promised to set up a Technology Transfer Facility,” Nakandala said.
However, he regretted that cooperation in agriculture has been slow though it ought to be easy. And trade facilitation in terms of FTAs and removal of Non-Tariff Barriers is yet to show progress.
“Though real integration will come only through trade links, economic and nationalistic considerations still prevent trade relations from blossoming. BIMSTEC’s job is to get member states to address these sensitive issues,”Nakandala said.
A great believer in the value of “People-to-People” contacts, the Secretary General said that besides striving for “State-to-State”contacts and Cooperation, “People-to-People” contacts should also be encouraged in equal measure, because People to People contacts and cooperation will automatically lead to State to State contacts and cooperation.
“We should build on the existing areas of cooperation at the state to state level as well as the people to people level in areas where there is a felt need for regional cooperation. And based on the trust developed through these micro-level contacts, we can promote trade and investment which require a great deal of mutual trust,” Nakandala said.