BIMSTEC: Poised to make Progress?

India’s commitment towards establishing regional connectivity has been reiterated once again at the Bay of Bengal initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) Summit held at Kathmandu on August 30-31, 2018. According to Prime Minister Modi, BIMSTEC offers ‘a big opportunity for connectivity – trade connectivity, economic connectivity, transport connectivity, digital connectivity, and people-to-people connectivity.’ It is no secret that India is keen to make BIMSTEC work. Its invitation to the heads of the member states for an outreach during the BRICS summit in Goa in 2016 was an effort towards making BIMSTEC an effective organisation. As the largest economy in the grouping India decision to lead the regional group out of its present slumber was not unexpected.

For India, the raison d'être to build an effective BIMSTEC is manifold. This regional group is firstly, aptly poised to complement Indian overall foreign policy in its engagement with the south eastern economies, and secondly, it also dovetails into its domestic policy of integrating the North-East region both with rest of India as well as with its extended neighborhood. Thirdly, India is keen to drive a regional policy which has not experienced an effective regional initiative. Fourthly, assuming leadership and providing a momentum to BIMSTEC not divided by any sharp political differences, is a realistic expectation premised on its promise of leading India’s growth story.

India’s ‘Neighbourhood First’ and ‘Act East’ policies both find resonances within BIMSTEC. Indeed India’s ‘Look East’ policy coined in early 1990s had actually led to establishing a substantial terms of engagement with economies of the East and Southeast Asian countries. But India’s political and economic engagement with these vibrant economies bypassed India’s northeast region consisting of eight states (known generically as simply the North-East) that lies adjacent to them. Interestingly, this region is connected to the rest of India through a narrow corridor of 11 km, popularly known as the ‘chickens neck’, while each of the North- Eastern states share have international borders to share.

With the North-East forming a bridge between the two regions that the BIMSTEC connects, PM Modi also expressed his interest in ensuring North- Eastern states playing a ‘key role’ in enhancing connectivity within the member countries. Indeed, Bangladesh and Myanmar that are directly connected to India’s North-East are critical in making BIMSTEC operational. A functional BIMSTEC organisation will not only be the precursor to establishing trade and connectivity and creating cross border value chains with the member states but will also generate an economic momentum that will vitalise the land and sea route connections to the rest of India. The bilateral cross-border connectivity and transport corridors India is developing with them will be woven together into a regional transportation and connectivity network, complementing many of the other BIMSTEC agendas.¹ Without a doubt, significance of the Bay of Bengal for the security and development of all the member countries found references in Modi’s speech too.

BIMSTEC comprising of five South Asian states - Bangladesh, Bhutan, India, Nepal and Sri Lanka, and two Southeast Asian immediate neighbours in the region, Myanmar and Thailand - is a unique regional initiative straddling two regions. For an organisation that brings together one of the most integrated regions with one of least integrated regions of South Asia, BIMSTEC’s activities seemed limited to official meetings and issuing some joint statements. Clearly, BIMSTEC was yet to capture the imagination of the nearly 1.6 billion people inhabiting the region making up 23 per cent of the total world population it represents. Its visibility both within the member countries and outside has been rather limited.

At this juncture, with BIMSTEC entering its 22^nd year, it is important to examine the status of this grouping. Conclusion of just four summits in over two decades speaks louder than any other statement would. The initial decision to hold summit meetings every four years was subsequently changed in 2004, through a ministerial meeting, to holding it every two years. The decision, could not be implemented for a variety of reasons. That apart, the lack of interest seems obvious.

How do the other member countries view BIMSTEC? Thailand, the second largest economy in BIMSTEC, has in fact played a lead role in many of the BIMSTEC initiatives, especially till a Secretariat was established in Dhaka in 2014. The idea of BIMSTEC flows well into Thailand’s ‘Look West’ policy that focuses on promoting multi-dimensional connectivity (land and sea), trade and investment, and people-centric BIMSTEC visibility. Connectivity being a core interest for all, in the run up to the Summit, the foreign ministers’ group agreed on 167 various connectivity-related projects at an estimated cost of $50 billion.

The BIMSTEC Motor Vehicle Agreement (MVA) would be a precursor for any land connectivity to be operational. It would be useful to recall Thailand's concerns over the proposed BIMSTEC Motor Vehicle Agreement during 2014. They had insisted on domestically-owned transport companies being allowed to participate to ensure protection to the local players. Thus, they had proposed to limit the participation for trucking companies that belong to the member countries stipulating a limitation of 51 per cent (stake of) Thai or Indian companies.² There are several such outstanding issues to resolve before any actual progress is possible.

While the 4^th Summit has initiated establishing BIMSTEC Grid Inter-connections paving the way for energy trade among member states, the idea of a Free Trade Agreement (FTA) mooted by Thailand in the past has seen limited progress. The recently launched Federation of Indian Chambers of Commerce and Industry (FICCI) Knowledge Paper on BIMSTEC also similarly suggests concluding negotiations for FTA agreements and trade facilitation but the trade liberalisation process is still far from being finalized, and it was not covered under the latest round of discussions held in Kathmandu given the differences over market access issues. Interestingly, Thailand seems comfortable with the slow pace within BIMSTEC. At a recent BIMSTEC panel discussion at FICCI, where several diplomats from the member states shared their views, the Thai Ambassador cautioned against rushing and suggested patience in taking this process forward. Although the advantages of organic processes was highlighted, it is difficult to see BIMSTEC growing through such measures.

Myanmar is a critical player in the connectivity plans too and towards that end India has been undertaking both bilateral and other regional connectivity plans. However, apart from reference to the draft BIMSTEC Master Plan on Transport Connectivity by President U Win Myint, there seemed no other substantial plans underway³. Myanmar has been designated as the Lead Country of the Agriculture Sector and will host the first BIMSTEC Ministerial Meeting on Agriculture in Myanmar within the next year. The point about a peaceful environment for improving regional networks was made at the FICCI meeting too.

Certainly, there are a few outstanding bilateral issues, but in the constantly changing international environment, absence of any friction is a near impossibility. Indeed, an effective regional grouping can offer conflict resolution mechanisms.

For PM Oli, Nepal hosting this Summit shortly after forming government under the new constitution is an achievement of sorts. He is keen to extend cooperation with India and all regional players no doubt. Oli, however voiced his dismay about BIMSTEC not living up to its potential. At the same time, voices outside the government have also questioned the rationale behind Nepal’s being a member of this regional group.⁴ Others have also pointed to consider utilising Nepal’s water resources in the interest of member countries.

BIMSTEC actually offers both Nepal and Bhutan an access to a vast region in the Bay of Bengal to break out of its landlocked state existence in the Himalayan region. Keeping in mind, the sensitivity of Bhutan to land connectivity issues, improving their trade and services access to Bay of Bengal region, will be a useful exercise.

For both Bangladesh and Sri Lanka, BIMSTEC offers ample opportunities. As the lead country in trade and investment and climate change, Bangladesh has been able to improve its outreach through new connectivity and energy corridors in the South Asian region and is now keen to extend the same to the South East economies too. Bangladesh in the past has also led the discussion on Blue Economy, focusing on one of the core sectors of cooperation for sustainable development which finds synergy amongst all the members. Issues of climate change and of ecology necessarily finds equal resonance. Nepal, given its geography, has also been distinctly cognisant of the concept of ‘Mountain Economy’ for ushering in prosperity and development in the BIMSTEC region.

The present BIMSTEC Secretary General, who hails from Bangladesh, has expressed interest in ensuring progress within this regional grouping but the apparent lack of secretariat support has impeded its functioning. Thus, members committing greater funding to the group’s activities and investing in the Secretariat with some decision-making powers will go a long way in strengthening the Secretariat which is an essential component of an effective BIMSTEC. Similarly, holding annual Summit and increasing the interactions at both government and non-governmental levels will enable BIMSTEC to acquire greater momentum.

Sri Lanka, which has now taken over the Chairmanship from Nepal, has the potential to lead the trade and security issues at the littorals of the Bay of Bengal, both issues that are critical to making BIMSTEC a robust entity. While experts have argued about BIMSTEC offering an alternative to China’s One Belt One Road initiative, the institutional lethargy to move on several of the ideas seems irrational.

While BIMSTEC lacks visibility in the public domain, there has been a variety of dialogues at the official level. Members have held discussions on disaster management and India will be hosting the first ever military exercise shortly. India has in the past suggested developing the Bay of Bengal region as ‘common security space’ and sharing of best practices on this forthcoming counter- terrorism platform would not only be a first of its kind initiative but possibly a move towards all members converging on this idea of formulating common responses to common security challenges.

Notwithstanding the above, BIMSTEC is yet to unveil any substantial project that connects all. There have been suggestions for prioritising some key areas, such as connectivity, energy, trade and investment, counter-terrorism and people-to-people contact before consolidation of all the 14 core designated areas of cooperation.

The 18-point declaration of the Summit’s core theme of 'Towards a Peaceful, Prosperous and Sustainable Bay of Bengal Region', amongst others, recognised Thailand’s suggestion of ‘reprioritisation’ of the core areas to five pillars of cooperation, including connectivity, energy, trade and investment, counter-terrorism and people-to-people contact. Towards this, a calibrated opening of the Andamans to BIMSTEC tourism could be examined too.

There are clear limitations to the efforts being confined to the governmental sectors. Evidently, proposals have taken long to be finalised and most ideas have been confined to discussions only. For BIMSTEC to be effective, it has to closely engage with the real stakeholders, essentially the people of BIMSTEC. Thus, in continuation of the policy suggestions contained in the FICCI Knowledge Paper, several ideas, popularly tagged as low hanging fruits that do not suffer the problems of building large infrastructure and similar issues, have been given attention. Some of the decisions taken at this Summit, including opening up a Bay of Bengal Centre at Nalanda University, building knowledge network, increasing social cultural connect etc. would be a way forward. Increasing the visibility of BIMSTEC among its own people will create energy and greater synergy. It seems apt to conclude with the words of PM Oli, ‘Translating the promises into action will be a key challenge ahead. The visibility of BIMSTEC will lie in progress it makes and, in its capacity, to deliver.’

People of BIMSTEC will look forward with hope to see the promises being delivered this time round.

Endnotes

1. Sreeradha Datta, ‘BIMSTEC: Compelling reasons for India to make it work,’ Asia Dialogue, 22 Jan, 2018 at http://theasiadialogue.com/2018/01/22/bimstec-compelling-reasons-for-india-to-make-it-work/ [3]
2. Thailand expresses concern over BIMSTEC motor vehicle pact, Business Standard. April 11, 2018.
3. President U Win Myint attends 4th BIMSTEC Summit Aug 31, 2018 at http://www.globalnewlightofmyanmar.com/president-u-win-myint-attends-4th-bimstec-summit/ [4]
4. Despite Playing Host at Fourth BIMSTEC Summit, Nepal Has Little to Look Forward To The Wire, 26 August 2018