By P.K.Balachandran/Ceylon Today
Colombo, February 14: The 5 th. Summit of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is to be held at the end of March in Colombo. It is expected to be an in-person Summit in which Indian Prime Minister Narendra Modi is expected to participate.
The seven-nation BIMSTEC, comprising Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand, has bright prospects if the members pull together on well-thought out schemes. But going by experience since its founding in 1997, BIMSTEC has inherent problems, preventing it from realizing its potential. Though better placed than SAARC to coalesce into a conflict-free group, BIMSTEC has been showing many warts characteristic of SAARC, namely, mutual suspicion, rivalry and distrust. Both organizations lack commitment at the very top level. While SAARC summits have been postponed many times, BIMSTEC has had only four summits since 1997.
The Bay of Bengal region covered by BIMSTEC is home to around 1.6 billion people, who constitute 23% of the world population. It houses a collective economy of US$ 3 trillion, which accounts for 4% of the global GDP and 3.7% of global trade. But BIMSTEC is not a homogenous group. Its members are at different stages of development having different income levels. Among the seven members, five are also members of the dysfunctional SAARC.
However, presently, increased cooperation is called for because of the adverse impact of COVID on all member countries. Integration through BIMSTEC will help overcome divisions that impede trade flows, movement of people and capital, needed to fight the pandemic.
According to an ESCAP Working Paper written by Prabir De, the decade prior to the pandemic (2010 to 2019) was highly rewarding for BIMSTEC countries. “The smaller economies grew faster than the larger ones, which is a sign of regional prosperity and inclusivity. With a rate of growth of over 10% per annum, the GDP of Bangladesh, for example, expanded over five times in the last two decades, and reached to US$ 302.57 billion in 2019 from US$ 53.37 billion in 2000. In terms of growth, Nepal comes next. Such a spectacular expansion of economic size was accompanied by higher openness to trade and regional partnership in the Bay of Bengal region,” he notes.
Intra-regional trade grew. Almost 98% of Bhutan’s global exports were directed to the Bay of Bengal region in 2019, increasing from 85% in 2000. Similarly, about 69% of Nepal’s global exports were directed to the Bay of Bengal region, up from 43% in 2000. India, the largest economy in BIMSTEC, had exported US$ 25.45 billion in 2019 to the region, followed by Thailand (US$13 billion) and Myanmar (US$4 billion).
However, during the pandemic, intra-regional trade faced deceleration and the trade volume declined. Except Bangladesh, Bhutan and Nepal, others plunged into economic recession in 2020. BIMSTEC countries are likely to witness about 9.11% GDP loss (US$ 355.37 billion) during 2020-22.
Individual countries may do well or badly. But what about BIMSTEC as an organization? How well has it been meeting collective challenges? Though established in 1997, it has been a low profile organization, seeing some rejuvenation only in 2016, mainly due to the political directions it received at the BRICS-BIMSTEC Outreach Summit, held at Goa that year. The 4th BIMSTEC Summit, held at Kathmandu in 2018, had recommended three key measures: (i) strengthening BIMSTEC Secretariat; (ii) activating the BIMSTEC institutions; and (iii) setting up BIMSTEC Development Fund.
A paper by Padmaja Murthy written for CUTS International says that BIMSTEC arose as a result of India’s “Look East” Policy and Thailand’s “Look West” Policy. Unlike SAARC, it has had a clear economic agenda. Both India and Thailand had been wanting to benefit from globalization. And India wanted to form an organization without an irritant like Pakistan in it. Further, India’s relations with Myanmar and Sri Lanka could be strengthened to combat China’s growing influence in those countries. Murthy adds that for Nepal, Bhutan, Bangladesh and Sri Lanka, BIMSTEC is a forum where India’s overpowering presence can be minimized by the presence of Thailand. In SAARC, on the other hand, there was no such countervailing economic power.
In 1997, BIMSTEC adopted the mechanism of “sub- regional cooperation” by deciding to co-operate in six areas with each member country playing a “lead role” in planning and implementing programs in their specific areas. These sectors were further divided into sub- sectors with each sub-sector having a “chair country” responsible for co-coordinating activities of that sub-sector reporting to the lead country.
Members indicated interest in discussing Non-Tariff Barriers, market access issues, services and Preferential Trade Agreements (PTA). In 1998, the BIMSTEC Business Forum was formed to enhance private sector cooperation. In 1999, the BIMST-EC Economic Forum was established. In November 2003, the BIMSTEC- Chamber of Commerce and Industry was launched. Member countries offered training scholarships in technical areas.
Meetings resulted in excellent reports on project possibilities. Areas were identified and studies were either carried out or were commissioned. In August 2006, BIMSTEC members decided that the areas of cooperation should be expanded to 13 sectors from the six originally agreed upon. The new areas were agriculture; cultural cooperation; environment and disaster management; public health; people to people contact; poverty alleviation; counter- terrorism and transnational crime.
Paucity of Action on Reports
However, on the ground, not much progress has been made. Summits have been few and far between – only four since 1997.Thus, BIMSTEC has lacked frequent political directions from the top. Implementation of reports has been wanting. Why does co-operation not take place? There is an opinion that the India-Pakistan differences have resulted in the ineffectiveness of SAARC. But there is no Indo-Pakistan conflict in BIMSTEC, as Pakistan is not a member.
The Bangladesh-Bhutan-India-Nepal Growth Quadrangle (BBIN-GQ) should also have been a success. But it has not taken off. That clearly brings out the fact there can be a trust deficit even in an organization without the India-Pakistan factor. According to Murthy, there are apprehensions that some BIMSTEC members will benefit more than the others and exercise domination. Or that national sovereignty will be compromised in projects which promote regional economic cooperation. Currently there is a debate in BIMSTEC as to whether the Mynamar junta should be invited, which is an ideological issue.
Murthy points out that all BIMSTEC countries are going through important socio-political transformations. “These processes have given rise to many dissident groups within them. In the past too, state authority has been challenged through violent means by non-state actors who had access to arms. Thus, on issues like terrorism and those linked with separatism and extremism, there is deep suspicion that the non-state actors are on many occasions being supported morally or politically or in other ways covertly or overtly by one or more of the member countries or some groups and religious organizations within these countries itself. These influential groups also obstruct efforts towards greater economic cooperation,” she says.
Then there is the inherited SAARC suspicious mentality, as five of the members of BIMSTEC are members of SAARC too. Some members feel that the way to get out of suspicious mindsets is to recognize bilateral differences, address them and sort them out. However, the most practical methodology would be one where sincere efforts are invested in “sub-regionalism and bilateralism.” This process has already been set in motion by India which is trying its best to forge bilateral relations with each country in the region. These bilateral agreements could gradually erase distrust at the broader level.
ADB’s program South Asia Sub-Regional Economic Cooperation (SASEC) through Regional Technical Assistance Grants (RETA), which identifies intra-regional projects, should also help bridge gulfs between member States. Private entrepreneurs, being less biased and driven more by profit, could invest in the region and help member countries shed distrust, Murthy suggests.