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BIMSTEC must scale new heights

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Sri Lanka's President Mahinda Rajapakse, Myanmar's Prime Minister Thein Sein, Bangladesh's Chief Advisor Fakhruddin Ahmed, India's Prime Minister Manmohan Singh, Bhutan's Prime Minister Jigmi Thinley, Nepal's Prime Minister Prachanda and Thailand's Prime Minister Somchai Wongsawat pose for a picture during the inauguration ceremony of the second summit of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) in New Delhi, 13 November 2008 (Photo: Reuters/B Mathur).

In Brief

On 30 August 2018, the heads of the Bay of Bengal Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) countries will meet in Kathmandu for the fourth BIMSTEC summit. The last BIMSTEC summit was held in 2014 and a mini-summit was held on the sidelines of the BRICS summit in Goa in October 2016.

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Barring the Prime Minister of Bangladesh, this will be the first BIMSTEC summit for the current heads of the rest of the BIMSTEC member states: Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand.

BIMSTEC is a unique regional cooperation initiative in terms of member states’ geographical contiguity and access to the ocean. BIMSTEC is a resource powerhouse: it has access to the Indian Ocean and the Himalayas, as well as natural resources such as oil, gas and hydropower.

Although BIMSTEC made its humble beginnings in 1997, it was a low-profile regional bloc until recently. There are many reasons for this underachievement. Regional prowess notwithstanding, the regional advantages of BIMSTEC are yet to be unlocked. Tariffs are no longer a major barrier to intra-regional trade, but the costs and time associated with trade remain high. Intra-regional trade has grown only slightly to 7 per cent in 2016. Growth of intra-regional investment has also been negligible and the region is yet to witness any major regional connectivity projects.

The rejuvenated momentum of the BIMSTEC process at present is due mainly to the political direction it received at the BRICS-BIMSTEC Outreach Summit in Goa, where substantial progress was made to energise BIMSTEC integration. While this was a joint effort, Indian Prime Minister Narendra Modi’s political leadership ignited the integration effort.

Some achievements have been realised since the October 2016 summit. BIMSTEC member states have approached the Asian Development Bank to prepare a Master Plan for BIMSTEC Connectivity. Negotiations for a memorandum of understanding on the establishment of the BIMSTEC Grid Interconnection have been completed and the BIMSTEC Agreement on Mutual Assistance on Customs Matters has been signed. Negotiations for the BIMSTEC Coastal Shipping Agreement and the BIMSTEC Motor Vehicle Agreement are also underway.

A BIMSTEC Secretariat has been established and is now up and running. The foundation for greater cooperation is being laid in sectors such as tourism, the environment and climate change, counterterrorism, transnational crime, disaster management and cultural relations. For instance, BIMSTEC national security agencies have begun cooperating to combat transnational security threats such as smuggling, human trafficking, fake currencies, drugs and piracy.

But the glass is still half full. While progress in non-economic areas is laudable, BIMSTEC countries have failed to reach consensus on a BIMSTEC free trade agreement. Progress in physical and digital connectivity has also been limited.

Twenty years after the establishment of BIMSTEC, the organisation needs a new impulse to go beyond wishful thinking. There is no dearth of ideas. The real challenge is implementation. For example, Myanmar could use its strategic position to become a ‘Golden Gateway’ between the Bay of Bengal and the heartland of Asia. To realise the gains, BIMSTEC member states should speed up the integration process, both within and across the region.

What is clear is that BIMSTEC has achieved much over the last 20 years. But its success has given rise to new challenges that require fast-track interventions and solutions. Greater investment and improvements in cross-border infrastructure will be necessary to overcome the challenges associated with the size and geography of BIMSTEC countries. Among other things, BIMSTEC should give special focus to cross-border e-commerce and digital connectivity. More socio-cultural interactions will build a greater sense of ownership of BIMSTEC among the people of the region.

How can the grouping gain new momentum? BIMSTEC should complete the construction of regional economic corridors such as the Trilateral Highway, and Kaladan Multi-Modal Transit Transport Project. As the BIMSTEC region is a natural contour of the Indian Ocean, the organisation should also strengthen maritime security and safety. India may consider hosting the first BIMSTEC conference on maritime security and cooperation in 2019.

BIMSTEC countries should also aim for regulatory harmonisation to build regional value chains. Regional investment agreements are essential to encourage regional and global value chains. The organisation should aim to rationalise non-tariff measures to facilitate regional trade and production networks. BIMSTEC countries may also partner with observer countries to build connectivity and consider inducting new members from the Bay of Bengal region such as Indonesia.

To drive this agenda, BIMSTEC may consider establishing a BIMSTEC Centre or Bay of Bengal Centre in the region to function as a think tank for the BIMSTEC Secretariat. BIMSTEC could be a potential game changer: countries in the region are bound by geography and linked by history. Since expectations for the summit are set too high, BIMSTEC leaders must deliver another political push to take regional integration to the next level at the 2018 summit. A stronger BIMSTEC means a stronger Asia and Indo-Pacific.

Prabir De is a Professor at the Research and Information System for Developing Countries (RIS) and Head, ASEAN–India Centre (AIC), New Delhi. The views expressed in this article are his own and do not represent the AIC or RIS.

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