(BIMSTEC) Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation

Why in news:

Fourth BIMSTEC Summit concluded in Kathmanduon August 31, 2018

About  BIMSTEC:

The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is a regional organization comprising 7 Member States lying in the littoral and adjacent areas of the Bay of Bengal. This organization came into being on 6 June 1997 through the Bangkok Declaration. It constitutes seven Member States: five deriving from South Asia, including Bangladesh, Bhutan, India, Nepal, Sri Lanka, and two from Southeast Asia, including Myanmar and Thailand.

Initially, the economic bloc was formed with four Member States with the acronym ‘BIST-EC’ (Bangladesh, India, Sri Lanka and Thailand Economic Cooperation). Following the inclusion of Myanmar on 22 December 1997 during a special Ministerial Meeting in Bangkok, the Group was renamed ‘BIMST-EC’ (Bangladesh, India, Myanmar, Sri Lanka and Thailand Economic Cooperation). With the admission of Nepal and Bhutan at the 6th Ministerial Meeting (February 2004, Thailand), the name of the grouping was changed to ‘Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation’ (BIMSTEC).

Significance of BIMSTEC:

The regional group constitutes a bridge between South and South East Asia and represents a reinforcement of relations among these countries.BIMSTEC has also established a platform for intra regional cooperation between SAARC and ASEAN members.

The BIMSTEC region is home to around 1.5 billion people which constitute around 22% of the global population with a combined gross domestic product (GDP) of 2.7 trillion economy.

All seven countries have sustained average annual rates of growth between 3.4% and 7.5% from 2012 to 2016.

A fourth of the world’s traded goods cross the bay every year.

Key cooperation areas :

Starting with six sectors—including trade, technology, energy, transport, tourism and fisheries. For sectoral cooperation in the late 1997, it expanded to embrace nine more sectors—including agriculture, public health, poverty alleviation, counter-terrorism, environment, culture, people to people contact and climate change—in 2008

4^th Summit points and Kathmandu declaration

At the closing session, KP Sharma Oli presented an 18-point draft of the Kathmandu Declaration, which was adopted unanimously.

In the two-day summit, BIMSTEC leaders agreed to turn the Bay of Bengal region peaceful and prosperous by building common strengths through collective efforts. They also agreed to make the organisation a dynamic, effective and result-oriented body for intensifying regional cooperation, alleviating poverty and promoting connectivity, energy and free trade.

Memorandum of Understanding (MoU) wassigned on establishing a BIMSTEC Grid Interconnection to enhance energy cooperation among the seven member states. MoU would open the door for energy cooperation among the member states and would also facilitate the promotion of efficient, economic, and secure operation of power system through the development of regional electricity networks.The foreign ministers of the countries signed the deal, which is expected to pave the way for buying and selling electricity among BIMSTEC members once the cross-country energy grids will be put in place.

It included cooperation in areas such as agricultural technology exchange, gradual reduction of climate change impact, boosting trade and investment, blue economy, mountain economy, tourism, cultural cooperation and people-to-people contact.

Acknowledging that enhanced inter-linkages and inter-dependence within the economies and societies of the BIMSTEC member states provide greater opportunity to advance regional cooperation, the summit underlined the importance of multidimensional connectivity for economic integration and shared prosperity.

The declaration acknowledged the importance of trade and investment as one of the major contributing factors for fostering economic and social development in the region.

The BIMSTEC member states reiterated their strong commitment to combat terrorism and called upon all countries to devise a comprehensive approach in this regard which should include preventing financing of terrorists and terrorist actions from territories under their control, blocking recruitment and cross-border movement of terrorists and tackling misuse of internet for purposes of terrorism.

The summit agreed to establish seamless multi-modal transportation linkages and smooth, synchronized and simplified transit facilities through the development, expansion and modernization of highways, railways, waterways, sea routes and airways in the region.

It was also decided to speed up the efforts to conclude the BIMSTEC Coastal Shipping Agreement and the BIMSTEC Motor Vehicle Agreement as early as possible taking into account the special circumstances and needs of the member states.

Additionally, the grouping decided for an early conclusion of BIMSTEC Free Trade Area (FTA) negotiations, and directed the BIMSTEC Trade and Economic Ministerial Meeting and its subsidiary bodies, including the Trade Negotiating Committee, to expedite finalisation of all related agreements of the BIMSTEC FTA as early as possible.

The summit also called for exploring the possibility of establishing a BIMSTEC development fund with voluntary contributions from the member states. The fund would be utilised for research and planning of BIMSTEC and financing of projects, and other activities of the regional organisation, according to the Kathmandu Declaration.

The declaration called for strengthening cooperation and coordination among the law enforcement, intelligence and security agencies of the member states, holding meetings at the level of BIMSTEC Home Ministers and the BIMSTEC National Security Chiefs.

The declaration also recognized that eradication of poverty is the greatest regional challenge in realizing development objectives and expressed firm commitment to work together for implementing the Agenda 2030 for sustainable development.

At the end of the summit, Nepal PM K P Sharma Oli handed over the chairmanship of the grouping to Sri Lankan President MaithripalaSirisena.

INDIA’S POINT

Making a strong pitch for enhanced regional connectivity, India was committed to working with the BIMSTEC member states in the critical sector and to combating the menace of terrorism and drug trafficking.

There is a big opportunity for connectivity — trade connectivity, economic connectivity, transport connectivity, digital connectivity and people-to-people connectivity

The region had become a meeting point for India’s ‘Neighbourhood First’ and ‘Act East’ policies.

The BIMSTEC member states, situated between the Himalayas and the Bay of Bengal, face frequent natural disasters such as flood, cyclone and earthquake, and called for “cooperation and coordination” among them in humanitarian assistance and disaster relief efforts.

As no single country can move alone for attaining peace, prosperity and development, we need to collaborate and cooperate with each other in this interconnected world

For research on art, culture and other subjects in the Bay of Bengal, India would set up a Centre for Bay of Bengal Studies at the Nalanda University,

India will host the International Buddhist Conclave in August 2020 and invited all BIMSTEC leaders to attend the event as guests of honour.

India was committed to enhance its national knowledge network in the field of digital connectivity in Sri Lanka, Bangladesh, Bhutan and Nepal. India also plans to extend it to Myanmar and Thailand. Mr. Modi hoped that the BIMSTEC member states will attend the India Mobile Congress in New Delhi scheduled for October.

The Positives of the summit

Several important decisions have been taken.

• a Permanent Working Committee will be set up to provide direction during the period between two summits and also to prepare the Rules of Procedure.
• the Secretariat has been promised additional financial and human resources and enhancement of its role to coordinate, monitor and facilitate the grouping’s activities.
• as the institution has been handicapped due to lack of financial muscle, the leaders took the bold decision to establish the BIMSTEC Development Fund.
• Finally, recognising that 16 areas of cooperation represent too wide a spectrum, the BIMSTEC governments will make a serious endeavor  to review, restructure and rationalise various sectors, identifying a few core areas. In this exercise, Thailand has proposed a new strategy of five pillars (viz. connectivity, trade and investment, people-to-people contacts, security, and science and technology). This will be considered, although the difficulty in dropping specific sectors dear to individual member-states should not be minimised.

Importance of BIMSTEC  to INDIA

Under its Look East Policy, India sought greater economic engagement with the Association of South East Asian Nations (ASEAN). Delhi also moved to create new forums like the Indian Ocean Rim Association (IORA) and the BIMSTEC, which aligns India with four South Asian neighbours — Bangladesh, Bhutan, Nepal and Sri Lanka — and two South East Asian neighbours, Myanmar and Thailand.

Alongside the BRICS summit in Goa, India hosted an outreach summit with leaders of BIMSTEC countries. India had long felt the potential of SAARC was being under-utilised and opportunities were being missed due to lack of response and/or an obstructionist approach from Pakistan. Pakistan also opted out of the ambitious SAARC Satellite project proposed by India, leading to a change in its name to the South Asia Satellite.There is a tendency in some quarters to see India’s interests in BIMSTEC as part of its strategy to isolate Pakistan and position BIMSTEC as an alternative to SAARC.

The SAARC remained ineffective because Pakistan tied progress in regional economic integration to a successful resolution of the dispute with India over Jammu and Kashmir.

The two organisations — SAARC and BIMSTEC — focus on geographically overlapping regions. However, this does not make them equal alternatives. SAARC is a purely regional organisation, whereas BIMSTEC is inter-regional and connects both South Asia and ASEAN.BIMSTEC not only connects South and Southeast Asia, but also the ecologies of the Great Himalayas and the Bay of Bengal.

With shared values, histories, ways of life and destinies that are interlinked,BIMSTEC represents a common space for peace and development. For India, it is a natural platform to fulfill our key foreign policy priorities of ‘Neighbourhood First’ and ‘Act East’,

The Bay of Bengal is crucial for an increasingly assertive China in maintaining its access route to the Indian Ocean. As China has undertaken a massive drive to finance and build infrastructure in South and Southeast Asia through the Belt and Road Initiative in almost all BIMSTEC countries, except Bhutan and India, BIMSTEC is a new battleground in the India-China battle for dominance.

BIMSTEC could allow India to push a constructive agenda to counter Chinese investments and instead follow best practices for connectivity projects based on recognized international norms. The Chinese projects are widely seen as violating these norms.

Again, the Bay of Bengal can be showcased as open and peaceful, contrasting it with China’s behavior in South China Sea. It can develop codes of conduct that preserve freedom of navigation and apply existing law of the seas regionally. In addition, BIMSTEC could stem the region’s creeping militarisation by instituting, for instance, a Bay of Bengal Zone of Peace that seeks to limit any bellicose behavior of extra regional power.

Challenges for INDIA

One strategic challenge for India is that China has long desired to be part of the SAARC grouping. China has observer status in SAARC. When this was given, it only increased the demand to make China a full member of SAARC. India will have to carefully navigate the emerging regional geopolitics, as many of the elements that made SAARC hostage to political rivalry and turned it into a defunct mechanism can re-emerge in BIMSTEC.

There will be challenges for India from both within and outside. These will pose policy dilemmas. India is currently the largest contributor to the BIMSTEC secretariat’s budget. India’s annual contribution was Rs. 2 crore (or 32% of the total secretariat budget) for 2017-18. With the secretariat planning to strengthen its capacity by increasing human resources and the number of officials representing each member state, India may need to consider allocating more resources. India’s generosity would be a key test of its commitment to the subregional grouping.

Another issue would be for India to counter the impression that BIMSTEC is an India-dominated bloc, a problem that it faced for a long time in SAARC. In reality, the suspicion was mutual in SAARC — while India was wary of the smaller neighbours ‘ganging up’ against it, the smaller neighbours were worried that closer integration might lead to India’s domination.

Today, most of the smaller neighbors are more willing to engage so as to benefit from India’s economic rise. India will need to show sensitivity to the concerns of smaller neighbors.

Challenges For BIMSTEC

• BIMSTEC planned to hold summits every two years, ministerial meetings every year and senior officials meetings twice a year. But only three summits have taken place in 20 years.
• It should be noted that of at least six legal instruments awaiting finalisation, only one, the Memorandum of Understanding on Grid Interconnection, could be inked in Kathmandu.
• Fourteen years after signing the framework agreement on Free Trade Area (FTA), the leaders could only renew, rather lamely, their “commitment to an early conclusion” of FTA negotiations.
• The Thai Prime Minister bravely urged participants to accept making BIMSTEC a Free Trade Zone by 2021 as “our common goal”, but this did not find a place in the summit declaration.
• The grouping had established its Energy Centre in 2009, but it was still struggling for the “early operationalisation” of the Centre.
• Every participant dwelt on the advantages and potential of connectivity- trade connectivity, economic connectivity, transport connectivity, digital connectivity, and people-to-people connectivity.The Kathmandu Declaration has spelt out a number of measures, old and new, to secure this objective. However, it was noted that the Motor Vehicle Agreement and the Coastal Shipping Agreement would still need more time for finalisation.
• The annex to the summit’s declaration presents an overview of the present state of play in various areas of activity. Plans to revitalise the Business Forum and the Economic Forum should be welcome if they help in fully engaging business and industry. 

Way forward

The objective of building such an alliance is to harness shared and accelerated growth through mutual cooperation in different areas of common interests by mitigating the onslaught of globalization and by utilizing regional resources and geographical advantages. BIMSTEC should engage with other groupings: ASEAN, (Bangladesh-Bhutan-India-Nepal) BBIN, IORA (Indian Ocean Rim Association), MGC (Mekong Ganga Cooperation) and CMLV (Cambodia-Myanmar-Laos-Vietnam).There is need for deeper economic integration and collaboration among the members for speedy development of the region.

BIMSTEC summit should be made an annual affair.  Now is the time not just to deliberate, but also to deliver. BIMSTEC can become a dynamic, effective and result-oriented organisation.

By: Richa Aggarwal