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Mainstream, VOL LIV No 46 New Delhi November 5, 2016

BRICS-BIMSTEC Outreach may pave the way for Regional Integration, Trade

Monday 7 November 2016

by Ashok B. Sharma

This article was written before the BRICS-BIMSTEC Outreach programme but is still relevant.

Leaders of the group of emerging economies, BRICS, are meeting in Goa and India being the host country has rightly planned an Outreach programme with the leaders of the Bay of Bengal Initiative for Multi-Sectoral and Technical and Economic Cooperation (BIMSTEC). The initiative of inviting regional leaders for the Outreach programme began with South Africa at the 5th BRICS Summit, followed by Brazil by inviting Latin American leaders in the next Summit and subsequently Russia invited leaders of the SCO and Eurasian Union at the Ufa Summit. The practice has given an unique opportunity to the leaders of BRICS—that consti-tute Brazil, Russia, India, China and South Africa and represent four continents—to interact with regional leaders of the host country.

India took over the BRICS presidency from February 16 this year and Prime Minister Narendrabhai Damodardas Modi has rightly planned the Outreach meeting with the BIMSTEC leaders from five South Asian countries and two South-East Asian neighbours. Prime Minister Modi had planned the integration of South Asian countries by inviting the leaders of the SAARC nations at his oath-taking ceremony in 2014. He announced priority to South Asia in his Neigh-bourhood First policy. However, later the initiative did not fructify much with Pakistan posing as a roadblock.

Signs of cracking in South Asian integration were evident in the 18th SAARC Summit in Kathmandu where three slated agreements, namely, on motor vehicle cooperation, railway connectivity and cooperation in electricity trade could not be signed at the venue. However, the agreement on electricity cooperation was signed with the intervention of the host, the then Nepalese Prime Minister, Sushil Koirala, at the Retreat of the leaders at Dhulikhel. Subsequently, under the sub-regional cooperation mandated by the SAARC Charter, an agreement on motor vehicle cooperation was signed amongst Bangladesh, Bhutan, India and Nepal (BBIN).

The 19th SAARC Summit slated in Islamabad had to be deferred owing to the reported ceasefire violation along India-Pakistan border, terrorist attacks on the Indian air base at Pathankot and the Army base at Uri. New Delhi had to avenge these attacks by conducting surgical strikes on terrorist bases in Pakistan-occupied Kashmir. India, Bangladesh, Afghani-stan, Bhutan pulled out of the SAARC Summit followed by Sri Lanka. Afghanistan and Bangla-desh have also accused Pakistan time and again for export of terror.

Integration of South Asia has, thus, become a dream for some sceptics. They believe that SAARC’s march towards a common customs union and an economic union would continue to remain a distant possibility for times to come. The SAARC Free Trade Area (SAFTA), already in operation, has not met with much success as the official intra-regional trade remains around $ 22 billion a year, though trade through unofficial channels continues unabated. If the figure of unofficial trade is added up to the official, the total may be around $ 60 billion. This shows the potentiality of the region.

South Asia is the third largest economy in terms of GDP on the basis of purchasing power parity after the US and China. It hosts 21 per cent of the world’s population on three per cent of the global land mass. Though the trade relations between both have improved in recent years with the Pakistan Commerce Ministry moving from positive to negative list for imports to facilitate the entry of more Indian goods, still much needs to be done. Over a decade back India had accorded the most favoured nation (MFN) status to Pakistan in matters of trade, but the latter has yet to reciprocate. Islamabad was thinking of giving non-discriminatory market access (NDMA) to Indian goods and at the same time is yet to allow Indian goods to pass through its territory to reach Afghanistan.

The big question is: for how long will the South Asian integration be held hostage? Is there a way out? Yes. India, which is a major country in the region, shares borders with all countries with the exception of Afghanistan, which shares its borders with Pakistan. Hence, New Delhi should play a more proactive role in deeper integration of South Asia and work out the plans with all the countries that share the same borders. Regarding integration with Afgha-nistan, India should explore the possibility of using the Chabahar port in Iran to reach goods and services to Afghanistan by the rail and land route. Rightly this possibility is being explored. Regarding, Maldives, India and Sri Lanka a sub-regional cooperation can be worked out under the SAARC Charter similar to that of BBIN.

However, BIMSTEC—that consists of Bangladesh, Bhutan, India, Nepal, Sri Lanka and two ASEAN countries, Myanmar and Thailand—can supple-ment SAARC’s regional integration and act as an effective bridge between South Asia and South-East Asia.

BIMSTEC is much younger to SAARC which is around 30 years old. It has some definite positive achievements to its credit. It brings together 1.5 billion people amounting to 21 per cent of the world population and a combined GDP of $ 2.5 trillion. But unfortunately, BIMSTEC so far has had only three Summit-level meetings since its formation in June 1997 in Bangkok. Only recently it had got its Secretariat which is rightly situated in Bangladesh. The present leadership in Dhaka under Sheikh Hasina is very proactive in fostering regional integration not only in SAARC but also in BIMSTEC. The last BIMSTEC Summit was in Nay Pyi Taw in Myanmar last year and the next is scheduled to be hosted in Nepal.

A new democratic government in place in Myanmar may prove beneficial for regional cooperation. The architect of democracy in Myanmar, Aung San Suu Kyi, is slated to come for the BRICS-BIMSTEC Outreach Summit. Further, as Sheikh Hasina is determined to ensure regional cooperation, the Myanmar-Bangladesh-India gas pipeline can become a reality. New Delhi also needs to do a bit for Dhaka in matters of sharing waters of river Teesta. Bangla-desh, Bhutan and other BIMSTEC countries have assured to act on counter-terro-rism in the region. India, by striking electricity generation and sharing agreements with Nepal and Bhutan other than initiating sub-regional agreement of Mekong-Ganga Cooperation that includes Myanmar, Thailand, Cambodia, Laos and Vietnam, has set an outstanding example.

Unlike SAARC, BIMSTEC has no written charter of its own and is, therefore, more flexible in nature. It has identified 14 priority areas where a member-country takes the lead. India is the lead country for transport and communi-cation, tourism, environment and disaster management, counter-terrorism and trans-national crime, Bangladesh for trade and investment and has circulated a concept paper on climate change. Bhutan is the lead country for cultural cooperation, Myanmar for energy and agriculture cooperation, and Nepal has taken up the issue of cooperation in poverty alleviation. Sri Lanka is the lead country for technology cooperation and Thailand is for cooperation in fishery, public health and people-to-people contacts.

The BIMSTEC Transport Infrastructure and Logistics Study (BTILS) has identified as many as 100 projects that would promote connectivity within the region. These projects are to be funded by the Asian Development Bank. Apart from these, there are the Kaladan Multi-Modal Project that would connect India to ASEAN countries and the India-Myanmar-Thailand Trilateral Highway, both of which are expected to be completed. There is also the ESCAP dream project of an Asian Highway.

Among BRICS countries, particularly Russia, India and China (RIC) can play an effective role in Asian connectivity; India has floated the concept of North-South Corridor to increase trade connectivity between major cities such as Mumbai, Moscow, Tehran, Baku, Bandar Abbas, Astrakhan, Bandar Anzali. China has its own plans for connectivity under the One Belt One Road concept and Maritime Silk Route. Though India and China have differences over the boundary dispute and issue of terrorism, Beijing is cooperative in matters of regional and economic development. It has floated the idea of a BRICS free trade agreement. Also among the BRICS countries, India, Brazil, South Africa (IBSA) can connect South Asia with Africa and Latin America. Thus the BRICS-BIMSTEC Outreach programme can be an excellent oppor-tunity for regional integration in South Asia in particular.

The author is a senior columnist writing on strategic and policy issues in several Indian and international newspapers and magazines. He can be contacted at e-mail: ashokbsharma[at]gmail.com

ISSN : 0542-1462 / RNI No. : 7064/62