Regional Integration: BIMSTEC the way
by Ashok B Sharma on 16 Jan 2015 0 Comment

Integration of South Asia has become a dream for some skeptics after the last SAARC summit at Kathmandu. They believe that SAARC’s march towards a common customs union and an economic union and then to a monetary union would continue to remain a distant possibility for all 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 figures of unofficial trade is added up to the figures of official, the total may be somewhere around $60 billion. This shows the potential of the region.    


South Asia is the third largest economy in terms of GDP on the basis of purchasing power parity after US and China. It hosts 21% of world’s population on 3% of the global land mass.


The deeper integration of South Asia is being held hostage on account of political differences between two major powers – India and Pakistan. Very often there are skirmishes at the border. Some feel that unless and until the differences between India and Pakistan are fully resolved integration of South Asia would remain a distant dream. Though trade relations between the two countries have improved in recent years, with Pakistan commerce ministry moving from positive to negative list for imports to facilitate entry of more Indian goods, still much remains to be done. Over a decade back India had accorded most favoured nation (MFN) status to Pakistan in matters of trade, but the latter has yet to reciprocate. Pakistan is thinking of giving non-discriminatory market access (NDMA) to Indian goods. It is yet to allow Indian goods to pass through its territory to reach Afghanistan.


The outcome of the last 18th SAARC Summit at Kathmandu has strengthened the belief of the skeptics. The SAARC leaders were slated to sign three agreements, namely on motor vehicle cooperation, railway connectivity and cooperation in electricity trade. None of these agreements were signed at the Summit venue. The agreement on electricity cooperation was signed with the intervention of the host, the Nepalese Prime Minister Sushil Koirala, at the Retreat of Leaders at Dhulikhel. The signing of two other agreements is slated to be resolved at ministerial level.


For how long will South Asia integration be held hostage? Is there a way out? Obviously there is. India which is a major country in the region shares borders with all countries with the exception of Afghanistan. Only Pakistan shares borders with Afghanistan. Hence India should play a more proactive role in deeper integration of South Asia. It should work out plans for integration with all countries that share borders. Regarding, integration with Afghanistan, India should explore the possibility of using Chabahar port in Iran to reach goods and services to Afghanistan by rail and land route. Rightly this possibility is being explored.


With a view to strengthen South Asian integration, focus should be given to the sub-regional grouping already in existence. The Bay of Bengal Initiative for Multi-Sectoral and Technical and Economic Cooperation (BIMSTEC) group that is already in existence includes five of the eight SAARC countries, excluding Maldives, Pakistan and Afghanistan. BIMSTEC also includes two countries of ASEAN bloc - Thailand and Myanmar. Therefore, if BIMSTEC is reactivated in real spirit, it can serve as an effective bridge between South Asia and South East Asia. It would also be better to offer BIMSTEC membership to Maldives, even though it is situated in the Arabian Sea and not in the Bay of Bengal. Maldives, being a SAARC country can play a positive role in BIMSTEC by strengthening South Asia’s integration with ASEAN.


BIMSTEC is much younger than SAARC which is around 30 years old. Though not much focus has been given to it, this sub-regional group has some definite positive achievements to its credit. It brings together 1.5 billion people amounting to 21% of the world population and a combined GDP of $2.5 trillion.


Unfortunately, BIMSTEC has so far had only three Summit-level meetings since its formation in June 1997 in Bangkok. Only recently it got its secretariat which is rightly situated in Bangladesh. The present leadership in Bangladesh 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 in 2014 and the next Summit is scheduled to be hosted in Nepal.


BIMSTEC has identified 14 priority areas where a member country takes the lead. India is the lead country for transport and communication, tourism, environment and disaster management and counter terrorism and transnational crime. Bangladesh is the lead country for trade and investment and has circulated a concept paper on climate change. Bhutan is the lead country for cultural cooperation. Myanmar is the lead country for energy and agriculture cooperation. Nepal has taken up the issue of cooperation in poverty alleviation. Sri Lanka is the lead country for technology cooperation while Thailand is the lead country for cooperation in fishery, public health and people-to-people contact.


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 Kaladan Multi-Modal Project that would connect India to ASEAN countries and is expected to be completed by 2016, India-Myanmar-Thailand Trilateral Highway is expected to be completed also by 2016 and the ESCAP dream project of Asian Highway.


A new democratic government is likely to be in place in Myanmar this year which may intensify regional cooperation. Further as Sheikh Hasina is determined to ensure regional cooperation, the Myanmar-Bangladesh-India gas pipeline can be a reality. India also needs to do its bit for Bangladesh in matters of sharing Teesta waters and effecting the land boundary agreement. India by striking electricity generation and sharing agreements with Nepal and Bhutan has set an outstanding example. India has set another example through sub-regional Mekong-Ganga Cooperation that includes Myanmar, Thailand, Cambodia, Laos, Vietnam and India.


To foster faster and deeper integration in South Asia, BIMSTEC is the way. But BIMSTEC should include Maldives also. India should integrate with Afghanistan through Iran. If all this happens, Pakistan will be compelled to play a positive role in faster and deeper integration of South Asia.  

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