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    South Asia
     Apr 8, '14

Rich can help BIMSTEC poor bloc
By Vibhanshu Shekhar

The leaders of seven countries of South and Southeast Asia - Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand - gathered in Naypyidaw, Myanmar last month to take part in the third Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) summit.

BIMSTEC was set up in 1997 as an expression of the convergence of economic interests coming out of India's Look East policy and Thailand's Look West policy. Its objective was to integrate the regions on both sides of the Bay of Bengal. Representing one fifth of the world's population, including nearly a third of its poorest members, the bloc's member states are

demographically young, politically evolving and ethnically diverse.

At the recent summit, they were deliberating over three key issues: development, connectivity and economic integration. Though the BIMSTEC nations are rich in resources, they remain underdeveloped and disconnected from Asia's growth story. And even though the member states are connected via regional cooperative processes, they have remained on the margins of Asian market integration.

The third summit saw three important decisions. First, the member states agreed to set up a permanent secretariat in Dhaka, Bangladesh, with Sumit Nakandala, a veteran diplomat from Sri Lanka, as its first secretary general. Until now, BIMSTEC has been run largely through the foreign-affairs offices of its member countries. The secretariat will provide a platform for more effective debate on the priorities of the bloc.

The second important decision was for BIMSTEC states to expedite negotiations on a free-trade agreement (FTA) in goods by the end of 2014. A BIMSTEC FTA would create an integrated market of 1.5 billion people with a combined economic strength of US$2.5 trillion. But member states, even after 19 rounds of FTA negotiations stretching over 10 years, have not been able to reach a consensus over issues like market access or a dispute-settlement mechanism. his is in contrast to the FTA between the Association of Southeast Asian Nations (ASEAN ) and India, which was proposed in 2003 and came into effect in 2010.

Third, the BIMSTEC states established a network of policy think tanks, a welcome step that was suggested by the Indian government during the second summit in 2008 in New Delhi.

BIMSTEC's two challenges
Notwithstanding these decisions, the group continues to be an underperformer, with vital elements of cooperation remaining incomplete. BIMSTEC's limited accomplishments can be attributed to two critical problems: lead-actor inertia; and structural constraints on member states in the form of limited technological, financial and even operational capabilities.

First, New Delhi's contribution to the bloc has not been commensurate with its place in it. India is the lead actor in BIMSTEC, representing more than two-thirds of its constituency, and thus assumes greater responsibilities. New Delhi has sought to use the group as a platform for the development of its landlocked and troubled northeastern states and their integration with Southeast Asia, for the building of stronger ties with Bangladesh and Myanmar, and for the extraction of the vast energy resources available within the sub-region. But these projects remain incomplete.

Moreover, India's intellectual contribution to the growth of BIMSTEC has been sub-optimal. BIMSTEC has not emerged as a priority forum for India, and has been overwhelmed by the debates in the South Asian Association of Regional Cooperation (SAARC ) and ASEAN. Discussion about BIMSTEC in the Indian strategic community has also been limited, cursory and somewhat episodic in nature. As a result, the group has remained marginal to the integrative discourse in South and Southeast Asia.

Second, structural constraints, in the form of limited state capabilities of the majority of its member countries, have also stymied the growth of the group. The majority of the BIMSTEC countries are technology deficient and lack the resources to invest in development and infrastructure projects, with Bangladesh, Bhutan, Myanmar and Nepal among the world's least developed countries.

Nepal and Thailand have also experienced sustained political instability during the last five years. Nepal has yet to finalize its constitution, and Thailand not only changed its constitution in 2008 but has also endured another bout of political instability since December. The absence of Thai Prime Minister Yingluck Shinawatra from the March summit meeting amplified Bangkok's internal preoccupation and its inability to contribute substantially to BIMSTEC.

Remedy: expand BIMSTEC eastward
It is time that BIMSTEC begins to address its limitations, which are impeding critical initiatives. An important step in this direction would be to expand the group by incorporating technologically advanced countries from the east either as new members or as observers. BIMSTEC can start this by incorporating both Malaysia and Singapore, situated on the eastern rim of the Bay of Bengal. They would bring new momentum to the group by considerably expanding its capabilities to undertake substantial developmental, connectivity and energy projects.

Admittedly, this is not a new idea, with such suggestions for the expansion of BIMSTEC having been made in the past. This is not surprising when we consider that both Singapore and Malaysia possess advanced technologies and capabilities that could play an important role in the accomplishment of two critical objectives of the bloc - the development of infrastructure and energy projects, and the expansion of the skill and technology base of member states. And Singapore and Malaysia have a proven record of their willingness and capability to invest in the Indian market, especially in the infrastructure and construction sectors. These ASEAN members also have considerable experience in engaging cooperatively with other countries.

For its part, BIMSTEC offers ASEAN countries a much bigger market. Bangladesh, India's northeastern states, and Myanmar are rich in energy resources, especially hydro power and natural gas. And the countries of East Asia have long wanted to enter the larger South Asian market. BIMSTEC provides that opportunity without the hassle of getting into the Indian-Pakistani vortex.

A major thrust of BIMSTEC is connecting South Asia with Southeast Asia via Myanmar. The participation of ASEAN countries in BIMSTEC connectivity projects would speed that process up while also promoting intra-ASEAN connectivity.

Finally, the geographical composition of BIMSTEC has remained overwhelmingly South Asian. The presence of Malaysia would give more legitimacy to the idea of a community that covers the entire arch of the Bay of Bengal.

The bloc can later on consider incorporating the more efficient countries of Northeast Asia - China, Japan and South Korea - as observers. Both China and Japan have shown interest in joining hands with India and other BIMSTEC member states. Japan is already an important economic player and stakeholder in Myanmar, and has contributed significantly toward developing ASEAN connectivity.

A win-win arrangement
The idea of incorporating new members from East Asia is a win-win formula. It offers an expanded market for the East Asian economies, and a much-needed push towards greater integration for South and Southeast Asia.

At this juncture, it seems impossible for BIMSTEC to address its key developmental and integration challenges without receiving substantial resources and technological assistance from the east. The inclusion of East Asian nations will also bring much-needed business skill and efficiency into BIMSTEC.

Above all, such a partnership would give the advanced economies of Asia an opportunity to mobilise their resources to address the needs of the continent's poorest citizens.

Dr Vibhanshu Shekhar is visiting fellow at the Institute of Peace and Conflict Studies, New Delhi, and is currently based in Washington DC. Dr Shekhar previously worked as a research fellow at the Indian Council of World Affairs in New Delhi.

(Copyright 2014 Vibhanshu Shekhar)

Japan a gauge of India's 'Look East' policy (Sep 30, '11)

The emerging Bay of Bengal (Jan 25, '05)



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