Sunday Times 2
Scaling up BIMSTEC in the new era
The 5th BIMSTEC Summit ended on March 30, at Colombo in Sri Lanka. The Summit adopted the BIMSTEC Charter for the first time since its inception in 1997, and signed three Memoranda of Understanding (MoUs) on the BIMSTEC Convention on Mutual Legal Assistance in Criminal Matters, Mutual Cooperation Between Diplomatic Academics and Training Institutions of the BIMSTEC Member States, and Establishment of the BIMSTEC Technology Transfer Facility at Colombo, in Sri Lanka. The Summit also highlighted the importance of trade and energy, transport, digital, and people-to-people connectivity. With the Charter in place, BIMSTEC’s leaders are now committed to promote the BIMSTEC Partnership guided by the fundamental principles, shared values, and norms that have steered relations since 1997.
According to the newly adopted Charter, the Summit will take place every two years, and the meeting of the Foreign Ministers of the BIMSTEC Member States will take place every year. Though progress on regional integration in BIMSTEC, even after 25 years, has remained slow by global standards, successful implementation of the agreements of the 5th Summit can pave the way for widely desired greater integration in the Bay of Bengal region.
BIMSTEC’s Potential
BIMSTEC provides a unique opportunity for its members from South and Southeast Asia to collaborate for mutual benefit. Its seven members come from a variety of geographical, historical, cultural, and developmental backgrounds. They account for 22% of the world’s population and four percent of world gross domestic product (GDP). With their varying size and endowments, the members and region as a whole have significant economic potential.
The COVID-19 Pandemic and the Russia-Ukraine Conflict
The COVID-19 pandemic, and now the Russia-Ukraine conflict, have drastically altered the global economy’s prospects for recovery. The economy is about to enter a new, more uncertain period marked by more geopolitical, economic, and pandemic threats. Many countries in South and Southeast Asia, particularly small countries, are extremely vulnerable to these threats, and face a bleak future of slower growth, limited market opportunities, rising inflation, and increased poverty.
South Asia looking east and Southeast Asia looking west offer pathways to mitigate multiple risks and exploit opportunities for trade-led growth in Asia, a potential that remains largely untapped. International experience suggests that effective regional governance is necessary for economic development and achieving a peace dividend.
What Needs to Be Done?
More must be done, however, to position BIMSTEC as an effective organisation tuned to the needs of the new and emerging, but more uncertain, era. To start, there is the unfinished agenda item of concluding a BIMSTEC Free Trade Area (FTA), which has been under negotiation since 2004. A comprehensive FTA can help reduce barriers to trade and investment, and help businesses join regional and global supply chains. At the 5th Summit, all the heads of the BIMSTEC governments and states expressed a strong desire to conclude the FTA negotiations. Therefore, we must bring the negotiations to a successful conclusion in a reasonable time.
The foundation of BIMSTEC’s economic growth has been the rules-based, open, multilateral trading system. Along with it, foreign direct investment (FDI) must move freely in the region if we want to promote national growth as well as regional and global value chains.
Seamless, sustainable, multimodal transport links and synergy with other connectivity frameworks, such as the ASEAN Master Plan on Connectivity 2025, are what BIMSTEC needs in the post-COVID era. Improving trade facilitation can also speed up the BIMSTEC integration process. Accordingly, moving to a regional single window in customs and a paperless trade regime can reduce trade costs and facilitate cross-border business.
Significant work is needed to prepare BIMSTEC members to embrace the potential of the fast-moving digital economy. This means investment in digital technologies and related infrastructure, a business-friendly regulatory approach to e-commerce, and investing in digital skills. We will also promote greater gender equity in education and the workplace so women have the same opportunities and are paid the same as men for equal work. This will foster jobs, higher incomes, and entrepreneurship across BIMSTEC countries.
For the maritime economy, cooperation is key to safe and secure trade. Bay of Bengal countries work together for safety and security on the sea in cases of search and rescue, humanitarian assistance, coastal surveillance, and other matters. Regional cooperation on maritime connectivity will ease trade and investment. At the 5th BIMSTEC Summit and preliminary consultations, the importance of maritime connectivity was felt across the board, along with the desire to work together to achieve Sustainable Development Goal (SDG) 14 targets and ensure “good order at sea.”
BIMSTEC countries also differ in financial resources, technical skills, and development capacity. Most members face such constraints that may be exacerbated for those who are slated to graduate from the group of least developed countries by 2026. In the spirit of solidarity and common purpose, the more advanced members must support the less developed ones so that the benefits of regional integration are spread among all members.
Fulfilling the economic promise of the BIMSTEC Charter and the proposed development agenda under the “new normal” may not be achieved without empowering the BIMSTEC Secretariat. The Secretariat must be adequately resourced and have sufficient delegated powers to fulfil its role as a coordinator of activities across BIMSTEC members. Strong encouragement came from Indian Prime Minister Narendra Modi, who announced during the 5th Summit that India would provide US$ one million to the BIMSTEC Secretariat to increase its operational budget. Other member countries may come forward. With the increased resources, there is now a need to develop a roadmap for capacity building of the Secretariat.
Finally, efforts to overhaul the integration process in the BIMSTEC region require normative dialogues about the desirable and substantive form of regional architecture. The time is ripe for fresh thinking on BIMSTEC’s priorities and developing the required institutional capability for the new era. The success of the regional integration initiative will be guided by the political will of member countries. The 5th Summit created optimism that this goal will finally be translated into reality.
Nihal Pitigala is a Senior Fellow at InReach Global. Selim Raihan is the Executive Director of SANEM. Ganeshan Wignaraja is a Non-Resident Senior Fellow at the National University of Singapore. Prabir De is a professor at the ASEAN-India Centre (AIC), Research and Information System for Developing Countries in India. Posh Raj Pandey is the Chairman of South Asia Watch on Trade Economics and Environment (SAWTEE) in Nepal. Achyut Bhandari is the Founder of the Centre for Research on Bhutanese Society in Bhutan. Watcharas Leelawath is Honourary Advisor at Bolliger & Company in Thailand.