BIMSTEC is now forging a path of its own. Has SAARC hit a dead end?

With SAARC hitting a dead end, BIMSTEC has emerged as a major platform for regional cooperation in South Asia but it has its own problems and needs deft manoeuvring to realise its true potential.

In his very first public engagement after taking over as the external affairs minister of India, Dr S Jaishankar had said that the time had come to look beyond SAARC to other regional multilateral forums like BIMSTEC. Formed back in 1997 with its headquarters in Dhaka, BIMSTEC seeks to foster regional and economic cooperation among nations in the Bay of Bengal — India, Thailand, Myanmar, Nepal, Bangladesh, Sri Lanka and Bhutan. It is home to more than 1.5 billion people or roughly 22 per cent of the global population with a combined GDP of over $2.7 trillion.

“SAARC [South Asian Association for Regional Cooperation] has certain problems and we all know what they are. Even if you were to put terrorism aside… there are connectivity and trade issues,” Dr Jaishankar had said in June 2019. “BIMSTEC leaders were invited for the Prime Minister’s swearing-in because we see energy, mindset and possibility in that grouping.”

As such, motivation would not have been in short supply when he attended the 17th BIMSTEC ministerial meeting held virtually on April 1. Chaired by Sri Lanka and attended by representatives of all member countries, Jaishankar reiterated India’s commitment to further building the momentum of regional cooperation under the BIMSTEC framework while highlighting the progress achieved in sectors where India is the Lead Country viz Counter Terrorism & Trans-national Crime, Transport & Communication, Tourism, and Environmental & Disaster management.

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The meeting endorsed the BIMSTEC Master Plan for Transport Connectivity for adoption at the next summit where three MoUs/agreements would also be signed -- BIMSTEC Convention on Mutual Legal Assistance in Criminal Matters, Mutual Cooperation between Diplomatic Academies/Training Institutions, and establishment of BIMSTEC Technology Transfer Facility (TTF) in Colombo. The next summit, which would be the fifth edition, would be held in Sri Lanka later this year.

SAARC appears to be nearly defunct

Indeed, the near defunct nature of SAARC, which has not had its customary bi-ennial summit since 2014 has prompted India to play a more aggressive role in BIMSTEC. India’s refusal to participate in the 2016 SAARC summit which was to have been held in Pakistan led to the cancellation of the event and there has been no progress ever since. In the same year, India held a joint BRICS-BIMSTEC summit in Goa which gave fresh impetus to the group. India has also been aggressively pushing for conclusion of the long-pending free trade agreement among BIMSTEC nations.

Already bilateral trade between BIMSTEC member countries has seen a considerable rise over the years. A larger volume of exports was observed in the case of Thailand’s exports to India ($ 5.5 billion in 2015); India’s exports to Sri Lanka ($ 4.4 billion), Bangladesh ($ 3.4 billion), and Nepal ($ 2.6 billion); Myanmar’s exports to Thailand ($ 3.3 billion) and India (US$ 1.3 billion).

Overall trade accounts for over 60 per cent of combined GDP of the members and between 2002 and 2017, the share of intraregional trade rose from 3.6 to 5 percent. This remains lower than comparable figures in other regional trade blocs, including 7 percent among SAARC members, and 29 percent among ASEAN states, which only points to the potential for growth in trade.

BIMSTEC can act as a bridge between nations

“Sandwiched between SAARC and ASEAN, BIMSTEC can be and is a bridge that would benefit and link both regions,” a report by think tank Delhi Policy Group had said in 2018. “In fact, the original intention of the member states of this inter-regional body was inspired by the idea of turning the two regional groupings into a free trade area and opening the door for investment, identifying priority projects on trade, transportation, tourism, energy, health and agriculture through collective action.”

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It is not tariffs that are the major barrier to intra-regional trade, but cost and time to trade remain relatively high. Non-tariff barriers are a bigger stumbling block. Differences between India and Thailand, the two major economies of BIMSTEC, over market access for professionals, duty cuts on traded goods and policy relaxation stalled the process of FTA at the last time of asking. While the fate of FTA still hangs in the balance, there are other notable achievements. One of them is the BIMSTEC Grid Interconnection signed during the BIMSTEC Summit in Kathmandu in 2018, which aims to promote an optimal power transmission in the region.

Trade issues alone aren’t the only one that may stymie progress. Dispute its genesis in the previous century, BIMSTEC has a history of dormancy. It did not even have an official head office and meetings were held at the Thai foreign ministry in Bangkok until it was given headquarters in Dhaka in 2011. It also got a secretary-general in Sri Lankan diplomat Sumith Nakandala only in 2014.

The fragile nature of democracy in some member countries like Thailand, which saw a military coup in 2014 and an eventual return to electoral politics only in 2019, also stalls the development process. Other political events like the Rohingya refugee crisis which involves three of its member countries--Myanmar, Bangladesh and India, are roadblocks. The military coup in Myanmar earlier this year and the worsening situation in the country in recent weeks presents another curveball to the aspiration of BIMSTEC realising its true potential.

While the weakening of other multilateral forums in the region presents a chance for BIMSTEC to flourish, it would need some luck and a lot of diplomacy from the likes of Jaishankar for it to really take off.