Carnegie India hosted a discussion on the role of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) in fostering regional cooperation in South Asia. The discussion was led by Ambassador Sumith Nakandala, Secretary General of BIMSTEC, and chaired by Dr. C Raja Mohan, director of Carnegie India. The roundtable took place in the aftermath of the BRICS-BIMSTEC Leaders’ Outreach Summit and the BIMSTEC Leaders’ Retreat held in Goa in October 2016.
DISCUSSION HIGHLIGHTS
- Rediscovering Regional Integration: The Bay of Bengal once represented a major share of world trade. Participants argued that BIMSTEC seeks to rediscover this common heritage around the Bay through its stated goal of regional integration. They explained that colonization interrupted the exchange of ideas, people, and trade characteristic of the area. The protectionist economic policies of the post-independence era prolonged this interlude. The idea of integration only rose to prominence after India implemented economic reforms in the 1980s. Since then, international institutions like the Asian Development Bank and the United Nations Economic and Social Commission for Asia and the Pacific have also promoted regional and sub-regional cooperation and proven to be favorable for BIMSTEC. Participants noted that geographical continuity is recognized as a central tenet of BIMSTEC, and despite interesting inputs from the United States and China, it is important to consolidate the organization as it exists today instead of focusing on expansion .
- Strategic Drivers: Participants discussed the drivers behind the renewed interest in BIMSTEC, and underlined the need for the organization to perform significantly better than the South Asian Association for Regional Cooperation (SAARC). From India’s standpoint, they added, there is great interest in connecting with Thailand and Myanmar, the gateways to high-growth economies in the region.
- Institutional Inadequacies: Institutional mechanisms essential to the organization’s ability to fucntion are yet to be fully established and remain inadequate, participants said. The BIMSTEC permanent secretariat in Dhaka remains chronically understaffed and underfunded. Despite being the largest funder of the secretariat’s budget, India has not yet appointed a representative director. Additionally, while the secretariat has proposed several recommendations to better enable the organization to function successfully, most are pending approval at the next summit. Meanwhile, participants added, the Senior Officials Meeting at the level of foreign secretaries has been repeatedly postponed for more than two years. One participant proposed increasing the frequency of engagement, with a summit meeting every two years along with annual ministerial meetings.
- Focus on Trade: Participants agreed that economic cooperation forms the bedrock of BIMSTEC’s success. While noting the difficulty in extending the Free Trade Agreement (FTA) to services, participants emphasized that the limited market access provided for goods in the FTA was a bigger problem. A participant suggested doing away with the negative list of differential tariffs. Another participants countered by saying that this change would cause further delays, and that it would be more feasible to revisit this problem in 2017 once the FTA is operationalized, before the next summit hosted by Nepal. One participant raised the question of whether the sectors of cooperation under BIMSTEC should also include issues such as job creation and achieving the Sustainable Development Goals, while others stressed the need to reduce the numerous working groups (currently numbering more than a dozen) and identify key focus areas.
- Window of Opportunity: Participants concurred that it is urgent to utilize the window of opportunity of interest in the Bay of Bengal and that good leadership and collective political championship is required for BIMSTEC to succeed. India can play an important contribution, according to one participant, but must be able to invest significant resources and work collectively. Participants also discussed the importance of building a positive narrative around BIMSTEC, a narrative of a regional and historic community anchored around the Bay of Bengal. Participants also discussed the importance of creating dedicated BIMSTEC cells within the respective foreign ministries, citing India’s BIMSTEC Division in the Indian Ministry of External Affairs as an example.
This event summary was prepared by Sharanya Rajiv, an intern at Carnegie India.