‘Tremendous opportunity for growth’ identified in the BIMSTEC region

Participants at a Yangon roundtable discussion today point to largely untapped opportunities for trade, communication and cultural exchange in a region of 2.5 billion souls.

Parami Roundtable and Mizzima Media Group organised a roundtable on Myanmar and BIMSTEC to commemorate the celebration of 20 years of BIMSTEC. BIMSTEC, known as Bay of Bengal Initiative for Multi-Sectoral, Technical and Economic Cooperation, is a regional cooperation initiative of Bay of Bengal countries, namely, Bangladesh, Bhutan, India, Myanmar, Sri Lanka and Thailand.

Recent progress of BIMSTEC has opened up enormous opportunities in trade and value chains within BIMSTEC. But growth of intra-regional investment is negligible and the region is yet to witness any regional connectivity projects on the ground.

Today’s roundtable was attended by high level speakers not only from BIMSTEC countries but also from several parts of Asia such as Japan. Mr Ken Tun, Chairman, Parami Energy Group, the main organiser and sponsor, extended the opening remarks. U L ZauGoone, Member, Myanmar Institute of Strategic and International Studies (MISIS) also gave a special remarks.

The roundtable discussion was chaired by Prof. Lau Sim Yee, Reitaku University, Japan. Panellists were Prof. Toshihiro Kudo, National Graduate Institute for Public Studies (GRIPS), Tokyo; Dr. V S Seshadri, Former Indian Ambassador to Myanmar; Mr. KaviChongkittavorn, Editor, Myanmar Times;Dr. Myo Thant, former Asian development Bank Director; Prof. AjitavaRaychaudhuri, Jadavpur University, Kolkata; Dr. Shinya Imaizumi, Director, Institute of Developing Economies (IDE-JETRO), Japan; and Prof. Prabir De, ASEAN-India Centre (AIC), New Delhi.

BIMSTEC was established to expand cooperation among Bay of Bengal countries. While long maintaining a relatively low profile as a sub-regional grouping, the Bay of Bengal area in general, and BIMSTEC, in particular, is gaining prominence in foreign policy making of countries of the Bay of Bengal sub-region.BIMSTEC could be a driver of future integration between South and Southeast Asia.

Established in 1997 as BIST-EC (comprising Bangladesh, India, Sri Lanka, Thailand), BIMSTEC is a sub-regional grouping that connects countries of the South Asian region (Bangladesh, Bhutan, India, Nepal, Sri Lanka) with the Southeast Asian (Myanmar, Thailand) countries. As a matter of fact, BIMSTEC is the only grouping that completely represents the Bay of Bengal sub-region. The eighth ministerial meeting of the grouping was held in Kathmandu in July 2017, and a Summit is likely to take place in coming November 2017 at Kathmandu.

BIMSTEC is a unique regional cooperation initiative in terms of geographical contiguity and spread, natural resources and the vast combined labour force of its member states. BIMSTEC countries together boast access to the Indian Ocean and the Himalayas, as well as natural resources such as hydro power.

Trade should be the top priority for BIMSTEC countries which currently accounts for over 60 per cent of the grouping’s combined GDP. Member countries constitute 3.8 per cent of world trade and intra-regional trade grew to 6 per cent of global trade in 2016. Tariffs are no longer the major barrier to intra-regional trade, but cost and time to trade remain relatively high. At the same time, BIMSTEC countries face huge trade burden due to wide varieties of non-tariff measures (NTMs).

There has been a rejuvenated momentum in BIMSTEC due mainly to India’s economic growth and political leadership. If India and Thailand take an interest, BIMSTEC could make a turn towards deeper integration.

BIMSTEC countries have high potential in regional and global value chains, where Myanmar plays an important node in such value chain. To facilitate value chains in BIMSTEC, countries need to promote intra- and inter- regional maritime linkages and air links, set-up industrial zones, build growth corridors, to mention a few. Ultimately, B2B linkages will drive the market in BIMSTEC and strengthen the value chain formations.

BIMSTEC countries need to encourage trade in the region by signing the BIMSTEC free trade agreement (FTA) in goods and services. But it could certainly activate production links among member countries, generating new value chains.

Connectivity — particularly digital connectivity and backend infrastructure — needs to be improved across all BIMSTEC countries. To this end, BIMSTEC’s greatest advantage is member countries’ access to the Bay of Bengal.

BIMSTEC has already outlined an ambitious plan to build economic corridors linking India with Southeast Asia. To strengthen the maritime connectivity, member countries need to further promote cooperative coastal shipping in the region. More shipping links, particularly between Sri Lanka, India, Bangladesh and Myanmar, will pave the way for faster trade in the region. The emphasis of the corridor should be on expanding the manufacturing base and trade within the region. At the same time, countries need to focus on border connectivity.

Participants said they need to go beyond land-based connectivity. The Bay of Bengal plays a key role in the region’s maritime architecture. Strengthening maritime connectivity would pave the way for higher trade and investment. BIMSTEC countries should design a plan to strengthen maritime linkages with Malaysia, Singapore and Indonesia under the BIMSTEC Plus model. A BIMSTEC Plus model could be highly beneficial to Myanmar, Bangladesh, Bhutan and Nepal.

BIMSTEC countries shall consider a regional trade facilitation agreement, coastal shipping, etc. BIMSTEC countries shall consider facilitating Customs Bonding System, sign TIR conventions, and establish paperless trade. APEC offers many important lessons to BIMSTEC.

Improving traditional knowledge in biodiversity in BIMSTEC will help in gaining patents and international market access. Therefore, BIMSTEC countries may consider setting up a regional arrangement to deal with traditional knowledge in biodiversity.

BIMSTEC countries shall also design and implement a regional agreement to promote health services. India’s strength in pharma and health sectors is another opportunity for BIMSTEC countries to effectively manage the industry and strengthen the access to health.

BIMSTEC countries have to strengthen cultural relations among themselves. Strengthening cultural relations through exchange of scholars, media, etc, is needed. Besides, skill development, digital connectivity, education, tourism, etc. should be developed through regional projects and with priority.

BIMSTEC’s resurgence, centring on the Bay of Bengal, is critical to the Asian integration process in the backdrop of RCEP (Regional Comprehensive Economic Partnership). India’s involvement in the grouping therefore holds promise to foster the regional integration process.

Finally, sub-national entities should be involved actively. All participants felt more track II dialogue should be organised to exchange opinions and free discussion.

Source: mizzima