Bimstec will mark 25 years of its establishment next year, but it is yet to establish a free trade area (FTA) that can boost intra-regional trade by removing tariff and para tariff barriers, discussants on Bay of Bengal Initiative for Multi-Sectoral, Technical and Economic Cooperation BIMSTEC said Thursday in the capital. They also said the organisation comprising Bangladesh, Bhutan, India, Nepal, Sri Lanka, Myanmar and Thailand hosted 21 meetings to accelerate regional cooperation in 14 areas, but most discussions to produce desired results remained unfinished. Discussants have recommended reducing trade barriers, geopolitical stress, and establishing proper connectivity to boost trade in goods and services within the region.The South Asian Network on Economic Modelling (Sanem) organised the two-day event virtually looking for ways to accelerate cooperation and boost intra-regional trade.
The Keynote paper on regional cooperation and integration in the Covid-19 era highlighted that Bimstec has been growing. The volume of trade increased nearly 10-fold in two decades but insurmountable political issues, especially between larger partners remained a key handicap to unleash the potentials of regional cooperation. For example, India and Thailand are at odds with each other on reducing tariffs on automobile marketing. Both the countries produce automobiles and neither wants to pave the way to other’s automobiles in their markets. Politically India is also sensitive to adopting Bimstec projects in the northeast fearing closer connectivity may negatively affect local ethnic people who are more aligned culturally to Burmese or Thai people. Connectivity between Thailand and Myanmar on the one hand and India, Nepal, Bhutan and Bangladesh, on the other, remains poor. The priorities for the region are completion of Bimstec coastal shipping agreement, Bimstec connectivity master plan and expediting the India-Myanmar-Thailand Corridor, which will enable overland connectivity.
But connectivity between the eastern part of Bimstec with the western part is very poor. ‘Bangladesh-India connectivity progress shows what can be achieved but other big economies within the Bimstec block are critical on many points. Imports of goods in the region dropped by 19 per cent in 2020, while exports dropped by 15 per cent amid Covid-19 shock.
We would say unless big economies become accommodative, Bimstec goals will remain unfulfilled. Also the regional leadership must come to realise that individual countries may lose initially but everyone will gain collectively raising trade, investment and development to a new level. In our view BIMSTEC must see a breakthrough without wasting time.
