BIMSTEC, Myanmar and India’s Northeast
24 July 2014
BIMSTEC provides an opportunity for India to deliver development and peace to its Northeastern region. This must be seized.
The Bay of Bengal Initiative for Multi-Sectoral and Economic Cooperation (BIMSTEC) is a sub-regional economic grouping comprising seven geographically contiguous (both littoral and peripheral) South and Southeast Asian nations. Consisting of Sri Lanka, Bangladesh, India, Myanmar, Thailand, Nepal and Bhutan, the grouping held its first summit in 2004 in attempt to bridge the Association of South East Asian Nations (ASEAN) and the South Asian Association for Regional Cooperation. The Third BIMSTEC Summit of the Heads of States or Governments was held from 1 to 4 March in Myanmar’s new capital, Naypyidaw, with leaders reaffirming their commitment to accelerating the pace of regional integration and bringing prosperity to the people in their respective nation states. India’s then Prime Minister Manmohan Singh underscored the relevance of BIMSTEC, stating that “Ours is a natural grouping of countries. We are bound by geography and linked by history… Our culture, religions and architecture bear eloquent testimony to our ancient bonds.”
The idea of BIMSTEC was first mooted by Thailand in 1997 as part of its ‘Look West Policy’, and was immediately appreciated by India, largely because of the vast commonalities with its own ‘Look East Policy’ (LEP) unveiled six years earlier. At the time, BIMSTEC provided New Delhi a regional platform able to address a range of security concerns, as well as the opportunity to counter the underdevelopment of border regions, particularly in the country’s Northeast. The states of the region – Assam, Arunachal Pradesh, Meghalaya, Mizoram, Manipur, Nagaland, Tripura and Sikkim – share international boundaries with Myanmar, Bangladesh and Bhutan, which are all members of BIMSTEC. That BIMSTEC’s potential remains only partially realised demands greater leadership on the part of India.
The Northeast and Myanmar
Arguably, India’s primary objective within BIMSTEC is to develop the Northeastern region by integrating it with existing trade networks while capitalising on future opportunities. According to the Foreign Secretary Sujatha Singh, BIMSTEC could be a “potential game changer” for the Northeast’s overall development. While considering the potential of BIMSTEC to bring trade, transport, tourism and other linkages to the states of the Northeast, the foreign secretary, prior to the third summit, said, “It is in our interest to make sure that our northeast does not fall behind, that it develops as well in a manner that is commensurate to its potential.”
To this end, Myanmar is crucial to India’s economic engagement with Southeast Asian countries. The country shares a 1643 kilometre border with the Northeastern states of Manipur, Mizoram, Nagaland and Arunachal Pradesh. Under the Indo-Myanmar Trade Agreement of 1994 (which has resulted in increased bilateral trade ever since), formal border trade is conducted through the designated custom posts at Moreh in Manipur to Tamu in Myanmar, and Zokhawthar (also known as Champhai) in Mizoram to Rih in Myanmar, while an Integrated Check Post at Moreh-Tamu trade point is expected to be completed in 2015.
In enhancing sub-regional cooperation, extending current transit and transport connectivity is vital. While several trade routes existed between India and Southeast Asian countries prior to British colonial intervention, they were disrupted as a result of the narrow business and imperial interests of the British. In the post-independence period, trade and cultural exchanges have, for the most part, remained stagnant and road connectivity between India and Myanmar underdeveloped. Following the inclusion of the Northeast as an indispensable element of India’s LEP in 2003, new possibilities have emerged. The planned extension of the Indo-Myanmar Friendship Road will link Mandalay with the Trans-Asian Highway, while states that possess modern medical facilities such as Assam and Manipur are being touted as possible destinations for medical tourists from Myanmar.
The prospect of cooperation between Myanmar and the Northeast has brightened in the context of ongoing reform and reconciliation processes in the former pariah state. After several decades of international isolation, Myanmar is opening up to foreign investment; and India, as its immediate neighbour, has the added advantage of exploring its valuable resources such as gas and oil. Unlike other regional forums, BIMSTEC does not have an overt political or security agenda to pursue.
The integration of the Northeast with the fast-developing economies of ASEAN is fundamental to peace, security and development within the region. According to reports, BIMSTEC has the potential of producing trade worth USD 43-50 billion under a proposed Free Trade Agreement (FTA) that the grouping is in the process of finalising.
An early conclusion of the planned FTA among BIMSTEC member states is of the utmost necessity for the acceleration of trade and investment in the Bay of Bengal region. To this end, commercial and economic cooperation occupied a major part of deliberations in the recently concluded third summit, with India’s then-Prime Minister Manmohan Singh saying, “We should aim for an early conclusion of the BIMSTEC Free Trade Agreement for trade in goods and extend it to investment and services. Most of us are connected with each other through one or more regional economic arrangements and it should not be difficult for us to conclude one for BIMSTEC.” Nonetheless, ongoing negotiations are complex and time consuming. Referring to this drawn-out process, the foreign secretary observed, “FTA negotiations are processes that take time. The BIMSTEC negotiation is particularly complex because it already encompasses countries which have FTA[s] under the SAFTA process… We have to arrive at an outcome that is optimal for India… This is going to take time.”
New Delhi also wants to intensify cultural ties with BIMSTEC member countries. In the words of former External Affairs Minister Pranab Mukherjee, India’s LEP “encouraged a renewal of linkages with our civilisational neighbours in Southeast and East Asia”. The Northeast is pivotal to this vision as it shares international borders with five neighbouring countries and is home to 200 ethnic groups, languages and dialects. People of some of the bordering states – Nagaland, Manipur and Mizoram – have close familial and community links with those across international borders, especially in Myanmar. Despite its economic focus, BIMSTEC is also aimed at, and will inevitably result in, the integration of people of different sociocultural and politico-economic backgrounds throughout the region via greater people-to-people contact among citizens of all member states.
Despite these prospects, there still exists a gap between the region’s immense potentialities and their optimum utilisation. As a sub-regional grouping, BIMSTEC has made little headway in terms of the implementation of its various schemes, while the grouping’s intra-regional trade and commerce has failed to grow substantially over the years. The goal of regional integration has also remained unfulfilled as infrastructural bottlenecks persist. Moreover, a lack of cross-border physical connectivity is a major obstacle to expanding trade and investment between India’s Northeast and BIMSTEC’s Southeast Asian member states. According to a recent study conducted by the New Delhi-based Research and Information System for Developing Countries (RIS), some of the key impediments to India-Southeast Asia trade include inadequate infrastructure, absence of a common currency, restrictive visa regimes and inconsistent and difficult border-crossing formalities, particularly those pertaining to the transnational passage of motor vehicles.
To date, the private sector’s contribution to BIMSTEC’s goal of forging greater economic and commercial ties has been meagre, and the region is yet to witness any extensive transfer of technology, capital and services among member states. The sluggish economic growth experienced by Southasian countries has likewise cast its shadow over broader economic cooperation. India’s private sector is, however, optimistic about BIMSTEC’s future. The Associated Chamber of Commerce and Industry has identified possible sectors of bilateral trade and commerce between India and other BIMSTEC countries, and the general secretary of the apex body recently affirmed that “India is required to play a lead role by integrating trade and investment while promoting economic cooperation.”
The dissimilar economic credentials of BIMSTEC member states are partly responsible for the present state of affairs. The economies of the grouping vary in terms of their resource bases, the size of their domestic markets, their levels of industrial development, as well as their economic governance regimes. Indeed, BIMSTEC accommodates fast-growing economies such as Thailand, as well as ‘least developed’ countries such as Nepal, Myanmar and Bangladesh. The volatile domestic politics of some member countries has delayed BIMSTEC’s progress: the recently concluded third summit, for example, was held after a gap of six years, as most of the members had been preoccupied with their internal political milieus.
Despite these difficulties, India’s leaders must not give up on the organisation. Being a leading member of the sub-regional grouping, India has to play its role in a way that addresses the vital issues facing the sensitive Northeastern region of the country. After years of neglect by the union government, the Northeast has gained prominence in India’s LEP and BIMSTEC primarily due to its geostrategic location and resource potentialities. The importance of this region cannot be underestimated against the backdrop of fast-changing economic and strategic scenarios in India’s neighbourhood and beyond. For India, BIMSTEC’s development and peacemaking potential must be seized.
~ Rupak Bhattacharjee is an independent analyst. He can be contacted at email@example.com.