Q. Can the BIMSTEC really be an alternative to SAARC? Or are we comparing apples and oranges here?
A. Political elites from both India and Pakistan have significantly gained by opposing each other even if there were economic significance of cooperation within SAARC. In this regard, the political economy of BIMSTEC and SAARC is different, and BIMSTEC should not be seen as an alternative to SAARC. The apprehension among BIMSTEC member countries is more strategic in terms of developing trade and economic partnership/alliances.
Q. Inter-governmental cooperation is just one of the many enabling factors for real regional cooperation. In the present context, what do you think are the 2 or 3 game-changers that could result in real cooperation on-ground, and not just in discussions/conferences?
A. To my understanding, BIMSTEC has two core issues on agenda – (i) free trade agreement (FTA) and (ii) strengthening connectivity. To the best of my knowledge, despite high enthusiasm, little progress has been made as regards the BIMSTEC FTA. As regards strengthening connectivity; rail connectivity is receiving priority between India and Bangladesh, Bangladesh-Nepal. Road and sea connectivity are high on agenda between and among India, Thailand and Myanmar. Some transit routes are now on offer to businesses to avail (e.g. multi-modal transit facility from Kolkata to Agartala via Ashuganj), Kaladan Multi Modal Transit Transport Project is also making some tangible progress. Nevertheless, custom points (or port of calls) in this region irrespective of member countries are still seen as a controlling point by the businesses rather than facilitating gateway for trade. Only physical investment or reforms on paper will not help to alter this very perception – efforts must be concentrated to train up the professional on-ground.
Q. At CPD, you co-authored a Policy Brief on BIMSTEC. What has been the reaction of the BIMSTEC Secretariat officials on such policy research?
A. The Policy Brief draws substantially from an extended research report. The initial findings were presented in a conference hosted by the BIMSTEC Secretariat. The Secretariat has always appreciated such policy research inputs and shown positive intent to address these research findings at various platforms, including the BIMSTEC Summit.
Q. Which are the low-hanging fruits in terms of business areas which could create immediate benefit amongst BIMSTEC countries in regional value-chains? Which industries should be in focus?
A. BIMSTEC member countries are somewhat competitors rather than complementary partners. Though members tend to produce similar exportable products, there are opportunities to scale up their production network towards high value-added products by developing strategic business partnerships. As China is shifting its production to more sophisticated items, BIMSTEC members like Bangladesh, India and Sri Lanka may capitalize this opportunity and integrate more with the global readymade garments (RMG) manufacturing value chain. In addition to RMG, member countries may gain relatively quickly by developing a strong regional as well as global value chain in pharmaceuticals (including organic medicine), leather products and footwear, plastic products (specially toys), handicrafts etc. However, BIMSTEC members should prepare for developing strategic alliances to capture the regional as well as global value chain in industries such as e-commerce, light engineering, computer accessories and automobile from a forward looking perspective. Thailand’s experience of relatively high involvement in backward and forward global value chain may prove useful for other members to scale up in developing value chains, as well as penetrating the ASEAN and East Asian market.
Q. How can BIMSTEC cooperation result in more local SMEs becoming larger in size? What all is needed for that to happen? Investment Promotion Agency is one thing, but most IPAs concentrate on large corporates. What is your view?
A. Globally, rules of business and trade are shifting, and they are shifting fast. Artificial Intelligence, robotics and application-based technology are shaping a new business climate. My apprehension is that, by the next decade, the very business models of SMEs may not exist in today’s form and Investment Promotion Agency may not be that effective anymore while competing with various advertising platforms of social media. However, to scale up local SMEs with BIMSTEC’s type of cooperation, there is no alternative than to promote technology based scientific and social research. BIMSTEC members should create a common research fund to facilitate experiment and innovation in business. A separate regional fund may be created to finance start-up businesses in cooperation with private sector.
Q. Lastly, in your opinion, where do you see BIMSTEC 10 or 20 years down the line? Which ones of its 14-agenda points do you think it would have addressed the most?
A. Four relatively small BIMSTEC members, i.e. Bangladesh, Bhutan, Nepal, and Myanmar, are prospective graduates from least developed country (LDC) status by 2024. All these countries are expected to show more positive intention and efforts towards regional cooperation now than before. Sri Lanka is also experiencing phasing out of concessional financing. Thailand is in a phase of economic transition to sustain its growth momentum by avoiding the middle-income trap. As India is actively advocating for reinvigorating the BIMSTEC, therefore, a common but tacit expectation is that a few major developments under discussion may take place over the next 10 years. However, 14 agenda points are too many to work on effectively given the BIMSTEC Secretariat lacks both financial and human resources. For the effective advancement of BIMSTEC, a few specific goals and targets need to be set and resources should be adequately employed to attain those. To be specific, three areas out of 14 should receive utmost attention – (i) Trade and Investment, (ii) Transport and Communication and (iii) Energy sector.