The BCIM economic corridor: Prospects and challenges

 BCIM, Bangladesh, Dhaka, MEA

Exchange of Agreements in Sher-e-Bangla in Bangladesh

Source: MEA

Introduction

One of the major policy initiatives among national governments in Asia in recent years is directed towards developing sub-regional, regional and trans-regional corridors with the aim to further connect and integrate their economies. One such corridor is the proposed Bangladesh, China, India and Myanmar-Economic Corridor (BCIM-EC) involving four nations and has generated much interests as well as concerns. While the former focuses on its potentials, particularly in transforming landlocked and underdeveloped border regions of the countries involved, the latter pays more attention to the strategic implications it might have on the region. Within this context, this paper attempts to understand where this emerging trans-regional corridor stands today and discusses three key questions: What was the thinking behind setting up the BCIM initiative? What has been achieved so far? And what are the prospects and challenges of the BCIM-EC? The paper argues that the BCIM initiative has surely made forward movements in recent years, breaking a long impasse, but as it makes progress there are new dilemmas and challenges on how to take it forward.

The Rationale

In the late 1990s some ideas emerged from China’s Yunnan Province about a possible sub-regional cooperation involving south-western China, eastern India and the whole of Myanmar and Bangladesh. One of the first tasks was in defining this “zone” as a sub-region. The proponents of the idea argued that this zone contains a few key essential characteristics based on which cooperation at the level of sub-region could be explored.[1] Among other features, this zone is seen as “the meeting point of the three markets of China, Southeast Asia and South Asia” and thereby connecting “two major markets of China and India and even the whole of Asia”. Second, even as the sub-region suffers from poor infrastructure, its rich natural resources promise huge potential for large-scale development. Third, the sub-region is “isolated from global markets and is characterised by relative poverty”. Lastly, all the four countries have actively participated in regional and sub-regional organisations with the aim to integrate into the global economy.

Having argued that this zone shares certain characteristics that could form the basis for cooperation, a few likely benefits were visualised.[2] First, it was felt that if China and India could cooperate in regional affairs through such a mechanism, it would contribute to promoting peace and stability of Asia and the world. Second, such cooperation at the sub-regional level could also help in “rooting out social evils such as drug production and trafficking.” Third, it would also “assist in the alleviation of poverty and promote social development” and lastly it would “connect the unlinked markets of Asia and thus integrate” the whole continent. Five key areas were outlined as the immediate plan – building modern communication and transportation networks – thus connect the sub-region by rail, road and air routes; the expansion of intra-regional trade; the development of tourism; the institution of economic and technological cooperation by leveraging ancient ties; and the promotion of cultural exchanges.[3]

Progress Made

Conceived as a sub-regional economic cooperation, the above ideas formed the basis of launching the BCIM initiative in 1999 in Kunming, the capital of Chinese Yunnan province. As evident from the above discussion, two prominent objectives had driven the BCIM initiative since the beginning - one is economic integration of the sub-region that would also enable integration of Asia and the other is development of the border regions. The BCIM priority agenda has evolved over time. From the 3-T’s of Trade, Transport, and Tourism, the BCIM priority agenda has moved to TTE (Trade, Transport, and Energy).[4] Apart from these items, social, cultural and environmental issues were also brought on the table for discussion but the focus increasingly has favoured trade, connectivity and energy cooperation. Some proponents continue to argue for the “soft” agenda to be brought back in the BCIM dialogue as this is seen “more feasible” in the sub-region and will have direct positive impact on “the livelihoods and aspirations of the peoples in the borderlands.”[5] The idea of multi-modal transportation was also added to the BCIM connectivity agenda with the focus on Inland Water Transportation and the promotion of port development and coastal shipping.[6]

The year 2013 was crucial in the development of BCIM initiative. In February that year a car rally from Kunming to Kolkata (K2K) was organised with great success.[7] It took six years for the rally to materialise ever since the idea was first mooted in 2006 by Prime Minister Manmohan Singh during Chinese President Hu Jintao’s visit to New Delhi. This event gave a new energy to policy makers and other stakeholders to take a renewed interest and confidence that a physical connection linking the four countries was indeed achievable. The most important indication of this confidence was reflected during Chinese Premier Li Keqiang’s visit to India a couple of months after the car rally. For the first time since its existence for more than a decade, the BCIM initiative received its high-level endorsement. The joint statement issued during Premier Li’s India visit stated that both sides agreed to consult the other parties on “establishing a Joint Study Group on strengthening connectivity in the BCIM region for closer economic, trade and people-to-people linkages and initiating the development of a BCIM Economic Corridor.”[8] In October 2013, during Indian Prime Minister Manmohan Singh’s visit to China, Kolkata and Kunming as sister-cities was unveiled.[9] In a major development in realising the BCIM-EC, the first meeting of the BCIM-EC joint study group held in December 2013 in Kunming thus officially setting up the mechanism to promote cooperation.[10] These developments have given a clear indication that India and China are prepared to work together in their common peripheries. Surely, the BCIM initiative has moved away from the state of stalemate and uncertainties that had defined the initiative for a long time. This is evident from the fact that the current government in New Delhi under Prime Minister Narendra Modi has continued with the same enthusiasm of the Manmohan Singh government in acknowledging the progress made in promoting cooperation under the BCIM-EC framework and to implement the understandings reached between the two sides.[11] But as the BCIM initiative enters new ground there are issues and challenges that needs to be addressed.

Future Prospects

Many observers in South Asia see the BCIM initiative as “an emerging opportunity”[12] that could be a “game changer” for the region.[13] Such assessments are clearly driven by the prospects of economic benefits at a time when bilateral trade in the BCIM countries are growing rapidly in recent years. However, there are other issues and challenges that are still at play when the initiative is seen from the political prism. Some issues have been inherent in the BCIM initiative since the beginning. Government involvement in the BCIM initiative has been not different in terms of both the attitude and level of participation. Since the beginning the BCIM was a Track I activity for China and Myanmar with the Burmese central government on the one hand and the Yunnan Provincial government taking the lead role. For India and Bangladesh, the BCIM began as a Track II initiative and soon Dhaka decided to move towards Track I. The BCIM remained largely a Track II activity as far as New Delhi was concerned until the India-China Joint Statement of May 2013 when the BCIM was officially endorsed at the highest level, thus moving towards Track I venture. An extension of this issue has also been reflected in the level of involvement and role of government. For instance, Yunnan province of China has played a leadership role in the BCIM discussions but this has not be the case the states from eastern India.[14] While some of these issues continue to create challenges, new dilemmas and questions are also emerging on how to take the BCIM initiative forward.

First, there are two views emerging on the approach itself – one group arguing for an economic-centric approach and the other for a “more people-centric, inclusive approach mindful of local social realities.”[15] The other dilemma is the tension between centralisation and decentralisation.[16] The issue is whether the increasing centralisation of the initiative is in the right direction. This tension seems to be producing differences in perceptions and approaches to the BCIM project. Some observers have rightly asked whether the BCIM-EC is “to be conceived as a transnational zone of commercial engagements, enabled by physical and soft infrastructure? Or is it merely the shortest and most economical route between two end-points.”[17] For instance, while people in border regions are more concerned about socio-economic and environmental impacts, national governments are more concerned with security and political issues. Thus, people in India’s northeast and upper Myanmar are increasingly talking about the likely impacts of the proposed corridor on society and environment.[18] However, in the capitals of the four countries, the concerns are about security and geo-strategic implications of the project.

The third dilemma is the tension between regionalism and sub-regionalism. Is the BCIM project a regional initiative or a sub-regional initiative? Clarity on this question is important because it has policy implications in terms of framing the overall objectives of the BCIM project. There are some who point out that the issue is “whether the aim of the BCIM project is to develop the remote areas or to link the remote regions to the global supply chain?”[19] Where do the local governments figure in the grand schemes of thing? There are concerns among the local population that in these grand strategies the remote borderlands could become merely transit routes. Hence, questions such as: In what way can the people in the border regions can be assured of “benefit sharing” and not merely “risk sharing” needs to be addressed.[20] Is the borderlands of India ready to play the “new role as a transnational entrepot and, if not, how can it be made ready through skill development and entrepreneurship training?”[21] Also, will the sub-regional development ensure inclusive growth or complicates existing social tensions in a region already burdened with conflicts?

Another issue is whether the BCIM project should be driven by economic logic? If we look at the ground realities, so far the BCIM project has been driven by political and strategic considerations. Take for example the route of the BCIM Car Rally itself. There are some who argue that the decision on the current route of the BCIM-EC is not an economic decision but a politico-diplomatic decision. The route of the car rally avoided the populous and industrially developed Brahmaputra valley and altogether bypasses most of NE states. Is this route economically viable? Even as the economic viability of the route is important to consider, as mentioned earlier, the question is whether the current BCIM project is too narrowly driven by economic-centric approach. There is a view that a holistic approach is needed for the BCIM project where community-building forms the base of the initiative, thereby emphasising with social, cultural and environmental issues and making them integral part of the project.[22]

Although river diversion is a controversial issue, some observers in India are of view that if China pursue river diversion and dam-building projects at the cost of environmental degradation and economic dislocation of the lower riparian countries, the BCIM corridor project may be adversely affected as such issues could impact relations among the member-states. Hence the need to understand the concerns of its neighbouring countries is important. Given the rich biodiversity of the region, questions have been raised about the impact of the project on the region’s fragile ecology since the project would involve clearing of forests, land acquisition and possible eviction. Notwithstanding the benefits, what will be the impact of the BCIM-EC on culture, demographic profile, environmental pollution, social security, economic exploitation, etc? Need for proper study on the likely impacts of the project to avert such undesirable scenarios is critical.

Lastly, before the announcement of the “One Belt One Road” initiative by China, the BCIM-EC was seen in India as a single project not connected with other initiatives that could be explored for mutual benefits. With the OBOR now emerging as the main topic of debates and discussions, there is a sense that China’s grand strategy of trans-boundary connectivity needs to be critically studied to better understand its implications on India’s strategic interests. This emerging concern is casting its shadow over the BCIM-EC. Even so, New Delhi continues to support the BCIM-EC initiative as part of its “Act East” policy.[23] There is a growing sense among Indian strategic community that since “India lacks the resources today to set up competing networks; it may be worthwhile to participate in those components of the OBOR which might improve Indian connectivity to major markets and resources supplies.”[24] With this logic, there is a view that “India will continue to cooperate with China where it can but India will be ready to compete when it must and be watchful that China does not use the OBOR as to build its military capabilities to India’s detriment.”[25] Although India is committed to the BCIM it is likely that New Delhi would want to go slow with its implementation until it develops its own internal linkages with its Northeast region. In fact, China decided to open up its Western region after fully integrating the region into mainland China.

Conclusion

The above discussion suggests that there are various political and security issues at the local, national, regional levels that need to be addressed before discussing the commercial prospects of the BCIM-EC. Trade architectures, transit facilities, infrastructure capabilities are all important but these operational aspects of economic corridor need to be discussed within the larger societal context. Perhaps, the question boils down to who gets what, and at what cost if the BCIM-EC is seen purely from the economic perspective. But if one expands the scope of the BCIM framework to the society there is a lot that the BCIM initiative could offer to all stakeholders. While top-down governmental initiatives are important, it is the society that determines the success or failure of any national and transnational initiatives. It is important to initiate people-centric projects to ensure engagement and involvement of the society in projects developed under the BCIM. The BCIM needs to be a sub-regionalism from below where small business houses have a role to play. An institutional issue that needs to be looked at is the question of decision making. The Joint Study Group in its first meeting agreed on the principle of consensus-building. Nobody should be pushed to just agree, but everybody should be taken along. It is important to identify low-hanging fruit––the most practical, to give confidence. There is need to have realistic targets. The BCIM needs to be a confidence building organisation not only within BCIM but also with external players and groupings and keep it inclusive for all. The pilot projects need to be geared towards addressing some of the existing problems. There is need to recognise that we are talking about a conflict zone. Hence conflict sensitive approach is necessary.

The crucial role of people-to-people contact in fostering greater understanding, cooperation and goodwill should form the base of the BCIM. Collaboration in education and health among the member-states and eco-tourism holds immense potential in this rich bio-diversity sub-region. Environment friendly parks could be explored. Skill development and capacity building for local people is must. In the long-term, the goals should be sustainable development in the sub-region. Ecology, local identities and culture are interlinked in the border areas. An adverse impact on one aspect has its implications on the other. Adopting sensitive approach with the goal of sustainable development needs to be made the base of BCIM projects. It is important to make these concepts integral in the mechanism building. In the current context of trust deficit between India and China, the inclusion of people to people links is important as it could play an important role in creating a congenial political environment for sustaining this ambitious initiative.

This article was originally published in GP-ORF’s Emerging Trans-Regional corridors: South and Southeast Asia.


[1] For more details see in Patricia Uberoi, “The BCIM Forum: Retrospect and Prospect”, Working Paper, Paper 2013/11/1, Institute of Chinese Studies, Delhi.

[2] Ibid, p.7.

[3] Ibid, p. 8.

[4] Ibid, p. 14.

[5] Ibid, p. 14.

[6] Ibid, p. 15.

[7] “Kolkata-Kunming rally begins”, The Hindu, 23 February, 2013 at http://www.thehindu.com/news/international/kolkatakunming-rally-begins/article4446805.ece

[8] See “Joint Statement on the State Visit of Chinese Premier Li Keqiang to India”, Mis

May 20, 2013http://mea.gov.in/bilateral-documents.htm?dtl/21723/Joint+Statement+on+the+State+Visit+of+Chinese++Li+Keqiang+to+India

[9] “Kolkata to Kunming: Indian and Chinese strategies converging to build land and trade ties in northeast”, Economic Times, December 5, 2013 at http://articles.economictimes.indiatimes.com/2013-12-05/news/44808300_1_bcim-bangladesh-china-india-myanmar-kunming-and-kolkata

[10] “BCIM corridor gets push after first official-level talks in China”, The Hindu, 21 December, 2013. http://www.thehindu.com/news/international/world/bcim-corridor-gets-push-after-first-officiallevel-talks-in-china/article5483848.ece

[11] See “Joint Statement between the India and China during Prime Minister's visit to China”, 15 May, 2015, Press Information Bureau, Government of India at http://pib.nic.in/newsite/PrintRelease.aspx?relid=121755

[12] Mustafizar Rahman, “BCIM-economic corridor: An emerging opportunity”, The Daily Star, 15 March 2014 at http://cpd.org.bd/wp-content/uploads/2014/03/Daily-Star-Page-52-March-15-2014.pdf

[13] Pravakar Sahoo and Abhirup Bhunia, “BCIM Corridor a game changer for South Asian trade”, East Asia Forum, 18 July, 2014 at http://www.eastasiaforum.org/2014/07/18/bcim-corridor-a-game-changer-for-south-asian-trade/

[14] Uberoi, “The BCIM Forum: Retrospect and Prospect”, p.12.

[15] Ibid, p. 17.

[16] See “Continental and Maritime Silk Routes: Prospects for India-China Cooperation”, ORF Event Report, January 2015.

[17] Uberoi, “The BCIM Forum: Retrospect and Prospect”, p.17.

[18]  For instance see “BCIM-EC and trade corridor Manipur at stake”, Editorial, The Sangai Express (Manipur), July 22, 2014 at http://e-pao.net/epSubPageExtractor.asp?src=news_section.editorial.editorial_2014.BCIM-EC_and_trade_corridor_Manipur_at_stake_TSE_20140722

[19] This question was asked by Patricia Uberoi during the 1st ORF-RIIO symposium held on 9-10 January, 2015 in Kunming, China.

[20] Uberoi, “The BCIM Forum: Retrospect and Prospect”, p.17.

[21] Ibid.

[22] See Zhang Li’s remarks in Continental and Maritime Silk Routes: Prospects for India-China Cooperation, Proceedings of the 1st ORF-RIIO Symposium, 9-10 January, 2015, Kunming, China at http://www.orfonline.org/wp-content/uploads/2016/02/India-China-Cooperation_Report.pdf.

[23] Insurgency in the NE will not impact BCIM connectivity: India”, Economic Times, 15 June, 2015, at http://economictimes.indiatimes.com/news/defence/insurgency-in-ne-will-not-impact-bcim-connectivity-india/articleshow/47648667.cms

[24] Shyam Saran, “What China’s One Belt and One Road Strategy Means for India, Asia and the World”, 9 October, 2015 at http://thewire.in/2015/10/09/what-chinas-one-belt-and-one-road-strategy-means-for-india-asia-and-the-world-12532/

[25] Jayan Prasad, “One Belt and Many Roads: China’s Initiative and India’s Response”, Issue Brief, Delhi Policy Group, September 2014 at http://www.delhipolicygroup.com/uploads/publication_file/1093_OBOR_Prasad.pdf

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