A two-day international conference on Advancing the BBIN Agenda: Exploring possibilities in Trade, Transit, Energy and Water Cooperation organized by the Observer Research Foundation and The Asia Foundation was held at Kolkata on December 3-4, 2015. The following is the report on the deliberations and proceedings of the same.
Connectivity has been for quite a while and continues to be one of the key issues in regional interaction and politics. As it is increasingly recognized that the development of physical links among countries in a geographically contiguous zone would eventually lead to economic, political and social interconnected-ness, the emphasis on establishing, developing and improving these links has grown. The BBIN (Bangladesh, Bhutan, India and Nepal) Motor Vehicles Agreement signed in Thimphu, Bhutan in June 2015 marks a watershed in the efforts of South Asian nations towards re-connecting.
Emphasizing the three pillars of the BBIN Motor Vehicles Agreement, the importance of reviving past linkages such as river, road and rail routes need to be recognised. Roads do not merely serve the purpose of trade but are also vital for reviving emotive and ancestral links between the states of the region. In this context, the BBIN formation brings a platform and increases the scope for greater people-to-people interactions. The governments of India and Bangladesh are currently in talks for launching a bus route from Kolkata to Khulna via Jessore. Both governments have also been taking steps to reopen past routes such as the one through the Raimangal River linking Satkhira district in Bangladesh with the South 24 Parganas district in West Bengal, India. They are also reinvigorating the use of National Waterways 1 and 2 to include passenger connectivity. Similar efforts at the bilateral and multilateral level among other BBIN countries are needed to realize the objectives of seamless economic and socio-political links. Governments of BBIN countries must also continue their work towards providing cerebral links along with physical ones.
We are now witnessing a growing move towards regionalism coupled with a shift from an idealistic approach towards a more realistic and pragmatic one in addressing multilateral and bilateral concerns. Another significant development is the recognition of the importance of Kolkata in spearheading India’s move towards regionalism and sub-regionalism. Delhi is no longer the centre of gravity for integration. Kolkata has to be in the lead and this therefore marks the significance of involving more and more sub-national actors in the move towards regionalism. Along with this there is also a need to identify ‘low hanging fruits’, or in other words, incremental steps in the progress towards regionalism. This was particularly highlighted with regard to the sense of impatience regarding the pace of regionalism in this part of the world. It is thus necessary to identify ways in which we are making actual progress.
The possibility of bringing Myanmar into the BBIN formation to strengthen efforts towards regionalism can be explored. Geographically, connectivity with Myanmar is desirable as it is South Asia’s gateway to the Southeast. Myanmar forms a bridge between the southern and southeastern parts of the continent and in the wake of the ongoing political transitions in that country, it is conducive as well as constructive to strengthen connectivity links with Myanmar.
Each member country of the BBIN formation might act as a hub of selected competitive products which might consequently help in resolving bilateral problems and help the BBIN initiative to move forward. Given that the dialogue around regional and sub-regional cooperation has been going on for a long time, it will be beneficial to learn from the success and failures of previous attempts. In this context the idea of a project-based approach in the move towards boosting sub-regionalism and learning from regional formations in the area like the Greater Mekong Sub-region and the ASEAN could prove helpful.
The idea of growth zones which came up during the 1990s from economic growth theories gives the rationale behind why we need to have sub-regional cooperation to provide an impetus to economic growth. The movement of comparative advantage and product cycles from one country to another is being studied to support regional economic growth and the objective of the BBIN formation should be viewed in this context of growth with development. Success stories where bilateral cooperation is expanding and enhancing need more visibility along with renewed emphasis on research which would identify further scope for collaboration. The discussion also revolved around how to incentivize politicians to take up the agenda of sub-regional cooperation and also concerns related to China’s growing influence in the region.
Energy-water nexus among BBIN countries
The three pillars of access to life-line energy for the people living in the BBIN region could be: availability, affordability and accessibility. Despite abundant water availability per capita in these countries, especially Bhutan, India and Nepal face acute shortage of water during dry season. There is scarcity in drinking water, irrigation and power sectors. These countries are often subjected to severe flood landslide and debris flows each year. Despite the huge potential of Hydropower, the countries face acute shortage of power and energy. India has the potential to supply petroleum products of very high standards and specifications to the BBIN countries with its surplus in refined petroleum products.
On the issue of water, the Ganga-Brahmputra-Meghna basin presents a development paradox: there is ample water with ample poverty and it is thus important to identify what would be required to convert it into ample water with ample prosperity. Another aspect that can be explored is the impact of linking of rivers in India on relations within the BBIN region. Factors that have the potential to promote power trading and exchanges in the region also need to be considered and understood so that effective policies can be drawn up. Within the purview of energy-water nexus, other dimensions relevant for the BBIN region like the poverty-environment linkages need to be made part of the dialogue.
Changing life-styles and economic growth can be identified as the main reasons for increasing energy consumption in the South Asian economies. Access to clean, efficient and cheap energy along with equity in access are some of the critical issues facing the region. The potential that solar energy has in meeting energy needs of the region will require more extensive understanding. Another aspect related to this includes the issue of sustainable development and military security, which together can strengthen cooperation among the countries of South Asia.
The term “nexus” may need to be deliberated since it assumes water to be an economic commodity and ignores the social and cultural characteristics of water. The definition of nexus treats the problem in a techno-managerial fashion ignoring the role perceptions play in shaping political decisions. Finally, ecosystem-livelihood linkages can also be looked into in the light of the development paradox that the region has and continues to face.
Trade cooperation among BBIN countries
Trade, hypothetically or axiomatically, is one of the key drivers of development. However, it is to be explored how trade cooperation among BBIN countries can happen, and is there any optimal level of cooperation which is beneficial for all the nations in order to exploit their comparative advantage. India being a dominant member of BBIN and SAFTA may be in a better position to negotiate at this forum which may be politically more difficult at a bilateral level. One such area of negotiation is access to India’s North-East and land route access to South-East Asia through Bangladesh. All BBIN members apart from India are Least Developed Countries (LDCs) and India has given them Duty Free Tariff Preference (presently, Bhutan and Nepal are yet to become beneficiary of this scheme). Trade cooperation will be more through trade facilitation. However, Non-tariff barriers (NTBs), trade facilitation and Rules of Origin (ROO) remain some of the more problematic areas of cooperation under SAFTA.
There is a persistent sentiment among trade experts that the real trade barriers that kept intra-South Asia trade low are mostly issues related to trade facilitation including trade logistics and trade finance. Improvement in trade logistics, development of regional value chains and export oriented infrastructure will be vital for the future of the region. While the BBIN region is at a disadvantage since the share of trade in this region is very small, an active BBIN region can improve trade by 60% in the region. However due to lack of trust among the countries and geopolitical issues, this potential is yet to be tapped fully. There is a very urgent need to explore issues related to finance and trade with regard to facilitation of trade among the countries in the region. For instance, many people use a tourist visa for coming to India for treatment since obtaining a medical visa is both complicated as well as expensive. Trade facilitation also depends on capacity building in addition to the improvement of infrastructure and in this context the service sector potential must be tapped along with trade in goods.
Prevailing Concerns
Infrastructure
The importance of development of infrastructure and supporting mechanisms has been increasingly recognised in today’s world of interdependencies. The quality of infrastructure and political will at the national level are vital for encouraging and providing the much needed stimulus to regional integration. Infrastructural links like roads and railways which existed in the pre-partition years in South Asia were lost after India’s independence and partition. The shared history of the countries in the region has always vitiated the atmosphere of South Asian politics and has prevailed over geo-economic concerns. Thus the region has always remained internally disconnected though otherwise contiguous.
Upgrading the existing infrastructural at entry and exit points, effective coordination between central and state governments in a country like India, legal reforms for seamless movement of cargo and people and strengthening the political will towards these efforts are some of the challenges that remain.
Security
The all-encompassing nature of the issue of security is something that needs careful understanding. Due to the porous borders among countries in the region coupled with the existence of large-scale smuggling, trafficking and insurgent operations, the issue of cross-border security is extremely urgent and yet one that requires time and vigilance. The security measures in place while necessary, have often affected seamless movement of trade. Security concerns frequently jeopardize easily workable routes. Often due to lack of connectivity (not just physical but also soft connectivity), links cannot be established between major business potential hubs.
Market potential
The need to understand and utilize the market potential available among the four BBIN countries was also discussed along with the need to strengthen institutional connectivity. BBIN countries must stand up to their core concerns and interests and revisit the connectivity problem on the ground to better understand everyday realities. In this context the economic development of areas located on the border between countries needs to be explored. Cross-border trade inevitably stands to affect the people living in areas located close to the borders. The decision to set up border haats between India and Bangladesh and India and Myanmar was taken with the aim to provide an impetus to the economic development of these areas. Similar arrangements on the India-Nepal and India-Bhutan border may also considered. It has to be understood that connectivity links have the potential of becoming economic boosters not only for the domestic economies of participating countries but also, in general The necessity of transforming informal trade to a more formalized one by building infrastructure, encouraging exchange, increasing the value of trade and free flow of goods and services, and so on also needs to be recognized.
Conclusion
A very welcome and secular decline in the number of inter-state conflicts in the latter half of the previous century and in this century can be noted. Instead, cooperation and also an urge for improvement of the standard of living have become the buzzwords in international politics of today. Hence we can clearly perceive a change in the ambience of international politics in that it has been realized that self-interest can be achieved not through conflict but through cooperation. It has also been noted that international politics is not entirely a zero-sum game so there can be win-win situations created by different nation states. In this context, it has to be recognised that the BBIN formation is a very sensible and very possible regional platform for achieving these goals for the people of this sub-region.
This platform needs to be nurtured by all the constituent states carefully. The most important thing that all the BBIN countries share is the common element of a secular democracy. And India being the largest and oldest democracy has a special role in strengthening these newer and fledgling democracies in the region and in contributing to the development of all.
The difficulties posed by “big countries” and “small countries” can be talked about but that is the order of nature. What is important is that it is not necessary for there to be any disparity as long as things are handled with delicacy and sensitivity by all concerned.
Cooperation is a process of inclusion and exclusion. Therefore it is imperative for the countries of the BBIN formation to develop the process of dialogue, formulation of policy and eventual implementation in a manner that would effectively and sustainably address the needs and the goals. The importance of communication and interaction among countries cannot be exaggerated and it is very important for these countries to realize that looking towards the future is important. Transforming the constraints and limits of a shared history into strengths will help the countries in integrating at a deeper level.
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Speakers-
Keynote: Alapan Bandyopadhyay, Principal Secretary, Transport, Government of West Bengal
Panelists:
Roundtable 1: Possibilities of Cooperation at the Sub-regional level in South Asia
Panelists at the session included Pinak R Chakravarty, Former Diplomat & Distinguished Fellow, ORF-New Delhi, India; Naichu Tshering, Ex- Member of Parliament, Bhutan; Bishwambher Pyakuryal, Professor of Economics, Nepal; Sachin Chaturvedi, Director General at the Research and Information System for Developing Countries (RIS), India and Nazneen Ahmed, Senior Research Fellow, Bangladesh Institute of Development Studies (BIDS), Bangladesh. It was moderated by Sagar Prasai, Director, The Asia Foundation, India.
Roundtable 2: Policy and market signals for strengthening connectivity in BBIN
Panelists at the session included Bipul Chaterjee, Executive Director, CUTS International, India; Sujeev Shakya, Founder & CEO, BEED, Nepal; Shanawez Hossain, Research Fellow, BRAC Institute of Governance and Development (BIGD), Bangladesh; Khampa Tshering, Business consultant (Private and government), Bhutan. The session was moderated by Anasua Basu Ray Chaudhury, Fellow, ORF-Kolkata, India.
Roundtable 3: Energy-water nexus among BBIN countries
Speakers at the session included Mahendra P Lama, Chairman, Centre for South, Central, South East Asian and South West Pacific Studies & Jawaharlal Nehru University, India; Hari Pandit, Professor of Water Resources Engineering, at the Institute of Engineering, Tribhuvan University, Nepal; Shaheen Afroze, Research Director, Bangladesh Institute of International and Strategic Studies, Bangladesh; Nilanjan Ghosh, Senior Fellow, ORF, Kolkata, India; Madhukar Upadhya, Former PEI Advisor, National Planning Commission, Nepal and Sonali Mittra, Associate Fellow, ORF-New Delhi India. It was moderated by Ashok Dhar, Director, ORF-Kolkata, India.
Roundtable 4: Trade cooperation among BBIN countries-
Parthapratim Pal , Chairperson PGPEX and Professor, Economics, IIM Kolkata, India; Hiramani Ghimire, Executive Director, South Asia Watch on Trade Economics and Environment, (SAWTEE), Nepal; Fahmida Khatun, Research Director, CPD, Bangladesh and Sonam Jatso, Member, Technical Advisory Committee, Bhutan Chamber of Commerce & Industry, Bhutan were speakers at this session, which was moderated by Nilanjan Ghosh, Senior Fellow, ORF-Kolkata, India.
(This report has been compiled by Pratnashree Basu, Junior Fellow, ORF Kolkata)The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
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