The Bay of Bengal community, a critical part of the Indian Ocean Region, has been offered a unique opportunity by COVID 19 to work together.

THE BAY OF BENGAL COMMUNITY: ITS SIGNIFICANCE

While the normal narrative for regional cooperation and integration is through land connectivity, oceans and water bodies have worked as strong integrators to bring regions together. Sunil Amrith’s book, “Crossing Bay of Bengal,” has called this region “the heart of global history.” However, because of colonial adventures in the Indian Ocean, the importance of the Bay had withered away.

The idea of a Bay of Bengal community first emerged in a 2000 article by V Suryanarayan who wrote that purely going by the historical narrative, the community was very much possible. The archaeological and political evidence, the basic foundations to create a community, were all there. The creation of Bay of Bengal Initiative for Multi-Sectorial Technical and Economic Cooperation (BIMSTEC) in 1997 with Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand as its members, was, therefore, a logical step in this direction.

The geographical demarcation of Bay of Bengal starts from the Bay just North of Sri Lanka to Aceh, Indonesia then goes on Malaysia on to Thailand, Myanmar and later Bangladesh. Interestingly, the Indira Point in the Andaman’s Islands of India is closer to Aceh in Indonesia than the distance between Chennai to New Delhi.

With a common cultural and civilisational heritage, cooperation is possible, which has been greatly amplified by the common threat posed by COVID-19. At the same time, the pandemic also brings possibilities of greater cooperation and integration. The opportunism is there in the field of regional supply chains, FDI and intra-regional trade. What is required is dynamic leadership to muster support from various nation-states. Regional digital connectivity through broadband at affordable prices is vital to link the region together. A suitable template could be the Asia-Pacific Information Super highway.

Is BIMSTEC relevant?

BIMSTEC links the ecologies from those of the Himalayas to the Bay of Bengal. It acts as a bridge between South Asia and South-East Asia and provides an opportunity to transform India’s North East regions into a gateway connecting the two regions.

The community accounts for 21% of the world’s population with a combined GDP of 3.1 trillion dollars, providing a huge potential for trade. The intra-regional trade as a percentage of the total trade is one indicator of regional economic integration. The intra-regional volume of BIMSTEC is only 7% while according to some projections it can go up to 21% if efforts are accelerated and roadblocks removed. In contrast, ASEAN’s intra-regional trade accounts for 25% of its total trade. The low level of intra-regional trade has manifested itself from low levels of intra-regional investment. Existing barriers have hampered the flow of capital and qualified human resource.

Although BIMSTEC was formed in 1997, the idea of BIMSTEC as a regional grouping has only been gaining traction in recent years. Geo-political developments leading to the deteriorating India-Pakistan relations and the consequent impasse during SAARC have given an impetus to BIMSTEC cooperation. Also, to counter the growing foot print of China in the region, India feels it must step up its engagement with its regional neighbours. Further, BIMSTEC integration owes a lot of its progress to the Bangladesh-Bhutan-India-Nepal Initiative (BBIN).

BIMSTEC is focused on sectoral cooperation on 14 thematic areas and is expected to progress to macro-level issues like coastal shipping agreement gradually, greater interconnection MOU, transport and infrastructure logistic support.

BIMSTEC is well placed to cooperate in addressing security challenges in the Eastern Indian Ocean region. India, Myanmar and Thailand have cooperated in ASEAN-centric regional security platforms. The three countries can seek to reinforce their role and can act as a forum for consultation among leaders in the Bay of Bengal region. They can also focus on targeted cooperation in multilateral forums as they are members of IORA. In the region, BIMSTEC can help in shaping a regional architecture for the Bay of Bengal.

COVID-19 has posed a common threat to mankind with the most important being the disruption of the global economy. Trade flows and global value chains have been disrupted. Global GDP has shrunk, unemployment and poverty are rising. The crisis has demonstrated the overdependence of the rest on one country for their production chains. There are increasing tensions between the USA and China; the growing mistrust between the two may accelerate the pushback towards de-coupling of their economies. The US has often criticised multilateral institutions like the United Nations and on occasions, undermined them. However, when it comes to supporting the multilateral order, China’s record is equally disruptive.

BIMSTEC has the size and the critical mass to navigate around these trends or at least mitigate their ill-effects. It can do so effectively by encouraging regional economic integration by enhancing security cooperation by building its institutions and dialogue platforms, shunning great power rivalry and strengthening its relations with regional powers including Indonesia, Vietnam, Japan and Australia.

Power play the in the Bay of Bengal region 

Recent years have witnessed significant changes in Asia’s maritime landscape, and there has been an escalation in great power rivalry, heightened geo-political competition and conflict. The Bay of Bengal is now a critical theatre of economic and strategic competition. It has always been a connector between South and South-east Asia but has now become a focal point in competition between competing initiatives. New connectivity corridors are coming up as China seems to link its western provinces to the Bay of Bengal.

There have been two incidents on the border between India and China earlier this month. However, the competition between regional powers has not been as intensive as in the South China Sea, although the Chinese Navy’s incursion into the Bay of Bengal and the Northern IOR has accelerated over the years with its growing blue water capabilities.

The Bay of Bengal Community has the potential to rival China’s BRI in the region, as the Chinese intention behind BRI is not as much connectivity but a “dominance initiative.” BRI was not deterred or slowed by COVID 19; the distraction has been used in many areas only to speed up under the pretext of “Health Road Initiative” to send medical supplies with great fanfare. BIMSTEC has to become equally focussed as it has a nobler agenda that supports the wishes of both sides and ensures mutual benefits.

In the global power play in the region, the US initiative also needs to be addressed and leverage by the Bay of Bengal community to its advantage.

Making Bay of Bengal attractive for FDI

The Bay of Bengal was known for its focus on fisheries, shipping and ports, which is the most significant part of the trade. This needs to be extended to other fields, especially agriculture as post-COVID-19, food security will assume greater importance as now countries cannot depend upon external supply chains for food. Also, the historical connection between the people makes intra-regional tourism a great economic booster.

With the change in the world economic order, many nations will favourably look at BIMSTEC for FDI. All these nations have the four factors for enabling businesses – natural capital, labour capital, social cohesion and widely improving physical capital among member states. At a global level, these nations are relatively less explored so that the rates of return can be higher than in the post-COVID world. In this context, the larger member nations of the BIMSTEC like India and Thailand need to lead.

The investment opportunities are there for the Bay of Bengal Region. While in the short term, investments may be hard to come by, in the longer term, according to Japan’s Bank of International Cooperation’s last survey, India is the number one investment interest in the next three years, Thailand the fourth and Myanmar stands ninth.

Assessment

BIMSTEC during the last two decades has fauled to live up to it’s expectations. The ecinomic benefits have continued to elude the millions of it’s citizens despite the proximity and huge markets shared by it’s members. The level of economic activity has remained below par, and now is the time to make a realistic assessment of the impediments, create and innovate measures to mitigate the same.

The largely cordial relations between member states and the fact that the members straddle two economic regions-South Asia and ASEAN- the grouping can leverage the strength of both including close institutional cooperation.

BIMSTECmehas generally remained obscured in the background of regional dialogues and interactions; thus very few influencers in all the member states can fully grasp its potential. BIMSTEC must focus on enhancing its visibility in the public consciousness and in a way “market itself” to potential investors, who may be looking for alternatives to China.