Explained: Importance Of SAARC And BIMSTEC; And Why India Should Keep Its Avenues Open

The recent phenomenon of Brexit and the withdrawal of the United States of America from the Trans-Pacific Partnership reflect the global mood of resistance towards regional cooperation and the emphasis on bolstering the national identities. Contrary to this, the picture in South Asia and East Asia presents before us a different story altogether. South Asia along with East Asia is a region rich in human resources. However, these two regions have had different approach towards development. On the one hand, East Asian economies have witnessed growth by investing in human resource development by creating the platform of  ASEAN whereas, due to the conflicts emerging after the subcontinent’s partition and resulting mistrust have acted as stumbling blocks in the South Asian region’s development.

South Asia is a very complex region. It faces a myriad of socio-economic problems, which cannot be resolved without a cooperative approach. There are insurgencies, contested identities, border conflicts and rivalries. There is great cultural, ethnic and religious diversity in the region. But there are many overlapping features in this diversity which serve as unifying factors in this landmass with high human density. Amidst this unique region, the birth of SAARC (South Asian Association for Regional Cooperation) was envisioned in the late 1970s by the military dictator of Bangladesh General Zia-Ur-Rahman. Owing to its proximity with the Soviet Union during the Cold War, India was reluctant to join SAARC. It thought of SAARC as the brainchild of the USA to counter Soviet influence in the region which might ultimately result in an ‘Asian Cold War’, a war between pro-soviet and anti-soviet nations.  Eventually, due to the insistence of the neighbouring countries, India agreed to join SAARC which finally was formed on December 8, 1985, with its headquarters in Kathmandu. Its first meeting took place in Dhaka in 1985 which has been followed by 17 more summits.

The objectives of the Association as outlined in the SAARC Charter are:

  • To promote the welfare of the peoples of South Asia and to improve their quality of life
  • To accelerate economic growth, social progress and cultural development in the region and to provide all individuals the opportunity to live in dignity and to realise their full potentials; to promote and strengthen collective self-reliance among the countries of South Asia
  • To contribute to mutual trust, understanding and appreciation of one another’s problems;
    To promote active collaboration and mutual assistance in the economic, social, cultural, technical and scientific fields
  • To strengthen cooperation with other developing countries
  • To enhance cooperation among themselves in international forums on matters of common interests
  • And to cooperate with international and regional organisations with similar aims and purposes.

Nowhere in its Charter does it mention the mechanism for ironing out the contentious issues in the bilateral relations between the member countries and that has posed as a grave problem in the functioning of the SAARC ever since its inception.

It is imperative to point out that the relations between India and Pakistan, the two largest members of SAARC, have been instrumental in shaping the organisation. Nonetheless, stalling its success.
In 2014, during 18th SAARC summit in Kathmandu in 2014, India initiated SAARC–Motor Vehicle Agreement (MVA) give an impetus to the regional connectivity across South Asia. But, it could not be signed due to Pakistan’s dithering.

It is the tumultuous relationship between these two countries which has made SAARC dysfunctional. In 2016, India pulled out of the scheduled meeting at Islamabad citing terrorism as the reason, followed by Bangladesh, Afghanistan and Bhutan. The other members of SAARC include Nepal, Sri Lanka and the Maldives. The monumental achievement of SAARC has been in the economic domain in terms of devising the South Asia Free Trade Agreement (SAFTA) which was signed in the year 2004 and was implemented in the year 2006. SAFTA was envisaged to gradually move towards the South Asian Economic Union. But, the current intra-regional trade and investment relation are not encouraging, and it may be difficult to achieve this target. The SAARC intra-regional trade stands at just 5% on the share of intra-regional trade in overall trade in South Asia.

Similarly, foreign direct investment is also dismal. The intra-regional FDI flow stands at around 4% of the total foreign investment. The small member countries of SAARC fear that India, a ‘Big Brother’ in the region might use the organisation to pursue its hegemony. Over the years, the purpose and enthusiasm with which SAARC was created have fizzled out due to a host of factors. Needless to say, SAARC has been successful in establishing a regional forum but has failed to attain its primary aim of accelerating the process of development in the South Asian region.

However, the need for an organisation persisted in the same countries which ultimately led to the formation of BIMST-EC (Bangladesh, India, Myanmar, Sri Lanka and Thailand) in 1997. It expanded the horizon of the organisation to the East Asian countries of Thailand and Myanmar. Nepal and Bhutan also acquired membership of the organisation, resulting in the change of its name to Bay of Bengal Initiative for Multi-Sectoral Technological and Economic Cooperation. Its members include five countries from SAARC and two countries from ASEAN. Thus, it has acted as the bridge between South Asia and South East Asia. The primary objective of this organisation has been on providing technological and economic cooperation in 14 sectors such as customs, connectivity, technology, counterterrorism, transnational crime, agriculture, poverty alleviation and public health, etc. It brings together 22% of the world population and a combined gross domestic product (GDP) of over $2.7 trillion. The trade among the BIMSTEC member countries reached 6% in just a decade. Among the member countries, Myanmar’s intra-BIMSTEC trade is around 36.14% of its total trade. Nepal and Sri Lanka’s share of intra-regional trade is around 59.13% and 18.42%, respectively. For Bangladesh, the intra-BIMSTEC trade share is 11.55%, while for India and Thailand, it is approximately 3%. Regarding connectivity, BIMSTEC has at last three major projects that, when finished, could transform the movement of goods and vehicles through the countries in the grouping.

The member countries have been working extensively for increasing the connectivity in this region by joining South Asia and South East Asia. One is the Kaladan Multimodal project that seeks to link India and Myanmar. The project envisages connecting Kolkata to Sittwe port in Myanmar, and then Mizoram by river and road. India and Myanmar had signed a framework agreement in 2008 for the implementation of this project. It’s yet to be finished. Another is the Asian Trilateral Highway connecting India and Thailand through Myanmar. The highway will run from Moreh in Manipur to Mae Sot in Thailand via Myanmar.The project is expected to be completed this year. The geographical sub-grouping called the BBIN- Bangladesh, Bhutan, India and Nepal- have also signed pact for the movements of goods and services between them.

BIMSTEC offers many opportunities to its member countries.  India has been instrumental in propelling the organisation further. In support of the connectivity projects, Prime Minister Narendra Modi said they should include connectivity in trade, economics, transport, digital networks and people-to-people. This fits in well with two key policies of the dispensation in New Delhi — “neighbourhood first” and “Act East”. The development of the Northeastern region, by opening up to Bangladesh and Myanmar, is another incentive. For Thailand, BIMSTEC helps in its Look West policy. Under the BIMSTEC framework, smaller nations, too, can benefit from the markets in India and Thailand. BIMSTEC’s major strength comes from the fact that it includes two influential regional powers: Thailand and India. This adds to the comfort of smaller neighbours by reducing the fear of dominance by one big power. Notwithstanding the achievements of BIMSTEC, inconsistency has remained a huge point of criticism for this organisation as only four BIMSTEC summits have been held till date with Nepal being the host in the latest one on August 2018. The Secretariat of BIMSTEC was established as late as the year 2014 in Dhaka and has been a victim of severe resource crunch ever since.

In November 2016, the question of comparison between the two organisations arose when India hosted BRICS (Brazil, Russia, India, China, and South Africa) summit in Goa. This was where India deliberately reinterpreted the regional outreach of BRICS. According to this interpretation, BRICS heads of state/government would reach out not to SAARC but BIMSTEC leaders. Since then BIMSTEC – of which Pakistan is not a member – has come to be flaunted as an alternative to SAARC. But it’s clear that BIMSTEC more naturally lends itself to regional integration—physical connectivity as well as economic cooperation—than SAARC which is dominated by India and Pakistan and hamstrung by tensions between the two. Therefore, BIMSTEC seems an attractive alternative to SAARC. However, India has spent more political capital and effort to make SAARC work than on BIMSTEC, and it is only very recently that the latter is being given importance over the former.

Regardless to say, India is looking to the two-decade-old BIMSTEC to get around the South Asian Association for Regional Cooperation (SAARC), which has become dysfunctional because of differences between New Delhi and Islamabad, and to counter China’s creeping influence in countries around the Bay of Bengal due to the spread of its Belt and Road Initiative. Most of the members of BIMSTEC have either formally signed on for President Xi Jinping’s ambitious plan to build a modern Silk Road or closely aligned their developmental plans and programmes with those of China’s, thanks to investment lavished on infrastructure projects. India, as the solitary holdout, realises the need to offer its neighbours a viable alternative to the One Belt, One Road project. This is largely because policymakers in New Delhi believe that it will be easier for India to work through a grouping not affected by the constant tensions with Pakistan. In the latest summit held in Kathmandu, The fourth BIMSTEC summit managed to achieve what even the SAARC couldn’t hold states responsible for encouraging terrorism.

Prima facie, both SAARC and BIMSTEC involve member states that hold similar sets of rapidly developing economies, and the two groupings have identical sizes of collective gross domestic product, markets and population. This makes both very noticeable as pregnant with possibilities. The two organisations—SAARC and BIMSTEC—focus on geographically overlapping regions. However, this does not make them equal alternatives. SAARC is a purely regional organisation, whereas BIMSTEC is interregional and connects both South Asia and South East Asia. As Nepalese Prime Minister K P Sharma Oli told his parliament last Friday, while BIMSTEC holds great possibilities, there is nevertheless urgent need to revive SAARC. These two regional organisations can surely thrive together and even prove complementary. And being the biggest in stature and size, India surely holds the key to reviving SAARC summits while strengthening BIMSTEC at the same time. India has called for an anti-terror military exercise in the city of Pune between the member countries of BIMSTEC followed by an inaugural meeting between their army chefs.  Neither SAARC nor the Association of Southeast Asian Nations (ASEAN) has had any military component like this. Nepal has pulled out from it citing that no diplomatic or political level agreement was made before deciding to take part in the exercise. This is not a good signal for the relations between India and Nepal especially against the background of the upward trajectory in the relations between China and Nepal, thus proving to be a setback on the efforts of India to strengthen regional connectivity in the South Asian countries. In tandem with its national interest, India must keep all its avenues open and must have a comprehensive approach to promote cooperation amongst its neighbours.

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