Bimstec can anchor a new regional economic order - Hindustan Times

Bimstec can anchor a new regional economic order

Jun 19, 2023 09:47 PM IST

Bimstec has emerged as a critical instrument of regional cooperation linking five South Asian countries, Bangladesh, Bhutan, India, Nepal, and Sri Lanka.

A few days ago, the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (Bimstec) – an important intergovernmental organisation – celebrated its 26th anniversary. Established in 1997, Bimstec has emerged as a critical instrument of regional cooperation linking five South Asian countries (Bangladesh, Bhutan, India, Nepal, Sri Lanka) with two Asean (Association of South East Asian Nations) countries – Myanmar and Thailand.

On June 6, the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (Bimstec)(PTI) PREMIUM
On June 6, the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (Bimstec)(PTI)

Realising the dysfunctionality of Saarc (South Asian Association for Regional Cooperation) due to Pakistan’s obstructionist approach and unabated support to terrorism, India has put its weight behind Bimstec to pursue institutional regionalism. Thanks to India’s diplomatic push, the group finally got its charter in 2022 after 25 years of existence. Although its focus is on the Bay of Bengal region, it can also be employed to stitch together a new South Asian regional economic order, supplanting the existing sub-optimal order that hasn’t accomplished deep economic integration.

International lawyer Tan Hsien-Li argues that on the one end of the regional economic order spectrum lies the dynamically expansive supranational model of the European Union (EU). This model is flanked by mechanisms that enlarge the social, economic and political agendas and implement them through a powerful centralising commission and courts. Arguably, this model leads to the erosion of State-sovereignty and thus, is unlikely to be adopted by Bimstec member-States. On the other end of the spectrum is the static intergovernmental model of the United States, Mexico and Canada (USMCA), which aims at fulfilling few economic-focussed obligations with barely any addition to the agenda without treaty renegotiation. This model is too shallow for any meaningful economic integration.

The model that Bimstec member countries should consider emulating is that of Asean’s concordance legalisation as Hsien-Li puts it. Concordance legalisation represents an inimitable experiment in regional economic integration that includes the expansion of regional agenda through hard and soft laws and institutions, but without compromising on the sovereignty-centric nature of Asean. This model characterised by incrementalism and flexibility lies between the two poles of the EU and the USMCA models. The Bimstec charter already contains elements of concordance legalisation. The sovereignty-centric nature of Bimstec is enshrined in Article 18 of the charter, which states that all decisions must be based on consensus.

The agenda-expansion trait of Bimstec is evident from the seven areas or pillars of cooperation that have been adopted, ranging from trade and investment on the one hand to security on the other. There are different views on whether Bimstec should restrict itself to economic and technical cooperation or also focus on security issues. These will need to be resolved through talks. Nonetheless, the Bimstec charter gives flexibility for agenda-expansion. Countries can adopt hard and soft laws to operationalise these areas of cooperation.

To boost the prospects of a new South Asian regional economic order in accordance with the concordance legalisation model, an important step will be to conclude the long-pending free trade agreement (FTA) within Bimstec countries. Although the member countries signed a framework agreement 19 years ago on establishing a Bimstec free trade area, FTA is yet to materialise. Last year, Prime Minister Narendra Modi, and recently, Bangladesh’s state minister for foreign affairs, Md Shahriar Alam, advocated for a Bimstec FTA, giving it the much-needed political impetus. In recent times, positive steps have also been taken to boost regional connectivity, trade facilitation, and maritime cooperation, which can give a leg up to finalising an FTA. However, much more needs to be done. As a study by the Asian Development Bank argues, a Bimstec FTA will not only promote intra-regional trade but also augment the region’s participation in global value chains (GVCs). Developing robust GVCs requires binding rules not just on trade but also on investment protection to stimulate intra-regional investment.

South Asia is the least integrated region in the world and is ripe for a vibrant regional economic order. Bimstec, which doesn’t face the kind of problems that plague Saarc, can deliver on this front. India and other member-States need to make it work for the sake of 23% of the world population residing in this region.

Prabhash Ranjan teaches at the Faculty of Legal Studies, South Asian University. The views expressed are personal

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