The Bangladesh-China-India-Myanmar (BCIM) Initiative is expected to help accelerate cooperation among the member nations for building an economic corridor focusing more on power and energy, transport infrastructure, shipping, tourism, trade, business and investment.
This was observed by Commerce Minister Tofail Ahmed at a seminar held in Dhaka last week. He disclosed that negotiations are now at the final stage among the four countries for the establishment of the grouping for the common benefit of the region. In fact, Bangladesh is eagerly waiting for implementation of the new initiative which will improve its connectivity with neighbouring India and China and will have great impact on the country's economy.
The economic corridor is expected to help implement the government's vision to turn Bangladesh into a middle-income country by 2021. It will also help increase the country's overall trade with two giant economies, China and India--also major sources of imports.
Analysts say implementation of the Initiative would help explore more potential opportunities of cooperation among the member-countries. Bangladesh's socioeconomic development will also be accelerated. Once the planned corridor is in place, the initiative would break new ground for expanding trade and investment under the ambit of sub-regional cooperation among the four Asian countries, they said.
In fact, the BCIM region is one of the richest in the world in terms of natural, mineral and other resources. The region covers 9.0 per cent of the world's total area, 7.3 per cent of the global gross domestic product and involves a huge population. It has the potential to generate enormous economic benefits in the arena of trade, investment, energy, transport and communications.
Access to large Indian and Chinese markets will make Bangladesh an attractive destination for Foreign Direct Investment (FDI). Bangladesh can also be benefited from connecting to China through Myanmar and becoming a commercial hub for South and Southeast Asia.
But the fact remains all this depends on the will of political leaders of member-countries. All tricky bilateral issues need to be resolved bilaterally. The countries that are involved in the process need to remove the bottlenecks, break trade barriers and build infrastructure to help develop the sub-regional cooperation a reality.
The economic corridor initiative is, in fact, a 'win-win' situation for all the member nations, especially Bangladesh and Myanmar, to play a key role in implementing the Kunming-to-Kolkata Silk Road, that requires a staggering sum of US$22 billion.
As China and India are two largest emerging economies and Bangladesh and Myanmar have rich natural and human resources, the corridor could enable the four countries to work with each other's advantages, accelerate economic growth, and open wider to the outside world.
The initiative will also help dovetail member countries on the issue of development strategies, build an even closer network of common interests, and bring integration of respective interests to a higher level. These will enhance mutual understanding and trust and further unlock vast economic potential, and secure lasting peace, stability and prosperity for the people in the region.
The economic corridor is expected to combine the China-ASEAN Free Trade Area, ASEAN Free Trade Area and ASEAN-India Free Trade Area to shape up the biggest free trade area in the world. It will contribute to the free flow of goods, services and people throughout the region, thus setting a good example for broader regional cooperation between the Pacific and the Indian Ocean.
The initiative is also designed to translate advantages of political relations, geographical proximity and economic complementarities into strengths of practical cooperation and sustained growth, with the aim of achieving mutual benefit and common development.
Business leaders of the four countries at a recent meeting have laid strong emphasis on improvement of road communication infrastructure and reduction in tariff and non-tariff barriers to utilise unexplored trade and investment potentials among the countries. They said it would not be possible to tap the potential of expanding trade, investment and tourism in the region without addressing these issues.
Businesses want development of possible land routes along with rail and river communications among the BCIM countries. They say, there is great scope to enhance intra-BCIM trade through further reducing tariff and non-tariff barriers and deepening of trade facilitation.
Meantime, greater intra-BCIM investment flow could be an important tool to ensure more trade of goods and services in the region. The opportunities of reaping the benefits of rail, water and road linkages within the region remain largely unrealised so far. Experts have suggested for developing multimodal transport linkages and urged the business people to use Chittagong sea port instead of the Singapore port.
On the other hand, trade within the region is expected to increase manifold if necessary infrastructure development is ensured. Currently, the BCIM countries are utilising only 40 per cent of their trade potentials. The four countries need at first to develop infrastructure facilities and establish connectivity through road, rail and sea for ensuring regional trade and investment in higher volume.
Trade among the BCIM countries reached 5.0 per cent in 2012, when it was over 35 per cent among the ASEAN member-states. Reduced cost of transportation and shorter lead time, however, are necessary to deepen cooperation in trade, commerce and investment in the region.
It was observed that formidable challenges remained in the region in the form of tariff and non-tariff barriers, weak trade facilitation measures, lack of custom harmonisation and obstacles to cross-border movement of goods arising from weak infrastructure at and beyond the borders.
These impediments raise the cost of doing business in the region, discourage trade-oriented investment and financial flows and undermine competitiveness of entrepreneurs from the region.
Addressing such bottlenecks will not only lead to increased intra-regional trade but also contribute to strengthened global integration of the region. Ensuring energy security remains a major concern for all the countries of the BCIM region. But of late, there are opportunities for joint exploration of natural resources, collaborative investment in energy sector development and cross-border trade and movement in energy within the region.
If the BCIM collaboration is institutionalised, it is expected to help members obtain concessional financing from multilateral and bilateral agencies for cross-border, sub-regional and regional projects and investments.
There is, of course, a need to create a BCIM fund to remove infrastructure deficits and improve connectivity. Trade agreements among the four nations should be implemented. There is also a need for introducing faster visa processing to enhance intra-regional trade.
Multimodal transport system is vital to exploring new business corridors and opportunities. Of late, India is working to launch a multimodal transport system with Myanmar.
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