The latest meeting of the BIMSTEC taskforce ended in the city late last month without finalisation of any concrete decision on the draft Memorandum of Understanding (MoU) on trans-border power trade.
The seven member-states -- Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand -- of the Bay of Bengal Initiative for Multi-sectoral Technical and
Economic Cooperation (BIMSTEC) -- have been working on operationalisation of the concept of a common power grid since 2005.
The BIMSTEC secretariat will now collect the observations and suggestions on the draft from all the member-states. It will organise a meeting before the energy ministers' meeting scheduled for June in Nepal. This initiative was intended to provide energy security in the region to share its surplus electricity with its each other member-country.
The MoU was also supposed to provide a broad framework for the implementation of grid interconnections to promote rational and optimal power transmission among the BIMSTEC member-countries.
Bangladesh has already set up cross border electricity grid with India for importing 500-Megawatt (MW) power from India. The country is also currently negotiating to import, at least, 3,500-MW more electricity through bilateral, regional and sub-regional joint venture initiatives by 2030.
The seven-member states of the BIMSTEC have the potential of generating around 260,000 megawatt (MW) of hydropower, including 150,000MW by India, 40,000MW by Myanmar, 30,000MW by Bhutan and Nepal each, 500MW by Bangladesh and Thailand each and 1,000MW by Sri Lanka.
The BIMSTEC brings together 1.5 billion people or 21 per cent of the world population with a combined gross domestic product (GDP) of US$ 750 billion and having a considerable amount of complementarities. A study shows that this regional grouping has the potential to create trade worth between US $43 and $59 billion if a free trade agreement (FTA) is put in place.
The forum, as many people note, is an 'imaginative' experiment in promoting regional cooperation and connectivity. Conceived as a bridge-builder between the South Asian Association for Regional Cooperation (SAARC) and the Association of South East Asian Nations (ASEAN), the Bay of Bengal Initiative started off as the Bangladesh, India, Sri Lanka, Thailand Economic Cooperation Group in 1997.
Over the years, the BIMSTEC has, no doubt, expanded its agenda. The grouping has identified 14 priority areas among which India is the lead country in four focus areas, including transport and communication, tourism, environment and disaster management, and counter-terrorism and transnational crime.
However, it is worthwhile to note that although the forum has been in force for a pretty long time, it has not yet been able to make an impact on the economic fields of its member-countries. It could not come forward for collaborative actions during natural disasters or the price-hike of food experienced by its member-countries.
Existing trade as well as investment in the BIMSTEC area is otherwise negligible. Its member-countries ought to be proactive to exploit the potential to boost the intra-regional trade. Besides boosting intra-regional trade, the grouping can be an alternative to trade expansion in traditional markets in Europe and North America that are now facing uncertainties due to various reasons.
The present turnover of intra-regional trade within the BIMSTEC region is only a small fraction of the total trade of its member-countries. Unlike other regional organisations, the intra-regional trade and investment among and between the BIMSTEC member-countries is not much. This has been so, despite the fact that there is considerable potential for intra-regional expansion of trade and investment.
To meet such challenges, the BIMSTEC will have to strengthen its management structure in such a way that other regional bodies cannot get an advantage. About the areas of cooperation, there could be more significant, diversified, rewarding and viable programmes or projects for each of its member-countries to make the organisation more effective and attractive.
Bangladesh, being one of the major regional countries in areas of trade and commerce, needs to try to secure full advantages and opportunities in areas of exports, foreign direct investment, tariff concessions, market access etc. Its initiatives to fight against poverty and reduce the same to half, as per targets of millennium development goals (MDGs), deserve pro-active support from the BIMSTEC forum.
It is, however, important to point out here that the forum members need to actively consider the impacts of climate change, global warming and recent price-hike of food and energy on poverty, in order to tackle such challenges collectively.
The forum, as the analysts acknowledge, does provide a unique link between South Asia and Southeast Asia. Many regions of the world had achieved fruitful results in trade, industry, tourism, monetary cooperation and technology transfer, resulting in a better life for their respective people through regional collaborations.
In this context, the recently-held ministerial meeting of the BIMSTEC took one most important decision. It relates to introduction of free trade in the region. In the first phase, it will be trading in goods, then it will be in the services and investment under the FTA.
The volume of intra-regional trade would be increased between $40 and $60 billion every year once complete trade liberalisation takes place under an FTA accord. Cooperation is no longer a matter of choice for the countries in this region. At a time when countries throughout the world are regrouping on the basis of economic blocs, the BIMSTEC as a regional grouping can ill-afford to remain immobilised.
On the trade front, South Asian countries were otherwise seen more enthusiastic about opening their domestic markets to countries outside the region rather than to each other. Only 13.3 per cent of South Asian total trade is within the region compared to over 55 per cent for the ASEAN countries. A small step as the pro-active initiative of the BIMSTEC towards economic integration could bring net benefits of $2.0 billion.
Looking ahead, the finalisation of an FTA accord among the BIMSTEC members could be considered a potential paradigm changer for accelerating trade and investment in the region that it now covers.
szkhan@dhaka.net
Need for a consensus on regional energy security
Shahiduzzaman Khan | Published: April 02, 2015 00:00:00 | Updated: November 30, 2026 06:01:00
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