BCIM Economic Corridor and its potential

Chinese President Xi Jinping, during his visits to Kazakhstan and Indonesia late last year, called for joint development of an economic belt along the Silk Road and a Maritime Silk Road of the 21st century. Such initiatives by China aiming to deepen reform and opening-up and advance its neighbourhood diplomacy, were acclaimed at home and abroad.
Running parallel to such initiatives, Bangladesh-China-India-Myanmar Economic Corridor (BCIM-EC) was also put on fast track basis after the first inter-governmental meeting took place in Yunnan, China. The four nations -- China, Bangladesh, India and Myanmar -- connected by the Southern Silk Road and Maritime Silk Road since ancient times, share commonalities in terms of history and culture.
As China and India are two largest emerging economies and Bangladesh and Myanmar have rich natural and human resources, this Economic Corridor could enable the four countries to work with each other's advantages, accelerate economic growth, and open wider to the outside world.  
The Economic Corridor (EC) will also help dovetail China, Bangladesh, India and Myanmar 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 would enhance mutual understanding and trust and further unlock vast economic potential, and secure lasting peace, stability and prosperity for the people in the region.
Once the BCIM economic corridor is established, it will combine the China-Asean Free Trade Area, Asean Free Trade Area and Asean-India Free Trade Area, shape the biggest free trade area in the world, and contribute to the free flow of goods, services and people throughout the region, thus setting a good example for broader regional cooperation between Pacific and Indian Ocean.
The BCIM-EC is designed to translate advantages of political relations, geographical proximity and economic complementarity into strengths of practical cooperation and sustained growth, with the aim of achieving mutual benefit and common development.
The latest BCIM meeting in Dhaka last year has indeed visualised an expansion of its membership beyond the current four countries to embrace more of South and Southeast Asia. Secondly, geo-economics looks at maps and borders in a different light than geo-politics is now accepted, and BCIM has at least prompted a vigorous debate in India between regional development, security and the empowerment of its north-eastern states in this process. At a recent meeting, business leaders of four countries have laid strong emphasis on improvement of road communication infrastructure and reduction in tariff and non-tariff trade barriers to utilise unexplored trade and investment potentials among the countries. They said that it would not be possible to tap the potential of expanding trade, investment and tourism in the region without addressing such issues.
The businessmen also wanted development of possible land routes along with rail and river communications among the BCIM forum countries. They said there is a scope to enhance intra-BCIM trade through further reducing tariff and non-tariff barriers and through deepening of trade facilitation.
It was observed that greater intra-BCIM investment flow could be an important tool to ensure more flow 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. Many suggested developing multimodal transport linkages and urged the business people to use the Chittagong sea port instead of the Singapore port.
In fact, 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.
It may be mentioned here that the BCIM covers 9.0 per cent of the world's area, 40 per cent of population and 7.3 per cent of the global gross domestic product (GDP). 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 obtain concessional financing from multilateral and bilateral agencies for cross-border, sub-regional and regional projects and investments.
Direct investment by the two Asian giants -- China and India -- is low in Bangladesh and Myanmar. Improving trade facilitation and connectivity will have the strongest effect on building regional production networks. India's northeast will benefit from FDI (foreign direct investment).  Bangladesh is poised to become a hub. For that matter, multimodal connectivity should be established through road, rail, water and air linkages. Special thrust needs to be given to river connectivity as it enables businesses to lower shipment costs.
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. The 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.
Despite having enough potential, the South Asian Association of Regional Cooperation (SAARC) has so far failed to grow up as an effective regional body. On the contrary, countries within the Association of South East Asian Nations (ASEAN) and the North American Free Trade Association (NAFTA) have witnessed robust growth in respect of trade facilitation through greater connectivity. As such, it is expected that the BCIM EC would make a steady growth through greater connectivity for the betterment of common people in the region.     
szkhan@dhaka.net