Connectivity holds the key to BCIM success

Shahiduzzaman Khan The 11th meeting of the BCIM Forum on regional cooperation concluded early this week in the city with a call for concerted efforts for cooperation in areas of trade, investment, energy and connectivity for the greater interest of the peoples in the region. The two-day meeting of Bangladesh, China, India and Myanmar (BCIM) Forum on regional cooperation also called for building trust among the member-countries. Furthermore, the participants from these countries laid emphasis on establishing an overarching and functional institutional arrangement for the betterment of the conditions of living of the common people in the region. 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 between BCIM countries reached 4.5 per cent in 2010, when it is over 35 per cent between ASEAN countries. Reduced cost of transportation and shorter lead time, however, are necessary to help foster deeper cooperation in trade, commerce and investment in the region. The BCIM Forum issued an statement signed by the heads of the delegations of the four countries, reflecting their consensus on increasing the opportunities for collaboration and cooperation among the peoples and countries of the region in view of the fast changing global context and dynamics of developments within the region. Some potential areas have also been identified by them for this purpose. It has been observed that formidable challenges remain in the region in the form of tariff and non-tariff barriers, weak trade facilitation measures, lack of customs harmonisation and obstacles to cross-border movement of goods arising from weak infrastructure at, and beyond, the borders. Such impediments raise the cost of doing business in the region, discourage trade-oriented investment and financial flows and undermine competitiveness of businesses in 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 is, of course, a major concern of all the member-countries of the BCIM. There are, however, opportunities for joint exploration of natural resources, collaborative investment in energy sector for its development and cross-border trade and supplies of energy within the region. This is borne out by some of the latest developments in this area across the region. If BCIM collaboration can be institutionalized, it is expected to help secure concessional financing from multilateral and bilateral agencies for cross-border, sub-regional and regional projects and investments. Any bilateral or other level of participation between or among some member-countries of the BCIM, in one form or other, in existing regional trade agreements where its other member-countries are also involved, may be taken up for considerations for giving formal shape to cooperation among the BCIM grouping. The ongoing BCIM Car Rally is a high point of the forum; it is a unique opportunity to witness the realisation of BCIM concept into a concrete reality. In fact, greater dissemination of the activities of the BCIM Forum and developments in its region are essential to demonstrate some visible impact, in order to provide a boost to promoting cooperation among the BCIM countries. There is a need for holding regular summit-level meetings of the head of the states for deepening the relations. The countries under the Forum could gain significantly from trade and transit agreements and also through benefit-sharing arrangements along prospective trade and transport corridors. In this context, investment in infrastructure needs to be recognised as a key area to stimulate cooperation in the BCIM region. In 2011, trade among the four countries stood at $90 billion, some 31.8 per cent below its potential of $132 billion. Bangladesh enjoys a preferential market access to India now, but it faces high tariffs to China. Non-tariff barrier (NTB) is also a big issue, too. China has high NTBs on goods from Myanmar. India has also NTBs but the extent is lower than that of China. In this region, trade agreements do not move faster because of political considerations. As such, a strong political will, more in deeds than in words, is important for all the member-countries of BCIM to grow in tandem. Many good initiatives could not earlier really take off due to a lack of political will. Direct investments by the two Asian giants -- China and India -- are low in Bangladesh and Myanmar. Improving trade facilitation and connectivity will have the strongest effect on building regional production networks. India's northeastern states, also known as "seven sisters", will also benefit from foreign direct investment (FDI) inflows. Bangladesh is poised to become a hub. For that matter, multimodal connectivity has to be established through road-rail-water and air linkages. A special thrust should be given on 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, true to their potential. Furthermore, there is a need for introducing fast visa processing to enhance intra-regional trade. The multimodal transport system is necessary to explore new business corridors and opportunities. Of late, India is working to launch a multimodal transport system with Myanmar. Despite having enough potential, South Asian Association of Regional Cooperation (SAARC) has failed to grow up as an effective regional institution. On the contrary, countries within the Association of South East Asian Nations (ASEAN) and the North American Free Trade Association (NAFTA) have all witnessed robust growth in respect of trade facilitation through greater connectivity. All concerned would like to share the hope at this stage that the BCIM Forum would witness a steady growth sooner rather than later through greater connectivity for promoting socio-economic well-being of the common people in the region. szkhan@dhaka.net