BIMSTEC, not SAARC, more in focus as Bangladesh gains economic heft

BIMSTEC, not SAARC, more in focus as Bangladesh gains economic heft
The development of India’s economy and the core of its Neighbourhood First and Act East policies can only be fulfilled with Bangladesh’s help. (Image: Twitter/ PM Narendra Modi)

This story first appeared in The Financial Express

BIMSTEC, a sub-regional grouping, comprising some geographically contiguous South Asian and ASEAN countries in the Bay of Bengal, was formed to leverage synergies in their capabilities for their development.

India and Bangladesh celebrated 50 years of the establishment of diplomatic relations between themselves as ‘Maitri Divas’ (friendship day) on December 6, in a year that is very special for both countries. Bangladesh celebrated 50 years of its independence from Pakistan on March 26, 2021 as India entered its 75th year as a free nation. Both landmarks provided an opportunity for introspection on what has arguably been the most significant bilateral relationship between two nations.

For India, Bangladesh will always be special, and vice-versa. Their shared history and geography will continue to dictate their intertwined destinies. For people of India’s Northeast, this ‘Bangladesh-locked’ region can have an entirely different future through the gateway of Bangladesh, making it, from that perspective, India’s most strategic neighbour.

As Bangladesh marks the golden anniversary of its independence, there is admiration for its remarkably successful economic and social transformation. Earlier, the main players in South Asia were India and Pakistan. That has changed and, today, Bangladesh has outstripped and overtaken Pakistan economically. Emerging from least developed country status, it is now an economic tiger in the making, threatening to outdo India on major economic indices.

Today, Bangladesh is among the world’s fastest-growing economies; estimated to grow at around 8%, (ahead of India), a remarkable success story, set to become a middle-income nation by 2030. India, hitherto confident about being the only South Asian economy that mattered,must grapple with the fact that it is, on some indices today, poorer than Bangladesh. India’s purchasing power per capita in 2020-21 was $1,947.India’s bilateral trade with Bangladesh is over US$10 billion.

Among the vital geopolitical consequences of Bangladesh’s economic rise is a shift in South Asia’s centre of economic gravity to the east and the reintegration of an eastern subcontinent, set to play a stronger role in the region and beyond, with new maritime possibilities in the Indo-Pacific, where both New Delhi and Dhaka are looking to focus.

Thus, the BIMSTEC (or The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation)forum is increasingly assuming a critical role for the foreign policy of both India and Bangladesh, certainly over the SAARC (South Asian Association for Regional Cooperation), even though the latter was founded in 1985 as an initiative of Dhaka, to promote regional cooperation and trade.That India had largely lost interest in SAARC was apparent during the BRICS summit of 2016, when leaders of BIMSTEC nations were invited to Goa for the outreach summit with the heads of Brazil, Russia, India, China and South Africa.

However, when the Covid-19 pandemic started to grip India and the world, from March 2020, Prime Minister Modi tried to revive the largely defunct SAARC forum to foster a common South Asian response to the pandemic, even setting up a fund and discussing best practices with the neighbouring countries. Despite supply of Covid kits and medical supplies and vaccines, India’s SAARC neighbours seemed largely unimpressed by New Delhi’s efforts to contain the pandemic, particularly after it suspended the Vaccine ‘Maitri’ initiative and stopped exporting India-made vaccines as cases within India spiraled, and SAARC is rarely contained in the neighbourhood foreign policy discourse.

BIMSTEC, a sub-regional grouping, comprising some geographically contiguous South Asian and ASEAN countries in the Bay of Bengal, was formed to leverage synergies in their capabilities for their development. The member countries Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand, have economies with strong complementarities. BIMSTEC constitutes a significant building block for eventual establishment of a Bay Bengal Economic Community. Except Afghanistan and Pakistan, all other SAARC nations are members, along with Myanmar and Thailand, allowing BIMSTEC to serve as a crucial link for both India’s ‘Neighbourhood First’ and ‘Act East’ policies.

As the largest bay in the world, the Bay of Bengal is of pivotal importance to the countries bordering it. One-fourth of the world’s populations live in the seven countries around it, and half a billion people live directly on its coastal rim. The bay is also rich in untapped natural resources, with large reserves of gas and other seabed minerals.

India’s growing focus on the Bay of Bengal as a maritime space and as a gateway to Southeast Asia makes Bangladesh central to New Delhi’s regional remapping. By utilising the Bay of Bengal astutely, Bangladesh can become a hub of the Indo-Pacific economic corridor. Bangladesh’s sea ports, particularly Chittagong, are therefore highly important because of their geographical location in the Bay of Bengal, and can become a connecting route for its neighbouring countries, allowing trade and economies to flourish.

Bangladesh Prime Minister Sheikh Hasina has said, “I reiterate our government’s total commitment to the BIMSTEC. It has the potential to move us all to our common goals.” Dhaka is pushing Delhi to move beyond bilateralism and “work closely in furthering relevant regional/sub-regional cooperation processes.”

Realising that growth of its economy is also vitally dependent on economic commerce along sea-lanes; the Indian government seeks an Indo-Pacific that is free, open and inclusive, and founded upon a cooperative and collaborative rules-based order. India’s participation in the ‘Quad’ (or quadrilateral of four major democracies, USA, Japan, Australia and India), is based on this premise.

As India’s External Affairs Minister S Jaishankar said, “We see Bangladesh as a key neighbour and a valued partner not only in South Asia but also in the broader Indo-Pacific region. Every outcome and achievement in our relationship resonates through this region.”

The development of India’s economy and the core of its Neighbourhood First and Act East policies can only be fulfilled with Bangladesh’s help. The first 50 years of bilateral relations consolidated the foundation of India-Bangladesh ties. The future can replicate the current “shonar adhyay” (golden chapter) in relations provided that the leadership of both neighbours play their diplomatic cards with maturity and pragmatism, keeping their regional aspirations and sensitivities in mind.

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About Nilova Roy Chaudhury

Nilova Roy Chaudhury is Editor of India Review & Analysis, a journal of Society for Policy Studies, and writes on Indian foreign policy. She is a Visiting Faculty member with Symbiosis School of International Studies. Roy Chaudhury was Chief Editor of Indian Review of Global Affairs, an online, independent foreign affairs magazine and Consulting Editor with Asia Pacific Communications Associates (APCA). An M Phil from Delhi University, New Delhi-based Roy Chaudhury began as a Researcher/Reporter with The Washington Post. She has been Staff Correspondent with AP, Special Representative with The Statesman and Deputy Foreign Editor with the Hindustan Times.