Bhutan’s gains from the Third BIMSTEC summit

Apart from a lot of handshakes and diplomatic niceties at the Bay of Bengal Initiative for Multi Sectoral Technical and Economic Cooperation (BIMSTEC) one main issue is how Bhutan gained at the end of the day.

The Prime Minister Lyonchhen Tshering Tobgay said that apart from the summit he was able to further Bhutan’s interests in meetings with the heads of the government attending the meeting.

Lyonchhen said that he managed to have bilateral meetings with India, Myanmar, Thailand and Nepal and informal meetings with Bangladesh and Sri Lanka.

Apart from Manmohan Singh assuring an additional Nu 17 bn for P 1 and an additional Nu 1 bn for the ESP Lyonchhen said that the Indian PM expressed satisfaction with the relation between the two countries. Lyonchhen Tshering Tobgay thanked the Indian PM for the continued assistance for the 11th plan and the ongoing hydro projects.

The PM also came to some important agreements in his bilateral meetings with the Myanmar leadership that included meetings with the President, Speaker, Commerce Minister, Tourism Minister, Health Minister and Transport Minister.

Lyonchhen said, “Bhutan is looking at resuming flights to Myanmar with the additional advantage of being allowed to carry passengers from Myanmar to Singapore and back which will make it

viable for Bhutan’s airlines and also get more tourists.”

He said both countries also agreed to promote each other as tourist destinations and also promote the citizens of their respective countries to visit each other as tourists.

The PM said that the Myanmar government has also agreed to allow Bhutanese students to study in their medical colleges to become doctors and at the same time also agreed to continue sending more doctors to Bhutan.

He said that Myanmar has also agreed to train Bhutanese artisans in the art of lacquer work which Myanmar is known for.

Lyonchhen said that Myanmar wanted to expand on its relations with Bhutan and further cooperation on trade and Agriculture.

The Bhutanese ambassador to Thailand who was also in Myanmar will also become the Ambassador to Myanmar.

The Prime Minister also called on the Opposition leader and Nobel laureate Aung Sang Sui Kyi. Lyonchhen said, “She remembered her days in Bhutan very fondly and we had very wide ranging discussions on democracy, human rights and strengthening relations between the two countries.”

The PM in his meeting with the special Thailand envoy further discussed and followed up on Thailand training Bhutanese airplane and helicopter pilots and also hiring more English teachers from Bhutan. He said that the envoy assured him that Thailand was working on the issue.

Lyonchhen in his meeting with the Nepal Prime Minister discussed the need to strengthen relations between the two countries.

He said that he had informal meetings with both Sri Lanka and Bangladesh where they discussed issues of mutual interest.

At the Summit, Bhutan signed the “Memorandum of Understanding on the Establishment of the BIMSTEC Cultural Industries Observatory (BCIO) and the BIMSTEC Cultural Industries Commission (BCIC)”.

The First BIMSTEC Ministerial Meeting on Culture was held in Paro, Bhutan from 23 – 25 May 2004. The Meeting adopted the concept paper prepared by Bhutan for cooperation in culture as the Paro Initiative to serve as a roadmap for socio-economic progress driven by cultural industries in the BIMSTEC region.

The Cultural Industries Observatory will be located in Paro and will serve as the repository for information on cultural industries, disseminate such information and facilitate its access by member states.

The Observatory will have to maintain a cultural industries database, undertake research, develop indicators for impact of activities on poverty reduction and community vitalization, support member states in developing cultural industry plans, networking and receiving project based funding.

The director of the Observatory will be nominated by Bhutan and a small pool of general staff will be locally recruited in Bhutan.

The MoU is the first stage before the details of a full fledged Observatory is worked out and set up in Bhutan.

Lyonchhen said that the BIMSTEC summit also saw discussions on the modality of the Free Trade agreement. He said that all leaders called for the early finalization of the Framework Agreement on the BIMSTEC Free Trade Area preferably by the end of 2014.

The Framework Agreement on the BIMSTEC Free Trade Area (FTA) was signed on 8th February 2004 to stimulate trade and investment, increase intra-regional trade, and to enhance trade and investment in BIMSTEC Member Countries by other countries. A Trade Negotiation Committee (TNC) was also established to negotiate and finalize the various agreements under the FTA.

The FTA covers liberalization of goods, investment and services. It proposed two tracks for tariff reduction i.e. a Fast Track to commence on 1st July 2010 to be completed on 30th June 2015; and a Normal Track to start on 1st July 2011 to be concluded on 30th June 2021. Provision exists for giving a longer timeframe of two years for tariff reduction by the LDC Member Countries (Bangladesh, Bhutan, Myanmar, and Nepal) and at the same time accelerated tariff reduction for products of the LDC Member Countries by the non-LDC Member Countries (India, Sri Lanka and Thailand). However, the progress and pace of negotiations has been slow which members are hoping will now pick up.

Following nineteen rounds of TNC meetings the documents that have been finalized are The Agreement on Trade in Goods, Rules of Origin and Operational Certification Procedures, Agreement on Cooperation and Mutual Assistance in Customs Matters and Agreement on Dispute Settlement Procedures and Mechanism.

All BIMSTEC countries including Bhutan have submitted their tariff schedule of commitments except for Sri Lanka.

Lyonchhen said that BIMSTEC was important not only because it allowed for the SAARC members of BIMSTEC to further consolidate their relations but it also opened up opportunities and potential with two major countries of Thailand and Myanmar.

One of the main outcomes of the Summit was the establishment of the BISMTEC Permanent Secretariat in Dhaka, Bangladesh to oversee the work of the group on a full-time basis. This would also allow the group to better coordinate and function more effectively. The Secretariat is expected to come into operation from 01 May 2014. Ambassador Sumith Nakandala from Sri Lanka has been appointed as the first Secretary General to head the Secretariat.

The summit also saw the signing of the “Memorandum of Association on the Establishment of the BIMSTEC Weather and Climate Centre in India”.

In his Summit statement the Prime Minister stressed on the need to capitalize on the enormous potential of the region for the benefit of its people. The Prime Minister said that though BIMSTEC had been making steady progress, much still remains to be done especially in terms of economic integration and trade facilitation which continues to remain a priority for the region. The Prime Minister called on member countries to hasten with the regional transformative actions which are vital to remain globally competitive

Following the conclusion of the Summit, Myanmar formally handed over the Chairmanship of BIMSTEC to Nepal.

At the Summit the leaders from the seven BIMSTEC countries reviewed the progress made and agreed to further intensify and deepen cooperation in all areas of activities within the framework of BIMSTEC, including strengthening institutional mechanism.


In 1994, Thailand took the initiative to explore economic cooperation on a sub-regional basis involving the countries of Southeast Asia and South Asia around the Bay of Bengal.

On 6 June 1997, a new sub-regional grouping was formed in Bangkok and was given the name BIST-EC (Bangladesh, India, Sri Lanka, Thailand – Economic Cooperation). Following Myanmar’s on 22 December 1997 the name of the grouping was changed to BIMST-EC.

Bhutan and Nepal were formally admitted as new members on 8 February 2004. Following the admission of Bhutan and Nepal, the First BIMSTEC Summit (Bangkok, 30-31 July 2004) decided to rename the grouping as the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC).

According to the Bangkok Declaration on the Establishment of BIMSTEC, the aims and purposes of BIMSTEC are to create an enabling environment for rapid economic development, accelerate social progress in the sub-region, promote active collaboration and mutual assistance on matters of common interest, provide assistance to each other in the form of training and research facilities, cooperate more effectively in joint efforts that are supportive of, and complementary to national development plans of member Countries, maintain close and beneficial cooperation with existing international and regional organizations, and cooperate in projects that can be dealt with most productively on a sub-regional basis and which make best use of available synergies.

BIMSTEC is a regional grouping that encompasses about 1.3 billion people and combined GDP exceeding USD $ 2.4 trillion.

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