Connecting Bhutan with the Bay of Bengal

Despite attracting new attention as the strategic heart of the Indo-Pacific, the Bay of Bengal remains one of the world’s least integrated regions, with abysmal levels of connectivity and formidable barriers to cooperation.

To overcome these divides and foster regionalism, the countries in the region must invest in multilateralism by strengthening BIMSTEC, the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation.

Founded in 1997, in Bangkok, and with Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand as its seven member-states, BIMSTEC’s fourth summit will finally take place at the end of this month, in Kathmandu. But unless its leaders use this occasion to revive the institution and endow it with resources to realize regional integration on the ground, we will be left with just a few more speeches and declarations of intent.

BIMSTEC matters to Bhutan, in particular, because it allows Thimphu to moderate the dependence on bilateral relations with India. Far from being incompatible with SAARC or BBIN, BIMSTEC is one more parallel avenue for Bhutan to support multilateral initiatives in the region, where it is bound to have greater bargaining power together with other smaller states.

BIMSTEC’s success is crucial because the region will not prosper without strong multilateral mechanisms that harness its economic potential, address transnational challenges, and manage geostrategic pressures.

First, while the Bay of Bengal hosts one-fourth of the world’s population and several high-growth economies, its intra-regional trade barely exceeds 5 percent, compared to thirty percent within ASEAN. India’s land-based trade with neighbouring Myanmar, for example, amounts to its total trade with Nicaragua. And visa restrictions make it ironically easier for a European, Chinese or American to visit BIMSTEC countries than for people from within the region to travel across its borders.

Second, the Bay also faces significant non-traditional security challenges that can only be addressed cooperatively, including cross-border criminal and insurgent organizations, increasing refugee populations, and a degrading ecosystem. Natural calamities, including some of the world’s deadliest cyclones, have taken the lives of almost half a million people in BIMSTEC states in the last twenty years alone. None of these issues can be tackled in isolation by any individual country.

Finally, several geostrategic connectivity agendas are now converging and competing in the Bay of Bengal region, including China’s Belt and Road Initiative, India’s Act East policy, the Asia-Africa Growth Corridor, or ASEAN’s new Western focus. Instead of competing against each other and playing off India, China, Japan or the United States, which risks militarization and destabilization, the Bay of Bengal states will benefit more from working together and develop their own regional governance outlook, norms and institutions.

As I show in my recent study “Bridging the Bay of Bengal: Toward a Stronger BIMSTEC,” with its multilateral mandate, BIMSTEC is the ideal platform to address these challenges, but it will only succeed if its seven member-states take concrete steps to strengthen the organization.

First, they must express political commitment by holding summits and ministerial meetings more regularly – if leaders don’t meet frequently at the highest level, officials can’t be expected to follow up and do their part of the work.

Second, the BIMSTEC Secretariat must be empowered with greater autonomy, as well as more human, technical and financial resources to drive the organization’s agenda. With just one Secretary General and three directors located in Dhaka, compared to ASEAN’s staff of more than one hundred, this is one of the world’s weakest regional organizations.

Third, member-states must conclude a free trade agreement (FTA), however limited in scope. Negotiations for a BIMSTEC FTA have been dragging on for more than fifteen years, and economic growth is bound to stagnate in the region unless borders cease to be barriers to the free flow of goods, capital and labour.

Fourth, BIMSTEC must focus on priority areas, reducing the excessive number of fourteen different working groups, from tourism to climate change. Instead, it must prioritize the development of cross-border infrastructure and the blue water economy. Particular attention must be paid to multi-modal projects and inland waterways that link the Bay of Bengal coastal ports to the South and Southeast Asian landlocked hinterlands.

With one of the highest trade-to-GDP rations in the region (82 percent) Bhutan’s developmental goals will hinge on its ability to moderate its landlocked position by developing connectivity with the Bay of Bengal region. This Southern focus, via India and Bangladesh, will not succeed if pursued at a purely bilateral level. With SAARC in stand-by, Bhutan’s strategic and economic priorities will benefit from a stronger BIMSTEC.

By Dr. Constantino Xavier

By Dr. Constantino Xavier is Fellow, Foreign Policy Studies, Brookings India, New Delhi. He is the author of Bridging the Bay of Bengal: Toward a Stronger BIMSTEC.   cxavier@brookingsindia.org