Mains Daily Question
Feb. 10, 2021

  1. Critically examine the potential of the BIMSTEC grouping for regional economic cooperation and growth.

 

Approach:

  • Introduce with the BIMSTEC grouping

  • Examine BIMSTEC potential as enabler of economic growth in the region - trade, connectivity etc.

  • Highlight the challenges faced by the BIMSTEC in realizing its potential

  • Conclude appropriately

Model Answer

The Bay of Bengal region hosts one-fourth of the world’s population and several high-growth economies, and is attracting growing attention as the strategic heart of the Indo-Pacific. BIMSTEC (Bay of Bengal initiative for Multi sectoral Technical and Economic Cooperation), comprising 7 nations of the South and South East Asia, is a sector driven cooperative organisation with focus on sector such as- trade, technology, energy, transport etc.

The BIMSTEC has immense potential for economic growth for the region:

  • BIMSTEC by acting as a bridge between South Asia and South East Asia can help in economic development in the region.

  • The project such as Kaladan Multimodal project, IMT Highway will boost connectivity and economic cooperation in the region.

  • The Motor vehicle Agreement signed between India, Myanmar and Thailand can facilitate movement of goods, services and boost productivity and trade in the region.

  • Several geostrategic connectivity initiatives are now converging and competing in the region, including China’s BRI, India’s Act East policy, the AAGC, and ASEAN’s new Western focus. This comes with huge potential for trade and economic growth.

  • The Free trade agreementbeing negotiated, when concluded, will help in elimination of tariff and non-tariff barriers and give further push to the trade in the region.

  • The untapped potential of BIMSTEC in form of natural and human resources can benefit the regional economy.

But at the same time, the BIMSTEC faces various challenges, which may inhibit it in realising its full potential. Some of these challenges are as follows:

  • Little tangible progress: BIMSTEC has achieved very little in 20 years, with no Vision Statement or a BIMSTEC Charter.

  • No FTA: There's been little movement forward towards agreement on Free Trade Area (FTA).

  • Fragile nature of the countries in the region: South Asian states remain politically fragile and the economic projects in the region have failed to take off as a result.

  • Resentment against India's dominance: India’s structural dominance of South Asia makes it a natural target of resentment and suspicion.

A successful BIMSTEC can promote regional economic integration and connectivity, which will also help in countering China's influence in the region. India must take on an informal BIMSTEC leadership role in securing the removal of the formidable physical and regulatory obstacles to the free flow of goods, capital, services and people between its member-states.

 

Subjects : Economy
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