May 2, 2022

Incorporating the Blue Economy into BIMSTEC Agenda

Written By: Rajiv Bhatia

Introduction

The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) took nearly 25 years from its inception in June 1997 to equip itself with a charter that defines its long-term vision and priorities for cooperation among its seven member-states. These are India, Bangladesh, Nepal, Bhutan, Sri Lanka, Myanmar and Thailand. The grouping completed this task admirably on 30 March 2022 when the charter was formally adopted at the fifth summit, held virtually in Colombo. The charter expresses the shared commitment of member countries to make BIMSTEC “a dynamic, effective and result-oriented regional organisation for promoting a peaceful, prosperous and sustainable Bay of Bengal region”,[1] a goal to be achieved through greater cooperation and “deeper integration.”[2]

The three noteworthy features of this carefully crafted formulation are: BIMSTEC is now a regional organisation, not a sub-regional one as often mentioned earlier; it is oriented towards and identified with the Bay of Bengal region; and clearly the achievement of its purposes will require more regional cooperation and integration than what exists at present.

This essay, composed for a compendium to underline the achievements and prospects of BIMSTEC during its 25th anniversary year, argues that the vital regional grouping needs to ensure continuity with past efforts to strengthen economic cooperation and also be innovative to realise its potential in newer areas such as the Blue Economy. Only then will BIMSTEC be viewed as an institution developing in consonance with the ethos and temper of the 21st century. The linkage between these two facets demands speedy progress in securing a comprehensive Free Trade Agreement (FTA), work on which began over two decades ago, as well as fulfilling expectations built up since 2016, regarding maritime security and sustainable cooperation based on maritime resources.

It is, therefore, necessary to trace the trajectory of dialogue and policy development concerning the Blue Economy; examine the present state of play regarding the finalisation of arrangements to expand and deepen economic cooperation; explain the pivotal importance of multidimensional connectivity for both facets; and make recommendations for the consideration of policymakers. The overarching objective is to stress that BIMSTEC has the potential to transform itself into an effective tool of regional cooperation by the end of the current decade if it strives hard enough and is driven by strong political will.

BIMSTEC and the Blue Economy

Meaning, trajectory

The Blue Economy, a relatively new concept that transcends the ‘Ocean economy,’ represents the totality of water-related activities and resources—lakes, rivers, bays, coastal regions, seas and oceans—which need sustainable development to meet the growing needs of an expanding world population. When the planet’s population increases from 7.8 billion in 2020 to 9.9 billion by 2050, land-based resources will not be enough. The dependence on oceanic resources will increase for food, medicines, energy and other requirements. It is imperative to protect the oceans and their biodiversity with immediate effect and utilise their vast assets sustainably. Some oceanic areas have already become the locus of several inter-state disputes and the source of insecurity of diverse kinds.

The Blue Economy, therefore, should be viewed in terms of three interlinked pillars—security, sustainability, and productivity. Their optimal development demands a synthesis of knowledge and cooperation with navies and coast guards, with diplomats, officials and legal experts, and with scientists, researchers, business leaders and entrepreneurs.

At the UN Conference on Sustainable Development held in 2012, special attention was paid to creating a global institutional framework for sustainable development through the ‘Green Economy.’ The Small Island Developing States (SIDS), in this context, requested a focus to be placed on their special interests, insisting on the incorporation of provisions for better adaptation mechanisms for coastal and sea resource-based countries. This brought into salience the ‘Green Economy in a Blue World’ or the Blue Economy itself. SDG 14[3] became the bedrock of guidelines that would determine global policy on this subject.

Thus began a growing consciousness about the Blue Economy and the shaping of public policy and discourse in the member countries of BIMSTEC, even before it seeped into the lexicon of BIMSTEC, the organisation. India led the way through Prime Minister Narendra Modi’s famous speech in 2015 propounding the concept of ‘SAGAR’ (Security and Growth for All in the Region).[4] The five constituent elements of ‘SAGAR’ offer a blueprint for collective action and coordination in the broader Indian Ocean region.[5]  Bangladesh emerged as an ardent advocate of the Blue Economy, given its pivotal position in the Bay of Bengal and the dependence of its economy on the fisheries sector. It hosted an international workshop on the Blue Economy in Dhaka in September 2014, the precursor of a series of national and international level deliberations in subsequent years. Sri Lanka, with its unique position on the maritime transportation map of the Indian Ocean, has been active in thinking about and planning appropriate cooperation measures from fisheries to marine tourism, from sea transportation to ocean energy. Thailand has been a leader in its own right, playing a significant role within the ASEAN family and beyond to realise the opportunities of this ecosystem.

From Goa to Kathmandu

It was no surprise that when the historic Retreat of BIMSTEC Leaders was convened by India in Goa in October 2016, the Blue Economy found prominent mention in the outcome document:

We recognise the enormous potential that the development of the blue economy holds for our region, and agree to explore ways to deepen our cooperation in areas such as aquaculture (both inland and coastal), hydrography, seabed mineral exploration, coastal shipping, eco-tourism and renewable ocean energy to promote holistic and sustainable development of our region.[6]

The document stressed the importance of cooperation for the sustainable development of fisheries for food security, as “the Bay of Bengal region is home to over thirty percent of the world’s fishermen.”[7] The leaders agreed to derive benefits from the mountain regions for sustainable development. Obviously, rivers form the bridge between the mountains and oceans, and between the mountain economy and the Blue Economy.

The fourth summit in Kathmandu in August 2018 projected BIMSTEC as a regional organisation that was geared to advance “Towards a Peaceful, Prosperous and Sustainable Bay of Bengal.” Its outcome document contained clear-cut formulations on mountain economy and fisheries-related cooperation. But its two paragraphs on the Blue Economy in the section named ‘Sectoral Review’ were truly significant and forward-looking. Therein, the leaders acknowledged the hosting of the International Blue Economy Conference by Bangladesh in 2017. They agreed to:

Emphasise the importance of blue economy and agree to cooperate in this sector for the sustainable development in the region and decide to establish an Inter-governmental Expert Group to develop an action plan on blue economy, keeping in mind the special needs and circumstances of the landlocked Member States.[8]

The subsequent fifth summit in Colombo simply reiterated the instruction to the ministers, officials and the Secretariat to ensure “prompt implementation” of its directives, including on the Blue Economy.[9]

Between the Goa Retreat and the Colombo Summit, much has been activated in the Blue Economy, regionally and internationally. India’s focus has been on Sagarmala, the flagship mega programme for the expansion and modernisation of ports and port-related-infrastructure; crafting of a policy framework through a draft policy on the Blue Economy[10] and a series of diplomatic initiatives to promote cooperation with diverse entities ranging from the IORA, ASEAN, and the Quad to Norway, the EU and France. Encompassing the overarching Indo-Pacific model, New Delhi released its Indo-Pacific Oceans Initiative (IPOI), mentioned in Prime Minister Modi’s speech at the East Asia summit in November 2019.[11] Through its seven holistic pillars, it covers various aspects of the Blue Economy and maritime security. The pillars and their leads identified so far, are: i) maritime security (India), ii) maritime ecology (Australia), iii) maritime resources (France and Indonesia), iv) capacity building and resource sharing (lead country pending), v) disaster risk reduction and management (India), vi) science, technology and academic cooperation (lead pending), and vii) trade, connectivity and maritime transport (Japan).”[12]

Despite some members of BIMSTEC thinking seriously about the Blue Economy, the grouping has done little so far to promote regional cooperation in any tangible manner. But now that it has set in motion its plan for institutional reform, it can move forward in newer areas.

Trade and Investment

In contrast to the Blue Economy as a new domain, trade and investment represent a traditional area of regional cooperation on which BIMSTEC has worked since its inception in 1997. The signing of the framework agreement in 2004 raised hopes of an early breakthrough in concluding a viable, comprehensive FTA, but it did not follow. Nearly two decades of negotiations have made only modest progress. Of the seven constituent agreements of the FTA, just two are ready: the agreement on dispute settlement procedures and mechanism, and the protocol to amend the framework agreement. Negotiations for five agreements remain inconclusive so far. These are agreements on trade in goods; cooperation and mutual assistance in customs matters; trade in services; investment; and trade facilitation.[13]

Whether the reiteration of the Leaders’ directives at the Colombo summit will motivate the officials to expedite matters, remains debatable, if not doubtful. This is because much has changed in the BIMSTEC region in the past two decades. Pratim Ranjan Bose, an analyst, explains that the record of negotiations does not build confidence. The region’s experience with SAFTA, the widespread perception that FTAs lose jobs at home, the unwillingness of Bangladesh and Sri Lanka to open their economies to Indian competition, and India’s lack of enthusiasm to further open up its market to Thailand, have been among the factors holding up the FTA negotiations.[14] In addition, the Regional Comprehensive Economic Partnership Agreement, to which Thailand and Myanmar are signatories but India is not, has complicated matters. Finally, there is a growing realisation in the region that in the absence of extensive infrastructure connectivity, trade and investment flows cannot really grow.

In view of the above, BIMSTEC has no choice but to take a hard, realistic look at the current state of play regarding FTA negotiations as well as step up efforts to expand the multidimensional connectivity that links member states seamlessly through developed road, rail, air, shipping, digital and energy networks. This, say researchers NilanjanBanit and Aparna Sharma, will raise intra-BIMSTEC trade, stuck at 7% of total trade to an impressive macro figure.[15]

Policy Suggestions

Advocates of BIMSTEC believe that it has a promising future. “The Bay of Bengal,” says an academic, “is evolving as the centre of the Indo-Pacific region again.”[16] A serious endeavour is essential to translate intentions and declarations into action, as recommended below:

Blue Economy

  • Speedy action to establish an Inter-governmental Expert Group for an action plan on the Blue Economy. It should be multi-disciplinary, factoring in all relevant developments in recent years as also the special needs of all member states and present a plan for concrete results.
  • A full-fledged presentation on IPOI should be made before a representative gathering of officials from various ministries of the BIMSTEC countries. The goal should be to optimally associate BIMSTEC with this ambitious initiative.
  • Bangladesh, Sri Lanka, Thailand and Myanmar should be invited to make detailed presentations on their national plans, achievements and best practices relating to the Blue Economy before a representative gathering of officials in the BIMSTEC governments.
  • The Bay of Bengal waters wash the shores of three countries that are not members of BIMSTEC: Maldives, Malaysia and Indonesia. It is necessary to involve them in BIMSTEC’s endeavours to develop various dimensions of the Blue Economy, especially fisheries, marine tourism, coastal shipping ecosystems, and maritime security.
  • A regional mechanism should be created for practical cooperation among BIMSTEC members in the research and management of “maritime trade, shipping, aquaculture and tourism” as well as to strengthen the fisheries sector and protect it against pollution, minimizing the impact of climate change.[17]
  • A vision document, encompassing all facets of cooperation in the Blue Economy for the next 25 years, should be prepared. An applicable template is the ‘India-France Roadmap on the Blue Economy and Ocean Governance.’[18]

Trade and Investment

  • Decide whether BIMSTEC’s business community needs a comprehensive FTA or not. An apex industry chamber in India, FICCI, undertook a perception survey and reported in January 2018 that businesses favoured an early conclusion of the FTA.[19]A repeat of this exercise throughout the region is necessary and will be fruitful
  • Progress on connectivity has been held up in the absence of relevant legal instruments. Their finalization should be a priority.
  • Implementation of the Master Plan for Transport Connectivity should be thought through properly, with periodic reviews at the ministerial level.
  • Existing mechanisms like the Business Forum and the Economic Forum should be activated for optimal results in strengthening trade and investment linkages.

Conclusion

There is no dearth of ideas on how to transform BIMSTEC into an effective instrument of regional integration. What is now needed is active supervision by the political leadership of measures taken and progress achieved; the full commitment of bureaucracies; the engagement of business and industry; and a sustained and visible watch by an informed citizenry.

The combined endeavour should be to make BIMSTEC a model platform for cooperation in the Bay of Bengal region before the current decade ends. This needs collective political will.[20]

Author Brief Bio: Rajiv Bhatia is Distinguished Fellow, Gateway House and former Ambassador to Myanmar. He headed the BSM division in the Ministry of External Affairs, which handled India’s relations with Bangladesh, Sri Lanka, Myanmar and Maldives. As Chair of FICCI’s Task Force on Blue Economy and Chair of FICCI’s Core Group of Experts on BIMSTEC, he supervised and contributed to the crafting of three Knowledge Papers published in April 2017, January 2018 and December 2019.

References

[1] BIMSTEC Charter. https://drive.google.com/file/d/1imTXMnsLg3ostI-kN8E5L6CeRyMWrGhh/view

[2] Ibid.

[3] Conserve and sustainably use the oceans, seas and marine resources for sustainable development. https://sdgs.un.org/goals/goal14

[4] ‘Text of the PM’s remarks on the Commissioning of Coast Ship Barracuda’, PMINDIA. https://www.pmindia.gov.in/en/news_updates/text-of-the-pms-remarks-on-the-commissioning-of-coast-ship-barracuda/

[5] For details, see Rajiv Bhatia, India–Africa Relations: Changing Horizons, Oxon & New York, Routledge, 2022. P. 118

[6] ‘BIMSTEC Leaders’ Retreat Outcome Document and 16-Point Agenda of Action, Goa, India, 16 October 2016’, BIMSTEC.https://bimstec.org/?page_id=3812

[7] Ibid.

[8] ‘Fourth BIMSTEC Summit Declaration, Kathmandu, Nepal, 30-31 August 2018’. https://bimstec.org/?page_id=3812

[9] ‘Fifth BIMSTEC Summit Declaration, Colombo, Sri Lanka, 30 March 2022’. https://bimstec.org/?page_id=3812

[10] ‘India’s Blue Economy: A Draft Policy Framework’, Economic Advisory Council to The Prime Minister Government of India, New Delhi, September 2020. P. 12. https://incois.gov.in/documents/Blue_Economy_policy.pdf

[11] ‘Prime Minister’s Speech at the East Asia Summit, 04 November 2019’. Ministry of External Affairs, 4 November 2019. https://www.mea.gov.in/Speeches-Statements.htm?dtl/32171/Prime_Ministers_Speech_at_the_East_Asia_Summit_04_November_2019

[12] Keynote Address by Ms. Riva Ganguly Das, Secretary (East), Ministry of External Affairs, Government of India at the National Consultations on Indo- Pacific Oceans Initiative (IPOI), 3 September 2021. https://www.icwa.in/show_content.php?lang=1&level=1&ls_id=6877&lid=4682

[13] ‘Trade, Investment and Development’, BIMSTEC. https://bimstec.org/?page_id=6124

[14]Pratim Ranjan Bose, ‘The Relevance of BIMSTEC FTA in View of New Realities’, in Sreeradha Datta (ed) BIMSTEC: The Journey and The Way Ahead, New Delhi, Pentagon Press LLP, 2021. Pp. 227–250

[15]NilanjanBanik and Aparna Sharma, ‘Trade Potentiality in BIMSTEC’, Briefing Paper, CUTS, No. 1/2015. https://cuts-citee.org/pdf/Briefing_Paper15-Trade_Potentiality_in_BIMSTEC.pdf

[16] Rajeev Ranjan Chaturvedy, ‘Bridging the bay in quest of a stronger BIMSTEC’, The Hindu, 30 March 2022.

[17]VenuRajamony, ‘A subregional grouping that must get back on course’, The Hindu, 29 March 2022.

[18] ‘India-France Roadmap on The Blue Economy and Ocean Governance’, Ministry of External Affairs, 20 February 2022. https://www.mea.gov.in/bilateral-documents.htm?dtl/34882/INDIAFRANCE_ROADMAP_ON_THE_BLUE_ECONOMY_AND_OCEAN_GOVERNANCE

[19] FICCI Core Group, ‘Reinvigorating BIMSTEC: An Industry Vision for the Next Decade’, Knowledge Paper, New Delhi, FICCI, January 2018.

[20]Probal K. Ghosh, ‘BIMSTEC: a Potential Arena of Maritime Convergences and Capacity Building’, in Sreeradha Datta (ed) BIMSTEC: The Journey and The Way Ahead, New Delhi, Pentagon Press LLP, 2021. P. 317.

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