REGIONAL GROUPINGS: AN OVERVIEW OF BIMSTEC AND MGC

Transcription

1 An Overview of BIMSTEC and MGC/313 REGIONAL GROUPINGS: AN OVERVIEW OF BIMSTEC AND MGC MAN MOHINI KAUL In the last decade, India has shown a keen interest in the formation of sub-regional groupings such as Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) and the Mekong Ganga Project (MGC). There are five reasons for this: the need to find a working alternative to a non-functional South Asian Association for Regional Cooperation (SAARC), the importance of this contiguous region with regard to geopolitics and security, rivalry with China, the growing economic links between India and the Association of Southeast Asian Nations (ASEAN) and the strategic advantages of enhanced relations with Myanmar. There are barriers to regional integration within the region mentioned, such as weak political institutions and human rights violations, but ASEAN offers a good model. India needs to adopt a multi-dimensional consultative approach in this matter. IN THE LAST decade, India s keen interest in the formation of sub-regional cooperation forums like BIMSTEC and the MGC is clearly discernible. The establishment of various regional initiatives has marked the beginning of a new era of political and economic cooperation among neighbours in South Asia and Southeast Asia, in which India is not only a participant but an active initiator. This is an interesting break from India s previous outlook where the sub-region was almost completely ignored and very little effort was made to either develop a regional approach or build linkages with neighbouring countries. The only significant regional initiative was the formation of SAARC in 1985, but the organisation has been marred almost constantly by interregional tensions and has in fact, proved to be an obstacle in the building of regionalism in South Asia. This article examines the reasons behind India s renewed activism, in particular China s role, the barriers to successful regional integration, lessons that can be learnt from successful groupings such as ASEAN, and the way ahead. This can partly be attributed to the liberalisation of the Indian economy in the early 1990s, which opened up a new world of economic growth and development. Man Mohini Kaul is Associate Professor, Southeast Asian and Southwest Pacific Studies, Jawaharlal Nehru University, New Delhi, India. SOUTH ASIAN SURVEY 13 : 2 (2006) Sage Publications Los Angeles/London/New Delhi/Singapore DOI: /

2 314/MAN MOHINI KAUL I WHY REGIONAL INTEGRATION Four explanations are traditionally put forward to explain why countries choose to follow a regional approach. Firstly, there is a commonality of certain important interests (economic, political, security) that takes precedence over differences and divergences. Secondly, most Regional Integration Agreements (RIAs) tend to involve neighbouring countries and it is possible that the trend towards regionalism is encouraged by the perceived potential benefits from reducing the chances of conflict with neighbours and facilitating agreements to share regional resources (Schiff and Winters 2003: 71). Thirdly, it is argued that a rise in trade leads to economic interdependence, which in turn promotes peace and stability and induces a desire for trade pacts (Schiff and Winters 2003: ). In fact, according to this assessment, ASEAN is a prime example of regional integration leading to regional peace (Schiff and Winters 2003: 192). Lastly, regionalism could lead to cooperative security, which is particularly important in an era where there is a need to deal with asymmetrical wars in a concerted manner. India s keen interest in initiating regional groupings and its commitment to promoting the essential variables gives credence to the above explanation. In fact, both India and China are actively forging regional initiatives to influence the new structure emerging in the region in which both want to be in a pivotal position. The importance the present Indian administration attaches to regional integration is apparent from Prime Minister Manmohan Singh s statement: Regional economic integration, however, is more about finding an engine of growth rather than just for promoting trade. Countries developed as well as developing have looked to regional economic integration as a means of strengthening their international competitiveness and as an engine of economic growth in recent years (Singh 2005). India s growing confidence and capacity to play a major role in regional integration has grown with its economic growth and nuclear capability (Yahuda 2003: 28). II INDIA S GROWING INTEREST IN REGIONAL GROUPINGS India s diligent pursuit of closer trade relations with the neighbouring countries and the strengthening of security ties with this contiguous region are clearly visible from its growing cooperation in all fields from comprehensive security cooperation to economic partnership in the region. The key factors underlying India s desire for sub-regional initiatives can be categorised into the following: i. The need to find a working alternative to the non-functional SAARC. ii. The geopolitical significance of India s neighbourhood, and India s identification of its own security with the stability of the contiguous region. iii. China s rising power and influence.

3 An Overview of BIMSTEC and MGC/315 iv. Growing economic links with ASEAN. v. The importance of finding effective ways of enhancing relations with Myanmar. AN ALTERNATIVE TO SAARC Though still at an early stage in this process, BIMSTEC and MGC can be viewed as efforts to forge closer links with countries as part of India s Look East policy. The main consideration for their formation appears to have been India s desire to find a successful alternative to SAARC. India s former Foreign Secretary, Shyam Saran, admitted SAARC s ineffectiveness when he stated, If the thrust of initiatives of some of the members is seen to be patently hostile to India or motivated by a desire to contain India in some way, SAARC would continue to lack substance and energy. Elaborating further, he stated that SAARC continued to remain largely a consultative body, which has shied away from undertaking even a single collaborative project in its twenty years of existence. In fact, there is deep resistance to doing anything that could be collaborative (Saran 2005). Although efforts are being made to implement the South Asia Free Trade Agreement (SAFTA), contentious issues between India and Pakistan have hampered the overall SAARC process. In 1990, merchandise exports within the respective trade blocks were worth US$27,365 million for ASEAN and US$863 million for SAARC; by 2004, this had increased to US$122,369 million for ASEAN but was still only US$5,706 million for SAARC (World Bank 2006). Therefore, in the face of insignificant multilateral trade arrangements, India is now focusing on a strategy for closer economic ties with its neighbours through bilateral Free Trade Agreements (FTAs). To facilitate the process of economic integration, a number of multilateral fora have been established through organisations like the Confederation of Indian Industry (CII), and there is no doubt that India has emerged as a key promoter of economic cooperation in the region. For some time now, Indian analysts, academics, and former diplomats have been calling for a new and innovative approach for strengthening regional linkages. According to Sanjaya Baru, BIMSTEC can acquire a profile larger than SAARC if it acts as a bridge between the more inward-oriented South Asia and the more outward-oriented South-east and East Asia. (Baru 2004) V. Suryanarayan reiterates Baru s sentiments: The Bay of Bengal community as a specific area of regional cooperation deserves greater attention from academicians and policy planners. Suryanarayan (2000) supports the idea of a wider Bay of Bengal community, which would also include Indonesia, Malaysia and Singapore. According to this formulation, the countries from the extended neighbourhood would rightly become a part of the immediate neighbourhood. Sanjay Baru s persuasive argument for including the two land-locked countries in South Asia that are completely dependent on the Bay of Bengal for their national economic needs (Nepal and Bhutan) seems to prevail. There appears to be support for Baru s vision of a Bay of Bengal community with a wider membership. Baru and Suryanarayan are both openly critical of Pakistan and their views give further credence to the political aspect of the Bay of Bengal Community.

4 316/MAN MOHINI KAUL BIMSTEC was founded in Initially the membership was limited to the littoral states of Bangladesh, India, Myanmar, Sri Lanka and Thailand, and later in 2004 Bhutan and Nepal joined as members. In July 2004, the grouping was renamed the Bay of Bengal Initiative for Multi-Sectoral Technical Cooperation (BIMSTEC). The wider membership was hailed by regional newspapers as being necessary for bridging the gap between SAARC and ASEAN. The objectives of BIMSTEC were enshrined in the Summit Declaration of 6 June 1997, which stated: Desiring to establish a firm foundation for common action to promote sub-regional cooperation in the areas of trade, investment, technological exchange and other interrelated areas in a spirit of equality and partnership and thereby contribute towards peace, progress and prosperity in their common region; Conscious that in an increasingly interdependent world, the cherished ideals of peace, freedom, and economic well-being are best attained by fostering greater understanding, good neighbourliness and meaningful cooperation among countries of the same subregion already bound together by ties of history and culture (BIMSTEC 1997). Under BIMSTEC, the member countries have agreed upon a plan for a Free Trade Pact by 2017 and in addition to that, India, Sri Lanka and Thailand have committed to trade liberalisation by The proposed Asian rail link envisaged for BIMSTEC nations would enhance connectivity by linking India with the five Southeast Asian countries. The other sub-regional grouping, the Mekong Ganga Cooperation (MGC), was formed on 10 November 2000, in Vientiane. The MGC consists of Myanmar, Thailand, Cambodia, Vietnam and India. Though closer economic cooperation with Mekong countries is the main rationale behind this grouping, India also expects to strengthen its connectivity and influence. However, a complimentary process is taking place in the same sub-region, with China as the central element; unlike MGC, the Greater Mekong Sub-region (GMS) is making significant progress under an integrated policy implementation programme of the Asian Development Bank. GEOPOLITICAL SIGNIFICANCE OF INDIA S NEIGHBOURHOOD It is clear that the Indian political elite is often guided by the requirement to secure a safe neighbourhood through economic cooperation and strengthening of political relations with neighbouring countries. Despite India s commitment to democracy, they do not want to lose sight of the economic and security interests. An important factor that is shaping the foreign policy of many major powers, including that of India and China, is the issue of energy security. Although in the past India s security policy did take cognisance of the region, its approach was more noticeable in bilateral rather than multilateral relations. India s closed economy, domestic problems and preoccupation with a hostile geo-strategic setting marginalised its capacity to play a constructive role Downloaded in the from region. sas.sagepub.com at PENNSYLVANIA STATE UNIV on September 19, 2016

5 An Overview of BIMSTEC and MGC/317 THE CHINA FACTOR China and India are the two major economic countries vying for influence in the emerging economic integration in the region. India s growing economic integration with the Southeast Asian region is welcomed by the ASEAN countries, which see in India the capability to balance China s presence as an economic centre and competitor. However, compared to China s high economic growth, India has miles to go. China s economy showed 9.9 per cent growth in 2005 and is now the fourth largest economy after the United States, Japan and Germany. In Southeast Asia, it is an economic giant and with the signing of the ASEAN-China Accord in November 2004, it became the world s biggest free trade area. Aware that it has a negative image of possessing hegemonic ambitions, China is trying to establish a benign image by showing generosity and fairness when signing economic treaties with neighbouring countries. In other words, it is playing by the rules. However, in spite of China s workable and cooperative relations with its neighbours (Yahuda 2003: 28), the South China Sea dispute and the Taiwan issue are still regarded as potential flashpoints (Collins 2003: ). Mark Beeson writes: The China threat has not entirely diminished; concerns about China s long term hegemonic ambitions in the region have, to some extent, given way to immediate concern about its potential as an economic rival to a Southeast Asian region still coming to terms with the aftermath of economic crisis (Beeson 2004: 209). India too has qualms about China intruding in South Asia. However, the feeling is mutual; China has never really wanted India to be part of the East Asian Summit, while India was not keen to see China included as an observer in SAARC (Malik 2006). In spite of these competing interests, trade between India and China is increasing at an incredible pace and there is an admiration in India for China s economic success. China is now India s second largest trading partner after the United States, and the Indian and Chinese business communities are pleased about the enhanced economic and trade relations between the two countries. Trade between the two is expected to go up to US$ 20 billion by The strengthening of economic integration will have a positive impact on political relations. INDIA-ASEAN ECONOMIC LINKS It was not too long ago that India was left out of Asia Pacific Economic Cooperation (APEC), an aberration not lost on the Indian policymakers, leading to introspection and overhauling of India s policy towards Southeast Asia. It was only when Cold War perceptions were no longer valid and the environment in the post-cold War world changed with the emergence of new regional complexities that India started developing a policy framework towards ASEAN. India s friendly overtures and ASEAN s display of interest during Downloaded the Narasimha from sas.sagepub.com Rao at PENNSYLVANIA government STATE had UNIV an on September immediate 19, 2016 and successful

6 318/MAN MOHINI KAUL fallout, with India becoming a Sectoral Dialogue Partner of ASEAN in January 1992, a Full Dialogue Partner in December 1995, and a member of the ASEAN Regional Forum (ARF) in July The Dialogue Partnership with ASEAN enabled India to significantly deepen its relationship with the member countries and the change in its economic policy opened a new world of economic growth and development. India s successful experience with the ASEAN process has helped its profile in the region as a reliable political, strategic and economic partner. This is substantiated by the institutionalisation of the India-ASEAN multilateral dialogue (ASEAN plus India) and the expansion of areas of cooperation from limited trade to free trade. In order to further develop investment and trade links, an ASEAN-India Economic Linkages Task Force (AIELTF) was set up, which drafted a Comprehensive Economic Cooperation Agreement (CECA) that was signed between ASEAN and India at the Bali Summit in October India also signed the Joint Declaration for Cooperation to Combat International Terrorism. In the Laos Summit of 2004, an agreement on ASEAN-India Partnership for Peace, Progress and Shared Prosperity was signed. Emphasising the importance of ASEAN to India, the McKinsey Report of the Second India-ASEAN Business Summit of September 2003 stated:... the Asian region combines the fastest growing economies in the world. Together, it forms a huge market that is growing faster than any other region in the world. Moreover, India and ASEAN, as regional trade partners, offer a huge and attractive geographically contiguous market of more than 1.5 billion people. This provides a compelling rationale for strengthening the business relationships between India and ASEAN... the summit reaffirmed the importance of India-ASEAN cooperation in the 21st century (McKinsey 2003). It has to be recognised that recent initiatives have impacted positively on the trade figures and are reflective of the more open and less discriminatory regime coming into force. In , India-ASEAN trade was about US$13.25 billion, which is an increase of four to five times compared to the figures for the previous decade. The regular participation in the ASEAN process has given India the experience to deal with regional and sub-regional initiatives like SAARC, BIMSTEC and MGC. India- ASEAN interaction has had a positive impact on the member countries of the subregional groupings; they have shown keen interest to be a part of the new emerging regionalism. ENHANCING RELATIONS WITH MYANMAR India has been concerned with China s growing influence and naval activities in Myanmar, and there are serious strategic implications for India if China gains access to vital ports in Myanmar (Fink 2001: ). India s land connectivity with mainland Southeast Asia is through Myanmar, with which India shares a 1,643 km long land border. Therefore, India s engagement with Myanmar, despite the criticism

7 An Overview of BIMSTEC and MGC/319 from pro-democracy supporters of Aung San Suu Kyi, is to prevent it from going even further into China s arms (Ramachandran 2006; Vatikiotis 2005). In its pursuit of finding effective ways of enhancing its relations with Myanmar, India has taken up multilateral initiatives like the BIMSTEC and MGC. There are also many asymmetrical threats to India from Myanmar smuggling of illicit arms into India s north-east, illegal immigrants as well as drug trafficking. Close engagement with the Myanmar junta has helped in joint military operations against insurgents in India s north-eastern states. With a new relationship evolving between India and Myanmar, there is agreement to develop a gas pipeline through the Eastern Corridor Pipeline. Many Indian firms are being awarded contracts for the exploration and production of oil and gas. A Memorandum of Understanding on Cooperation in the field of Non-Traditional Security Issues was signed between the two countries during the visit of Senior General Than Shwe, head of Myanmar s ruling military junta, to India in October During the visit of India s President A.P.J. Abdul Kalam to Myanmar in March 2006, the two countries signed a Memorandum of Understanding on the supply of gas from Myanmar to India. III BARRIERS TO SUCCESSFUL REGIONAL INTEGRATION The ongoing enlargement of BIMSTEC could hamper meaningful regional cooperation and there seems to be a need to identify what is distinctive about the BIMSTEC and MGC region (Yusuf 2003: 97). It is a diverse region and the political instability along with lack of democracy in some of the nations is clearly a handicap to successful integration. There are also no common norms among the member nations. They have extremely diverse economies, income levels, structure and growth rates, and trade between them is almost negligible. Thus, while there is a talk of Asian integration, the ground reality is in fact quite different. The strategic scenario is becoming extremely complicated and difficult to predict and the internal challenges in some of the BIMSTEC countries could have serious security implications that could jeopardise prospects for peace and stability in the entire region. Moreover, while at one level confidence-building measures are being undertaken, at another level there are regional jealousies and suspicions. There are a number of internal problems facing these countries that may prevent successful regional integration. These problems reflect lack of democracy and transparency, weak institutions and human rights violations. In a globalised world, it is difficult to suppress people s aspirations for human security. Until this is recognised, internal instability will continue threatening the territorial integrity of the nation states. Military solutions have failed to settle internal security problems. All the member countries need to cooperate in combating the menace of international terrorism and other transnational crimes, such as trafficking in drugs, arms smuggling, human trafficking, environmental crimes, sea piracy and money laundering, through effective economic linkages and regional cooperation.

8 320/MAN MOHINI KAUL IV ARE THERE LESSONS TO BE LEARNED FROM ASEAN? ASEAN has emerged as the most successful regional organisation in Asia, in spite of the initial birth pangs (Acharya 2000). Although the apparent objective of setting up ASEAN in 1967 was to support economic, social and cultural development through joint endeavours, regional security was the prime preoccupation of its founders (Leifer 1989: 1). Although all the core countries were anti-communist, they did not develop ASEAN into an anti-communist bloc. There were critics who felt that the organisation was doomed to failure as the differences within the member countries were too many to be reconciled. However, from the point of view of the member countries themselves, the importance of ASEAN could not be exaggerated (Asian 1972: 2). Their desire to succeed was guided by the principle that regional security could only be achieved through regional cooperation. Since then, ASEAN has demonstrated its resilience in spite of the many challenges that it has had to encounter in its forty-three years of history. The ASEAN model has its own unique features, which can be broadly classified as under: i. Decisions are taken after musyawarah (consultation) and mufakat (consensus) (Stubbs 2004). ii. Non-interference in each other s internal affairs. iii. Framework for regional solutions to regional problems. iv. Treaty of Amity and Cooperation (TAC) provides a mechanism for settling disputes. v. Informal approach rather than a bureaucratic one. vi. Commitment to preserving the sanctity of national sovereignty. vii. Common desire on the part of the political elite to strengthen the organisation by shaping the direction of ASEAN. viii. The constructive role of Track II networks. ix. Development of regional institutions. There are critics like Amitav Acharya and Hadi Soesastro who argue that it is time for ASEAN to reinvent itself. According to Soesastro, the new ASEAN suffers from its own increasing weight. Scholars like Barry Buzan hold the view that except for Singapore, all the ASEAN countries have the characteristics of weak states lacking political and social cohesion. VCONCLUSION In view of India s deepening relations with the BIMSTEC and the MGC region, it is generally accepted that India, being the largest country in the groupings, must remove barriers that impede the free flow of goods, services and investment for deep integration. The most important constraints in multilateral cooperation are the bureaucratic hurdles and lack of political initiative. Despite the focus of BIMSTEC and MGC on the development of infrastructure, sub-regional groupings are still in the initial stage

9 An Overview of BIMSTEC and MGC/321 and there is much that needs to be done before positive results can be seen. There exists a wide gap between the approved and implemented programmes, and projects are often taken up without proper follow-up. For example, until now only one project (the Tamu-Kalemyo road network) has been completed under MGC, while ten road networks linking Yunnan province of China with the Mekong basin countries have either been completed or are already underway under the Greater Mekong Sub-Region (GMS) Economic Cooperation Programme. Indian analysts attribute the success of these projects to the financial assistance given to GMS by the Asian Development Bank (ADB 2005). For the success of a regional grouping, an integrated approach is necessary. As the largest country in the region, it is in India s interest to play a facilitating leadership role in forging FTAs not by imposing its will, but by building a consensus while keeping focus on the larger economic and strategic implications. For this, India needs to adopt a consultative approach that is multi-dimensional in nature across sectors and institutions. No one model of regional cooperation is perfect unless it is able to concentrate on some of the following: sustainable and inclusive economic growth, poverty reduction, and infrastructure development. REFERENCES Acharya, Amitav The Quest for Identity: International Relations of Southeast Asia. Singapore: Oxford University Press. ADB Asian Development Bank Review. August: Asian ASEAN: Five Countries Facing Four Options, The Asian (Hong Kong), 2 8 January. Baru, Sanjaya Last Call for South Asian Economic Union, The Financial Express, 2 January, accessed from Beeson, Mark Southeast Asia and the Major Powers: The United States, Japan and China, in Mark Beeson (ed.), Contemporary Southeast Asia: Regional Dynamics, National Differences. Hampshire: Palgrave Macmillan: 209. BIMSTEC Declaration on the Establishment of the Bangladesh-India-Sri Lanka-Thailand Economic Cooperation (BIST-EC), 6 June, Bangkok, accessed from establis.html. Collins, Alan Security and Southeast Asia. Colorado: Lynne Reiner. Fink, Christina Living Silence: Burma under Military Rule. London: Zed Books. Leifer, Michael ASEAN and the Security of South-East Asia. London: Routledge. Malik, Mohan China s Strategy of Containing India, Power and Interest News Report, 23 February. McKinsey & Company Second India-ASEAN Business Summit: Boosting Trade and Investment between India and the ASEAN Countries. New Delhi: McKinsey. Ramachandran, Sudha India embraces Myanmar on its own terms, Asia Times, 28 June, accessed from Saran, Shyam Foreign Secretary Mr. Shyam Saran s speech on India and its Neighbours at the India International Centre (IIC), 14 February, accessed from release/2005/feb/3.htm. Schiff, Maurice and Alan L. Winters Regional Integration and Development. Washington: The World Bank. Singh, Manmohan Prime Minister Dr. Manmohan Singh s speech at the Haksar Memorial Conference, 9 November, accessed from

10 322/MAN MOHINI KAUL Soesastro, Hadi ASEAN in 2030: The Long Way, in Simon S.C. Tay, Jesus P. Estanislao, Hadi Soesastro (ed.), Reinventing ASEAN. Singapore: Institute of Southeast Asian Studies: 278. Stubbs, Richard ASEAN: Building Regional Cooperation, in Mark Beeson (ed.), Contemporary Southeast Asia: Regional Dynamics, National Differences. Basingstoke: Palgrave: Suryanarayan, V Prospects for a Bay of Bengal community, Seminar 487, March, accessed from Vatikiotis, Michael India coddles its despotic neighbors, International Herald Tribune, 3 June, accessed from World Bank World Development Indicators: 332 (Table 6.6). Yahuda, Michael The International Politics of the Asia-Pacific. London: Routledge Curzon. Yusuf, Shahid Innovative East Asia: The Future of Growth. Washington: World Bank.