BISTEC determined to forge regional powerhouse<\/p>\n
By Baladas Goshal<\/p>\n
NEW DELHI (JP): In new international economic relations, and
\nthe regionalization of the world order in the post-Cold War
\nperiod, formation of regional economic blocs have become the
\norder of the day.<\/p>\n
The most recent one to come into existence is the BISTEC which
\ncomprises Bangladesh, India, Sri Lanka, Thailand, launched on
\nJune 6 at a ministerial meeting in Bangkok with the objective of
\nboosting economic and social development and cooperation in trade
\nand investment.<\/p>\n
The four countries who have joined the grouping all have a
\ncoastline on the Bay of Bengal and hope to convert it into a
\nregional power house. The goal is to promote subregional
\ncooperation in the form of a growth quadrangle patterned on the
\ngrowth triangles among the ASEAN and APEC countries, like the
\nPhilippines, Indonesia, Singapore and Malaysia.<\/p>\n
The formation of growth triangles or subregional economic
\nzones has become increasingly important as a strategy for
\ndevelopment not only in the ASEAN region, or the countries in the
\nAsia Pacific area, but is also catching on in South Asia.<\/p>\n
India formed recently a quadrangle with Nepal, Bangladesh and
\nBhutan to promote trade between them. With the current trend
\ntoward increasing globalization and liberalization, economies can
\nno longer act in isolation.<\/p>\n
Interdependence, collective self-reliance and mutual
\ncooperation are essential to the vast potentials of the region
\ninvolved and become competitive economic forces. Through this
\ncooperation process, synergies for development could be created
\nby taking advantage of the different factor endowments and their
\ncomplimentaries among participating geographically contiguous
\nregions. Basically, growth triangles link adjacent areas to form
\na subregion of economic growth.<\/p>\n
Subregional cooperation is perceived as a logical way to
\nenhance socioeconomic development in peripheral and less-
\ndeveloped areas. This is done by reaping the benefits of
\neconomies of scale, complimentaries in production and an
\nenlargement in the size of the market. Growth triangles or
\nquadrangles also enhance the region's attractions as an
\ninvestment location and market for global producers.<\/p>\n
The BISTEC was a Thai initiative in 1995, to which India
\nagreed in 1996. Originally, the idea was to cover Thailand, India
\nand Sri Lanka only, but later Bangladesh Prime Minister Shiekh
\nHasina was keen that her country joined it too.<\/p>\n
Though in due course the BISTEC, which is likely to have a
\nsecretariat at Bangkok and an annual feature of one ministerial
\nmeeting at least, will be open to other interested countries, its
\npresent name will remain unchanged. At the moment, Myanmar has
\nbeen given observer status.<\/p>\n
The Bangkok declaration, following the ministerial meeting,
\nhas outlined that the main areas of its cooperation would be in
\ntrade, investment, industry, transportation, infrastructure,
\nscience and technology, human resources development, energy,
\nfisheries, agriculture, natural resources and tourism.<\/p>\n
Thailand and India will be the pillars of the new initiative,
\nbut there is enough scope for Bangladesh and Sri Lanka to become
\nactive partners. Bangladesh is rich in natural gas, and
\ncooperation in the hydrocarbon sector a key area for possible
\ncooperation.<\/p>\n
Thailand and India as the sub has made a strategic decision of
\npitching a long-term economic stake in South Asia. While trade is
\nof immediate interest, Bangkok has a long-term stake in
\ndeveloping infrastructure. Investment in the areas of
\ntransportation and telecommunications is also a long-term
\nobjective. Trade between the countries currently totals a meager
\nUS$1 billion, but with a joint population of 1.3 billion people,
\ndevelopment of such growth triangles could lead to an increase of
\nexports from the country and push up the figure over the next
\ndecade.<\/p>\n
Investments too would be easier to find since links between
\ncountries would be closer in cases of subregional groups. The
\ncooperation agreement, therefore, is expected to impart
\nadditional buoyancy to trade in the region, along with the trade
\nIndia will have with the regional trade blocs consisting of these
\ncountries in the region.<\/p>\n
The new initiative, according to the members of the grouping,
\nwould not overlap with existing regional groupings. In the words
\nof A.N. Ram, the secretary of economic relations of the Indian
\nMinistry of External Affairs, this was an initiative where \"for
\nthe first time SAARC is overarching across Andaman Sea to join
\nhands with the ASEAN\".<\/p>\n
It is hoped that the new group will act as a link between the
\nASEAN, of which Thailand is a key member, and the SAARC, that
\nincludes India, Sri Lanka and Bangladesh. In fact, the BISTEC can
\nbe seen as \"progression towards the noble objective of a larger
\nAsian Economic Community\", which India and her founding fathers
\nhave always championed, and the others have found useful and have
\nbeen practicing even before India could do so. The new grouping
\ndid not propose to exchange any tariff concessions since all the
\nmembers were also members of the Bangkok agreement, and
\nconcession would be exchanged there.<\/p>\n
The group has already discussed the possibility of forming a
\nregional airline, owned by all four governments, to service
\nsmaller destinations in each country. Other projects include
\nestablishing a tourist circuit along religious themes, such as
\nthe Buddhist religious sites in all four countries.<\/p>\n
\"I said we could have religion with pleasure. New facilities
\nsuch as hotels and golf courses could be set up at destinations
\non this route,\" declared the Indian Minister of State for
\nExternal Affairs.<\/p>\n
An international organization like the Economic and Social
\nCommission for Asia and the Pacific is likely to get involved in
\nidentifying specific prospects in the areas of tourism, trade,
\ninvestment and infrastructure and which the new grouping could
\ntake up.<\/p>\n
\"Our basic emphasis is on projects that have tangible results
\non jobs and standard of living,\" observed Kobsak Chutjkul,
\ndirector of economic affairs at the Thai foreign ministry. The
\nfocus will be on achieving an \"early harvest\" in terms of one or
\ntwo projects becoming operational by 1998. The BISTEC could
\nconsult on and work out the subregional component for Trans-Asia
\nRailway and Trans-Asian Highway projects being considered at fora
\nsuch as ESCAP and ADB.<\/p>\n
The member countries have also listed the priorities in terms
\nof future cooperation: multimodel transformation hub (marine and
\nland); processing and marketing of marine products through joint
\nventures; development of tourism infrastructure and circuits for
\nmarketing; building communication and information technology
\nwebs; research and development collaboration; and
\ncommercialization of technologies, including areas such as
\nnonconventional energy sources, space and biotechnology and oil
\nand natural gas exploration, development and marketing.<\/p>\n
While the initiative is still at the level of declaration of
\nintent, and nothing concrete has been worked out at yet, except a
\nregional airline, the prospect for a such a subregional grouping
\nlooks quite bright. Economic liberalization policies recently
\nundertaken by South Asian countries are a sign of the group's
\neconomic potential.<\/p>\n
Just as India is looking toward the east for improving her
\neconomic prospects, Thailand is looking toward South Asia as well
\nas the Bay of Bengal for markets and investments to lessen her
\ndependence on the route through the Strait of Malacca. If the new
\ninitiative succeeds, it will go a long way to establish linkages
\nwith other groupings in the region and eventually create an Asian
\neconomic forum.<\/p>\n
The writer is professor of Southeast Asian Studies at
\nJawaharlal Nehru University, New Delhi, India.<\/p>",
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