There has been a continuing debate about whether India wants both the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation and the South Asian Association for Regional Cooperation to succeed or is using the former to dilute and weaken the latter. The fourth summit of Bimstec concluded recently in Kathmandu did not dispel the reason for that debate.
For starters, Saarc consists of Afghanistan, Bangladesh, Bhutan, India, Maldives, Pakistan and Sri Lanka. Bangladesh, Bhutan, India, Nepal and Sri Lanka. Bimstec has Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand as its members. In both groups, India — the largest country and economy — is the pivot.
Evidently, progress in Saarc has been sluggish. Established in 1985, it has set up some regional institutions, harmonized and standardized the nomenclature of goods, and relaxed some visa rules, and that is about it in almost four decades. Introducing a free trade regime in the region a-la the European Union remains a pipe dream.
For this slow progress, the strategic rivalry between India and Pakistan is often cited as the reason; it is certainly a major reason but not the only reason.
About Saarc, India has always held ambivalent views. On the one hand, New Delhi needs Saarc and free trade within its members to expand its own market for goods, investment and technology and to project regional power, including in the event that the UN security council expanded to possibly include India as one of the permanent members.
On the other, New Delhi privately sees Saarc as a forum where smaller countries seek to gang up against it to tame it. One Indian former foreign secretary was caught fuming against Saarc along this line. Bimstec will not be free from the same Indian ambivalence for the same reason.
However, this attitude is not unique to India. All large countries don’t appreciate the regional/global mechanisms and rules that demand of them to compromise their interest for greater good and demonstrate such ambivalence. Transformational leaders make compromises for long-term interest and hide their disdain for such rules and mechanisms. Transactional leaders like the US President Donald Trump wear it on their sleeves.
Trump has done it by pulling the USA out of the Transpacific Trade Partnership and the Paris Climate Agreement and threatened to pull out of the NATO, the WTO, and NAFTA.
In addition, we know it takes years to develop uniform standards and regulatory alliance necessary for a free market. For instance, several countries have been negotiating for years and even decades to join the EU. On the other side of the spectrum, the United Kingdom is struggling to strike a balance between the regulatory alliance to benefit from the EU’s common market when it leaves the organization and to exercise its independent right to make laws and control the border.
Therefore, one cannot imagine that the regulatory and standards alignments within Bimstec and between Bimstec and Asean (the Association of Southeast Asian Nations), which would be inevitable owing to Myanmar and Thailand being members of the latter as well, is going to be easy. Which means, in the short to medium term, the prospects for Bimstec to establish a free trade area are not any better than doing so within Saarc. In the long run, as John Keynes has said, we would all be dead.
Yours truly has no doubt on his mind that that Indian authorities understand this complication very well and yet they have put their feet in two boats. This has given room for the suspicion that perhaps New Delhi has pushed Bimstec forward to sideline Saarc. It is up to the Indian government to dispel such suspicion by pushing the Saarc process forward as its largest member while also moving ahead with Bimstec.