The Financial Express

Regional blocs: The benefit of banding together

Regional blocs: The benefit of banding together

It is learnt that there are half a dozen Asia-based regional platforms. The purpose of these platforms is to enhance solidarity among member countries. Besides, to keep peace and bring economic prosperity are the key purposes of the platforms which were formed time to time based on need of the hour. Leaders of South Asian countries are seen often to express their desire to work together at summits held on different occasions. But, what they promise in the conferences is nipped in the bud. What is the use of such blocs, if they do not come forward during a crisis period? Multi-modal connectivity in the Asian region is possible to the economic betterment of all, if they can work together.

Bangladesh's foreign policy is based on the principle of "friendship for all and malice towards none". Truly speaking, friendship with a lot of countries had so far been established after Bangladesh's emergence as an independent country. There are many friends during good time but when in trouble none is seen around. There is a proverb-'a friend in need is a friend, indeed'. As a lower-middle income country, Bangladesh now needs real friends in its weal and woe. Bangladesh has so far been connected with many platforms that are aimed to bring economic growth. Asian countries that are situated around Bangladesh have to be given importance at first. The countries that are very close to Bangladesh in respect of distance must be valued most economically. Besides, there are many economic organisations or groups in Asia. Sadly speaking, the presence of organisations is seldom noticed during any emergency period.  But, the present situation arising out of Covid-19 serves a reminder that they should be united shortly.

The South Asian Association for Regional Cooperation ( SAARC) was founded in 1985 headquartered in Kathmandu of Nepal. Member countries of SAARC are Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka. The birth of SAARC came only for regional economic expansion. At the beginning, the rulers of SAARC member countries moved fast. Subsequently, the pace of SAARC movement was not seen like before. The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) was borne aiming to serve various purposes of the member countries. Bhutan, Myanmar, Nepal, Sri Lanka and Thailand are the other members of the grouping which was established through the adoption of Bangkok Declaration in June 1997. BIMSTEC connects South Asia with Southeast Asia, and serves as a platform for inter-regional cooperation between SAARC and ASEAN members. It accounts for 21 per cent of the world population, providing huge potential for trade. But intra-BIMSTEC trade is very low mostly due to what experts say low level of economic integration within the region and a dearth of infrastructure, especially transport links within those countries.

BIMSTEC, a seven-nation organisation comprising Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand has to work together. The fifth BIMSTEC summit and the seventeenth BIMSTEC ministerial meeting, scheduled to be held in Colombo, should focus on regional co-operation. Post-Covid co-operation, poverty alleviation, food security, uninterrupted economic and physical connectivity in the region are expected to be discussed in the summit.

 During January to March of this year, export receipts stood at US$ 1 million from Bhutan, $248 million from India, $ 6 million from Myanmar, $ 13 million from Nepal, $7 million from Sri Lanka, $ 7 million from Thailand, according to Bangladesh Bank (BB) sources. On the other hand, import payments made to India stood at US$ 7647.5 million while $ 957.1 million went to Thailand, BB sources also said. Foreign investments from BIMSTEC member countries are not that significant. FDI worth around US$ 43.85 million came from Thailand, $ 36.06 million from India and $ 13.10 million from Sri Lanka during January-March period of the current year.  Sadly speaking, Japanese FDI to Asia in 2019 was $ 57 billion, but Bangladesh's share was just 0.09 per cent. We have a $ 350 billion investment gap in infrastructure development. The private investment to GDP ratio should be 26.6 per cent considering the present situation.

According to the central bank, the region-wise export receipts stood at US$ 4286 million from the EU, $1386 from NAFTA, $ 410 million from OIC, $297 million from ACU, $289 million from SAARC countries, $ 214 million from developing eight, $161 million from OPEC, $137 million from ASEAN, $448 million from other Asian countries and $292 million from other European countries.  Established in 1974, regional trade payments settlements through the Asian Clearing Union (ACU) have not proportionately risen. The ACU started its journey with its initial five member countries- India, Iran, Nepal, Pakistan and Sri Lanka. Subsequently, Bangladesh and Myanmar joined in 1976 and 1977 respectively while Bhutan joined in 1999 and lastly the Maldives joined 2010.       

Another regional platform- South Asia Sub-regional Economic Cooperation (SASEC) had been working hard towards regional economic growth. SASEC which comprises Bangladesh, Bhutan, India, the Maldives, Myanmar, Nepal and Sri Lanka launched the SASEC vision 2017-25 for the economic growth of the sub-region. Many agreements, which had been signed earlier, are awaiting to be executed shortly in the region. Bangladesh, Bhutan, India and Nepal Motor Vehicle Agreement (BBINMVA) is expected to significantly boost connectivity by road. Besides, around 2800-kilometre long Bangladesh-China-India-Myanmar (BCIM) economic corridor might spur economic activity to a great extent.

The border clash in Asia must be stopped for economic interest. India-Pakistan, India-China standoff in recent years has brought huge economic loss apart from hurting the long-lasting bilateral relations. The Coronavirus appears to the nations as a blessing, since the deadly virus taught the nations how to be united. It is high time to be close to each other. So, extensive measures as well as campaigns should be carried out from different platforms aiming to expedite regional growth.

Despite having a lot of limitations, the developing and least-developed countries in Asia have enormous strength to go forward. In view of the Covid-19 situation, there is no alternative but to warm up relations right now. Enhancing FDI and trade volume in the South Asia region is a must that requires huge support from regional platforms. In particular, member countries of SAARC and BIMSTEC should be determined to help the nations come together to battle any ills.

Md Mazadul Hoque is a banker and economic analyst. E-mail: mazadul1985@gmail.com

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