The failure to finalise free trade agreement (FTA) deals in South Asia even after a decade following the start of the discussions for it, as has been noted by Prime Minister Sheikh Hasina, raises questions about commitment of the leaders of the region. She has rightly raised the issue while focussing on how the leaders of BRICS (Brazil, Russia, India, China and South Africa)-BIMSTEC (The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) can otherwise identify mutual scope as well as synergies for cooperation.
The Prime Minister's observations were made at the BRICS-BIMSTEC Outreach Summit in Goa this week. All countries, she said, should have political will to implement the FTA. It will help enhance the intra-regional trade and boost BIMSTEC activities and programmes, she noted.
The Prime Minister was again to the point in her observations about the fate of the FTA deals. In fact, during this whole period, the leaders of the regional association or grouping in this part of the world did forget implementation of the most crucial issue that could have revolutionised trade and business activities in the region.
Not only BIMSTEC, many other regional trading blocs did also fail to move forward due mainly to lack of political will. The South Asian Free Trade Agreement (SAFTA) under the auspices of South Asian Association for Regional Cooperation (SAARC), for example, is in tatters now. Nearly three decades after the completion of negotiations for it, this trade bloc has largely become redundant, if not irrelevant.
After the recent Uri attack in Indian part of Kashmir allegedly by the Pakistan militia forces, the fate of the South Asian Association for Regional Countries (SAARC) is in doldrums. Its summit that was scheduled to be held in Islamabad, Pakistan, was abruptly postponed after India, Bangladesh, Bhutan, Nepal, Sri Lanka and Afghanistan refused to attend it. Besides security concerns, mistrust and misunderstanding among the member nations were the obvious reasons.
However, tangible gains so far achieved from the recent BRICS outreach summit is not that much encouraging either. The member-nations of BRICS have only agreed to fast-track the setting up of their own credit-rating agency to better cater to the needs of their developing economies, according to reports.
Such an agency was proposed to counter the existing ones that are mostly based in Western countries. The credit rating agencies in the West, as the allegations have it, function casually in rating the companies in the developing countries. Plans for such an agency follow the establishment of a BRICS bank 12 months ago with an initial capital of $100 billion, which has been seen as a challenge to Western-based institutions.
Meanwhile, the dream of an integrated South Asia has now become more elusive than before. Such integration, as has been said, requires the political will and firm commitment of governments in a way that it will not cause political tension, but will enhance and insulate regional economic cooperation.
However, many leaders of the region still believe that the SAARC could still play an important role in promoting business activities in the South Asia. The moot point is that the rivalry between the two big powers-India and Pakistan -- always hindered the smooth operations of this regional forum. No agreements of the forum could be fully implemented due to 'unbecoming' attitude of these two nations, unfortunately.
On the other hand, India is reportedly considering propping BIMSTEC up as a regional grouping in place of the SAARC. This is because it helps New Delhi to connect with South East Asia which is experiencing an annual economic growth of 6.5 per cent for a population of 1.5 billion and having a $2.3 trillion economy. Obviously this will largely be a major win-win situation for India.
Set up in 1997 with the main themes of cooperation over transport connectivity, economic development and energy, the BIMSTEC did also aim at halting rising tide of protectionism and anti-globalisation which is now otherwise posing a threat to the world economy's still fragile recovery.
The BRICS was formed in 2011 with the aim of using its members' growing economic and political influence to challenge Western 'hegemony'. These nations, with an estimated combined gross domestic product (GDP) of $16 trillion, set up their own bank in parallel to the Washington-based World Bank and the International Monetary Fund (IMF) and hold summits, rivalling the Group of Seven (G7) forum. The countries of the bloc, accounting for 53 per cent of world population, have been hit hard by falling global demand and lower commodity prices.
Meanwhile, most countries located in the BIMSTEC and other relevant sub-regional grouping in this part of the world, barring perhaps Bhutan, seek greater economic ties with China. For India, these countries are important for strategic and economic reasons because of their geographic locations.
The potential of the BIMSTEC region, in particular, is enormous. It is strategically located at the crossroads of South and South-east Asia. There are five areas of priorities of this association -- food security, water and sanitation, connectivity, energy development, and trade and human aspects of migration -- in terms of regional cooperation and integration.
As for Bangladesh, it is now the time to boost connectivity, regional cooperation in power sector and joint management of river basin. The most important one is the transport connectivity. On this count, it is critical to consider how an infrastructure, which will support trade and investment growth, can be created.
It these areas of cooperation are fully explored true to their potential, the dream for an establishing an integrated South Asia can be fulfilled. Before that, all countries of the region should open their minds to fulfil the aspirations of the millions of people under the two regional blocs.