New Delhi, Jan 11 : The future of regional cooperation in South Asia is currently at a pivotal juncture, shaped by its historical context. While initiatives such as the South Asian Association for Regional Cooperation (SAARC) have largely failed to achieve the anticipated pan-regional free trade, another important forum, the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), risks facing a similar fate unless significant intervention occurs from its largest member states, namely India and Bangladesh.

These concerns have been exacerbated by the recent political upheaval in Bangladesh in August 2024, which followed a prolonged student-led mass movement that resulted in the removal of long-serving Prime Minister Sheikh Hasina.

This development has been widely interpreted as indicative of a major shift in Bangladesh's domestic and foreign policy, particularly regarding its bilateral relations with India.

As Bangladesh navigates this new political landscape within the broader regional geopolitical context, it becomes essential for the country's new leadership -- regardless of its interim status -- to leverage Dhaka's strategic importance and continue contributing to regional cooperation grounded in mutual respect.

Despite the destabilising effects of the political upheaval in August 2024 and the external pressures on Dhaka to adjust its regional strategic relationships, potentially leading to a distancing from New Delhi, the Indo-Bangla relationship seems to be weathering these challenges with a notable degree of resilience.

As highlighted by Bangladesh's Chief of Army Staff General Waker-Uz-Zaman, this relationship is characterised by a "give-and-take" dynamic, where Dhaka's dependence on India aligns with New Delhi's vested interests in maintaining stability in Bangladesh, alongside a growing convergence of their regional and global strategic objectives.

Furthermore, the ongoing alignment of mutual interests, particularly in promoting regional economic integration through frameworks such as BIMSTEC and SAARC, continues to strengthen this bilateral engagement.

These platforms not only have the potential to spark an economic revival across the region but also promise transformative socio-economic benefits, improving the livelihoods of millions in both nations.

Thus, this bilateralism emerges as a fundamental pillar for regional stability and prosperity, emphasising its vital role in shaping the geopolitical and economic landscape of South Asia.

BIMSTEC, or the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, is an interregional cooperative framework involving seven countries from South Asia and Southeast Asia.

Originally conceived as BIST-EC (Bangladesh, India, Sri Lanka, and Thailand Economic Cooperation) in 1997, the initiative aimed to enhance intra-regional trade, investment, and economic integration within the Bay of Bengal area.

Following the later inclusion of Myanmar, Bhutan, and Nepal, the organisation was officially renamed BIMSTEC during its inaugural summit in 2004. The primary goal of this grouping is to foster economic collaboration among its member states while addressing various sectors of mutual interest.

As of 2023, the BIMSTEC member nations collectively have a population exceeding 1.73 billion and a combined gross domestic product (GDP) of around $5.2 trillion.

Within this framework, India and Bangladesh, ranked as the first and third largest economies based on nominal GDP, play crucial roles.

Their economic dominance provides them with a level of strategic autonomy that facilitates the advancement of regional cooperation, allowing these countries to engage in multilateral initiatives with relative independence from external influences.

This dynamic highlights BIMSTEC's potential as a platform for establishing a restructured, regionally focused economic framework in the Bay of Bengal.

Major ports of BIMSTEC countries in the Bay of Bengal

The establishment of a permanent secretariat in Dhaka in 2014 marked a significant institutionalisation of BIMSTEC's operational framework, aimed at enhancing technical and economic collaboration among its member states.

Initially, the organisation delineated 14 priority sectors for cooperation, each overseen by a designated lead country to ensure focused management and effective execution. India assumed leadership in strategic domains such as Transport, Tourism, and Counter-Terrorism, while Bangladesh took the initiative in Trade and Investment.

However, recognizing the necessity for a more streamlined and outcome-oriented approach, the 2022 Colombo Summit'conducted virtually in response to the COVID-19 pandemic'embarked on a comprehensive restructuring of these cooperation sectors.

The summit aimed to 'reduce, reconstitute, and construct' the cooperation framework by consolidating the original 14 sectors into seven core areas, with each member state entrusted with leadership over one sector.

Under this reconfiguration, Bangladesh now leads initiatives in Trade, Investment, and Development, whereas India has been assigned responsibility for Security and Energy Cooperation sectors.

The strategic positioning of the BIMSTEC member countries endows the bloc with considerable potential to facilitate economic integration through enhanced terrestrial and maritime connectivity.

For both India and Bangladesh, active engagement within this regional framework represents a significant opportunity to realise substantial economic gains.

For India, which boasts an annual trade volume exceeding $1,100 billion, BIMSTEC serves as a conduit to access the emerging markets of Southeast Asia, thereby aligning with its broader 'Act East Policy' and its aspirations to expand its economy to a $5 trillion threshold in the forthcoming years.

Furthermore, this platform provides a vital avenue for promoting the development of India's eastern and northeastern regions, which have historically been perceived as economically underutilised.

BIMSTEC's connectivity initiatives provide Bangladesh, which has an annual trade volume exceeding $120 billion as of 2023, with a new cost-effective mechanism to diversify its export portfolio by accessing the Southeast Asian and broader ASEAN markets.

This is particularly crucial for the country's rapidly growing ready-made garment sector, which consistently seeks to expand its market reach beyond traditional western partners.

Consequently, BIMSTEC's integrative potential can significantly enhance Bangladesh's economic presence within regional and global value chains, thereby reinforcing its role as a key player in the economic landscape of South Asia.

Despite the significant economic potential inherent in the BIMSTEC framework, the failure to operationalise the 2004 Framework Agreement on Free Trade has considerably impeded intra-bloc economic integration over the years.

The Agreement, which is ambitious in scope, sought to establish 'effective trade and investment facilitating measures, including the simplification of customs procedures and the development of mutual recognition arrangements, among others".

However, notwithstanding this comprehensive mandate, member states have been unable to achieve a consensus on the implementation of the Free Trade Agreement (FTA), thereby constraining the bloc's economic synergy.

This stagnation is reflected in the asymmetry of trade flows within the bloc.

For example, while annual trade between India and Bangladesh, as well as between India and Thailand, was recorded at over $15.83 billion and $17.29 billion respectively in 2023, trade among other member states has remained suboptimal.

This underscores the imperative for BIMSTEC member countries to re-engage in substantive negotiations, resolve outstanding issues, and operationalise the FTA to unlock its economic potential and promote deeper economic interdependence and shared prosperity throughout the Bay of Bengal region.

In the context of stagnation within regional cooperation frameworks, the recent advocacy by Bangladesh's Chief Advisor, Professor Muhammad Yunus, for the revitalisation of regional blocs such as SAARC presents a timely impetus for recalibration.

However, it would be judicious for Dhaka and New Delhi to prioritise the revitalisation of BIMSTEC, given its relatively lower friction points among member states, as a precursor to re-engaging with more contentious organisations like SAARC.

Despite the prevailing strains in India-Bangladesh relations, enhanced bilateral engagement between these two nations could exemplify to other BIMSTEC member states the feasibility of regional cooperation aimed at collective benefit and socioeconomic development.

Such a strategy could motivate other member states to strengthen bilateral trade relationships, thereby fostering an enabling environment for the eventual operationalisation of the long-stalled Free Trade Agreement within the BIMSTEC framework.

Nevertheless, the onus rests with India and Bangladesh to navigate the current tensions, which are exacerbated by external factors and actors, and to determine whether to permit these disruptions to impede progress or to reaffirm their commitment to advancing cooperation both bilaterally and multilaterally.

BIMSTEC, with its established institutional framework and shared regional aspirations, offers a viable platform for initiating this renewed trajectory of collaboration.

/IANS