New Economic Opportunity
The Bangladesh-China-India-Myanmar Economic Corridor can make Bangladesh a hub between South and Southeast Asia.
The BCIM economic corridor can make Bangladesh a hub between South and
In recent years, there has been much interest in exploring the historical links between the countries and peoples of South Asia and the people of China. There are calls to establish closer bonds between the Yunnan Province in South West China, northeast India, Bangladesh and Myanmar. Yunnan has a particular interest in reviving links with Assam as this could provide it direct access to Indian and western markets, which otherwise would involve a 7,000-km detour via Hong Kong and Singapore. There is an understanding that Myanmar and Bangladesh too could reap the economic benefits through mutual cooperation.
This growing interest has given birth to the proposed Bangladesh-ChinaIndia-Myanmar Economic Corridor (BCIMEC). It includes two fast-growing economies – India and China – and two developing economies – Bangladesh and Myanmar. The proposal received formal endorsement through the first inter-governmental study group meeting that took place in Kunming in December 2013.
The BCIMEC draws its inspiration from the concept of growth zones. The idea of growth zones is relatively new in development economics. It involves cooperation between three or more countries for the development of a geographically contiguous region consisting of a part or the whole of each of the participating countries. Growth zones bring together resources of the
member countries and provide a unique opportunity to use mutual cooperation in the areas of trade, investment, transport and communications in a planned way.
The major objective of this initiative is to promote economic cooperation among the countries of the sub-region through deeper integration of their economies. The corridor forms a thriving economic belt in the region to enhance people-topeople contact. Greater connectivity among Bangladesh, China, India and Myanmar, for example, could open new opportunities for trade and investment.
Viewed from the perspective of Bangladesh, the deepening of BCIM cooperation is of special interest as it can greatly benefit from the markets of China and India. As is known, Bangladesh has a significant bilateral trade deficit with both India and China. For example, Bangladesh's exports to India were $564.0 million as against imports of $4740 million in FY2013. The corresponding figures for China were $458.0 million and $6310.0 million. On the other hand, it is interesting to note that bilateral trade between India and China has been growing at an accelerated pace – from less than $5.0 billion in 2000 to $60.0 billion in 2010 and about $70.0 billion in 2012. The target is to take this figure to $100.0 billion by 2015. However, intra-regional trade in the BCIM region continues to remain at a low level.
Therefore, the politicians and government officials of Bangladesh are striving hard for a major breakthrough over the BCIM corridor as it can open doors to a transnational highway that will eventually turn Bangladesh into a hub between South and Southeast Asia. It will also help Bangladesh get the optimum returns from its proposed deep-sea port that could be used by all four countries. In addition to that, the country can benefit immensely from regional cooperation on energy, as it can purchase surplus electricity from Sikkim in India. Moreover, Bangladesh can increase trade with Myanmar, as the two countries share a border of 160 miles. It can also gain similar benefits from China and India.
However, it needs to be kept in mind that the BCIM countries are already members of a number of regional treaties. Bangladesh and India are members of the South Asian Free Trade Area, Bangladesh, Myanmar and India are members of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation and Bangladesh, India and China are members of the Asia-Pacific Trade Agreement. However, SAFTA is an offshoot of SAARC which itself is more or less moribund and has not lived up to its expectations. India and Pakistan, the two major members of SAARC, have not yet been able to liberalize mutual trade. The BIMSTEC, which is a recent initiative, is directed more towards combating terrorism, illicit drug smuggling and the challenges posed by climate change. The APTA is a much larger agreement signed in 1975 and includes countries such as Korea, Philippines, Nepal and Sri Lanka.
None of these agreements have contributed much to the economic improvement of the member countries because they do not address the issue of increasing trade from the logistical angle. Unless there are well-constructed highways and freeways to connect the countries of the region for quick movement of goods and personnel, all agreements on tariffs and trade will remain unprofitable. Therefore, regardless of these multilateral agreements, the need for an economic corridor remains a sine qua non for increasing trade and commerce in the sub-region.
This is why the BCIMEC is so important. The four member countries, with their diversified landscape, vast populations, heterogeneous industries, product specializations and coastal access, complement each other. Though the huge trade deficit can be a major area of concern, the high inter-regional trade potential among the four countries remains unrealized. As far as BCIM countries are concerned, increased market access, diversification and sophistication of products, harmonization of standards and fragmentation are the need of the hour.
India and China constitute 40 percent of the world’s population and present enormous trade potential and growth opportunities. China is India's top trading partner while India is among China's top-ten trading partners. India is striving to be included in the list of the top-five trading partners of China. On the other hand, trade has remained more or less static between India and Bangladesh. There is a trade surplus between India and Myanmar, but it needs to be further enhanced. Bangladesh's exports to China are 3.8 percent while imports are 32.8 percent. To the contrary, China's imports from Bangladesh were 0.02 percent. Bangladesh's exports to India are 0.01 percent while imports are14 percent.
There are historical pathways between Myanmar and the Yunnan province of China such as the Burma Road and the Ledo Road. China is investing heavily in developing ports in Myanmar to gain greater access to the Indian Ocean. Furthermore, Beijing is investing heavily in infrastructure, mining projects, hydropower dams and oil and gas pipelines to help feed southern China's growing energy needs.
Of late, Myanmar has also been looking towards India for developmental assistance. In fact, India's relationship with Myanmar has been amicable despite the military rule in Myanmar and notwithstanding Aung San Suu Kyi’s incarceration. Moreover, insurgents from the north-eastern region of India take refuge in Myanmar. Therefore, Myanmar’s cooperation is vital to India from the security point of view as well.
Given that the interests of India and China overlap in Myanmar, building the rail-road connection is high on the priority lists of both countries, especially for their landlocked provinces. Thus, the BCIMEC holds prospects of furthering both the political and economic ties among the nations of the region. Investment in building infrastructure will be a major issue and India and China will have to play a major role in this area.