High time for a Framework Agreement to further BIMSTEC connectivity

ARTNET, April 20, 2022

By Bipul Chatterjee and Suresh Prasad Singh

At the recently concluded Colombo Summit, the leaders of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) group of countries adopted a Master Plan for Transport Connectivity. Now, we need a framework for its operationalisation.

An important element in building a regional community is trust. Initiatives towards connectivity promotion do strengthen trust and thus can lead to increased trade and investment as well as tourism and other people-to-people contacts.

The adoption of the BIMSTEC Master Plan for Transport Connectivity, along with the BIMSTEC Charter, at its 5th Summit (dubbed Colombo Summit) held on 30th March 2022 in Sri Lanka is such trust building initiative among seven Member States of the BIMSTEC grouping Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand.

This Master Plan is a comprehensive 10-year strategy with an action plan (2018-2028), with 2018 as a base year when this work started, to promote an all-inclusive transport connectivity and trade, encompassing 267 projects. Out of them, there are 141 ongoing and planned flagship projects covering roads, railways, maritime and inland waterways, civil aviation and multi-modal infrastructure. The estimated cost of these flagship projects was US$ 47.8 billion in 2018.

Transport connectivity is one of the seven reconstituted priority sectors under the BIMSTEC Charter. Each of these sectors is led by one member state, with Thailand leading the transport sector. Other priority sectors are Trade, Investment and Development led by Bangladesh; Environment and Climate Change led by Bhutan; Security, including energy security, led by India; Agriculture and Food Security led by Myanmar; People-to-People Contact led by Nepal; and Science, Technology and Innovation led by Sri Lanka.

Road upgradation in border areas

Many of these projects are to improve connectivity in border areas by building/upgrading roads. As per this Master Plan, there are 55 flagship road projects with an estimated cost of around US$ 30 billion, which will directly or indirectly support regional connectivity. They are supported by the national governments and multilateral agencies such as the ADB and the Japan International Cooperation Agency (JICA). Many of them are either completed or scheduled for completion by 2025. They are to enhance arterial links to borders and ports, upgradation of roads, and upgradation of port access to roads, among other purposes.

For instance, the Master Plan contains 33 projects to upgrade roads in border areas. The estimated cost is over US$ 9.2 billion. India with 24 such projects, having relevance to BIMSTEC intraregional connectivity, accounts for a majority of them, followed by Nepal (4 projects) and Bangladesh (3 projects). Implementation of these projects will significantly improve India’s connectivity with Bangladesh, Bhutan, Myanmar and Nepal.

Optimising benefits from transport connectivity

Optimal use of such investments hinges on possible re-arrangements to facilitate cross-border movement of vehicles among the Member States. That could be in the form of a Motor Vehicles Agreement. The Master Plan distinctly mentions that for the overall benefits of the Member States, having through-transport agreements between and among them is necessary.

In recognition of this, BIMSTEC Leaders during the BIMSTEC Leaders Retreat in 2016 had stressed on the need for multi-modal physical connectivity. They had also agreed to explore the possibility for a Motor Vehicles Agreement.

Some progress in this direction was made during the BIMSTEC Senior Officials meeting in Kathmandu in February 2017, wherein the member countries endorsed creation of a new BIMSTEC Working Group to negotiate and finalise a Framework Agreement on Transit, Trans-shipment, and Movement of Vehicular Traffic (Motor Vehicles Agreement).

Furthermore, in August 2017, during the BIMSTEC Ministerial Meeting, it was agreed to expedite the negotiation and conclusion of this proposed Framework Agreement. With the adoption of the BIMSTEC Master Plan for Transport Connectivity in 2022 it should be natural to expect a stronger momentum towards delivering a Framework Agreement as mentioned above.

Going forward

To extract full benefits from such complex projects requires a holistic approach to their implementation. This points directly to the importance of the proposed Framework Agreement. In this regard, similar agreements such as the Association of Southeast Asian Nations (ASEAN) Framework Agreement on Multimodal Transport (2005) could act as a useful model.

The combined size of the BIMSTEC economies is US$ 4 trillion and is one of the fastest growing subregions in the world. Also, the group is uniquely placed as it comprises economies from South and Southeast Asia, building a bridge between these two Asian regions. A better connectivity through multi-modal means and institutional approach (that is, the Framework Agreement) will help it to not only recover faster from pandemic-induced supply- and demand-side shocks but also it will make such a recovery more resilient and sustainable.

*Executive Director and Fellow, CUTS International, respectively. CUTS International is a global public policy think- and action-tank on trade, regulation and governance

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