Bhutan’s overall share of trade with BIMSTEC member countries was 84% in 2020
As the region is confronted with similar challenges from the Covid-19 pandemic, it calls for renewed focus and attention of the member states to provide the extra effort and collectively work towards early finalization of the Free Trade Area negotiation, said Economic Affairs Minister Loknath Sharma.
According to the minister, it is observed that the Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) has an immense economic base and resources with huge potential to pave the way for a quick economic recovery of the region.
Meanwhile, the BIMSTEC Summit also adopted the BIMSTEC Charter on Wednesday. With the theme, ‘BIMSTEC: Towards a Resilient Region, Prosperous Economies, Healthy Peoples’, it has been hoped that those goals could be achieved through collective actions of the leaders of the region.
Bhutan became a member of BIMSTEC in 2004. BIMSTEC was formed on June 6, 1997 to enhance economic cooperation between the countries of Southeast Asia and South Asia around the Bay of Bengal. It is a regional grouping that encompasses about 1.5bn people and a combined GDP of over USD 2.7 trillion.
Economic Affairs Minister Loknoth Sharma said that the framework agreement on BIMSTEC Free Trade Area (FTA) under negotiation among the members aims to stimulate trade within the region and investment among the parties and to attract outsiders’ participation in the BIMSTEC region.
“With a small domestic market, Bhutan must pursue regional market access and BIMSTEC’s FTA is expected to provide one of the means for ready and predictable market access in the region,” Lyonpo said.
Lyonpo shared that Bhutan’s overall share of trade with BIMSTEC member countries in 2020 was 84% with an import share of 80% and export share of 98%.
In addition, Lyonpo said that Bhutan’s trade remains highly concentrated in terms of destination, which is dominated by India and Bangladesh. Bhutan’s trade with these two countries is facilitated by the Free Trade Agreement with India and the Bilateral Trade Agreement with Bangladesh. India alone accounted for 77% of Bhutan’s export as well as an import in 2020.
Lyonpo Loknath Sharma emphasized that Bhutan remains positive about the opportunities for expansion of trade with other member countries through the collective efforts in promoting trade facilitation measures such as harmonization of customs and trade procedures, mutual recognition of standards and certificate of origin, and other trade promotion initiatives under the BIMSTEC framework.
“BIMSTEC also adopted sector-driven cooperation that focuses on seven sectors, namely trade, investment and development, environment and climate change, security, agriculture and food security, people-to-people contact, science, technology and innovation, and connectivity,” Lyonpo said.
Further, cooperation amongst member states in these sectors that were adopted in the 5th BIMSTEC Summit will spur the economic activities in the region as each sector has to be led by a member state and thereby enhances progress and economic activities in the region, Lyonpo said.
“To make this objective to fruition, member states need to collaborate and engage closely on the sectors outlined by the BIMSTEC. This will lead to economic activities in the region and thus contribute to the economic recovery of the region in the long term,” the minister added.
Prime Minister Dr Lotay Tshering, who attended the Summit virtually when the BIMSTEC Charter was adopted on Wednesday, shared that trade and investment are at the core of BIMSTEC cooperation. However, intra-regional trade has seen only negligible improvement since its inception.
Lyonchhen said that this minimal growth could also be attributed to bilateral engagements at the national or private sector level, and not necessarily through the BIMSTEC platform. Therefore, concrete steps and initiatives, be it big or small, must be taken beyond the formalities, to enhance trade in the region.
“I see a great opportunity for the region to exhibit an ideal and efficient trading system through the BIMSTEC platform. It need not necessarily be in terms of trade volume, but we have an opportunity to create an exemplary network,” Lyonchhen said.
President Gotabaya Rajapaksa, who chaired the 5th BIMSTEC Summit in Colombo, said that enhanced cooperation between member states would be necessary not only for economic recovery, but also for greater economic prosperity, better public health, and improved regional resilience in the long term.
President Rajapaksa said that the signing of the BIMSTEC Charter was a significant step towards increasing the organization’s role, not just within the region, but also as a driving force from Asia in global affairs.
He also highlighted the importance of trade and investments within the BIMSTEC region given its strategic location at the center of the Indian Ocean and also highlighted that the resources in the Bay of Bengal should be preserved and managed equally.
Meanwhile, all the seven leaders emphasized the need to accelerate BIMSTEC’s agenda on trade and investment and the need to ensure that the private sector and start-ups of the BIMSTEC countries work closer.
Adopting the BIMSTEC Master Plan for Transport Connectivity, the leaders reiterated the implementation of projects on maritime, transport cooperation, and road connectivity.
“This lays the foundation for the organization to think, act, and craft policies and programs from the perspective of a regional identity that transcends our national identities and boundaries – to think in terms of win-win solutions for all,” he said.
Tenzin Lekphell shared that it will also allow BIMSTEC to transact business with the rest of the world from the perspective of a regional grouping or organization – to think, speak, transact business and negotiate as a region as opposed to individual countries.
“We are starting now. But the rationalization of sectors and subsectors has just been completed, with each country taking the lead to coordinate cooperation in a particular sector,” he said.
He explained that the region is emerging from the COVID-19 pandemic which has taken a toll on all our economies. This would therefore be the ideal time now with the adoption of the Charter as well for member states to identify and prioritize areas for quick implementation.
He added that concluding the BIMSTEC’s FTA which has been under negotiation since 2004 would be an important achievement for BIMSTEC. This has the potential to strengthen regional supply chains while assisting businesses in the region to join global supply chains.
“Better pandemic preparedness with protocols for the region and enhancing public health infrastructure would be useful,” he said, adding that the Summit also highlighted the need to expedite energy connectivity, transport connectivity, digital connectivity, and people-to-people connectivity.
Secretary-General Tenzin Lekphell said the leaders also adopted the BIMSTEC Master Plan for Transport Connectivity.
“This is important because transport connectivity is a fundamental requirement for regional cooperation and integration. We now hope that the BIMSTEC member states would find ways and means to implement the connectivity projects,” he said.
He added that the transport corridors that are created also become effective economic corridors that will facilitate seamless transport and logistics for trade and ease barriers so that borders don’t become choke points, and investments in transport connectivity become productive.
Kinley Yonten from Thimphu