BCIM-EC could be a game changer for Bangladesh

Bangladesh, China, India and Myanmar-Economic Corridor (BCIM-EC) is a sub-regional grouping that seeks to strengthen friendly cooperation among the four member nations and linking South Asia with Southeast and East Asia by establishing multimodal connectivity and harnessing economic complementaries. The four countries have agreed to build road, rail, air and waterways connecting each other, lay power transmission and oil pipelines along the corridor, promote trade and investment, alleviate poverty and enhance people-to-people contacts.

The 2,800 km-long proposed economic corridor would run from Kunming, capital of China's southwestern Yunnan province, to Kolkata through Mandalay and Dhaka. The Chinese and South Asian leaders are trying to revive the famous "Southern Silk Road" used by the merchants centuries ago.

Like other member nations, Bangladesh has shown keen interest in the BCIM initiative for greater regional connectivity, trade and economic cooperation. The country's policy makers have been engaged in consultations with business leaders, intelligentsia and various groups in evaluating the prospects and potential areas of cooperation under the BCIM. The three BCIM Regional Forums hosted by Centre for Policy Dialogue had been held in Bangladesh in 2002, 2007 and 2012. All these forums were attended by ministers and policy makers who gradually realised the vast scope of such a sub-regional cooperation and the country's future prospects in it.

Sheikh Hasina-led Awami League (AL) government has attached priority to the proposed economic corridor, which was an electoral pledge of the party. The AL government has been actively participating in the dialogues to push forward the BCIM initiative. On October 13, 2013, an eight-member delegation led by Deputy Director of the National Development and Reform of China, Lin Dajian, visited Dhaka and held talks with Foreign Secretary M Shahidul Huq and other key government functionaries. The Chinese side handed over a draft of the proposed regional cooperation framework to Bangladeshi officials.

The issues pertaining to BCIM were further discussed during the then Foreign Minister Dipu Moni's three day visit to Beijing from October 19 to 22, 2013. China's Foreign Minister Wang Yi reiterated that his country regards Bangladesh as a natural partner and important for its opening up westward. Dipu Moni also reaffirmed Bangladesh's foreign policy priority to build road and rail connectivity between Chittagong and Kunming through Myanmar. Again in March 2014, Yunnan provincial government delegation led by Governor Li Jiheng visited Dhaka and held talks with Bangladesh government officials to enhance exchanges and cooperation, business contacts and jointly promote the economic corridor.

There is also a historical dimension to the Bangladesh-China relations. Both the nations maintained commercial and socio-cultural ties in the past. Studies have pointed out that the "Southern Silk Road" originated from the Chinese province of Shu, today's Chengdu Plain, and then ran southwards through Kunming, Dali, Baoshan and Ruili of Yunnan province and entered Myanmar and then eastern Bengal—present Bangladesh.

Dhaka is fully aware that Bangladesh's central location in the BCIM region has the potential of turning the country into a focal point of trade, transit and connectivity. A concept paper prepared by the Ministry of Foreign Affairs observed: "BCIM is a land bridge between South-Southeast Asia/East Asia and Southeast-Central Asia. From geo-political point of view, Bangladesh lies at the heart of BCIM region". The concept paper further noted that China's Yunnan province is nearer to Chittagong than Shanghai or Beijing. Bangladesh's foreign, commerce, transport and communication ministries have reportedly been working together to realise the goals envisioned in the BCIM-EC.

The building of multimodal transport networks, special economic zones, industrial parks, export processing zones, business hubs and development of various other economic activities along the corridor would rejuvenate Bangladesh's economy to a large extent. The major objective of the BCIM is to enhance regional connectivity and economic cooperation between China's landlocked and underdeveloped southwestern parts and India's North Eastern region. The seven North Eastern states lack direct access to sea routes and Bangladesh could provide transit facilities to them for using the Chittagong port.

Similarly, China's Yunnan province is a remote region and trade is conducted through South China Sea, which is nearly 2000 km away. Both China and India could use the Chittagong port if seamless multimodal connectivity is developed. The up gradation of physical infrastructure could make Bangladesh a transit point between India and China. In such a scenario, Bangladesh will earn considerable revenue in the form of transit fees adding fillip to its economy. The schemes envisaged under the BCIM would also enable Bangladesh to expand cooperation in key areas and improve cross-border connectivity with neighbouring Myanmar.

Bangladesh stands to gain immensely from the integration of its market with the fastest growing economies of China, India and Association of Southeast Asian Nations (ASEAN). A recent Asian Development Bank (ADB) report says Bangladesh's real income gains will be 6.9% of the Gross Domestic Product (GDP) and export will grow by 86% after the transport connectivity between South and Southeast Asia is fully improved. According to ADB's estimate, Bangladesh will have to spend $ 14.268 billion to up grade its roads, railway networks, ports and energy infrastructure for economic integration.

Bangladesh needs international technical and financial assistance to develop its transport infrastructure. In major developments, the ADB has agreed to invest $ 505 million for railway link and the World Bank has expressed its willingness to provide $ 1 billion towards infrastructure development between Bangladesh, Bhutan, Nepal and India. Reports suggest that the country is also set to receive $ 5.9 billion during 2016-18 for its infrastructure projects.

The up gradation of cross-border connectivity is likely to enhance Bangladesh's exports to Myanmar and India, especially North East. Reports say Bangladesh will earn Tk 3,120 crore annually from duty free trade once the economic corridor becomes fully operational. This can further be increased to Tk 5,500 crore. Experts maintain that among the four member nations, Bangladesh may emerge as the second profit making country from the BCIM after India. Civil Aviation Minister Rashed Khan Menon has said that the BCIM is set to play a big role in Bangladesh's economic development by increasing the country's market access and promoting social development through connectivity along the corridor.

Bangladesh has an added advantage of exporting its products in the markets of China and India in terms of price. Bangladeshi goods are expected to well in these markets as the country's labour cost is much lower than China and India. Moreover, Bangladesh's access to the markets of two rising powers China and India could transform the country into a centre of foreign direct investment (FDI). While China is keen to invest in a number of key sectors, including energy, power, agriculture, industry and transport; India can invest in areas such as electrical machinery and equipment, vegetable, agro processing, automobiles and textiles.

Bangladesh could gain from the BCIM in other fields too. Electricity-starved Bangladesh will hugely benefit from the power cooperation plans incorporated in the BCIM agenda. The country could procure power from Nepal, Bhutan and India's Sikkim by constructing additional transmission lines. It may also consider importing power from neighbouring Myanmar's proposed hydropower plant in Rakhine state.

Furthermore, the BCIM tourism circle scheme is likely to add impetus to Bangladesh's economy. With the improvement of cross-border connectivity, visitors from India and China could make Bangladesh as their tourist destination particularly in places like Sunderbans and Cox's Bazar. The development of tourism sector in Bangladesh will significantly contribute towards generating revenue and jobs for local youths. Thus, looking from all perspectives, it appears that the BCIM initiative has the potential of taking Bangladesh's economy to a new height. Commerce Minister Tofael Ahmed is of the opinion that the BCIM-EC would help implement the AL government's development goal of making Bangladesh a middle income country by 2021.

Bangladesh is currently the chairman of the BCIM Business Forum and the country's business and industry leaders have shown a great deal of interest for expanding their business in the BCIM region. The International Chamber of Commerce-Bangladesh (ICCB) said the country's geographical location between three key regions of Asia—South, Southeast and East, provides it a unique opportunity to gain from cross-border movement of goods and services, and investment flows. In order to make Bangladesh a regional hub of trade, transit and connectivity, the ICCB urged the country's policy makers to address three issues—development of a deep sea port, greater energy cooperation with Bhutan, Nepal, India and Myanmar, and establishment of more economic or industrial zones.

Disheartened by the slow progress of South Asian Association for Regional Cooperation (SAARC) and South Asia Free Trade Area (SAFTA), Bangladesh is presently looking towards east to promote its trade and economic interests. This new policy thrust is aimed at integrating Bangladesh with the thriving economies of ASEAN and East Asia. Bangladesh's foreign policy makers seek to diversify the country's economic relations. Dhaka considers greater regional cooperation key to stability and prosperity in the future. Active participation in regional forum like BCIM is a step in that direction.