New chapter written on regional connectivity
The Bangladesh, Bhutan, India and Nepal (BBIN) Motor Vehicle Agreement for the Regulation of Passenger, Personal and Cargo Vehicular Traffic amongst BBIN, approved by the Union Cabinet on Wednesday, can be a game-changer for the region. It is also an important indication of India's readiness to play a more determined leadership role in its neighbourhood where it is a major power. South Asia is one of the least integrated regions of the world, and improving road connectivity is crucial to developing its full potential, especially in the economic sector.
Even though intra-regional trade has improved in recent years, from about two per cent of the total trade in 1970s to about five per cent now, it is still abysmally low. Forget about the European Union, even neighbouring Southeast Asia does better intra-regional business — more than a quarter of its total trade happens in the neighbourhood.
This is despite the fact that the Association of South-East Asian Nations was also plagued by some of the same problems that have hampered the effectiveness of the South Asian Association for Regional Cooperation, such as mistrust and acrimony among member-states and poverty and poor infrastructure in the transport, communication and business sectors. But Asean has done a better job of firming up at least its commercial linkages.
Hopefully, the BBIN grouping will be able to do the same. For this, the motor vehicle pact alone will not be enough — a liberalised visa regime and efforts to improve synergy between markets in different countries (such as the pact to bring in sync India and Bangladesh’s product standardisation systems signed during the recent prime ministerial visit to Dhaka) are just some of the other steps that will have to be taken. Still, a good place to start is the re-building of traditional trade routes that were disrupted in 1947. For example, with the carving out of East Pakistan/Bangladesh, road and rail links between India's ‘mainland' and the North-East became tenuous, and the region has since suffered decades of isolation.
The motor vehicle deal, which is to be signed at the BBIN Transport Ministers’ meeting in Thimpu, Bhutan, on June 15, will also improve bilateral trade ties between India’s eastern neighbours. Currently, whatever little trade happens in this sector, is anchored to India.
For instance, Bangladesh imports much from India and has a roaring garment export arrangement with the West, but shares no significant trade ties with Bhutan or Nepal. Another important aspect of the BBIN motor vehicle pact in particular, and increased sub-regional trade in general, is the boost that small and medium enterprises will receive. One only needs to look at the success of the borderhaats along the India-Bangladesh line (in West Bengal and Tripura) to understand the scope of cooperation that lies ahead.
Finally, as the BBIN motor vehicle pact moves towards formalisation, one hopes that it serves as a lesson for Pakistan. The BBIN pact was conceived as a Saarc project that included Pakistan and Afghanistan, but Islamabad, having already signed a similar bilateral deal with Afghanistan, refused to give the green light to the larger regional project at the Kathmandu summit last year. Consequently, India pushed ahead without Pakistan.