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Commercial News > Belt and Road Initiative to change landscape of economic cooperation in South Asia
Belt and Road Initiative to change landscape of economic cooperation in South Asia
2016-10-13

  BEIJING - The China-proposed Belt and Road Initiative, of which the Bangladesh-China-India-Myanmar (BCIM) Economic Corridor forms an important part, is expected to change thelandscape of economic cooperation in South Asia.

  The initiative comprising the Silk Road Economic Belt and the 21st Century Maritime Silk Roadproposed by Chinese President Xi Jinping in 2013 brings together countries in Asia, Europe andAfrica via land and maritime networks.

  Within the framework of the initiative, the BCIM Economic Corridor will connect India's northeast,Bangladesh, Myanmar and southwest China's Yunnan Province through a network of roads,railways, waterways, and airways. It seeks to improve connectivity, infrastructure, energyresources, agriculture, trade and investment in South Asia.

  Opportunities for South Asia

  Covering 9 percent of the global landmass, the corridor was first discussed in 1999 byspecialists and academics at a meeting in Kunming, Yunnan.

  The corridor initiative gained momentum during Chinese Premier Li Keqiang's visit to India inMay 2013.

  According to an article by Pravakar Sahoo and Abhirup Bhunia from India's Institute of EconomicGrowth, the BCIM corridor will allow all four countries to exploit complementarity in trade.

  Myanmar is a primary goods exporter and has abundant cheap labor. India has positioned itselfas a leading services exporter. China is the largest manufacturing exporter in the world; andBangladesh, like many other South Asian countries, engages in both services export and low-end manufactured goods, the academics said.

  Now under the Belt and Road Initiative, projects such as the BCIM Economic Corridor and theChina-Pakistan Economic Corridor have greatly promoted economic development in relatedcountries and injected dynamism into regional cooperation in South Asia, Chinese ViceCommerce Minister Gao Yan said.

  In recent years, China and South Asian countries have conducted cooperation in such areas astrade, investment, infrastructure and services, Gao said.

  By the end of 2015, direct investment from China in South Asian countries hit $12.29 billion andinvestment from South Asian countries in China reached $890 million, Gao said, adding thatChina has become the largest source of foreign investment for some South Asian countries.

  Chinese official data showed that trade between China and member countries of the SouthAsian Association of Regional Cooperation -- Afghanistan, Bangladesh, Bhutan, India, Maldives,Nepal, Pakistan, Sri Lanka -- hit $111.22 billion in 2015, up 4.9 percent from a year before.

  "The BCIM Economic Corridor, since it was first officially put forward by Premier Li in 2013, hasreceived positive response from India, Bangladesh and Myanmar," Chai Xi, former Chineseambassador to Bangladesh, told a forum in Kunming.

  Bangladesh's Information Minister Hasanul Huq Inu, in an exclusive interview with Xinhua in May,appreciated the Chinese leadership for proposing development initiatives such as the Belt andRoad Initiative and the BCIM Economic Corridor.

  "I think that this old Silk Road is being revived properly. It has $132-billion potential. So investingdollars in the Silk Road and reconnecting all the nations which were connected is great economicplanning," said Inu.

  The Belt and Road Initiative involves 26 countries, which represent nearly 30 percent of the globalgross domestic product and 63 percent of the global population.

  MS Siddiqui, professor at Dhaka's Daffodil International University, told Xinhua recently that theinitiative will bring opportunities to Bangladesh.

  "Bangladesh is in a strategic location between China, India and ASEAN (Association ofSoutheast Asian Nations) countries and hence is well placed to be a trading and manufacturinghub," Siddiqui said. "Bangladesh needs such increased connectivity with other economies in thisregion and China's Belt and Road Initiative will see the realization of this economic area."

  The BCIM Economic Corridor will increase trade, transport, tourism and investment forBangladesh, due to its strategic location between India and China, he said.

  "The availability and affordability of workers and its geographical location are important aspectsof Bangladesh's developing into regional hub, yet it urgently needs a port, and relatedinfrastructure to boost connectivity with other nations through ocean and land routes. The Belt andRoad Initiative will open up numerous opportunities for Bangladesh," said Siddiqui.

  Challenges ahead

  The BCIM Economic Corridor working group has held two meetings and issued a series ofdeliberations and joint statements, Chai said, adding that the governments and leaders of thefour countries have shown "surprisingly" strong willingness to build the corridor.

  However, as a long-term complicated and arduous systematic program, the BCIM EconomicCorridor faces many risks and challenges.

  "The construction of the corridor is slower than expected," Chai said, adding that the differenceof the four countries in national systems, policy-making mechanisms and procedures hasdragged to some extent the advance of the corridor.

  Besides, due to the lack of capital and experience, the corridor's construction has not been ableto enter a substantial stage, Chai said.

  Ren Jia, director of Yunnan Academy of Social Sciences, listed blocked road, laggardinfrastructure, ineffective policy, poor trade flow and lack of capital and communication as themain reasons that have impeded the construction of the corridor.

  "While there are free trade arrangements between China and Myanmar and Bangladesh, Indiahas adopted a positive and prudent attitude in building the economic corridor," said Liu Xiaoxue,a researcher with Chinese Academy of Social Sciences.

  In fact, for countries like India, the Belt and Road Initiative is "highly important as its primaryobjective is to create win-win situation to achieve economic prosperity through enhancing roadand rail connectivity," Bishnu Hari Nepal, a former Nepalese ambassador to Japan, told aseminar in Kathmandu in May.

  "India should work closely with China to collaborate and push forward the Belt and Road Initiativeinstead of being skeptical. This initiative should be taken as a new opportunity for the South Asiaregion," he said.

  Shreedhar Gautam, secretary general of the Council of World Affairs, a think tank in Nepal, alsourged India to join hands with China, saying that this initiative should not be taken as strategictool of China to exert influence in the region.

 

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