Progress of BBIN project

Context

• Bhutan government is to again place bill for ratification of BBIN initiative at its upper senate after the failed previous attempt.
• Bangladesh, India and Nepal have implemented the agreement but Bhutan is yet to accord its ratification of the agreement.

About:

Bangladesh, Bhutan, India and Nepal (BBIN) Motor Vehicle Project

• One of the major policy initiatives among national governments in Asia in recent years is directed towards developing sub-regional, regional and trans-regional corridors with the aim to further connect and integrate their economies. One such initiative is proposed Bangladesh, Bhutan, India and Nepal (BBIN) Motor Vehicle Project.
• Signed in 2015, it seeks to facilitate seamless trade and travel by improving rail and road connectivity in the region.
• It is the first sub-regional pact in South Asia with MVA as an umbrella agreement prepared along the European Union pattern.The South Asia Growth Quadrangle (SAGQ) is a precursor to the BBIN initiative
• It is currently pursued as a diplomatic priority from Indian side inan effort to showcase that Pakistan’s intransigence has been the main roadblock to regional integration in South Asia.
• The Asian Development Bank has been providing technical, advisory, and financial support to the BBIN MVA initiative as part of its assistance to the south Asia sub-regional economic cooperation (SASEC) programme, a projects-based economic cooperation initiative that brings together the BBIN countries, Maldives, Sri Lanka and more recently, Myanmar.
• Over five years, 30 road projects were to be implemented at a cost of $8 billion – to fill in, and upgrade, connectivity gaps.
• Several trial runs of the BBIN Motor Vehicle Agreement are underway. One of the recent one being Bangladesh-Nepal bus service through India.

Background

Formation:The BBIN project was conceived when SAARC at its 18th Summit in Kathmandu failed to sign a SAARC Motor Vehicles Agreement in November 2014—chiefly because of Pakistan. As an alternative, after the summit India re-packaged the agreement as BBIN forum together with otherthree countries of South Asia. It has kept the doorsopen for those outside to join when they felt comfortable to do so.

BBIN still is not projected as a breakaway group but a cohesive group, given the growing trade, economic and infrastructure connectivity that exist between these countries.

Need for the initiative from point of view of

Region-

• South Asia, with its 1.8 billion population, is only capable of conducting around 5% intraregional trade as connectivity remains a constant barrier.
• In addition to enhancing trade, connectivity can significantly improve people-to-people interaction leading to better understanding, greater toleranceand closer diplomatic relations in the region.
• It is likely to yield maximum dividends for the two Himalayan land-locked counties of Nepal and Bhutan.
• In strategical calculation, BBIN will promote regional and sub-regional cooperation which is essential to counter the compelling strategic challenge posed by China’s muscular geo-economic and geo-political interventions in Asia, particularly in India’s neighbourhood.

India-

• Its operationalisation will showcase a regional success story of India’s ‘neighbourhood first’ and ‘Act East’ policy.
• It also has a deeper strategic dimension, as it provides options for shorter trade routes between the eastern and the north-eastern parts of India. While granting transit to India has been controversial in Bangladesh in the bilateral context, Dhaka and New Delhi have managed to develop it under the cover of the BBIN framework.

Bhutan’sapprehensions with the initiative

• Bhutan, for decades, has pursued a policy of calibrated opening up to the world. But the pace of integration with the outside world has accelerated in the 21st century.
• Over the last 15 years, vehicle ownership in Bhutan has increased by 233%. At 91, it has the highest per capita vehicle ownershipamong SAARC countries. The road network has expanded exponentially – from just 1,500 kilometres to about 12,000 kilometres in 40 years.
• Upon ratification, due to the “principle of reciprocity” in the agreement, Bhutan will not be in a position to restrict vehicular movement from other countries. Currently, trucks from India are allowed to carry goods until Phuentsholing within a range of five kilometres. The goods are then lifted by local trucks and transported to the rest of the country.
• With traffic congestion becoming common occurrence in Bhutan, it fears that unrestricted vehicular movement through the country will bring forward concerns related to growth out-pacing infrastructure, and causing serious damage to Bhutan’s green cover.
• Transporters and truck and taxi operators in Bhutan have been vociferous opponents of the BBIN MVA, worried about the impact on their business if there was an influx of motor vehicles from other countries.

Challenges

Within BBIN agreement

• The MVA is a basic agreement with 16 articles, focusing only on the transport of cargo and passengers. However, such provisions are already present under the bilateral agreement with renewable permits. Further, the MVA also does not address regulatory bottlenecks.
• India already has bilateral trade and transit treaties with all the three countries. Many of these bilateral treaties are yet to be implemented successfully. It is still not clear whether BBIN-MVA supersedes these bilateral agreements or reinforces them.

With implementation

• Infrastructure: Sub-region is marred by dilapidated infrastructure. Many border crossing points do not have integrated check posts. Poor road conditions, the introduction of double-locking system on Nepalese trucks passing through Indian territory, technical issues related to customs and tariffs, etc., are likely to pose major challenges in this regard.If the border infrastructure does not improve, the corridor won’t work as evident from cases from South Africa and Mozambique which had identified several trade corridors, but they remain non-functional.
• Convincing Bhutan:In the past, the BBIN motor vehicles agreement (MVA) had a contentious passage through the national assembly. Now, the spotlight has moved to the national council. The council, comprising of 25 ‘independent’ members with no party affiliations, has never been a mere rubber stamp. 
• Security threats:Seamless transit increases chances of militants sneaking into India through rest of the nations. There is also concerns of undocumented migrations and related transnational crimes.

Way forward

As John F. Kennedy said, “Geography has made us neighbours. History has made us friends. Economics has made us partners, and necessity has made us allies.” While working on the BBIN initiative, these words are relevant.

In the past, when Bhutan failed to ratify the agreement due to opposition from its parliament, instead of halting progress, the country asked other stakeholders to move ahead and expressed hope of joining the initiative if and once it gets clearance from the parliament. Bhutan’s positive go-ahead not only demonstrated that it is possible to implement pragmatic plans even when all members are not able to participate at the same time.

BBIN agreement is gaining momentum again. On one hand, India-Bangladesh-Nepal will soon complete the internal approval processes for signing of the passenger protocol, with more trial runs for cargo vehicles planned in the future, and on the other hand, there is increased political will in Bhutan to get parliamentary approval on BBIN.  To sustain the momentum, Bhutan needs to be pursued using all diplomatic capital of member states. There are evidences from Luxembourg and Switzerland, the smaller countries in Europe that have gained greatly from regional economic integration. The same is true in East and South-East Asia.

This persuasion further needs to be supplemented through building and upgrading roads, railways and waterways infrastructure energy Grids, communications and air links to ensure smooth cross border flow of goods, services, capital, technology and people.

Looking at the bigger picture, currently, both China and India are pursuing regional initiatives on their own aimed to benefit all involved states. But these initiatives are competing rather than complimentary. If the BRI, BIMSTEC and BBIN were developed through coordination and consultation, led by the two Asian giants, the projects under the schemes could have been implemented more efficiently and faster. This would not only would be a win-win for the two giants but also enormously benefit smaller countries.

Practice Question:
Elaborate the concept of ‘sub-regionalism’. Discuss opportunities and challenges related to BBIN which aims to promote sub-regionalism in Asia.