Presentation on BIMSTEC and Regional Connectivity

1. BIMSTEC & Regional Connectivity
BIMSTEC Secretariat, Dhaka, 07 April 2017
S.M. NAZMUL HASAN
Director
BIMSTEC Secretariat, Dhaka, Bangladesh
dir_bd@bimstec.org
www.bimstec.org

2. An Overview of BIMSTEC
 Established as a Regional
Organization on 06 June, 1997.
 BIST-EC to BIMSTEC
• Economic bloc to Multi-Sectoral Org
• Myanmar joined on 22 Dec 1997
• Nepal and Bhutan joined in Feb 2004
 Bridge between SA and SEA
 A platform for intra-regional
cooperation between SAARC &
ASEAN

3. Overview/Contd.
 Member States- 07
 Some basic facts:
- 1.5 billion (22% of Global population)
- 3.64% of the world’s surface area
- Combined GDP- US$ 2.7 trillion
- Trade potential-US$ 59 billion
- Average Eco Growth -6.5%
- Intra-regional trade US$ 77 billion
(SAARC- US$ 44 billion, 2013)

4. Eastern Indian Ocean regional trade networks, c. 1300-1500
Adopted from © Ports-of-Trade, Maritime Diasporas, and Networks of
Trade and Cultural Integration in the Bay of Bengal Region of the Indian
Ocean: c. 1300-1500. Kenneth R. Hall. Journal of the Economic and
Social History of the Orient 53 (2010) 109-145

5. Objectives of BIMSTEC
 Promote free trade area
 Increase cross border connectivity,
investment and tourism
 Promote technical cooperation

6. BIMSTEC Areas of Cooperation
Sector
• Trade and Investment
• Technology
• Energy
• Transport and Communication
• Tourism
• Fisheries
• Agriculture
• Cultural Cooperation
• Environment and Disaster Management
• Public Health
• People-to-People Contact
• Poverty Alleviation
• Counter-Terrorism and Transnational Crime
• Climate Change
Lead Country
- Bangladesh
- Sri Lanka
- Myanmar
- India
- India
- Thailand
- Myanmar
- Bhutan
- India
- Thailand
- Thailand
- Nepal
- India
- Bangladesh

7. Establishment of Secretariat
MoA signed at the 3rd Summit in Nay Pyi Taw, Myanmar in
March 2014.
Secretariat started functioning in Dhaka, Bangladesh in
July 2014.
Hon’ble Prime Minister of Bangladesh inaugurated on 13
September 2015.
 Secretariat added momentum in its forward movement
through monitoring and follow up of important decisions
which required attention.

8. Institutional Arrangement & Structure
Summit:03
Ministerial Meetings: 14
SOM:17
PM-SOM:02
JWG/Sub-Group
BWG:152
Specialized Task Forces
TEMM, Cultural MM, Tourism MM,
Energy MM

9. Chairmanship of BIMSTEC
By rotation:
Bangladesh (1997-1999), (2005-2006)
India (2000), (2006-2008)
Myanmar (2001-2002), (2009-2014)
Sri Lanka (2002-2003)
Thailand (2004- 2005)
Nepal (2014-till date)

10. BIMSTEC’s Key Achievements
 Identified priorities on infrastructure and
connectivity in regions
Finalized the MoU on Trans Grid Connectivity.
 Operationalization of BIMSTEC Energy Centre in
Bangaluru
 BIMSTEC Free Trade Area [2004], progress is
being consciously made.
 Signed BIMSTEC Convention on Suppression of
terrorism [2009]
Finalized Convention on MLA in Criminal Matters
Conventions on Trafficking in Persons, TSP and
Extradition in-progress
BTILS

11. The Concept of Connectivity
 ‘flattening’ the world
 Cornerstone of regional economic cooperation and integration
 Enhanced Connectivity could result in:
- ASEAN and East Asia’s cumulative gain could be over 5% of GDP for
Cambodia, Myanmar, Thailand and Viet Nam and over 2% for India
[Economic Research Unit 2011].
 Improved connectivity along with trade facilitation can
significantly enhance regional trade by reducing transportation
time and trade costs

12. Connectivity Matters
 Global flows (trade, people, finance and data) add between $250
billion to $400 billion (15% to 25%) to global GDP growth each
year
 Most connected countries can expect to increase GDP growth
from flows up to 40% more than the least connected countries
 Connectedness Index 2012:
1. Germany 2. Hong Kong 3. USA 4. Singapore 5. UK
• India and Brazil jumped 15 and 16 ranks respectively because of
participation in global flows of services
Source: No Ordinary Disruption by R Dobbs et al, 2015
Global interconnectedness re-writing the rules of business and
inter-state relations

13. Factors Shaping Connectivity
7-Key drivers:
• Physical connectivity (Road, Rail, Air,
Maritime)
• Trade and transport connectivity (production
and distribution network, value chains etc.)
• Energy connectivity
• Significance of population dynamics
• Nurturing of knowledge-based society
• ICT advancements (digital connectivity)
• People-to-people exchanges

14. Opportunities for Bangladesh
 After full improvement of transport connectivity
between South and Southeast Asia [Source: ADB] :
• Real income growth 6.9% of the GDP
• Export growth 86%
• Annual income from duty free trade with
Myanmar and India US$ 390-688 million
 Connectivity with Myanmar (shipping and road)
will enhance bilateral trade from US$100 million
to US$ 500 million (target US$1 billion by 2020]

15. Challenges
 Financial Assistance
• Bangladesh needs US$ 14.27 billion to upgrade roads, rail
networks, ports and energy infrastructure for economic
integration.
• ADB – US$505 million, WB-US$ 1 billion, Others-US$ 5.9
billion [2016-18] for infrastructure projects.
 Technical Assistance
 Security
• BIMSTEC initiative [CTTC- CFT, Intelligence Sharing, LLEI,
Narcotic Drugs- Human Trafficking, Counter Radicalization,
NSA Forum]
 Renewed Political Commitment
• BIMSTEC initiative [Goa Summit]

16. BIMSTEC Transport Infrastructure and
Logistics Study (BTILS)
First raised at the 51st BWG Meeting in Bangkok, in July 2005.
BTILS was agreed and commissioned in February 2007,
Commencement in April 2007.
Study was completed in November 2007 and 12th BIMSTEC
Ministerial Meeting in December 2009 endorsed the Final Report
and its recommendations.
The BWG in 2011 requested ADB to conduct an update and
enhancement of the BTILS since there had been significant
changes (2007-2011)
ADB submitted the Draft Report on “Updating and Enhancement
of the BIMSTEC Infrastructure and Logistics Study” in July 2014
reflecting those changes and extending the planning timeframe
forward to 2020.

17. Sectors Identified by the BTILS
 The first BTILS report proposed to constitute the
following five Expert Groups to coordinate,
monitor and review the progress of
implementation of projects:
• Road development
• Railways
• Maritime transport
• Aviation &
• Trade facilitation and Logistics

18. Outcome of the updated BTILS Report
 Finalized Policies and Strategies for BTILS
 Prepared a Long List of projects (165) in the
area of connectivity including a short list (66) of
priority projects
 Finalized Monitoring and Follow up mechanism
for implementation of projects
 Finalized Institutional Mechanism for monitoring
 Proposed Work Plan for 2014-20

19. Recommended BTILS Policies and Strategies
2014-20
 Recommended Road Policies:
• Upgrading of border roads
• Upgrading of port access roads
• Enhancement of arterial links to borders and ports
• Coordination of road programmes

20. Recommended BTILS Policies and Strategies
2014-20/Contd.
 Recommended Road Transport Policies:
• Lack of through-transport
 Recommended Rail Policies:
• Rail connectivity to landlocked countries
• Enhanced rail connectivity between ports and
their hinterland.

21. Recommended BTILS Policies and Strategies
2014-20/Contd.
 Recommended Maritime Policies:
• Development of deeper water ports
• Container handling at BoB ports
 Inland waterways policies
 Aviation Policies:
• Expansion of Airport Capacity
• Development of freight service and facilities
• Development of support facilities for LCC operations

22. Recommended BTILS Policies and Strategies
2014-20/Contd.
 Trade facilitation policies:
• Development of border infrastructure
• Construction of ICDs
• Simplification and harmonization of import/export
documentation
• Further development of automated systems

23. ‘Soft’ infrastructure
 The number of ‘soft’ or non-physical structure projects
has increased in the enhanced BTILS list of projects
(trade and transport facilitation).
 The priority BIMSTEC soft infrastructure projects are
related to the following issues:
• Increased automation in customs through system
upgrades.
• Reductions in trade documentation
• Training of border personnel
• Development of national single windows
• Transport planning in Myanmar
• Port and road planning in Bangladesh

24. Shortlisted Projects under BTILS
Member Road Rail Maritime Aviation TF
Bangladesh 06 05 01 02 02
Bhutan 01 - 01 02
India 11 01 03 01 01
Myanmar 06 - 01 01 01
Nepal 03 01 - 01 -
Sri Lanka 02 - 02 01 -
Thailand 03 01 03 01 -

25. BTILS Long List
Member Road Rail Maritime Aviation TF Inland
Water
Bangladesh 18 16 05 05 03 -
Bhutan 04 - - 02 02 -
India 16 07 06 02 02 01
Myanmar 10 03 03 04 03 02
Nepal 12 01 0 03 01 -
Sri Lanka 06 04 04 03 02 -
Thailand 05 03 04 02 - -

26. BTILS Shortlisted Projects for Bangladesh
 Road: 06 Projects
• 4-laning Daudkandi–Chittagong highway (2014–2015)
• Construction of second Katchpur, Megna, Gomti bridges
(2014–2018)
• 4-laning Benapole to Jessore (2016–2020)
• 4-laning Jessore to Magura to Daulatdia (2016–2020)
• Construction of the Padma bridge (2015–2020)
• 4-laning Paturia to Nabinagar (2016–2020)

28. Shortlisted Projects: BD/Contd.
 Rail: 05 Projects
• Tongi–Bhairab Bazaar extra tracking (2014–2015)
• 2nd bridges at Bhairab Bazaar and Titas (2014–2016)
• 2 more lines Dhaka-Tongi & Tongi–Joydevpur (2014–
2015)
• Double tracking Laksham–Akhaura link (2016–2019)
• Bridge parallel to Bangabandhu Bridge (2016–2020)

29. Shortlisted Projects: BD/Contd.
 Maritime: 01 Project
• Karnafully Container Terminal at Chittagong 2014–2016
 Aviation: 02 Projects
• Upgrading of runway at Dhaka Airport 2015–2018
• Improvement of parking aprons at Dhaka Airport 2014
 Trade Facilitation: 02 Projects
• Second rail-connected ICD in Dhaka 2015–2018
• Developments at Benapole and Burimari 2014–2017

30. Digital Connectivity
 Higher rate and poor quality of international calls
 Higher cost of data usage
 Bilaterally Bhutan, India, Myanmar and Nepal are
engaged with Bangladesh for submarine cable
connectivity from Cox’s Bazar terminal
 Needs cross-border internet links through installing
optical fibre along with the regional and national
highways and rail tracks

31. Energy Connectivity in BIMSTEC
Thailand
Bay of Bengal
POWER•BIMSTEC
Energy Centre
in Bangaluru
•Renewable and
clean energy on
high demand

32. Energy Cooperation
 MoU on BIMSTEC Grid-interconnection
 Task Force on Trans-Power Exchange and Master Plan
Study after signing of MoU
 Import-export of natural gas among the member states
(frozen)
 Explore cooperation in hydropower & renewable
energy
 Energy Minister’s Meeting
 BIMSTEC Energy Centre in Bengaluru, India

34.  Member States submitted their comments on the Draft
Final Report of the BTILS and Draft ToR.
 The implementation of the recommendations of the
Study was discussed at the Inception Meeting of the
BTCWG, held in Bangkok (30-31 Aug, 2016).
 BTCWG finalized the ToR, adopted proposed Work
Plan, Implementation Measures and Monitoring
Framework.
Inception Meeting of the BTCWG

35. Leaders’ Retreat, India, 2016
Outcome Document (14 areas)
Agenda of Action (16 points)

36. Retreat Outcome Document
“Being convinced that the development of connectivity in
various forms and manifestations is the key to promote
regional integration, we express satisfaction at the continuing
efforts and initiatives to advance multi-modal physical
connectivity (air, rail, roads and waterways) in the BIMSTEC
region. We note with satisfaction the progress achieved in
implementation of the recommendations of the BIMSTEC
Transport Infrastructure and Logistics Study. We agree to
explore the possibility of having a BIMSTEC Motor Vehicle
Agreement.”

37. Leaders’ Agenda of Action
• Transport and Communication
i. Coastal Shipping Agreement
ii. Greater physical and economic
connectivity
iii. Master plan for BIMSTEC Connectivity
iv. Economical, Technical and Infrastructure
Cooperation

38. Leaders’ Agenda of Action/Contd.
• Trade and Investment
i. BIMSTEC Framework Agreement on
Transit, Transshipment and movement of
Vehicular Traffic
ii. BIMSTEC Trade Facilitation Agreement
iii. Fast track BIMSTEC FTA negotiations
iv. Discuss BIMSTEC Mutual Assistance on
Customs Matters

39. Key BIMSTEC Trade Routes
In the context of surface transport, there are 3
dominant existing/potential BIMSTEC trade routes:
 Route 1: Kolkata – Siliguri – Guwahati – Imphal -
Moreh/Tamu – Mandalay – Bago - Myawaddy/Mae
Sot – Tak – Bangkok - Laem Chabang;
 Route 2: Kolkata - Petrapole/Benapole – Jessore -
Dhaka - Chittagong; and
 Route 3: Kolkata – Raxaul/Birgunj - Kathmandu

40. BIMSTEC Trade Routes

41. The way forward
 Trade facilitation
 Explore new source of financing
 BIMSTEC-MVA
 Enhanced Rail Connectivity
 Coastal Shipping Agreement
 P2P Contact (Visa, Airfare and Foreign Exchange)
 Outward Foreign Direct Investment (OFDI)
 BIMSTEC-FTA
 Enhanced Institutional Connectivity

42. Thank You