BIMSTEC must adapt to global shifts and future challenges

The sixth Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) summit will be held in Bangkok, Thailand, from April 2-4. The New World Order, which denotes an evolving geopolitical landscape characterised by shifting power dynamics, technological advancements, and interconnectedness, necessitates BIMSTEC to adopt a novel approach to regional cooperation.

One major challenge is the escalation of uncertainty, a notable trend in the global trade regime. The undermining of multilateralism poses a significant threat to the WTO’s rule-based system, creating an unpredictable environment for international trade. Additionally, geopolitical realignments, such as the US-China and US-Canada trade wars, alongside Trump’s reciprocal tariff, highlight the shifting dynamics and rivalries in global trade. These developments drive trade diversification and regionalisation, exemplified by the “China+1” strategy.

Protectionism is on the rise, too, with tariffs, non-tariff measures, and trade restrictions becoming increasingly prevalent. Supply chain innovation is also transforming global trade as automation, AI, and ethical supply chains gain prominence. The rise of the Global South signifies another important trend, with India, ASEAN, and Africa assuming an increasingly vital role in the global economy.

Furthermore, digital commerce is experiencing substantial growth, driven by the expansion of e-commerce, blockchain technology, and AI-enabled logistics. Additionally, the green trade agenda is gaining momentum, with a focus on climate and renewable energy trade, reflecting a growing commitment to sustainability within global trade practices.

Meanwhile, conflicts, terrorism, and cyber threats across national boundaries are making international cooperation essential. Furthermore, rapid advancements in artificial intelligence, biotechnology, and digital infrastructure present significant opportunities, alongside ethical, security, and regulatory challenges.

Rising sea levels, extreme weather, and resource shortages is also impacting all countries, including those in the BIMSTEC region. Besides, the Covid pandemic has underscored the vulnerability of health systems worldwide, highlighting the need for preparedness, equitable vaccine distribution, and coordinated pandemic response—areas where many BIMSTEC nations fall short. Despite economic progress, poverty remains a challenge in many regions within BIMSTEC countries. Bridging economic disparities and fostering inclusive growth are crucial for both global stability and regional prosperity. Moreover, macroeconomic instability in several BIMSTEC nations hinders efforts to reduce poverty and build resilience.

BIMSTEC, comprising seven countries around the Bay of Bengal (Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand), holds immense potential for addressing modern challenges through effective regional cooperation. The region’s geographical proximity and historical ties provide a unique platform for collaboration, bridging South Asia and Southeast Asia. BIMSTEC prioritises areas such as trade, investment, connectivity, and cooperation to strengthen economic ties, alleviate poverty, and promote sustainable development.

Recognising the threats of terrorism and transnational organised crime, BIMSTEC member states can collaborate through coordinated efforts and information sharing as it emphasises physical, digital, and interpersonal connectivity. By enhancing transport links, energy grids, digital infrastructure, and technological partnerships, BIMSTEC can drive economic growth and resilience.

BIMSTEC can also bolster health systems, facilitate the exchange of best practices, and improve preparedness. Additionally, collaborative efforts within the organisation can effectively tackle climate change, disaster risk reduction, and sustainable resource management.

Despite numerous promises and its 27 years of existence, BIMSTEC’s progress toward deeper regional integration has remained limited. Several factors continue to hinder its advancement.

One significant obstacle is the lack of political commitment from the leaders of member countries. Larger nations have not consistently demonstrated the political will required to push the agenda forward, while smaller nations have not prioritised BIMSTEC sufficiently. For instance, it took 25 years for BIMSTEC to adopt a formal Charter, delaying institutionalisation and slowing decision-making processes. Furthermore, translating commitments into tangible actions demands sustained effort. BIMSTEC must focus on implementing projects and diligently monitoring their outcomes.

Creating a unified security framework is crucial, particularly in addressing unconventional threats such as cyber-attacks and climate-induced migration. BIMSTEC should involve civil society, academic institutions, and the private sector to adopt a holistic approach. Integrating gender perspectives and actively engaging youth are equally important.

Enhancing trade facilitation, reducing non-tariff barriers, and boosting investments are vital for improving economic integration within the BIMSTEC region. Although physical connectivity and trade volumes have improved, intra-regional trade remains limited (around seven percent). While this outpaces the performance of SAARC countries, it lags significantly behind ASEAN (approximately 25 percent). Additionally, the region suffers from a substantial infrastructure investment gap (estimated at $120 billion annually), hindering smooth economic collaboration.

Although the framework agreement was signed in 2004, BIMSTEC has yet to establish a comprehensive free trade agreement (FTA). Instead, member countries have individually entered into numerous bilateral and multilateral trade agreements, resulting in fragmented trade arrangements. Scepticism about the FTA among larger BIMSTEC nations raises doubts about its future progress. Historically, disputes over sensitive lists, reluctance to fully open economies, and non-tariff issues have impeded FTA prospects. Furthermore, bilateral tensions, such as those between Bangladesh and Myanmar, negatively affect BIMSTEC’s effectiveness. Additionally, nations like Thailand and Myanmar often prioritise ASEAN over BIMSTEC due to ASEAN’s advanced integration framework.

The BIMSTEC Secretariat operates with limited financial resources, severely curtailing its ability to implement projects, organise events, and facilitate effective cooperation among member countries. Inadequate funding also constrains its capacity to attract skilled personnel, affecting overall efficiency. Resource shortages further undermine the Secretariat’s visibility both regionally and globally, impeding advocacy, outreach, and communication of BIMSTEC’s goals.

Despite its potential, BIMSTEC faces challenges in fostering stronger people-to-people interactions among its member countries. To address these issues, initiatives such as educating youth about BIMSTEC’s significance, investing in cross-border infrastructure, and enhancing digital connectivity are essential. These efforts can help build closer ties, encourage mutual understanding, and promote trust—ultimately strengthening regional cooperation.

In conclusion, BIMSTEC holds immense potential to shape the New World Order by fostering cooperation, building resilience, and advancing sustainable development in the Bay of Bengal region. However, its effectiveness depends on collective commitment, practical initiatives, and the flexibility to adapt to evolving global challenges.

Dr Selim Raihan is professor in the Department of Economics at the University of Dhaka and executive director of the South Asian Network on Economic Modeling (SANEM). He can be reached at [email protected].

Views expressed in this article are the author’s own.