Published in China Daily Asia Weekly on Friday, May 30, 2014.
Upgrading corridor of connectivity
By EMANUEL JOHN in Kolkata / Asia Weekly
The BCIM Economic Corridor project has succeeded in creating a rare unanimity among the countries involved: Bangladesh, China, India and Myanmar. The four nations are exhibiting a new-found resolve when it comes to reviving the ancient southern and southwestern silk routes that once brought riches to the people of this region.
For China, it is providing a chance to help give its 14-year-old Western China Development Strategy a better shape, especially as the western provinces are dominating the country’s regional development plans.
At the Boao Forum for Asia, held in southern China’s Hainan province in April, Chinese Premier Li Keqiang made this clear and reiterated China’s firm resolve not to restrict development to coastal areas only.
China, which is seeking to further broaden its vast domestic market, has earmarked $53.87 billion for 20 major projects. These involve highways, airports, hydropower and wind power stations in the western regions, including Sichuan and Yunnan provinces, and Xinjiang Uygur and Tibet autonomous regions, according to the National Development and Reform Commission.
China is also keen to see Yunnan become one of the major tourist destinations in the country and is contributing vast amounts of money and energy to upgrade infrastructure, including a huge airport in Kunming, the capital of the province.
Its western development plan seeks to strike a balance with the eastern regions. No matter how rich China’s western regions are in terms of mineral reserves, poor connectivity remains a major obstacle.
This is where the BCIM corridor is key for China, especially at a time when its economy has just entered a new phase and demand for improved quality of life is dominating policymakers’ attention.
At the recent Boao Forum, Premier Li pledged to create impetus by adjusting the economic structure.
“We will narrow urban-rural and regional development gaps and address the unreasonable industrial structure to push forward structural adjustment through structural reform,” he said.
“In the face of the financial crisis, we should persist in our western region development strategy, magnify government support, balance urban and rural development, explore areas for new economic development, emphasize structural adjustment, technological renovation and improvement of people’s livelihoods, and raise western development to a higher level,” Li added.
The proposed economic corridor covers about 1.65-million square kilometers from Yunnan through stretches in Bangladesh, parts of Myanmar and parts of India’s eastern and northeastern regions.
Abdul Matlub Ahmad, head of the Nitol Niloy Group, one of the largest conglomerates in Bangladesh, agrees. “We all understand that China has a compelling reason to revive the route because the incentives are huge. But it’s win-win for us all,” he says.
“Not only will the proposed route ease the flow of goods between India and China, it will be a great boost for Bangladesh and Myanmar — the two other emerging economies.”
Ahmad believes an economic corridor will also encourage companies, especially Chinese, to invest in this vast region and market.
“In my view, if we work hand in hand, it will create a new era of economic cooperation which has not been seen before,” he says. “From China’s perspective, western development will deepen ties with South and Southeast Asia. We all hope that the proposed economic corridor gives birth to a new and enduring international economic cooperation. And, as people are saying, Bangladesh could well serve as a bridge in the corridor.”
According to Ajay Shankar, member secretary of India’s National Manufacturing Competitiveness Council, states in eastern India — West Bengal, Odisha, Bihar, Jharkhand and Chhattisgarh — can reap huge “benefits from the loss of jobs and slowing manufacturing activities in China” which is seeing increases in wages for workers.
“At a time when the whole world is becoming highly globalized and people are becoming more deeply and inextricably connected with each other, the importance of collaboration and cooperation is fast gaining currency,” says Shankar.
Sheikh Hasina, the prime minister of Bangladesh, has meanwhile given a thumbs-up to China’s part in establishing this economic corridor. “The Bangladesh Prime Minister also deeply appreciated the proactive role of China in establishing the BCIM Economic Corridor,” said a statement issued by her office.
Mustafizur Rahman, executive director of the Centre for Policy Dialogue, a Dhaka-based research organization, said the idea driving the BCIM initiative was that, by drawing on respective comparative advantages, all four countries could expect to make significant gains.
“These gains are envisaged to accrue from greater market access for goods, services and energy, elimination of non-tariff barriers, better trade facilitation, investment in infrastructure development,” explained Rahman. Cooperation in the development of mineral, water and other natural resources, as well as supply chain networks would also help all countries concerned.
He also cited the Greater Mekong Subregion Economic Cooperation Program as a good example to follow.
According to Rahman, Bangladesh’s unique geographical position can serve as a gateway to the landlocked and underdeveloped northeastern states in India and Chinese provinces such as Yunnan.
Since the lack of easy connectivity with larger markets hit these regions hard in terms of trade and economic development, the BCIM Economic Corridor will provide them with greatly improved access to markets.
“The proposed economic corridor will infuse new life in regional trade, commerce and investment,” says Khin Ko Latt, managing director of Yangon-based Hla Bayin Furniture. “The corridor will go a long way in promoting people-to-people contact and also reduce transport and transaction costs.”
According to him, an integrated highway from Kunming to Kolkata will not only bring the two big powers in Asia together, it will also immensely benefit Myanmar and Bangladesh.
The border town of Ruili, for example, attracts many Chinese who want to buy Myanmar jade, which they consider to be the best and most auspicious. The town’s position on the proposed route can only help buyers and sellers in this trade.
Sanjay Budhia, chairman of the Export and Import Committee with the Confederation of Indian Industry, says the BCIM Economic Corridor will usher a new era in trade and trust.
“The cost of transporting goods will be much less, and the accrued benefits are going to be huge for millions of people living in the region,” says Budhia, who is also the managing director of Patton International, a Kolkata-based export house.
One of the key objectives of last year’s BCIM Car Rally was to raise awareness about the importance of the revival of the Southern Silk Route, and was a great success, adds Budhia.
“In every respect, it was a milestone. There is huge enthusiasm and a lot of work is being done at multiple levels taking all stakeholders on board — governments, academics, think tanks and people at large.”
Currently, a four-nation joint study group is at work to see the project gets off smoothly, he says.
“And most importantly, there has been a new-found trust,” Budhia concludes. “There is a feeling among the four countries now that if they could do business along that route hundreds of years ago, there is no reason why they cannot do it in the 21st century.”