Published in The Financial Express on Sunday, 3 November 2016
Imtiaz A. Hussain
On the eve of the Ninth South Asian Economic Summit (SAES), both Bangladesh and India led the way to boycotting the scheduled November 2016 South Asian Association for Regional Cooperation (SAARC) summit in Islamabad, Pakistan. Irrespective of this political decision, a formidable economic constraint makes wholesome regional integration more unrealistic than when it was proposed by Bangladesh thirty-odd years ago: as the Centre of Policy Dialogue (CPD) pre-SAES newspaper piece observed (The Financial Express, October 15, 2016, p.13), only about 5.15 per cent of South Asian global trade is intra-regional (as contrasted, for example, with 25 per cent for the Association of South East Asian Nations, or ASEAN), a figure that obviously has not climbed an iota over that period to expect more than incremental future growth. More than that, since so much of each member-country’s trade patterns have already been spoken for (and institutionalised), the incentive to diversify partners just do not prevail: patience is not a South Asian credential, and since bilateral South Asian arrangements have done better than regional during that time, the question of extending that efficiency to regional trade agreements (or beyond) cannot be easily or realistically dispensed by imponderables.
On SAES’s heels, both Bangladesh and India indicated they were not averse to even more grandiose arrangements than the SAARC project: at the Goa BRICS (Brazil, Russia, India, China, and South Africa) summit, the clear winner was the Bay of Bengal Initiative for Multisectoral, Scientific, Technological, Economic Cooperation (BIMSTEC). Since the BIMSTEC future is in the east of India, all the way into Southeast Asia, exploring the west of India is not as attractive to South Asian countries unless the pursuit is embedded in other broader arrangements, like, for instance, the BRICS partnership, or China’s reconfigured New Silk Route, based on the “One Belt, One Road” (OBOR) strategy: in and of themselves, neither is attractive enough for a divided South Asia, nor capable of smoothening South Asian wrinkles to offer a “South Asian” catalyst. Markets, no doubt, matter, especially in this unfortunate materialistic era. Those in India and east of it dwarf those west of India within Asia, with neither BRICS nor OBOR helping the South Asia “region” directly. That individual countries’ benefits lead us back to the original regional sin: the stubborn political divide. If the political logic behind the SAARC boycott was poised to be overtaken by the economic logic, the latter depends upon resolving the former.
Though the SAARC fate was pushed to the back burner, and as the BRICS future was left in the air, either (a) lesser arrangements at bilateral and sub-regional political levels have increasingly occupied the front burner; or (b) such expansive politically-cleansed counterparts, as the BIMSTEC experiment, also suits the crucial needs of growing non-market needs that crusades like the UN Sustainable Development Goals (SDGs) have dedicated themselves to. There could even (and most likely will) evolve a combination of both, creating a mixed South Asian future bag: one foot in, probing selective integration; the other foot out, exploring alternatives.
Unsurprisingly, the Dhaka SAES congregation highlighted this very motley non-market outcome: rather than bury SAARC, it was drowned in pro-poor wish-lists in which the “sub-regional” call resonated more widely and loudly than the South Asia region. How eight economically, politically, geographically, aspirationally, and resourcefully very disparate countries can navigate coherently through the muddy waters may be the lesser question than its relevance within the SDG context. One underlying message was clear: if the FTA (free-trade agreement) idea whose time is not yet ripe across South Asia (whether for good or bad aside), non-FTA agendas, like Agenda 2030, might help pave the way for a FTA future over the long haul; and if so, the SAARC attachment or FTA embrace should not be cleansed off the slate.
Poverty-reduction, income-narrowing, gender-balancing, climate change corrections, and all the other Agenda 2030 targets may actually benefit from sidetracking SAARC and FTA initiatives: the time, space, and resources that it takes the typical government to deal with such arrangements can be diverted to more productively enhance pro-poor attention and outcomes within each country and at levels below the governmental, invoking greater involvement of “civil society” (as advocated by Dr. Jagdish Chandra Pokharel, Chairperson of Nepal’s Institute of Urban and Regional Studies), “people-to-people” interaction (like Afghanistan’s Poresh Research and Studies Organisation Research Board Member, Ahmed Shah Mobariz, discussed), a “bottom-up approach” (like Dr. Sreeradha Dutta, Director, India’s Maulana Abul Kalam Azad Institute of Asian Studies, would have been happy with), and “grassroots” input (such as proposed by Ms. Saroj Ayush, an UNESCAP consultant in New Delhi), among others. This is not to argue the government is not an efficient SDG implementing machine: a number of speakers noted how it may be a cut above private sector SDG management, and with valid reasons. Yet, since FTA pursuits have long been a metropolitan-centric exercise advocated and practised most by the upwardly-moving and dynamic sectors, rebalancing the equation by advancing Bangladesh’s other half, that is, people still out in the countryside, is increasingly overdue. Note how European farmers were never fully sold on economic integration for a long time (from 1958 to the 1970s/1980s) until benefits could be squeezed out of trans-border integration; nor did small- and medium-sized U.S. businesses take to the North American Free Trade Agreement (NAFTA) unless low-wage imports could be monitored. Family values most ferociously fend off open-ended materialistic pursuits if in the countryside, as countries in the development transition know too well (France, 1950s; United States, 1930s), with urban middle- and lower-classes joining in as soldiers within the city, particularly in developed countries (United States right now). Progress depends on how some truce is established.
SAARC alternatives have been flourishing of late, and particularly in the Bangladesh-India bilateral relationship. How both agreed to eventually establish 60+ “border haats” opens up the local, rural economies in a way that promotes people-to-people contacts productively across international borders (as opposed to smuggling, which also involves people-to-people trans-border interaction, but serving a limited population segment and blatantly more illegitimately). On the other hand, BIMSTEC playgrounds spring from technologically advancing sectors, and although this favours the urban sector more than the rural, the rural spillovers would still push that sector incrementally higher than if nothing was done: but it must be augmented, at some point, with a rural priority. That is a start, since the key dynamic must become people-to-people interaction, sowing both local and transnational infrastructural seeds. More dramatic examples of centre-periphery, or national-local admixtures include the highway/railway/pipeline projects, such as the Bangladesh-Bhutan-India-Nepal and India-Bangladesh-Myanmar gas-flow facilities. Not all such cross-border interactions have been or will be completely positive: to wit, the Rampal project illustrates how coal-fuelled Bangladesh-India energy integration is not popular locally (supporters tend to be metropolitans). Nevertheless, and especially as they reach beyond South Asia (as the Bangladesh-China-India-Myanmar Highway does), they expose more positive opportunities and outlets than exclusively South Asian. Since we cannot have it both ways (infrastructure development and its negative externalities), shrewd decision-making is imperative to drawing the line.
How Bangladesh-India “inter-connectivity” (a term used too frequently by the Dhaka SAES participants), or “sub-regional” experiments (also a popular SAES terminology), has been flourishing of late also carries some caveats: (a) they are not a first-timer, since India has similar, though less spectacular, arrangements with Afghanistan, Bhutan, Nepal, Sikkim, and Sri Lanka, and even with Pakistan, such as over the Indus River water-flow; (b) nor are they insulated from the vagaries of domestic politics: expecting similar outcomes through a Bangladesh Nationalist Party (BNP) government, for example, would involve a larger leap of faith than with the Awami League; and (c) indeed, they lack the very item this article is underscoring: the absence of a people-to-people network strong enough to divert attention from government-centric management (whose strength seems to be directly correlated with positive economic growth-rates); and concrete enough to withstand nationalistic gravitation (whose strength also spirals upwards the national pie expands).
Yet, their advantages should not be overlooked since, in the long-run, only they can supply the “bricks” of any free trade agreements or SAARC framework equivalents. Those bricks (a) expand government penetration of the countryside, thereby bringing the “masses” on board, no matter how tiny the “masses”; (b) encourage a multiplier-effect of their own at the local and rural levels, and for the people: one “border haat” benefit would make villagers more receptive to other trans-border flows, culminating eventually in softening FTA hostility at both the central government and local levels; (c) break trans-border barriers, such central government legislations as imposing tariffs, faster than at the local/rural level, thus creating that wider mind-set consistent with cross-border transactions; (d) they create a more conducive environment for eliminating barriers like poverty and inequality, not to mention shoring up climate change defences; and (e) they show how even FTA or SAARC projects can only be transient when, with the technologies we now have, the world can be made a local stage.
The final point is the crux: without a local/rural mindset comfortable enough with national/urban-level dynamics, selling trans-border flows and hopes fruitfully may be an unnecessarily steeper hill to climb, eventually weakening credentials to be a comfortable global player in an intensely globalised human era. What the SAES conference, SDG mission, and South Asia’s future firmly underscored, from such an interpretation, is to strengthen local defences first, since once that is done, the rest, such as national, regional, and global integration will automatically become downhill. That will take, as one SAES guest speaker, the Emeritus Professor Deepak Nayyar, of India’s South Asian Centre for Policy Studies, hammered home, a mindset change. Success demands nothing less just to begin with.
Dr. Imtiaz A. Hussain is Professor & Head of the newly-built Department of Global Studies & Governance at Independent University, Bangladesh.