Revisiting Bounties of Sub-Regional Cooperation: The Case of South Asia

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by Nahian Salsabeel        6 July 2022

Time and again, the history of international relations has showed us that sub-regional cooperation is a vital element for achieving sustainable development. It allows cooperation between states involved and the consequent achievement of economic, cultural, as well as security goals. The European Benelux (Belgium, the Netherlands, and Luxembourg), The Pacific Alliance, CARICOM, Secretariat for Central American Economic Integration (SIECA) in the Latin America and Caribbeans (LAC) region, the Southern African Development Community (SADC) and the East African Community (EAC) in Africa, Indonesia-Malaysia-Singapore Growth Triangle (IMS-GT) in South-East Asia are some prominent examples sub-regional cooperation across the international arena. One of the unique aspects of such cooperative blocs is perhaps the ability to operate and progress towards development despite the failures in larger regional cooperation initiatives.

South Asia’s regional bloc, the South Asian Association for Regional Cooperation (SAARC) has time and again faced numerous obstacles in its successful operation, and currently remains idle. Consequently, it has failed to fulfill the expectations in terms of boosting trade, investment, and cooperation through development projects. Unstable regional state to state relations also raise the question of the future of the almost redundant regional bloc. As such sub-regional cooperation institutions and initiatives such as South Asia Growth Quadrangle (SAGQ), South Asia Sub-Regional Economic Cooperation (SASEC), Bangladesh, Bhutan, India, Nepal (BBIN) Initiative, and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) are considered as the alternative dynamism to regional cooperation. A relatively nascent concept in South Asia, sub-regional cooperation, therefore, holds many opportunities for sustainable development for states in the region.

The goal of the current sub-regional cooperation initiatives is to provide a framework that will improve aspects of development in critical sectors such as trade, economy, and people-to-people connectivity, among others. With the passage of time, South Asian states have demonstrated greater political resolve as well as more focused efforts. Despite major hurdles such as inter- as well as intra-state disputes, competition for regional leadership, and policy implementation issues, the region still has the ability to make an impressionable impact on an international level. However, such a feat can only be achieved through cooperation within the region, and given the failure of its regional organizational initiative, it must maximize its potential of the sub-regional initiatives.

Scopes of Development

Among the central areas that require cooperation within the region cooperation to manage water resources stands as one of the most important one. Ensuring availability of water in all parts of South Asia can only be secured by comprehensive river agreements. More than fifty percent of the people in the region are reliant on water resources from the network of rivers and streams in the region for their own livelihoods, while almost all of the population in the region is reliant on them for their daily activities. Therefore, an integrated sub-regional approach directed at managing essential water resources is crucial for sustainable developments in the region.

A second key area of cooperation is that of energy sharing. The region is blessed with natural power sources such as natural gas, coal and hydropower resources. However, these natural resources are far from evenly distributed among the states of the region, with most lacking the infrastructural and logistical resources to effectively utilize the natural ones. Consequently, a new sector of sub-regional cooperation can ensure the establishment of a regional power market, which would provide more accessible energy supplies to the states in the region. It can, furthermore, enhance the energy trade, trade of energy infrastructure, operational know-how as well as harmonize legal and regulatory mechanisms when it comes to energy sharing.

Given that South Asia is one of the most climate vulnerable regions, and since the SAARC Action Plan on Climate Change has been long forgotten, sub-regional cooperation between states in the region is another very important sector that requires cooperation. With almost 50% of the population adversely impacted by climate issues, and threat of certain low-lying states in the region submerging underwater in the future, sub-regional climate action is something that requires immediate attention.

Another area of cooperation can be that of intraregional trade. The current figure of intraregional trade stands at $23 billion, accounting for only 5% of the region’s total trade, and making it one of the regions with the lowest intraregional trade globally. Despite the formation of the South Asian Free Trade Area (SAFTA), the reluctance of the states in the region to pursue a more tariff-free intraregional trade has led to the failure of the initiative. On average, 35% of the value of imports in the region continues to be subjected to tariffs, which undermines the whole proposition of creating a free trade area. Besides tariffs, non-tariff barriers to free trade also persist. Examples include asymmetric information, red-tape policies, sudden price hikes and cutting off supplies of products, and so on. Thus, more than one sub-regional cooperation initiatives are required in this case as the issue is multifocal in nature.

Existing Sub-regional Initiatives: What do they address?

The Nineth SAARC Summit, held in 1997, marked the endorsement of the South Asia Growth Quadrangle (SAGQ). It includes Bangladesh, Bhutan, India, and Nepal, and its goals include promoting economic growth, addressing infrastructural issues, and facilitating interdependence and cooperation on the policy making and implementation. Despite its loss of momentum in the past, SAGQ has re-emerged in the present as Bangladesh, Bhutan, India, and Nepal (BBIN) Motor Vehicles Agreement. BBIN Motor Vehicles Agreement is aimed at enhancing connectivity through improved infrastructural capacities linking the participatory states.

The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) can be viewed as one of the major cooperative initiatives that is both sub-regional in nature and extends beyond that. It consists of seven member states: Bangladesh, India, Sri Lanka, Thailand, Myanmar, Bhutan, and Nepal. Japan, Singapore, and the US are also BIMSTEC trade partners. It aims to promote collaboration and cooperation in a variety of sectors, mainly trade, investment and industry, technology, human resource development, tourism, agriculture, energy, and infrastructure and transportation, to ensure rapid economic growth through interdependence.

Challenges and Implications

The South Asian region is plagued by unwillingness of states to cooperate with one another for a variety of reasons. This can be located as one of the reasons for the failure of SAARC, SAFTA, and the premature failure of SAGQ initiative. As discussed above, tariff and non-tariff barriers remain critical barriers to free intraregional trade and investment. Additionally, the political economic upper-hand of India has also led to trade deficits in the region, which is a major concern in the region, especially among the smaller states in the region.

Similarly, inequality in regional power-sharing mechanism have made the smaller states in the region wearier of India’s regional hegemonic strength. Lack of bilateral agreements as well as use of pressure politics by the regional big brother have dampened not only the ties between the states, but also trustworthiness. Both are vital for success of sub-regional cooperation.

Sub-regional cooperation is crucial for the development of economy, infrastructure, connectivity and so on. It can be seen as an avenue of cooperation in the region. And in the face of failure of SAARC, sub-regional cooperation is perhaps the one of the last mechanisms left for the South Asian region to achieve sustainable regional cooperation. Therefore, the South Asian states should push towards achieving the success of goals of the existing sub-regional initiative and push towards organizing new, more effective ones which go above and beyond in addressing regional issues that have not been touched by the current sub-regional initiatives.