Sri Lanka will soon have a rare opportunity to contribute to the development of the Indian Ocean region, by harnessing the Bay of Bengal’s regional organization. Sri Lanka is about to assume chairmanship of that organization — the Bay of Bengal Initiative for Multi-sectoral Technical and Economic Cooperation (BIMSTEC or the “Bay of Bengal Initiative”) — for two years.
Sri Lanka’s leadership of the Bay of Bengal Initiative comes at a pivotal moment. India needs a productive regional network to promote regional growth while sustaining domestic growth. Additionally, the other main regional organization, the South Asian Association for Regional Cooperation (SAARC), has stalled. The Bay of Bengal Initiative therefore has an increasingly important role. The region’s littoral states account for 22 percent of the world’s population and have a combined GDP of around $3 trillion. Given the economic and strategic needs of these states, Sri Lanka must deploy effective leadership to uplift its own position in the Bay region and the status of BIMSTEC as a regional mechanism.
There are four areas in which Sri Lanka could demonstrate leadership — connectivity, security, trade, and institutional reform.
The Bay of Bengal Initiative envisions several different types of connectivity, including technology, people-to-people linkages, and transport. As the country designated to lead BIMSTEC’s work on technology, Sri Lanka has a particular interest in promoting technological connectivity in the region. In 2008, leaders agreed to establish a Technology Transfer Facility (TTF) in Sri Lanka. The TTF aims to expand the technological knowledge and skills of micro, small, and medium sized enterprises in the Bay of Bengal, and thereby build knowledge-based economies. Sri Lanka should study other regional technology transfer initiatives, like the “European Technology Transfer Offices Circle” to ensure that the TTF is comparatively efficient and effective.
Sri Lanka could also encourage BIMSTEC to introduce technology-driven “public goods” like free internet connectivity. Sri Lanka has shown interest in similar initiatives by establishing public Wi-Fi spots and experimenting with Google’s Project Loon. Mobile network operators in BIMSTEC countries could also be encouraged to provide zero-rating services i.e. services that allows low-income citizens to access high-usage applications and websites like Facebook and WhatsApp without using data plans. This is a common practice in developing countries and could have positive economic spillover effects, by increasing business through social media.
As the Indian Ocean becomes increasingly important to regional powers like India and China, so does ensuring the security of the Bay of Bengal. In addition to urging members to ratify BIMSTEC’s security conventions, Sri Lanka could propose establishing coordinated maritime patrols to secure the Bay against nontraditional security threats like piracy and trafficking. This would expand the current practice of coordinated patrolling by India and Myanmar and follow the example of some ASEAN states. Sri Lanka could also work to establish a hotline among littoral states of the Bay, to facilitate this coordinated patrolling. In 2016, Indonesia, Malaysia, and the Philippines agreed to establish a hotline to combat piracy and kidnappings, and to coordinate patrols in waters of common interest.
BIMSTEC remains in the early stages of becoming a trading bloc. The value of BIMSTEC intraregional trade in goods was $44 billion in 2017, which is an increase from $29 billion in 2007. However, this accounted for only 7 percent of member states’ total trade with the world. This partly reflects north-south trade patterns and limited trade complementarities. Meanwhile, ASEAN’s intraregional trade in goods was $421 billion in 2017 and accounted for 26 percent of member states’ trade with the world. Sri Lanka should aim to boost intraregional trade by finalizing the BIMSTEC free trade agreement (FTA), which has been in discussion since 2004, and by setting intraregional trade goals.
If there is no progress on the BIMSTEC FTA in the next two years, the agreement may become obsolete as BIMSTEC countries continue to pursue bilateral FTAs, including with non-BIMSTEC countries. Sri Lanka should also ensure that the FTA does not duplicate or contradict other existing or proposed bilateral and multilateral trade agreements of BIMSTEC members. It could also encourage member states to finalize and effect supplementary agreements to the BIMSTEC FTA, like the “Trade Facilitation Agreement” and the “Agreement on Cooperation and Mutual Assistance in Customs Matters,” to advance BIMSTEC economic integration.
Sri Lanka has proposed the idea of a troika system comprising the current chair, former chair, and future chair of BIMSTEC to enhance its institutional stability and impact. This would be a valuable step to ensuring policy consistency, institutional memory, and strong leadership. Sri Lanka has also raised the idea of including provisions for Observers or Dialogue Partners. Such partners could potentially bridge resource gaps, through funding, knowledge sharing, and technical expertise.
In addition, Sri Lanka could work to enhance the professionalism of the secretariat. The Permanent Secretariat of BIMSTEC was established in Dhaka, Bangladesh in 2014, to act as a coordinating body and improve the negotiation and implementation of BIMSTEC policies. However, ensuring its effectiveness has proved challenging. The secretariat appears to be understaffed and underfunded. Sri Lanka has an opportunity to improve this situation, and could look to relatively successful secretariats like those of ASEAN and the Pacific Island Forum (PIF) as reference points. As a first step, the secretariat could make its budget publicly available and begin producing annual reports detailing its funding allocations and activities. This would help member states to identify resource gaps and work towards meeting them.
The Bay of Bengal Initiative’s importance lies in connecting the relatively unintegrated South Asia to the well-integrated Southeast Asia, as well as in being a coordinating body for a key Bay in the larger Indian Ocean. Sri Lanka has diverse and untapped opportunities to transform BIMSTEC into a more impactful organization. For Sri Lanka, the success of its upcoming chairmanship will also underscore its preparedness to lead the initiatives of larger regional organisations like the Indian Ocean Rim Association (IORA) and will demonstrate the leadership abilities of smaller states in the Indian Ocean region.
Anishka De Zylva and Divya Hundlani are researchers at the Lakshman Kadirgamar Institute of International Relations and Strategic Studies (LKI). The opinions expressed in this article are of the authors and not of LKI. They do not necessarily reflect the position of any other institution or individual with which the authors are affiliated.