By Amit Agnihotri
New Delhi: As the world economies, shaken by COVID-19, look to relocate their manufacturing facilities from China, India today urged the member-states of a Bay of Bengal regional group to seize the opportunity to drive the industry shift to the region.
“The shock of the pandemic has, paradoxically, presented us with opportunities. One such opportunity has arisen due to the discourse, gathering momentum, of the requirement of diversification of manufacturing locations,” India’s Minister of State for External Affairs V. Muraleedharan said.
He was speaking at a webinar on ‘Revisiting Economic Cooperation in BIMSTEC in Post-Covid-19 Era‘ organised by a think-tank Research and Information System for Developing Countries. Muraleedharan did not name China directly.
BIMSTEC, which stands for Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, turned 23 this month. The regional grouping comprises Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand. The region brings together 1.5 billion people, around 21 percent of the world population, and a combined Gross Domestic Product of over $2.5 trillion.
The Coronavirus, which originated from Wuhan in China last year has caused the world economies to sink into a global recession, considered to be even worse than the great depression of the 1930s. According to a United Nations estimate, the loss to global output due to COVID-19 would be worth $8.5 trillion.
As nations strive to recover from the pandemic, a discussion about the New World Order, where China is no more the global manufacturing hub, has already begun.
India is locked in a bitter turf war with China along the Line of Actual Control in eastern Ladakh and while it is trying to resolve the border dispute through negotiations, discussions around how to counter the Asian giant in the long-term through non-military measures is gathering pace.
Experts estimate that hydrocarbon and commodity dependent economies will be hit as badly as manufacturing, services, agriculture, mining and tourism dependent economies. Global poverty and unemployment levels will rise and remittances will be impacted due to the pandemic.
Noting that trade routes, supply chains and business plans are being redrawn across the globe keeping these factors in mind, India reminded the BIMSTEC countries that there is an increasing demand for alternate production locations in several supply chains and the grouping is ideally placed to attract shifting industries and gain a foothold into these value chains.
This will allow the BIMSTEC nations an opportunity to move up the global value chain as well as provide jobs in their respective countries in the post-COVID world, the minister said.
Pointing out that the post-depression period is usually marked by growth, India urged the BIMSTEC nations to be on the right side of recovery and work together to ensure an equitable development for the populations in the region.
Muraleedharan, in his address, said India was ready to provide leadership to the grouping and help the member countries.
“As the largest country and economy in the grouping, India has been keen to partner with the countries of BIMSTEC on various initiatives over the years. In the recent years, we have successfully implemented various multilateral projects to bring our countries together,” he said.
He cited connectivity projects including the Kaladan transport project, the Trilateral Highway Project, an East-West corridor connecting India’s Northeast with Myanmar and Thailand, the Rhi-Tiddim road in Myanmar, construction of India-Bangladesh Friendship Pipeline and dredging of inland waterways in Bangladesh, the Biratnagar integrated check post with Nepal, reconstruction of railway tracks in Sri Lanka and road projects and power transmission lines in Nepal.
Talking about the opportunities, India also apprised the BIMSTEC nations about the need to ramp up its systems and have an adequate policy and operational environment for global businesses.
This would require revitalising the BIMSTEC Business Forum, BIMSTEC Economic Forum to further strengthen government–private sector cooperation for the promotion of trade and investment, and tasking the Expert Group on BIMSTEC Visa Matters to finalize the modalities for the BIMSTEC Visa Facilitation, said Muraleedharan.
India offered to share its experience of a vibrant start-up culture with the BIMSTEC members besides knowledge and best practices in the field of Information Technology and Information Technology Enabled Services and urged them to establish a legal framework to enable use of such infrastructure.
In this line, early conclusion of the BIMSTEC Coastal Shipping Agreement and BIMSTEC Motor Vehicle Agreement would provide for seamless transport of goods across our borders, the minister noted, while stressing the need to integrate digital networks like affordable and high-speed internet and mobile communications and power grids.