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Belt and Road Initiative to change landscape of economic cooperation in South Asia

(Xinhua) Updated: 2016-10-14 14:55

BEIJING - The China-proposed Belt and Road Initiative, of which the Bangladesh-China-India-Myanmar (BCIM) Economic Corridor forms an important part, is expected to change the landscape of economic cooperation in South Asia.

The initiative comprising the Silk Road Economic Belt and the 21st Century Maritime Silk Road proposed by Chinese President Xi Jinping in 2013 brings together countries in Asia, Europe and Africa via land and maritime networks.

Within the framework of the initiative, the BCIM Economic Corridor will connect India's northeast, Bangladesh, Myanmar and southwest China's Yunnan Province through a network of roads, railways, waterways, and airways. It seeks to improve connectivity, infrastructure, energy resources, agriculture, trade and investment in South Asia.

Opportunities for South Asia

Covering 9 percent of the global landmass, the corridor was first discussed in 1999 by specialists and academics at a meeting in Kunming, Yunnan.

The corridor initiative gained momentum during Chinese Premier Li Keqiang's visit to India in May 2013.

According to an article by Pravakar Sahoo and Abhirup Bhunia from India's Institute of Economic Growth, the BCIM corridor will allow all four countries to exploit complementarity in trade.

Myanmar is a primary goods exporter and has abundant cheap labor. India has positioned itself as a leading services exporter. China is the largest manufacturing exporter in the world; and Bangladesh, like many other South Asian countries, engages in both services export and low-end manufactured goods, the academics said.

Now under the Belt and Road Initiative, projects such as the BCIM Economic Corridor and the China-Pakistan Economic Corridor have greatly promoted economic development in related countries and injected dynamism into regional cooperation in South Asia, Chinese Vice Commerce Minister Gao Yan said.

In recent years, China and South Asian countries have conducted cooperation in such areas as trade, investment, infrastructure and services, Gao said.

By the end of 2015, direct investment from China in South Asian countries hit $12.29 billion and investment from South Asian countries in China reached $890 million, Gao said, adding that China has become the largest source of foreign investment for some South Asian countries.

Chinese official data showed that trade between China and member countries of the South Asian Association of Regional Cooperation -- Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka -- hit $111.22 billion in 2015, up 4.9 percent from a year before.

"The BCIM Economic Corridor, since it was first officially put forward by Premier Li in 2013, has received positive response from India, Bangladesh and Myanmar," Chai Xi, former Chinese ambassador to Bangladesh, told a forum in Kunming.

Bangladesh's Information Minister Hasanul Huq Inu, in an exclusive interview with Xinhua in May, appreciated the Chinese leadership for proposing development initiatives such as the Belt and Road Initiative and the BCIM Economic Corridor.

"I think that this old Silk Road is being revived properly. It has $132-billion potential. So investing dollars in the Silk Road and reconnecting all the nations which were connected is great economic planning," said Inu.

The Belt and Road Initiative involves 26 countries, which represent nearly 30 percent of the global gross domestic product and 63 percent of the global population.

MS Siddiqui, professor at Dhaka's Daffodil International University, told Xinhua recently that the initiative will bring opportunities to Bangladesh.

"Bangladesh is in a strategic location between China, India and ASEAN (Association of Southeast Asian Nations) countries and hence is well placed to be a trading and manufacturing hub," Siddiqui said. "Bangladesh needs such increased connectivity with other economies in this region and China's Belt and Road Initiative will see the realization of this economic area."

The BCIM Economic Corridor will increase trade, transport, tourism and investment for Bangladesh, due to its strategic location between India and China, he said.

"The availability and affordability of workers and its geographical location are important aspects of Bangladesh's developing into regional hub, yet it urgently needs a port, and related infrastructure to boost connectivity with other nations through ocean and land routes. The Belt and Road Initiative will open up numerous opportunities for Bangladesh," said Siddiqui.

Challenges ahead

The BCIM Economic Corridor working group has held two meetings and issued a series of deliberations and joint statements, Chai said, adding that the governments and leaders of the four countries have shown "surprisingly" strong willingness to build the corridor.

However, as a long-term complicated and arduous systematic program, the BCIM Economic Corridor faces many risks and challenges.

"The construction of the corridor is slower than expected," Chai said, adding that the difference of the four countries in national systems, policy-making mechanisms and procedures has dragged to some extent the advance of the corridor.

Besides, due to the lack of capital and experience, the corridor's construction has not been able to enter a substantial stage, Chai said.

Ren Jia, director of Yunnan Academy of Social Sciences, listed blocked road, laggard infrastructure, ineffective policy, poor trade flow and lack of capital and communication as the main reasons that have impeded the construction of the corridor.

"While there are free trade arrangements between China and Myanmar and Bangladesh, India has adopted a positive and prudent attitude in building the economic corridor," said Liu Xiaoxue, a researcher with Chinese Academy of Social Sciences.

In fact, for countries like India, the Belt and Road Initiative is "highly important as its primary objective is to create win-win situation to achieve economic prosperity through enhancing road and rail connectivity," Bishnu Hari Nepal, a former Nepalese ambassador to Japan, told a seminar in Kathmandu in May.

"India should work closely with China to collaborate and push forward the Belt and Road Initiative instead of being skeptical. This initiative should be taken as a new opportunity for the South Asia region," he said.

Shreedhar Gautam, secretary general of the Council of World Affairs, a think tank in Nepal, also urged India to join hands with China, saying that this initiative should not be taken as strategic tool of China to exert influence in the region.

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