BBIN

South Asian Growth Quadrangle

In light of economic interdependence demonstrated by "growth triangles" across Asia and hitherto unheeded concerns of eastern subcontinent nations, its Council of Ministers in May 1996 approved a sub regional body of Nepal, Bhutan, north east India and Bangladesh as the South Asian Growth Quadrangle (SAGQ). A Malé summit one year later agreed to coordinate efforts catered "to the special individual needs of three or more Member States," and formalized procedures focused on the subcontinent's north east to develop intra-regional trade and investment, tourism, communication, and energy resources. Particular areas of collaboration were targeted to channel growth and complementarity.

As the mechanism operated through specific projects, constituent members endeavoured to integrate without requiring alteration in broader policy or methods of governance. It sought to impel the subregion's latent socio economic potential, harnessing disparate stages of development to augment each other. Borders of member states rest within 50 kilometres of Siliguri, ergo contiguous norms, tradition and lifestyle amongst inhabitants underscore the importance of an integrated market. Considerable emphasis was placed upon power trading between naturally abundant and energy-scarce localities to address the impact of shortages on industrial production, reverse consequently depressed rates of growth, reduce transmission and distribution losses through interconnected grids, and provide needed revenue for upstream nations with adverse balance of payments. However, the benefits of such trade remain untapped in the absence of concerted strategy to remove barriers.

Over years its objectives expanded to incorporate land and port connectivity. Procurement of funds for this purpose was discussed at ADB headquarters, Manila, where formulation of the South Asia Sub regional Economic Cooperation (SASEC) Program within auspices of ADB concluded in March, 2001. The formation worked toward economic synergy through arterial channels of trade and cross border initiatives. For instance, to link West Bengal and remote north eastern states through Bangladesh by rail, highway and maritime corridors, alongside north-south transport routes that span Nepal, Bhutan and Indian hill states to northern Bay of Bengal ports. These grids would then bridge extraneous regions throughout member states and beyond eastwards. With accession of Maldives and Sri Lanka to SASEC in March, 2014, notions of quadripartite integration appeared subsumed or rendered dormant.

Déjà vu

Informal discussions led to renewed consensus on sub regional ties outside bilateral agreements, owing partly to continued failure of extant systems. A November 2014 Kathmandu summit saw endorsement of an accord on land transport by regional states, apart from one country's reservations causing it to fall through. The subsequent Summit Declaration reiterated sub regional steps as contributory to wider connectedness. A framework for cooperation was subsequently drawn, with the first quaternary Joint Working Group (JWG) meeting in January, 2015.

Framework and Implications

Through regular JWG sessions, representatives explore avenues of cooperation, exchange experiences and best practices, review data sharing arrangements for disaster forecasts and mitigation, besides strengthening transit facilitation measures such as shared border stations on key routes and harmonized customs procedures. The priority of "connectivity" further embodies seamless electrical grids, shared access to road, rail, air and port infrastructure, and ease of travel. To such ends, a sub regional Motor Vehicle Agreement that garnered assent in Thimphu would allow buses and later private vehicles with BBIN permits to travel unobstructed by border hindrances. Although manifestly of economic intent, the diplomatic weight accorded to this structure as opposed to alternatives in a region considered least integrated, was seen to connote purpose beyond interwoven commerce.

Member States

Motor Vehicle Agreement

India proposed a SAARC Motor Vehicle Agreement during the SAARC Summit in Kathmandu in November 2014. Due to objections from Pakistan, an agreement could not be reached. India instead pursued a similar motor vehicle agreement with the BBIN. The BBIN Motor Vehicles Agreement (MVA) was signed on 15 June 2015 at the BBIN transport ministers meeting in Thimpu, Bhutan. The agreement will permit the member states to ply their vehicles in each other's territory for transportation of cargo and passengers, including third country transport and personal vehicles. Each vehicle would require an electronic permit to enter another country's territory, and border security arrangement between nations' borders will also remain. Cargo vehicles will be able enter any of the four nations without the need for trans-shipment of goods from one country's truck to another's at the border. Under the system, cargo vehicles are tracked electronically, permits are issued online and sent electronically to all land ports. Vehicles are fitted with an electronic seal that alerts regulators every time the container door is opened.

DHL Global Forwarding was appointed by the Indian government to carry out a pilot run under the agreement. The first cargo truck to take advantage of the motor vehicle agreement was flagged off from Kolkata on 1 November 2015. The truck traveled 640 km to reach Agartala via Dhaka. Prior to the signing of the BBIN Motor Vehicle Agreement, the truck would have had to travel 1550 km through Indian territory to reach Agartala. Officials cited this as an example of the time and cost savings that the BBIN Motor Vehicle Agreement would bring. In August 2016, Bangladesh dispatched a truck carrying garments from Dhaka to New Delhi as part of a trial run of the agreement. The truck received an electronic permit to enter Indian territory through an online web-based system. Instead of having to undergo customs clearance and formalities as it would prior to the agreement, the truck was fitted with an electronic seal with a GPS tracking device. The truck was then inspected for custom clearance at New Delhi, rather than at the border.

The agreement will enter into force after it is ratified by all four member nations. The agreement has been ratified by Bangladesh, India and Nepal. The lower house of the Bhutanese parliament approved the agreement in early 2016, but it was rejected by the upper house in November 2016. Bhutan has requested for a cap to be fixed on the number of vehicles entering its territory.

Recent Developments

India approved $1.08 Billion for construction and upgradation of 558 km long roads that join Bangladesh, Bhutan and Nepal. The project will receive 50% funding from Asian Development Bank. The project is scheduled to be completed by 2018. It is estimated that this project will increase the regional trade by 60% while that with rest of the world by 30%.