Inaugurating the panel discussion on the historical and contemporary significance of the Bay of Bengal for connecting South and Southeast Asia in an ORF-ISAS Panel at ORF, Kolkata on 27 February, Professor Tan Tai Yong, President and Professor of Humanities (History) of the Yale-NUS College, National University of Singapore, recounted the importance of the Bay of Bengal region in connecting India and Southeast Asia. He said, historically the Bay of Bengal has been the point of connection between India and Southeast Asia and that, trade, ideas and people freely moved back and forth. But after the rise of nation-states in the Bay of Bengal, the states, became inward looking producing a gulf instead of a bridge between them.
Today, the powers in the region, including China, India and the ASEAN, want to re-connect; hence, it is important to see how the Bay can be reconstituted as a zone bringing together the two geo-political areas. Apart from traditional security issues, environmental challenges and refugee concerns are shared problems inviting cooperation in the Bay.
Professor Rakhahari Chatterji, Advisor, ORF Kolkata, chairing the Panel, said that the words ‘Reconnect’ and ‘Return’ assume that there was a past we want to resurrect without of course trying to repeat it. The past needs to be recollected to serve as a guiding light for the present and for reimagining the future. Based on such a constructive engagement with the past we need to examine the appropriateness of the trade, connectivity and strategic architecture we are building at present.
Dr. Ronojoy Sen, Senior Fellow, Institute of South Asian Studies, National University of Singapore (ISAS-NUS), discussed the history of connectivity that existed in pre-colonial and colonial era. The history of the Bay of Bengal region can be viewed through the prism of three significant broad-based themes, he suggested.
First, trade has historically facilitated deep and continuous interaction amongst people across the Bay of Bengal region. Since, the 6th century A.D., the records of trade in spices and textiles between Southeast Asia and Bengal can be found. Robust trade relations also enabled dissemination of religious beliefs and customs in the region.
Second, imperial ambitions have had a pivotal impact in fostering greater integration of the Bay of Bengal region. The Pallava and Chola dynasties of Southern India and subsequently, the Portuguese and the British imperial power established their economic suzerainty in the region by initiating vibrant trade activities.
Thirdly, the movement of people across the Bay gave considerable impetus to the integration of the Bay of Bengal region. The massive flow of people in the region can be traced from the 19th Century that coincides with the introduction of steam ships and the emergence of steam navigation companies.
Studies of interaction in the region are now once again being revived through renewed strategic and economic relations.
Dr. Nilanjan Ghosh, Director, Observer Research Foundation, Kolkata argued that a holistic approach in assessing the impacts of Free Trade Agreements (FTA), especially from the point-of-view of global value chains, needs to be adopted for boosting fair trade. India signed FTA’s assuming that such arrangements would open new areas for innovation, employment and investment. However, as Indian official databases have gone on to show, these trade agreements have largely benefitted India’s trade partners with an increase in India’s trade deficit.
Dr. Ghosh suggested that mere trade balance figures must not guide India’s trade agreements with her Southeast Asian neighbours. As a result of cheaper imports, consumers have largely gained, known in economic terms as ‘consumer surplus.’ Producers, on the other hand, have suffered due to these FTAs. Inflow of better quality and cheaper goods has reduced the competitiveness of the domestic producers and they have expressed their ire against such agreements.
Complementarities between trading partners play a key role and emphasis should be laid on exploiting them. Only then will trade make everyone ‘better off’. Unlike the Regional Comprehensive Economic Partnership (RCEP), which is fraught with its own complexities, the Bangladesh, Bhutan, India, Nepal, Motor Vehicles Agreement (BBIN-MVA) represents a better arena where regional integration can enjoy some success. It has a higher probability of achieving fiscal and monetary integration with a common market and a common currency. This will lead to development of the entire region by way of ensuring food security, employment opportunities and a larger market among other benefits.
Dr. Anasua Basu Ray Chaudhury, Senior Fellow, ORF discussed the significance of the Bangladesh, Bhutan, India, Nepal (BBIN) corridor as a hinterland of the Bay of Bengal and its potential for harnessing the dynamic economic prospects of the region. According to Dr. Basu Ray Chaudhury, the Bay of Bengal appears to be the most feasible and congenial option of connecting the nations that surround it, through mutually shared interests of growth and development. Three important ideas have been forwarded in this regard. First, the proper utilization of the land routes through roadways and highways, second identifying the vitality of the inland waterways and third, making proper use of the sea ports. Such transport corridors hold within themselves the immense potential of nurturing the true essence of the Bay.
Although many efforts have been seen in this regard, there is still a lot that remains undone, Dr. Basu Ray Chaudhury, said. She called for the need of developing proper infrastructure and protocol routes and efficiency of the actions.
Dr. C. Raja Mohan, Director, ISAS-NUS argued that physical or geographical proximity neither guarantees trade, nor strategic partnership. South Asia is a glaring example of this phenomenon. Instead of physical proximity, the political situation of the countries in question matters. For example, closing the market by Chairman Mao Zedong in China and Jawaharlal Nehru in India and their negative effects on the trade situation of both countries are results of the political environment and resultant decisions taken by the respective leaders.
According to Dr. Raja Mohan, India has missed the opportunity when it had the scope to build a robust trade and strategic partnership with littorals in the Bay of Bengal after the latter’s independence. Only after liberalization of her economy in1991 has India engaged strategically by undertaking joint military exercises with Bay littorals making her presence felt in the region.
Discussing the rise of China in the Bay of Bengal, Dr. Raja Mohan said that China has been following the colonial example of creating exclusive trading posts at strategic locations around the Bay like Sitwe, Kaladan etc. They have also been investing in pipelines for oil and gas supply and in other communication pathways as well. This is working as a back bone for China’s rapidly growing military presence in the region.
Secondly, the retreat of US military from the region will create a vacuum that China seems very eager to fill in and Japan seems to take an interest as well. Realignment of strategic relations between USA and her allies like Thailand and Philippines is further encouraging the latter to drift towards China.
The situation in the Bay presents new strategic opportunities for India as well and India seems to be on track with the Bay littorals as expressed through her settling border issues with Bangladesh and organizing joint naval exercises with Thailand. However, she needs more meaningful presence in the Bay. Given the transformation in the once strategically tranquil Bay of Bengal region into a contested zone, India, must retain some strong allies with her if she wants to be up front in the contest.
The report is compiled by Mihir Bhonsale with inputs from Dr. Jaya Thakur, Sohini Bose, Sohini Nayak, Ambar Kumar Ghosh and Roshan SahaI