That SAARC (South Asian Association for Regional Cooperation) has been facing since 2016 a situation in which any progress is impossible is a fact that seems to have thrown up an opportunity for New Delhi to promote the BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) as an alternative forum for regional cooperation.
The BIMSTEC comprises seven nations, including five of the eight SAARC member states. It includes India, Bangladesh, Bhutan, Sri Lanka, Myanmar, Nepal, and Thailand. It excludes Pakistan, which India has been accusing of blocking regional connectivity projects conceived within the framework of the SAARC.
New Delhi wants the BIMSTEC Energy Centre (BEC) at Bengaluru which will promote regional cooperation in the sector among India, Bangladesh, Bhutan, Sri Lanka, Myanmar, Nepal, and Thailand. The Government of India has signed the “host country agreement”.
This task, under SAARC, was originally delegated to the SAARC Energy Centre set up at Islamabad in March 2006 — which India now claims failed to accomplish the objective in the past 18 years.
The BEC in Bengaluru will manage a regional energy database, conduct feasibility studies for the intra-BIMSTEC projects and enhance cooperation by preparing a framework for networking among national agencies of the BIMSTEC member nations. It will also promote energy security through grid interconnections, renewable energy development and realization of energy efficiency.
The BIMSTEC is now working on finalising policies for transmission of electricity and for trade, exchange of electricity and tariff mechanism. A BIMSTEC Grid Interconnection Master Plan is also under discussion within the bloc.
Moreover, the Centre will foster capacity building, cross-border investments and infrastructure development for training in energy sector, according to the BIMSTEC secretariat in Dhaka.
The energy cooperation “focused on promoting renewable energy, improving energy efficiency, developing cross-border energy trade and undertaking grid interconnections, aimed at ensuring energy security, transition to green energy and sustainable development in the Bay of Bengal region”, according to the BIMSTEC secretariat.
All these initiatives, spearheaded by India, mean that the energy security of this South Asian region would rest in the hands of India and give India the access to capitalize on the energy resource of these countries, notably, the hydropower resources of Bhutan and Nepal. It also opens ways for India to monopolies the energy market in the region. The classic example is that of Bangladesh.
Bangladesh is primarily dependent on India for its electricity needs. Under a 25-year agreement, the Bangladesh has been sourcing electricity since April 2023 from the Adani Group of India, along with about 1,160MW from other Indian plants.
The Adani power costs Bangladesh about 12 takas (USD 0.1008) a unit, an official of the Bangladesh Power Development Board said, citing the latest audit report for financial year 2023/24. That is 27 percent higher than the rate of India’s other private producers and as much as 63 percent more than Indian state-owned plants, he added. This is becoming unsustainable for Bangladesh.
Dhaka is struggling to clear dues of USD 800 million to Adani Power among more than USD 1 billion that the country owes to Indian power companies because of difficulty in accessing dollars to make payment.
“We continue to supply power to Bangladesh despite mounting dues, which are of significant concern and are rendering plant operations unsustainable,” the spokesperson of Adani Power is reported to have stated. Lately, the power company is reported to have resorted to strong-arm tactics and begun systematically reducing power supply to Bangladesh to recover its receivables.
The SAARC failed to achieve its objectives on account of animosity between Pakistan and India. Much of its failure was by design.
The year of 2016 witnessed the demise of SAARC for all practical purposes when the SAARC meeting scheduled to be held in Islamabad in 2016 had to be called off by the then PML-N government as Prime Minister Modi had decided against attending the 19th SAARC summit in Islamabad under the pretext of a series of attacks in India by terrorists allegedly based in Pakistan, whereas, some other South Asian leaders had also rallied behind Modi by not attending the meeting. India thereafter abandoned SAARC and moved on with BIMSTEC - primarily to isolate Pakistan from the region and maintain its hegemony on other South Asian countries.
India’s nefarious designs aimed at isolating Pakistan from the global exposure continue and are successful. In the recent BRICS meeting held in Russia, Pakistan could not secure BRICS membership as the opposition by India prevailed in spite of the presence of China and Russia, both having a strong voice in BRICS. Pakistan’s credentials of hosting China’s key Belt and Road initiative —China Pakistan Economic Corridor—on its soil did not help this South Asian country to become member of BRICS. However, countries with far lesser credentials than Pakistan secured the membership of BRICS.
Pakistan appears to have lost much of its global outreach and significance in global diplomacy and economic outlook. It needs to take a fresh look and formulate the required strategies to regain its position of significance in relation to political and economic alignments primarily in Asia, the Middle East and Europe where much has been lost out. The other challenge is to strike a delicate balance insofar as its relationships with the USA, China, and Russia are concerned. Currently, Bangladesh government’s uneasy relationship with India provides Pakistan an opportunity to mend its diplomatic and economic relationship with Dhaka and gain a foothold in South Asia region. This is a time when Bangladesh needs reliable allies, and Pakistan could be one such ally. Pakistan must not squander this opportunity away.
Copyright Business Recorder, 2024
The writer is a former President, Overseas Investors Chamber of Commerce and Industry
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