Economic corridors, energy hubs and cross-border initiatives

In promoting regional cooperation in South Asia, natural resources in each country that can benefit others are hardly focussed. There are natural demands as well for the resources people can see beyond their borders but cannot access. A major consequence of trade and other barriers is smuggling which deprives governments of revenue and gives birth to underground economies across the borders.

However, authorities and entrepreneurs have further scope to create fresh demands based on natural resources available on both sides of the border for making cooperation a success. Energy and power are such an area which may remain unutilised unless the countries are willing to share it exploiting the potentials for benefits of their peoples and businesses.

The countries of the BBIN (Bangladesh, Bhutan, India and Nepal) sub-region are pursuing development, mainly focussing on bringing peoples out of the curse of poverty and elevating the countries' economic status globally. Energy is the basic requirement for attaining the development goals and thus demand for energy would be increasing day by day.

So, they have common goals, and because of their geographical proximity, can take advantage of energy and natural resources of each other for pursuing economic development.

Since any paper-based model of cooperation may not work in real life, these countries may work on projects that can be implemented realistically. Cross-border energy and power projects won't be successful unless there is demand while industries won't be set up depending on supply from outside unless there is a guarantee of uninterrupted supply.

Already, there are routes for movement of people and bilateral trade through border points. Utilisation of the economic potential of these routes can be enhanced if collaborative energy projects are undertaken. Energy to be produced on one side of the border, say Bangladesh or India, can be marketed to the second and third country like Nepal and Bhutan depending on proven demand.

In that case, consumers - big and small - may find an assured supply source for energy or power. They can be encouraged to initiate new business ventures that may raise demand for energy and power and thus a competitive, cross-border market may emerge and remain operational.

Once cooperation is offered and demand created, the process may lead to sustainable collaboration that is considered unthinkable in times of non-cooperation or lack of cooperation.

Policymakers and entrepreneurs of BBIN countries may strike a deal for making a complete package of cooperation in the area of economic development and energy trade. They may connect economic development corridors of each country to the ones in the other country and accordingly produce energy and power and supply them to the high demand corridors.

In such a manner, economic development in each country would be supported by the other members of the BBIN and benefits of cooperation could be materialised and made visible to all stakeholders.

Lafarge Surma Cement factory is a classic example of fruitful cross-border cooperation. It is located in Bangladesh's Sunamganj district but depends on supply of stones coming from India's Meghalaya state. The two countries have also started power trade and there is enormous scope for enhanced cooperation if they focus on economic corridors for energy trade.

Since Bangladesh is seeking investments in economic zones and the country's northern part is close to the Indian corridor (Shiliguri), India's Jalpaiguri and Coachbihar districts adjacent to Nepal and Bhutan may be considered as an energy supply hub.

Each of the BBIN members can exchange natural resources as raw materials for  industries to be set up in the respective territories. Such collaboration can become a game changer for the people living in and around the corridors. In such an atmosphere of cooperation, cross-border informal trade can be replaced by formal trade that benefits all the parties.

In view of certain improvements in physical infrastructure, especially in respect of  road transportation, there can be joint venture power projects for supply wherever required in each country. Production of energy and power targeting the market in the economic corridors would ensure sustainability of the projects.

In order to make that happen, government-to-government diplomatic approach and people-to-people contact may be useful. Demand for energy and power from consumers and entrepreneurs may encourage governments to initiate collaborative efforts while official initiatives may assure peoples that it's time to act on projects that may shape their future culture of cross-border cooperation.

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This article has been prepared as part of a BEI media fellowship with support of SARI/El Project Secretariat under IRADe and USAID