Bhutan may ratify BBIN pact in joint session

After the November blip, the motor-vehicles pact between Bangladesh-Bhutan-India-Nepal (BBIN), is back on the discussion table in Bhutan.

Expectation is rife that the Himalayan country will okay the deal by next month, thus clearing the deck for implementation of the first major sub-regional cooperation deal.

On November 15, when India was busy with demonetisation, the Upper House of Bhutanese Parliament rejected the ratification of the BBIN motor-vehicles pact (MVA), citing environmental and social concerns.

According to recent reports in the Bhutanese media, in a joint sitting on December 5, the Bhutanese Parliament decided to approach the King for further deliberations on ratification of the MVA. Sources in Bhutan said the king has already gone through the representations. However, a decision on the same is awaited.

The deal would mark a major success of Prime Minister Narendra Modi to move cooperation agendas, vetoed by Pakistan at the regional level, through sub-regional bridge building.

During the SAARC Summit in November 2014, Pakistan blocked the proposal for regional MVA.

Modi took this opportunity to revive the 1996 proposal for sub-regional cooperation, then described as the South Asian Growth Quadrangle.

In July 2015, BBIN nations signed the provisional agreement. Though Bangladesh and Nepal had reservations on movement of personal vehicles; they ratified the treaty by early 2016. A draft agreement was readied outlining rules and regulations for implementing the pact.

Only Thimpu was concerned that the deal would lead to a huge influx of vehicles impacting its pristine environment and killing livelihood of the local transporters.

Bhutan’s objections had nothing to do with wider geo-politics. India has the strongest ties with Bhutan in the region.

The Indian rupee is a parallel legal tender in Bhutan. Nearly 90 per cent of Bhutan’s trade is with India. And vehicles from India can move freely in Bhutan.

Considering their low capacity to export, Bhutanese are wary that the treaty would result in influx of Bangladeshi and Nepalese vehicles (over and above the existing arrangement with India) taking advantage of the reciprocity clauses.

The issue is both sentimental and economic. Bhutan measures its economic progress in terms of gross national happiness. Also, it is extremely concerned about environment and doesn’t allow over-exploitation of tourism potentials.

After prolonged discussion, the Lower House of Bhutanese Parliament cleared the treaty early last year. But it was rejected by the Upper House.

Prabir De, professor at the ASEAN India Centre at MEA-sponsored Research and Information System for Developing Countries, admits that MVA has “dis-economies”.

However, he says, completion of the deal will open “great opportunities” to Bhutan to integrate itself with the regional value chains and improve product competitiveness. This will further open opportunities for investment.

“I am hopeful that the joint session of the Bhutanese parliaments will get it passed. In case, it does not pass through, BBIN MVA will have to exclude Bhutan,” he said.

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