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Prospects of economic cooperation in the Bangladesh, China, India and Myanmar region: A quantitative assessment

This paper quantifies the economic impact of Bangladesh, China, India and Myanmar (BCIM) economic cooperation and compares it with the alternative option of expanding South Asian Free Trade Area (SAFTA) with China and Myanmar. The paper examines the macro-economic performance of the individual countries and the current level of trade among the BCIM member countries at the regional level. In addition, the paper attempts to explore the level underlying rationale, peripheral benefits and primacy of forming BCIM rather than expanding SAFTA. In a quantitative analysis, a SMART simulation shows that, the merchandise trade in the BCIM region would increase by US$ 5.7 billion, US$ 4.1 billion and US$ 2.7 billion under full, moderate and partial tariff liberalization, respectively. On the other hand, trade would total US$ 12 billion, US$ 9 billion and US$ 5 billion in case of adding China and Myanmar to SAFTA. The paper identifies most trade potential products for the BCIM region under full tariff liberalization. Finally, it explores the logic of forming BCIM even though the quantitative results support the expansion of SAFTA to include China and Myanmar. It explores the fact that the strength of the BCIM region lies in expanding cooperation along with north-east India, south-west China, Bangladesh and Myanmar in the case of forming a subregional development hub or quadrangle with expanded cooperation in the transport, energy and tourism sectors. This quadrangle may have large potential for enhancing economic growth by increasing intraregional trade among the member countries and will have a positive impact both on economic and on human development in the region.

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