Connecting with the BLUE ECONOMY

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Connecting with the BLUE ECONOMY

We should bear in mind that many landlocked developing countries including Bolivia, Mongolia, Ethiopia, Laos and Moldova own and operate ocean going vessels.


As a land-locked country, Nepal's outward orientation from the very beginning has hinged upon the saline waters of the Bay of Bengal (BoB). Two Rana Prime Ministers Jung Bahadur and Chandra Shumshere in the course of their visit to England in 1850 and 1908 respectively, started their journey from the port of Kolkata. Historians reveal that the ships carried several courtiers and servants, loaded with food, water and farm animals for use during the journey and stay in England.
Nepal bears a long historical and traditional link with the Bay of Bengal. Not only do all the rivers in Nepal flow south and drain into it, many holy and religious sites are also located in the watershed area of the bay. The famous Hindu and Buddhist religious sites are built around the river systems in Nepal and India, all joining together and making a confluence to the sea at Gangasagar. Due to the inflow of large volumes of fresh water, the Bay of Bengal has the lowest level of salinity among other seas and oceans around the globe.

Kolkata remains the oldest sea-port having linkages with Nepal and Nepali trade. An agreement signed in 1923 between the government of Nepal and British India formally allowed the use of the Indian port to transit goods to and from Nepal. The agreement on one side recognised Nepal as an independent and sovereign country while on the other side provided limited transit rights for the passage of traded goods to and from Nepal. Three treaties, namely the treaty of trade and commerce signed in 1950, the subsequent treaty of trade and transit-1960 and the treaty of transit-1978 have provided unfettered access for all of Nepal's traffic in transit through the ports of Kolkata and Haldia and lately through Visakhapatnam, all being coastal cities along the Bay of Bengal.

Nepal is a major contributor to the water inflow in the bay and heavy silt loads carried by the rivers have culminated in the forming of new islands in the Hooghly delta. However, it has not been able to utilise the marine resources except for the passage of traded goods in vessels. Even such passage takes place through the merchant ships that sail under foreign flags and is managed by intermediate agencies and shipping lines that are also foreign. As a result, there are several cost components in the shipping bills and transportation charges that are exorbitant and non-transparent. This is one of the reasons for the high cost in imports and exports, eroding competitiveness of Nepali trade with consequential adverse impacts in the balance of trade. 

It is a popular notion that land divides but water connects. Coastal countries find it easier to link with other countries on the other side of the sea. However, landlocked countries are geographically disadvantaged and not in a position to do so. Hence, a number of international legal instruments have been developed to allow land-locked countries unfettered access to the sea and to connect with global markets. The United Conventions on Law of the Sea-1982, New York Convention-1965 and GATT Article-5 are some of the instruments, just to name a few. 

A new discourse among the Bay of Bengal community has been initiated to promote the blue economy and share the maritime resources among the countries at the sub-region and regional level. Four countries of the South Asian Sub-regional Economic Cooperation (SASEC) signed a motor vehicle agreement in 2015 in order to facilitate cross border movement of goods and vehicles. India and Bangladesh signed a coastal shipping agreement in 2017; in 2016, Nepal added the port of Visakhapatnam as another maritime gateway for the movement of transit goods. The application of an electronic cargo tracking system has been started on a pilot basis to simplify the movement of goods in transit between the port in India and Nepal since 2018. All these developments are supposed to facilitate the process of economic integration among countries in the region.

Oceans are largely the common property of all humanity, irrespective of their place of residence and nationality. The UN Convention on Law of the Sea has also delineated the rights and obligations of land-locked and coastal countries in respect to the use and application of oceanic resources. Accordingly, the use of territorial zones, ports and docks for passage of merchant ships plying under the flag of land-locked countries should be facilitated by the coastal countries. Besides, the exclusive economic zones of the coastal countries, which extend to a stretch of 200 miles from the coast line, can be used for harvesting marine resources by land-locked countries under the given conditions.

Multi-modal connectivity in transport is another important aspect that helps land-locked countries connect with their immediate neighbours and international markets. The mode of transport thus needs to go beyond the traditional mode extending to inland waterways and maritime transport with proper integration with road, railways and air transport.

The BBIN Motor Vehicle Agreement signed by four countries is still in limbo pending the finalisation of protocol required for its implementation. Besides, this agreement is silent about port connectivity and linkages of inland waterways transport. Some important projects are being taken up by India and Bangladesh to enhance connectivity through land and maritime transport systems to establish linkages with South East Asia through Myanmar and Thailand.

The ongoing development of a tri-lateral highway linking India-Myanmar-Thailand, and the connectivity agreement between India and Bangladesh to upgrade transport infrastructures under the Act East policy of the latter,are considered important for enhancing connectivity in the region. Nepal is also implementing a few regional transport projects with a disposition on cross-border connectivity. Despite its absence in the sub-regional agreement, the inland waterways transport has surfaced in the bilateral agreement between Nepal and India with the signing of a protocol in 2018. As a land-locked country, Nepal should focus on leveraging the sub-regional cooperation mechanism of SASEC to effectively and efficiently connect with ocean transport and use of marine resources. We should bear in mind that many landlocked developing countries including Bolivia, Mongolia, Ethiopia, Laos and Moldova own and operateocean going vessels, let alone the developed countries like Austria, Luxemburg and Switzerland. The use of marine resources has been introduced in a roundabout way in the bilateral treaty of trade signed between Nepal and India in 2009. According to the provisions laid in the rules of origin criteria,marine products extracted by Nepal in accordance with the provisions of the law of sea will be treated as wholly produced in Nepal. Based on these signs wwand international practices, the government of Nepal should redouble its efforts to become a part of the blue economy. This would help towards enhancing the country's access to marine resources, achieve efficiency in multi-modal transport and advance the economic integration process at the sub-regional and regional level. 

(The author is the former Secretary of Commerce.) 

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