NorthEast: Bridging India and ASEAN

By Moirangthem Prakash *

"India is aware of the geo-economic potential of the North Eastern region as a gateway to the East and Southeast Asia. By gradually integrating this region through cross-border market access, the North Eastern region could become the bridge between the Indian economy and the fastest growing and dynamic region in the world."
--- External Affairs Minister, Pranab Mukherjee, National Conference on "India's Look East Policy: Challenges for Sub-Regional Cooperation", Guwahati, 7-9 October, 2007.

Discourses have been going on, for the last few years, on how 'Look East' Policy (LEP) of India will transform North East (NE). Ministries of External Affairs, DONER (Development of North Eastern Region), NEC (North Eastern Council), various NGOs and think tanks, have been analysing and putting efforts to make the policy a reality.

The first national consultation took place in Shillong in June 2007, with the second one held soon thereafter in Guwahati in October. The latest round in the series took place on October 31 in the form of a meeting of the Chief Ministers of the North East in New Delhi. In the context of LEP, Northeast has been seen with a new vigour, vitality and optimism.

According to Rajiv Sikri, Secretary East, Ministry of External Affairs, the Look East Policy "envisages the NE region not as the periphery of India, but as the centre of a thriving and integrated economic space linking two dynamic regions with a network of highways, railways, pipelines, transmission lines crisscrossing the region".

Advocates of freer trade envisage with conviction that the region will get maximum benefit from this so-called economic policy and thus will bring economic prosperity in NE.

In the light of the current much hyped favourable impacts of this policy, irrespective of its feasibility, we need to investigate: Whether the policy is going to benefit the region? If yes, how far the NE region in general and in particular Manipur is going to able to reap the benefits of this policy?

And, who will be real beneficiaries of the cross border trade: either the people of the region or the business community of mainland India? If not, in what ways and how the region as well as the State is going to be affected by the policy?

This piece of writing is an attempt to respond to these questions, which are in the minds of the people in the region. Understanding the logic behind the initiation of this policy and its various dimensions is of immense importance to deal with the above questions.

With the end of the Cold War, India's role in Non-Aligned Movement lost much of its importance in international politics. India's set back from the collapse of USSR and the near financial crisis of early 1990's made it amply clear for India that its foreign policy needed a fresh look.

The uncomfortable relations with most of the South Asian countries - failure of SAARC as a regional economic block - and its "inward looking economic structure and protectionist policies generated interest in the rest of South East Asia. Moreover, the increasing prospect of South East Asia as a region of high economic potential induced India to look eastward making a shift from its conventional westward looking.

Since the early nineties, India has been pursuing this policy coinciding with India's economic reforms to enhance economic cooperation with its neighbours in the East. The policy simply means focusing on extending relations, especially business ties with India's eastern neighbours like Thailand, Korea, Japan, Philippines, Singapore, Malaysia and other countries on the Pacific rim - countries which have thriving economies.

The policy was first initiated by former Prime Minister Shri Narasimha Rao in 1991, who felt that it was essential for India to turn to East Asian nations which were on the fast growth trajectory. Since then, successive Indian Governments have pursued this policy of expanding trade and business links with the Association of South East Asian Nations (ASEAN) and consequently with East Asia.

The policy is not only economic but it has political, security and strategic dimensions also. In political arena, the LEP was designated to divert India's cold relationship with Southeast nations that had been lasting during the cold war and another decisive element in political sense could be the development of regionalism.

The economic implication of the LEP seems to further indicate a strategic trend of India going beyond South Asia and joining Asia-Pacific. In military and security areas, the LEP clearly points to an Indian strategy for a global power.

It has been more than one and half decade since the policy was launched, and it is time to examine the policy keeping in mind the possible effects that the region may have. This can be done while trying to locate where the region does stand in the India-ASEAN trade.

It is a fact that economic growth and development of a region hinges on trade and business with other regions. But the question arising here is: where does NE stand in the India-ASEAN trade?

In its true economic sense, the region does not come into picture in this border trade. In the light of the ongoing LEP, NE serves the purpose of a gateway indicating that trade will take place between mainland India and other members of ASEAN. The region performs the role of consumer and buyer rather than that of producer and seller.

Goods consumed by the people of Manipur, for instance, ranging from toothpaste, soap to electronic goods are all made either in China or Thailand. Not only in final and manufactured goods, even agricultural commodities have flooded local markets in Manipur.

Local cucumber is no more seen in the markets during summer. Water melons from Burma have replaced it. This is one just example. This not only ruins the conditions of farmers, it is an attack to the State economy which will further make dependent even for such primary commodities.

And India's exports consist mainly of cement, cycle, drugs and pharmaceuticals, auto parts and accessories and cotton yam, which are manufactured and produced in the advanced mainland Indian States. In this sense, the Indo-Myanmar border trade, we can say, is an expansion of both the trading partners' market in the region.

From this expansion of market, people of the region may have the opportunity of readily available final goods. But this has adverse affects for the economy. The immediate effect is that as they only buy and do not sale, money will drain out from the region. The more grave effect will come in the near future.

As goods are brought from outside the region, rather than producing within the region itself, this forfeits the chance of a self sufficient and prosperous economy in the region in future paving the way for an entirely dependent economy, which have already been depending.

Another important question is who is the business community who has been actively taking part in this trade? This community is not the residents of the State; it is those businessmen from mainland Indian States like Punjab, UP, Tamil Nadu and Kerela who get maximum benefits from this border trade.

Only few State subjects could take part as petty businessmen. This further accentuates the control of the economy by the outsiders. Thus, the real benefit is shared by the trading partners while the chances of NE's getting the spill-over effects like trafficking in arms and ammunitions, drugs and human trafficking, being a gateway, are very high.

The dramatic turn in India's planning to take through its 'Look East Policy' will by-pass NE region in this India-ASEAN trade. Because of the precarious infrastructure facilities and stagnant economic environment of the region, the region is not ready to open for border trade.

In terms of both peoples' involvement and export of goods, the region is not taking part in this border trade. Thus Northeast India will be the gateway to South East Asia and will also serve the purpose of a bridge connecting mainland India and ASEAN.

The regional integration through the Northeast corridor of India will hardly solve many of the economic ills of the region that also has its spillover effects on social and political turmoils.