December 20, 2000


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G Parthasarthy

The Road to Mandalay

External Affairs Minister Jaswant Singh will be leaving shortly for Myanmar to inaugurate the 144 km road that engineers of our Border Roads Organisation have built, linking the township of Tamu with the railhead at Kalemyo in Myanmar. This road is essentially designed to provide Indian goods market access to important centres in Myanmar like Mandalay.

One hopes the minister will undertake a part of his journey by road travelling across the national highway from Imphal to the border town of Moreh, located barely two kilometres from Tamu. He will find the visit revealing. Provided the authorities don't intervene and ask traders not to display foreign goods, Jaswant Singh will find the markets in Moreh and other border towns well stocked with goods from Myanmar, China and Thailand. If he should visit any small township across the border in Myanmar he will find the shops there well stocked with Indian bicycles, consumer goods, pharmaceuticals and even electrical generators.

If Jaswant Singh's officials search the trade statistics prepared by the Mandarins of Udyog Bhavan they will find that none of these trade exchanges are reflected in official statistics. Those dealing with enforcement will label all these border trade exchanges as 'smuggling'. But, for the people of the North Eastern states the exchanges of goods across borders artificially drawn up by the British merely reflect a continuation of their historical links with countries like Myanmar, Laos, Thailand and China.

We often tend to forget the fact that through the centuries there has been a natural exchange of peoples, goods and services between our North East and the countries of South and South East Asia. The Ahoms of Assam after all migrated several centuries ago from the Shan State of Myanmar, where the language spoken is almost identical to that spoken in Laos and Thailand. The Chins from Myanmar have migrated over the past centuries to Manipur and Mizoram and the Maities of Manipur have ties for over 2000 years with the Burmans of Myanmar. There has been a similar migration to the North East from the Yunan Province of China. The ties between what is now Bangladesh and its neighbours like Assam and West Bengal are also so close that there is little that governments can do to prevent the free movement of goods and services across national boundaries. Likewise, there are now nearly half a million people of Indian origin living in Myanmar who retain close cultural, emotional and spiritual ties with India.

Just over two years ago Bangladesh, India, Myanmar, Sri Lanka and Thailand came together to form an economic association called BIMSTEC linking the littoral states of the Bay of Bengal. This economic grouping aims to promote rapid economic cooperation between members in key areas like trade, investment, tourism, fisheries, agriculture, transportation links and human resources development. India and Sri Lanka have already concluded a bilateral Free Trade Agreement that is showing the potential to rapidly expand bilateral trade and economic cooperation.

As members of ASEAN, Myanmar and Thailand will be moving towards developing free trade ties. It is, therefore, important that India should move ahead in concluding free trade agreements with Bangladesh and Myanmar as soon as possible. The way should be paved for BIMSTEC to move towards becoming a Free Trade Association. One effective way to deal with insurgency in the North East would be to cooperate with Myanmar in the development of forestry and agricultural resources in Myanmar's Sagaing division and Chin state that border Mizoram, Manipur and Nagaland. The immense hydroelectric potential of the areas bordering India could be developed to promote rapid economic growth of the North East.

China and Myanmar are now not only opening out their economies to foreign investment, but also endeavouring to become major tourism destinations. While India attracts barely 2.5 million tourists annually, an estimated 72 million tourists visited China in 1999. Beijing alone has 65,000 hotel rooms, almost the same number as the whole of India. Our capital city has only 8,000 hotel rooms. Thus, while there was much being spoken in India about China posing a strategic challenge to us, the fact of the matter is that unless we set our house in order and shed some of our policies regarded as sacred cows like reservations for the small scale-sector and treating tourism facilities as highly taxed luxury industries, we will soon find ourselves increasingly marginalised both industrially and in spheres like tourism by China and other East Asian countries.

More importantly, we will find people living in our North Eastern states raising queries about why they cannot be the beneficiaries of larger incomes through tourism, trade and transit as their neighbours to the east. The belief in New Delhi that problems like public disaffection, unemployment and insurgency can be overcome merely by pouring in financial resources into border states whether it is Jammu & Kashmir or Assam, needs to be reviewed. A greater emphasis has to be placed on these states raising their own resources and enhancing productive employment by encouraging, tourism, trade, transit and foreign investment.

There has naturally been concern that the opening out of border trade in the North East would lead to the region's own industries being adversely affected by a flood of Chinese goods. With China set to join the WTO it would have to make its trade and pricing policies much more transparent than at present. It is, therefore, important that arrangements should be concluded with China so that trade across land borders is conducted on an MFN basis with an appropriate tariff structure. This arrangement could extend to the Indo-Tibetan border also, with the progressive opening out of an increasing number of border check posts to promote trade. There have been some recent discussions on how to promote such cooperation with China regionally in a Track II Process, popularly known as the Kunming initiative.

The road we are presently constructing in Myanmar will have little utility in promoting our interests if we continue to follow our presently restrictive and unrealistic border trade practices. It is ludicrous to expect traders living in our North Eastern states to observe cumbersome procedures and banking arrangements in their trade with counterparts across the border. Procedures need to be simplified so that traders in the North Eastern states can exchange goods on barter and through counter trade arrangements.

There is need for introducing a number of trade facilitation measures to promote border trade with Myanmar and Bangladesh, including transportation systems that allow cross-border movements of vehicles and the provision of auxiliaries like weight bridges and cold storage. It makes economic sense to evolve measures for Myanmar to provide the requirements of agricultural commodities like rice and dals to our North East under counter trade arrangements, rather than pay huge subsidies for supplies from distant parts of India.

It is essentially for New Delhi to ensure that such arrangements are expeditiously put in place. The North-Eastern states will then become centres of transit for trade with our eastern neighbours. All this only increases the urgency for concluding free trade agreements with our eastern neighbours.

Given the high levels of literacy and prevalent use of English in some of our North Eastern states like Mizoram, the IT industry must be persuaded to move into software parks in the region. These parks will serve to attract business and trainees from our eastern neighbours. While moves are underway to construct an international airport at Guwahati, there is need to look at measures to promote foreign investment to attract tourists from ASEAN and East Asian countries including the Yunan Province of China to the North Eastern states. The land routes in Myanmar, bordering Manipur and Mizoram should be opened for travel, pilgrimages and tourism.

While much has been spoken over the past decade about a new momentum being imparted to our 'Look East' policies, these policies will serve our national interest best only if they are integrally linked to the promotion of the economic progress and welfare of the people of our North Eastern states.

G Parthasarathy

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