indushek
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I think the barriers for trade to north east are born out of security fears mainly though there may be other factors too. The below para from a article on north east economic problems outlines certain topics we are discussing here
para:
Another area where radical policy action is needed is the external sector. For long, it has been argued that the disadvantageous geographical situation of the Northeast region is one of the main stumbling blocks for its economic development. This isolated, landlocked region shares less than 2 per cent of its borders with the rest of the country, and the rest with Bhutan, Bangladesh, Myanmar and the Tibetan region of China. For the most part, this international border has been artificially created. The result has been the elimination of the region's trade, commerce and other linkages that existed in pre-Partition days. Using the region's two per cent perimeter as a major linkage point with the rest of India, and at the same time checking the inflow of goods and people from across the remaining 98 per cent, has been both a gigantic task and quite counter-productive.
Lately, there has been talk of converting this locational disadvantage into a boon because of an increasingly integrated world economy. This is particularly so when all the seven States of the region are on international borders. In addition, these States are very close to the dynamic Southeast and East Asian economies.
Most policy makers in the region are excited and optimistic about the idea of linking their economies with dynamic Asia. There are even suggestions that if, for security reasons, the Government of India is reluctant to open up the natural trade routes, the Northeast States should ask the Central government to compensate them for the loss of trade. [33]
It is imperative to develop a coherent policy perspective on this issue. The current situation not only represents a failure of the economic policy framework in the region, but also a weakness of country's foreign policy, which has ignored Southeast Asia for a long time. As a result, the Northeast region was not only cut off from its natural economic partners [34] but also encircled by unfriendly countries.
So far the major border trade activity of the region with Bangladesh and Myanmar is 'unauthorised trade'. The State authorities are fully aware of these activities, which function smoothly through unofficial channels. China is an important player in the border trade even though its trading activities are mainly through Myanmar.
The major policy issue, therefore, would be to synchronise these realities with Indian trade policies. In fact, to transform this low economic activity area into a dynamic region in the next ten to fifteen years, a co-ordinated effort by different Central ministries — mainly External Affairs, Home, Finance and Commerce — as well as a strong commitment from each of the Northeast States is needed. With a well thought-out long-term policy, this region has the potential to emerge as a strategic base for domestic and foreign investors to tap the potential of contiguous markets of China, Myanmar, Bangladesh, Laos, Thailand, Vietnam, Cambodia as well as Malaysia, Indonesia and beyond.
To begin with, the emphasis should be on creating conditions, both at the policy level and at the ground level, on converting the unauthorised trade into authorised trade. This is not a simple task. The genuine trader will have many practical problems. Unauthorised trade works on the basis of a strong network which involves traders, the police, forest departments and, of course, many underground groups - and each has its own share in the pie. Apart from infrastructural problems at Moreh, the large number of checkposts on National Highways 39 and 53 would create a problem in switching over from illegal to legal trade. Traders claim that the expenditure on transportation from Moreh to Dimapur is about Rs 50,000 per truck, which includes hire charges, payments to various underground groups, and money paid to almost every police and forest checkpost. [35] Similarly, transport expenditure from Imphal to Guwahati is more than Rs 35,000 per truck. The main reason is that the commodities that are coming from the border are not legal. The list of items agreed by the governments of India and Myanmar is not of much use to traders. However, even if the products were legal, the usual 'tax' would still need to be paid at every checkpoint.
In most cases, the State governments turn a blind eye to the border trade in illegal items because it creates a lot of economic activity in the region. But, since these commodities are not officially declared legal, there is corruption at every turn. It would be a good idea to declare certain areas in the region as Free Trade Areas officially since, for all practical purposes, they are free trade areas anyway.
After designating these areas as Free Trade Areas and creating a minimum infrastructure, the second major step could be to devise an aggressive strategy to form a Growth Triangle or Quadrangle involving neighbouring regions. Some scholars had previously emphasised the idea of the "Bay of Bengal Growth Triangle". [36] It was proposed to have joint studies and co-ordinated investment plans to tap the natural resources of the region that includes the eastern and north eastern States of India, Bangladesh, Nepal, Bhutan and possibly Myanmar. But, with the signing of the Bangladesh-India-Myanmar-Sri Lanka-Thailand Economic Co-operation (BIMST-EC) agreement, the focus has shifted to this forum.
While keeping the interests of India's Northeast in mind, some inter-related steps could also be taken to create a growth quadrangle involving Northeastern India, northern Myanamar, south-west China, [37] northern Thailand and Bangladesh. [38] In August 1999, the "Kunming Initiative" to promote a growth quadrangle between India, China, Myanmar and Bangladesh was launched at an international conference in Kunming, the Capital of the Yunnan province of China. The conference resolved to establish a Forum for Regional Co-operation between China, India, Myanmar and Bangladesh through interaction among academics, governments and leaders of business and industry. The basic objective of the conference was to strengthen regional economic co-operation among contiguous regions of eastern / north eastern India, Bangladesh, China and Myanmar. [39] It was agreed that regional co-operation "should be guided by the Five Principles of Peaceful Coexistence, emphasising equality and mutual benefit, sustainable development, comparative advantages, adoption of international standards, and infrastructure development in order to enhance connectivity and facilitate the widest possible economic co-operation". [40] In this way, in the long run, the vision of making India's Northeast a partner in a wider cross-border Brahmaputra-Yangtze-Mekong quadrant can be realised. [41]
The link
India's Northeast Rejuvenating a Conflict-riven Economy
para:
Another area where radical policy action is needed is the external sector. For long, it has been argued that the disadvantageous geographical situation of the Northeast region is one of the main stumbling blocks for its economic development. This isolated, landlocked region shares less than 2 per cent of its borders with the rest of the country, and the rest with Bhutan, Bangladesh, Myanmar and the Tibetan region of China. For the most part, this international border has been artificially created. The result has been the elimination of the region's trade, commerce and other linkages that existed in pre-Partition days. Using the region's two per cent perimeter as a major linkage point with the rest of India, and at the same time checking the inflow of goods and people from across the remaining 98 per cent, has been both a gigantic task and quite counter-productive.
Lately, there has been talk of converting this locational disadvantage into a boon because of an increasingly integrated world economy. This is particularly so when all the seven States of the region are on international borders. In addition, these States are very close to the dynamic Southeast and East Asian economies.
Most policy makers in the region are excited and optimistic about the idea of linking their economies with dynamic Asia. There are even suggestions that if, for security reasons, the Government of India is reluctant to open up the natural trade routes, the Northeast States should ask the Central government to compensate them for the loss of trade. [33]
It is imperative to develop a coherent policy perspective on this issue. The current situation not only represents a failure of the economic policy framework in the region, but also a weakness of country's foreign policy, which has ignored Southeast Asia for a long time. As a result, the Northeast region was not only cut off from its natural economic partners [34] but also encircled by unfriendly countries.
So far the major border trade activity of the region with Bangladesh and Myanmar is 'unauthorised trade'. The State authorities are fully aware of these activities, which function smoothly through unofficial channels. China is an important player in the border trade even though its trading activities are mainly through Myanmar.
The major policy issue, therefore, would be to synchronise these realities with Indian trade policies. In fact, to transform this low economic activity area into a dynamic region in the next ten to fifteen years, a co-ordinated effort by different Central ministries — mainly External Affairs, Home, Finance and Commerce — as well as a strong commitment from each of the Northeast States is needed. With a well thought-out long-term policy, this region has the potential to emerge as a strategic base for domestic and foreign investors to tap the potential of contiguous markets of China, Myanmar, Bangladesh, Laos, Thailand, Vietnam, Cambodia as well as Malaysia, Indonesia and beyond.
To begin with, the emphasis should be on creating conditions, both at the policy level and at the ground level, on converting the unauthorised trade into authorised trade. This is not a simple task. The genuine trader will have many practical problems. Unauthorised trade works on the basis of a strong network which involves traders, the police, forest departments and, of course, many underground groups - and each has its own share in the pie. Apart from infrastructural problems at Moreh, the large number of checkposts on National Highways 39 and 53 would create a problem in switching over from illegal to legal trade. Traders claim that the expenditure on transportation from Moreh to Dimapur is about Rs 50,000 per truck, which includes hire charges, payments to various underground groups, and money paid to almost every police and forest checkpost. [35] Similarly, transport expenditure from Imphal to Guwahati is more than Rs 35,000 per truck. The main reason is that the commodities that are coming from the border are not legal. The list of items agreed by the governments of India and Myanmar is not of much use to traders. However, even if the products were legal, the usual 'tax' would still need to be paid at every checkpoint.
In most cases, the State governments turn a blind eye to the border trade in illegal items because it creates a lot of economic activity in the region. But, since these commodities are not officially declared legal, there is corruption at every turn. It would be a good idea to declare certain areas in the region as Free Trade Areas officially since, for all practical purposes, they are free trade areas anyway.
After designating these areas as Free Trade Areas and creating a minimum infrastructure, the second major step could be to devise an aggressive strategy to form a Growth Triangle or Quadrangle involving neighbouring regions. Some scholars had previously emphasised the idea of the "Bay of Bengal Growth Triangle". [36] It was proposed to have joint studies and co-ordinated investment plans to tap the natural resources of the region that includes the eastern and north eastern States of India, Bangladesh, Nepal, Bhutan and possibly Myanmar. But, with the signing of the Bangladesh-India-Myanmar-Sri Lanka-Thailand Economic Co-operation (BIMST-EC) agreement, the focus has shifted to this forum.
While keeping the interests of India's Northeast in mind, some inter-related steps could also be taken to create a growth quadrangle involving Northeastern India, northern Myanamar, south-west China, [37] northern Thailand and Bangladesh. [38] In August 1999, the "Kunming Initiative" to promote a growth quadrangle between India, China, Myanmar and Bangladesh was launched at an international conference in Kunming, the Capital of the Yunnan province of China. The conference resolved to establish a Forum for Regional Co-operation between China, India, Myanmar and Bangladesh through interaction among academics, governments and leaders of business and industry. The basic objective of the conference was to strengthen regional economic co-operation among contiguous regions of eastern / north eastern India, Bangladesh, China and Myanmar. [39] It was agreed that regional co-operation "should be guided by the Five Principles of Peaceful Coexistence, emphasising equality and mutual benefit, sustainable development, comparative advantages, adoption of international standards, and infrastructure development in order to enhance connectivity and facilitate the widest possible economic co-operation". [40] In this way, in the long run, the vision of making India's Northeast a partner in a wider cross-border Brahmaputra-Yangtze-Mekong quadrant can be realised. [41]
The link
India's Northeast Rejuvenating a Conflict-riven Economy
