Guwahati, Wednesday, November 07, 2007
EDITORIAL
Preparing North East for Look East Policy— H N Das
During the current year (2007) there have been many exchanges between India and
the South East Asian countries as a part of Look East diplomatic initiative.
The Indian External Affairs Minister has visited Indonesia and Singapore. After
that the Prime Ministers of Thailand, Vietnam and Cambodia have visited India.
A Thai business delegation visited the North East Region of India sometime ago.
This has not yet borne any positive results in terms of trade and investment.
However, the Conference in Bangkok in October, 2007, might result in some
investment in NE by Thailand. Earlier India and Thailand had signed two
agreements: one on enhanced co-operation on renewable energy and the other on
cultural exchanges.Regional co-operation has been given a boost ever since the
first BIMSTEC (Bay of Bengal Initiative of Multi Sectoral Technical and
Economic Co-operation) summit in July, 2004. The countries concerned in this
summit were Bangladesh, India, Sri Lanka, Thailand and Myanmar. Again, the
Thailand Mekong Ganga Co-operation Project aims at revitalising and developing
overland trade, tourism, communication and transport. The countries involved
are India, Myanmar, Thailand, Laos, Cambodia and Vietnam. These are
developments which will advance the Look East Policy and enhance India’s
economic and diplomatic relation with these countries.According to Sanjib
Baruah, foremost scholar on the Look East Policy, “North East India’s isolation
from its neighbourhood has much older roots: that which came about as a result
of the advent of western dominance over sea routes and over global trade and
more particularly the British conquest of the region and the decisions to draw
lines between the hills and plains, to put barriers of trade between Bhutan and
Assam and to treat Myanmar as a strategic frontier – British India’s buffer
against French Indochina and China. While the British colonial rulers built a
major new transportation infrastructure, aimed primarily at taking tea and
other resources our of Assam, the disruption of old trade routes remained
colonialism’s most enduring negative legacy.”According to Baruah “North East
India was on the southern trails of the Silk Road.” If that was so, this region
had connectivity in the ancient times with the world outside. This got snapped
during British times. In this connection Baruah alludes to Bhutan. That country
realised the importance of connectivity with South East Asia. The Bhutan king
emphasised this when he made the following statement: “No other region in the
world needs harmonious and cooperative relations among its States more than
South Asia”. The king expressed similar sentiments when an official delegation
from the State visited Bhutan in April, 1993.In the second Indo-Asean summit in
2003 India signed the Treaty of Amity and Co-operation in South East Asia. A
separate declaration provided for combating international terrorism as also for
comprehensive economic cooperation with a view to step up the current volume of
trade. Again, in order to achieve closer trade relations it is expected that
India’s peak tariff rates would be reviewed to make these at par with the rates
in the Asean countries for which a Free Trade Agreement was also signed.The
legal and the formal arrangements for trade through North East to South East
Asia are now more or less complete. But is the North East ready for it? This
region is not yet economically as developed as the rest of India. Moreover, it
is land locked. After partition of India in 1947 the North East lost its
natural trade routes through what is now Bangladesh. Its land connectivity with
the rest of India remained limited to the 22 kms “Chicken’s neck” in northern
West Bengal.As far as trade itself is concerned many countries and regions in
the world have become prosperous through trade as noted by many economists. In
fact countries like Taiwan, South Korea, Hong Kong, Singapore and Malaysia have
achieved their present status and level of development through trade. But what
has the North East to offer to, say, China in exchange for the plethora of
goods which that country is already exporting to this region? Industrial
products are very limited. Agricultural products will need proper processing
and packaging before the same can be exported. The service sector in NE is not
doing badly. But the quality is low. Tourism has not been so attractive because
facilities are not upto the mark and also because of media’s projection of our
security environment in very bad light. An extremely concentrated endeavour
will be required to achieve economic development of NE and its principal State
of Assam before NE can be ready for participation in the Look East Policy.When
the Thai trade delegation visited Assam in June, 2007 the Union Minister for
Development of North Eastern Region (DONER) said that Rs 15,000 crore would be
spent on infrastructure development in NE in the Eleventh Five Year Plan. Now
the Deputy Chairman of the Planning Commission has declared that substantial
funds will be made available for all round development of NE. This declaration
was made in a seminar held by the External Affairs Ministry in Guwahati during
October 7-9, 2007. What is important, is to ensure that funds are utilised
properly and not frittered away. There is a perception that public funds are
siphoned off by politicians, bureaucrats and contractors and not much is spent
on project proper in NE. Such funds are then spent recklessly and mostly
diverted to realty. The hundreds of apartment houses in Guwahati with thousands
of flats are perceived to have been mostly built for corrupt functionaries and
out of diverted plan funds.Will opening a new trade route or reviving the
ancient land trade route through NE lead to economic development of this area.
There is nothing automatic about it. Before meaningful trade activities can be
undertaken our agriculture has to improve both in terms of production and in
terms of productivity. Processing industries have to be set up to manufacture
quality goods which can be offered in international markets at acceptable
process. The entire infrastructure of roads, railways, communication and air
transport will have to be completely revamped. Similarly hotels, restaurants
and resorts will have to be built for sophisticated tourists.If that cannot be
achieved Look East Policy will not benefit NE. In that case the Look East
Policy will only provide bridge between the rest of India and South East Asia
of which NE will forever remain an “underbelly”. This type of result probably
was not envisaged when the policy was devised. In order that the Look East
Policy in inclusive it must therefore provide for economic development of NE as
a direct objective. In India the indirect effect or “trickling down effect” has
not worked so far. Even the Nobel Prize winning Economist Joseph E Stiglitz has
opined that “trickle down economics does not work. The fact is that if the
economy grows, it is not inclusive, and some time, the poor can be worse off”.
He was speaking about India. He did not mention about planning or about
Mahalanobis. But the fact is that the Mahalanobis model of planning failed
because it was based on the expectation of trickling down. To be precise
instead of organising trade alone the Central government will have to actively
intervene in the economic development of NE.
(The writer is formar Chief Secretary, Assam)
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