Guwahati, Wednesday, October 31, 2007
EDITORIAL
Economic development of North East
— HN Das
Theoretical economics has all along pleaded for removal of all restrictions on
trade. The belief is that ‘in every country it always is and must be the
interest of the great body of people to buy whatever they want off those who
sell it cheapest? Stating this in the Wealth of Nations, Adam Smith also
clarified that ‘the proposition is so very manifest that it seems ridiculous to
take any pains to prove it, nor could it ever have been called in question, had
not the interested sophistry of merchants and manufacturers confounded the
common sense of mankind?In the practical field it has been noticed that
international trade has fostered the wealth of nations. Tremendous economic
development has taken place in the six decades since the end of the Second
World War. Trade has played the most important role in it. Delving into the
genesis of Taiwan’s transformation from a poor fishing island without any
natural resources into one of the most prosperous countries in the world, it
was collected that in 1950 General Issimo Chiang Kei Shek and his wife Sung Li
fled to Taiwan (then called Formosa) after Mao Zedong’s Red Army swept into
power in mainland China. They started the process of Taiwan’s economic
development through trade. First they harvested and exported fish. Then
agricultural and agro-industrial goods. Then the products of village and small
industries which included very large consignments of cheap readymade clothes.
This continued for sometime when they started manufacturing and exporting
computer hardware. This became possible through its technically rich human
resource.A number of countries including Korea, Thailand, Singapore, Hong Kong,
Malaysia, Philippines and others followed a more or less similar growth path
and became prosperous. To quote the Nobel Prize-winning economist Joseph E
Stiglitz, ‘the most successful developing countries in the world have achieved
their success through trade through exports’. But he has warned that, ‘opening
up markets in the developing countries to goods from the advanced industrial
countries without full reciprocation’ might not work. He quoted the case of
Europe when in 2001 it, ‘unilaterally opened to markets to the poorest
countries of the world’ and ‘almost no trade followed’. Stiglitz referred to
the various trade agreements and opined that, ‘even if trade agreements have
been truly free and fair, not all countries would have benefitted or at least
benefitted much and not all people, even in the countries that did benefit,
would share in the gains. Even if trade barriers are brought down
systematically, not everyone is equally in a position to take advantage of the
new opportunities’. (Making Globalisation Work).” These are prophetic words
indeed. Their potency can be examined with reference of the Government of
India’s Look East Policy adopted in 1990-91 after the liberalisation of the
Indian economy. By this policy a new orientation is sought to be given to
India’s foreign policy and trade by a thrust on South Asian and South East
Asian countries. Prime Minister Manmohan Singh described India’s Look East
policy as ‘a strategic shift in our perspective’ and further clarified that
‘the age-old India-ASEAN linkages have given a renewed thrust with the
impressive growth of connectivity and the ever-increasing flows of tourism
between India and ASEAN’. In fact ASEAN (Association of South East Asian
Nations) reached 40 years of its existence in 2007. Recalling the recent
events, Singh further said that ‘in the present phase of our Look East policy,
we in India seek to deepen our economic integration by entering into free trade
or comprehensive economic partnership agreements, both with ASEAN as a whole
and with individual countries of the region’.The very first agreement in this
field was the Indo-Myanmar Trade Agreement signed on January 31, 1994. The
agreement provided for ‘establishment of trade on the basis of equality and
mutual benefit.’ The idea was to put in place a ‘signaling device to monitor
the movement of commodities and people’. Probably another objective was to
provide ‘an insurance against the perceived threat of Chinese dominance of the
region’ as feared by one of the speakers in a ‘National Seminar on Border
Trade’ held in Imphal on November 8-9, 2004 in which this writer chaired a
session on the Stilwell Road. An MoU was also signed between the Government of
India and Myanmar the same day. These two agreements were followed up by a
delegation-level talk on June 10, 1994.Media comments on these events at that
time were favourable to the GOI. For example, Sapra, which is a serious
magazine on insurgency, national security etc under the overall guidance of Gen
(retd) Shankar Roy Choudhury said that ‘improvement in relations with ASEAN as
well as other key East Asian countries like China and Japan would only heighten
regional economic bonds. India’s increasing integration with this region will
only help ensure that these bonds do not snap at any time in the foreseeable
future.’ The MoU is concerned with co-operation between civilian border
authorities of the two countries. The minutes of the talk relate to banking and
trading arrangements, immigration and customs inspection and timing of border
trade. Indo-Myanmar trade was formally launched on April 12, 1995 by the then
Union Commerce Minister P Chidambaram and his Myanmarese counterpart Lt Gen Tun
Kyi.It is appropriate that the Look East policy first touched Myanmar. It has a
common border of 1,643 kms with four of India’s states, namely Arunachal
Pradesh, Nagaland, Manipur and Mizoram. For trade with China and the South East
Asian countries by the land route, all movement has to be through Myanmar. It
is true that Myanmar itself is poor. It does not have as much to offer as the
other South East Asian countries except for smuggled precious stones, gold
bars, teak wood, arms and drugs. But its strategic geographical location cannot
be ignored. That is why India is proposing to build a trans-Asian railway
network through Myanmar to Singapore. The Asian road highway is already under
construction through Myanmar. The ultimate idea is to link up the Indian Ocean
with the South China Sea.Writing about India’s foreign policy in the Asian
context, the former Indian foreign secretary J N Dixit in his, My South Block
Years : Memoirs of a Foreign Secretary had suggested that our trade relations
with Myanmar should be normalised irrespective of the government that may be in
power, because that country is geo-strategically important to India. Today,
India is following a pragmatic policy towards the autocratic junta which
controls Myanmar while at the same time supporting the world community’s effort
towards freeing the Nobel Laureate fighter for democracy, Aung San Su Ki, who
to under house arrest in Yangon.Sixtyfive years ago the then Supreme Commander
of the Allied Forces, Earl Mountbatten of Burma, also recognised the importance
of NE in the Asian context when he penned his report to the combined chiefs of
staff. Much later, this writer travelled on the Stilwell Road as far as the
Myanmarese army camp on the hill overlooking the Lake of No Return and spent a
night in the camp. It was Mountbatten’s South East Asia Command which built the
famous Ledo Road to Kunming in China for supervising the two oil pipelines
respectively from Kolkata and Chittagong via Tinsukia. This road was also used
for movement of troops and military supplies. Its construction was overseen by
Mountbatten’s quarrelsome deputy Stilwell. But a magnanimous Mountbatten named
the road after Stilwell. According to media reports, the Stilwell Road has been
rebuilt by China upto a reasonable distance of the India-Myanmar border. The
damaged stretch is now being repaired. It is the portion within Myanmar which
will need very extensive rebuilding. Myanmar does not seem to have the
resources to do this. Whether India and China will carry out the repairs is a
question which has no answer as yet. India has already undertaken several road
projects through Myanmar at its cost, besides initiating discussion for a rail
connection between Jiribam in Assam and Hanoi in Vietnam. All these measures
should lead to the success of the Look East Policy and economic development of
NE through trade.
(The writer was Chief Secretary of Assam during 1990-95)
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