‘Goods coming from Myanmar now flood the markets of Guwahati, Shillong, Itanagar, Kohima and Dimapur’

The term Northeast India is a misnomer of sorts. When the entire region, barring Manipur and Tripura was part of Assam, some tribal dominated districts within it asserted their right to a full-fledged state. Now that there are seven separate states, eight with Sikkim, all of them are clubbed under one amorphous entity — Northeast. It is both ironic and misleading because each state has its strengths and weaknesses, its opportunities and threats.

One conundrum that stares the so-called Northeasterner in the face is his ignorance of states other than his own. Hence, while people from this region complain that policy-makers in Delhi and the civil society in other parts of India do not understand the region, they also have to admit that they are themselves not better placed when it comes to first-hand knowledge of the region. How many of us have traversed the different states and understand their peculiar problems? Very few, I’m afraid!

Whereas there can be a sort of co-operation among some states in the area of tourism where package tours can include an entire circuit comprising Sikkim, Assam and Meghalaya, in that order, little headway seems to have been made by private tour operators to hard-sell the tourism potential of the above states. One is naming only the three states because they are more liberal and free from the stranglehold exerted by the Restricted Area Permit (RAP) and the Inner Line Permit (ILP), all of which are protective mechanisms to check unwanted influx of outsiders (read foreigners and Indians alike).

On more than one occasion the northeastern states have been known to crib about the manner in which their natural resources have been exploited and transported outside the region for value addition elsewhere. This inability to add value to resources from different states like tea and oil from Assam, coal, limestone, uranium from Meghalaya, horticultural, agricultural, forest and non-timber forest produce from Nagaland, Mizoram, Tripura, Manipur, Sikkim and Arunachal Pradesh, has created a situation where the states are ostensibly protected from outside influence but in the bargain have lost out economically because they refuse to open their economic borders.

There is today a worldwide flow of information and consumers want the best products from the super markets. They do not care where the products are made, who has made them and who will gain if they buy the products. The entire economy of Manipur, for instance, appears to revolve around the Myanmarese goods sold in Paona Bazar and Thangal Bazar. For a state that is virtually bankrupt and where government employees claim not to get their salaries for months on end, one thing remains an enigma. And that is the thriving gold jewellery business. I am yet to see so many gold jewellery outlets as I have seen in Imphal. A religious ceremony of the Meiteis is usually attended by both men and women. The latter are bedecked in the most exquisite gold jewellery. Incidentally, Meiteis are the best jewellers who can produce excellent filigree work with their bare hands.

Informal trade

Coming back to the thriving informal trade with Myanmar, (which certainly is a very one-sided affair since more goods come from the military junta state than they go from the Indian side), it would be interesting to assess the quantum of trade daily. On an average, about a dozen buses, a score or more of Tata Sumos and other vehicles, heavily loaded with Myamarese good ranging from Korean blankets, suitcases, ready-made garments, crockery, rice cookers, cotton material, shoes, detergent powders, candles, inverters, soaps, food products and so on, travel from Moreh to Imphal in a convoy. Three other states, Mizoram, Nagaland, Arunachal Pradesh, share their borders with Myanmar.

Goods coming from that country now flood the markets of Guwahati, Shillong, Itanagar, Kohima and Dimapur. Without anyone trying too hard, there is a flourishing trade with Myanmar, although, as stated earlier, the trade is one-sided since virtually nothing goes out from the Indian side. Myanmar also has a tremendous potential as a market for good quality, genuine precious stones, which can be picked up at Tamu. The question is where will all this one-sided trade lead?

The consumer in the Northeast is not bothered. He is ready to buy good quality candles made in Myanmar rather than the messy, leaky Indian candles that burn too fast or do not burn at all. An inverter, which is a must in all of the seven states where electricity is at a premium and is more often than not on “loadshedding mode”, is available for as low a price as Rs 3,000. In the Indian market the same product would cost Rs 6,000. This is also due to the fact that the Myanmar kyat is much lower than the Indian rupee. The Indian Rs 20 is equivalent to 100 kyat. This makes shopping quite a delight. Trade with Myanmar is what sustains the alternative economy of Manipur today.

In a sense then, the northeastern states are already looking east for most of their consumer goods. But since many of the goods pass through the informal sector, very little is reflected in the formal economic indicators. Renowned Japanese economist Kenichi Ohmae, in his book, The Borderless World, states that the belief that an ample stock of natural resources was what made a country rich and its product competitive, served as a powerful support for the idea of economic nationalism. If these resources were the primary source of national wealth, then foreign companies or countries that wanted access to them were seen as intruders and exploiters who should be kept at bay.

But Ohmae argues that this fundamentalist protectionist policy is what has kept countries poor. Political nationalism is not linked to economic nationalism in countries like Taiwan, South Korea, Thailand, Singapore and Hong Kong. The above countries do not boast of great natural resources but they are healthy, vibrant economic powers in their own right. The reason is because they enter the markets of other countries as value adders to their resources. Free flow of trade has demolished the economic borders of these countries.

Brazil and the African countries on the other hand are rich in resources but economically poor because of their protectionist trade policies. Ohmae contends that a country’s natural resources could actually become its liability if protectionist policies prevented other players from coming in and adding value to those resources. This has been amply demonstrated in the case of Malaysia whose economy suffered from the British protectionist policy of eliminating competition by importing all goods from Britain.

It was only when Prime Minister Mohammed Mahathir, Malaysia’s revolutionary ruler, introduced the “Look East” vision for his country after reducing government control on the economy that Malaysia’s economy began to look up. Earlier, the Malays, like most of us in the Northeast, used to look at foreign investment with great suspicion. They felt that it was just another attempt to steal their resources and exploit their people. This feeling completely turned around in 1998. Countries that look at their resources as a pot of gold that they can dip into whenever they want and are reluctant to let others use those resources have stagnated in the economic backwaters. The logic is that when no value is added to resources, no value can be collected. And value addition can come from any quarter, not necessarily those of the country that owns those resources. This is what global economics is all about.

Resource access

The “Look East” policy that is now being touted by the Vajpayee government envisages opening up of the Northeast borders for trade. Are the state governments of the northeastern states, which are under the stranglehold of a bureaucracy, which does not want to let go of power from any of the critical sectors of the economy, really ready to embrace this policy? Will the xenophobic population of Meghalaya, Mizoram or Nagaland allow this dismantling of economic borders? Do politicians form these states understand the broad parameters under which the “Look East” policy will function? If all the above actors do not see the big picture, the Northeast will remain a sickly economic zone, which will finally die of starvation.