NE India: A corridor to East and South-east Asia

Dr Kshetri Rajiv *

The abundant natural resources and the future prospect of international trade in the Northeast region have led India to formulate a kind of policy to tap this potentiality. At the same time, India's desire to extend its influence in a region where China is registering rapid growth in both military and economic power has led it to focus on the Northeast.

It was during the tenure of P.V. Narashimha Rao as Prime Minister that India formulated its Look East Policy (LEP) - a policy to forge stronger ties with Southeast Asia. It was a logical extension of India's policy of economic liberalization, which was introduced in 1991 with the then Finance Minister Manmohon Singh as the chief architect.

Substantive efforts towards closer political, economic and military ties underscore the logic of India's LEP. Thus, India's economic liberalization is a response to globalization and LEP is the product of this process in which India's economic agenda is to adjust with the changing international economic order.

In fact, the increasing security concerns in the region have also paved the way for India to redefine its relations with hostile neighbouring countries. The increasing level of political and military interface between India and Vietnam, Cambodia, Indonesia, Thailand and Myanmar in the recent years as parts of LEP signals a broader regional engagement.

In this context, India's LEP is also guided more or less by defense and strategic interests. At the same time, India's interest is driven by internal security. The perceived existence of various armed insurgent groups in the Northeastern part of India having base camps in Myanmar and Bangladesh is a matter of serious strategic concern.

The presence of these insurgents across the international borders has caused a lot of security anxieties for India. In order to cope up with the problem, India has to make attempt to persuade both Burma and Bangladesh to act against these insurgents operating from their soils.

With this vision, trading and development oriented ventures like the BIMST-EC (Bangladesh, India, Myanmar, Sri Lanka and Thailand Economic Corporation) and Mekong-Ganga Project are developed which have now gained their prominence. Facilitation of these projects has been done by the World Bank as plans for 1360 kilometer Trans Asian Highway to link India, Myanmar and Thailand in the first phase and with Indo-China in the second phase are on the card.

The Trans-Asian Highway will, in due course of time, be a much larger trans-Eurasian network linking South Asia, Southeast Asia, and China with Europe. The Mekong - Ganga Cooperation (MGC) launched in Vietnam in November 2000 comprising of India and five riparian states of Mekong namely Cambodia, Laos, Myanmar, Thailand and Vietnam is another important component in India's strategy to evolve a comprehensive relation with the Southeast Asian Nations through the strategic location of India's Northeast region.

This prospect is partly the reason that has drawn the Government of India to transform the economy of the region by exploiting its hydro power potentials through what some perceive as a major, 'aggressive strategy'.

In fact, India's LEP facilitates promise opportunities and challenges for the future of Northeast Region of India. It assumes that Northeast India has the potential to emerge as a producing and exporting region in South Asia if the policy is properly implemented. It is this advantage of the northeast region's geographical location that has generated India's massive interest, especially with the need to expand a particular type of trade and investment cooperation between the countries and dominant economic interests of South Asia and South East Asia. Thus, the Northeast has become critically important for the Indian government's economic and geo-political ambitions.

However, the underdevelopment of the northeast region has been the major impediment for India to carry forward the policy in earnest. As a result, the rich natural resources have become a target of the policy.

In India after the post -1991 phase of economic liberalization, International Finacial Institutions (IFIs) have now intensified their presence and reach. The IFI focus on this region is evident from the large number of projects including several in the pipeline that have mushroomed in an array of sectors such as infrastructure, energy, rural and urban development, tourism, agriculture and water resource management.

Three International Financial Institutes (IFIs) involved in influencing, legitimizing and funding these projects are the multilateral World Bank (WB), the Asian Development Bank (ADB) as well as the bilateral Japanese Bank for International Cooperation (JBIC).

It may be noted that the Asian Development Bank (ADB) has already assisted Assam and Sikkim, and is currently carrying out its grand plan covering road development, trade and investment, power, tourism and urban infrastructure development in the The World Bank (WB) has supported the preparation of strategic studies for roads in Assam, Manipur, Mizoram and Tripura.

It has been funding state roads in Assam and Mizoram and is likely to process a second loan for state roads in Assam. According to ADB, the economy of this region has remained far below potential and unable to provide basic infrastructure, resulting in the underutilization of the region's vast resources, keeping the region as a whole backward and poor.

However, the process of developmental initiatives carried out through these agencies has reached a critical situation as they are found to be insensitive to the way of life of indigenous communities of the region. The basic question now is whether the process of 'development' benefits people and whether the changes enhance social justice, equity as well as the sustainability of the ecosystem of the region.

A close observation on the working pattern of these agencies reveals the fact that there is little participation of indigenous peoples, lack of accountability mechanisms, transparency and disclosure policies. As a result, various forms of civil societies have now come out to oppose the intervention of these international financial institutions in the region thereby delaying the developmental process of the region itself.

Therefore, it may be argued that in the process of developmental planning of the region, it is imperative for the planners to formulate policies to suit various demands of the newly emerging impact of the liberalization process as well as the existing tribal economy of the region.

* Dr Kshetri Rajiv wrote this article for Hueiyen Lanpao(English Edition)
The author is a Research Associate at Centre for Political Studies, School of Social Sciences, Jawaharlal Nehru University, New Delhi
This article was webcasted on March 30, 2011.

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