Globalization, Act East Policy and Manipur

Oinam Nabakishore Singh *

Indo-Myanmar Friendship Gate at Moreh, a border town between India and Myanmar in August 2012
Indo-Myanmar Friendship Gate at Moreh in August 2012 :: Pix - CK Sharmai

Our state, Manipur, is slowly and surely being subjected to the forces of globalization. Because of various advantages readily available in the state, there has been continuous migration of people from Nepal, Bangladesh, Myanmar and other states of India like Bihar, Uttar Pradesh. According to report of Census of India, population growth rate of Manipur in 2001-2011 was 24.50 percent while in 1991-2001 period, it was 30.02 percent.

Average growth rate of population for the entire country during 2001-2011 was 17.64%and 1991-2001, 21.15%. The higher growth rate of population in Manipur will have to be accounted for by migration.Mass migration or movement of people from one country to another in search of better opportunities of livelihood and living is an aspect of globalization. Since the trend of illegal and legal entry continues unabated, there is great concern among the people in the state about its future.

On the other hand, people from Manipur also go out of the state and settle in metropolitan cities like Delhi and Bangalore. Some even go out to work and live in USA, Australia, Europe, South Korea, etc.

While there may be remittances to the state from those working outside the state, there is a huge loss in the form of brain drain as most of them are qualified persons in various fields-medicine, engineering, IT professionals, teachers,etc. Had such people of Manipur worked in Manipur, there would have been better economic growth. The loss of their service to Manipur cannot be measured only in financial terms.

Another aspect of globalization is movement of capital across borders. People of Manipur do not participate much in capital markets. None of the companies of Manipur is listed in any of major stock exchanges like Bombay Stock Exchange (BSE) – located in Mumbai, National Stock Exchange of India (NSE) – located in Mumbai, Calcutta Stock Exchange – a smaller stock exchange located in Kolkata. Hence, it is not possible to raise fund for investment in Manipur through issue of stocks.

There is some instances of issue of bond(debt) by the state government to RBI to meet the short-term requirement of ways and means of state finance. However, the companies in Manipur are yet to be financially and managerially mature enough to raise fund through debt instruments to meet their requirement of capital.

Overall, leave alone foreign capital, even the domestic capital is yet to penetrate Manipur. Such isolation from the mainstream capital market deprive the state from accessing capital for investment in the state. It will be worthwhile to open state’s own stock exchange on a small scale to raise capital from investors within and without the state.

It will help in channelizing savings of the households into formal financial and capital markets. It will also promote financial literacy and investment in different products leading to capital formation for the growth of the state. It will also open the door of inflow of portfolio investment from foreign fund, which is an aspect of globalization.

Seamless flow of capital across the countries help in integration of global financial markets. Just as water finds its level by flowing from higher to lower level, money too flows to the markets offering maximum return with least risk. India was, indeed, a closed economy till liberalization in 1991. By making imports and exports easier by removing the controls from 1991 onwards and by making Indian goods competitive through various measures like depreciation of rupees, Indian economy became more integrated with other large economies.

Everybody knows that international trade is good for the economic growth of participating countries. In the context of Manipur, we may trace the beginning of formal trade between India and Myanmar to the signing of an MOU in 1994 and commencement of border trade through Moreh in 1995. Main objective of border trade was exchange of 22 items between India and Myanmar to meet the daily requirements of goods by people living on both sides of the border at nil import duty.

Because of the condition of requirement of balancing imports by exports by a trader, border trade had the characteristics of barter trade. The list of items for border trade was expanded to 42 later on. However, the volume of formal trade was about Rs.50 crores annually.

When I was Principal Secretary of Commerce and Industry, Government of Manipur, a High Level Committee was constituted by Director General of Foreign Trade, Government of India with me as chairman to identify the constraints in trade between India and Myanmar through land border and suggest changes to remove the constraints to boost trade.

Based on the recommendations of that Committee, RBI removed the requirement of trade balancing by exporter/importer. It was a great relief to the traders as many traders were in default of fulfilling the requirement of trade balancing. Government of India replaced the border trade by normal trade at Moreh, where all items except those in negative list can be imported or exported by paying applicable duty. Under this regime, main item of import, betel nut, became more expensive and its import plummeted.

There are many other bottlenecks in bilateral trade through Moreh. Banking infrastructure on Myanmar side is poor. Traders on their side are reluctant to use dollar as currency of trade. Letter of Credit facility for trade is not used by traders. Disturbances along the trade route increases the cost of trade.

Delay due to checking at a number of gates between Moreh and Imphal is another complaint. However, the Government of India has set up an Integrated Check Post at Moreh by investing more than one hundred crore rupees to provide all facilities related to trade and travel between India and Myanmar.

Recently both the Governments of India and Myanmar have declared Moreh and Tamu as respective port of entry and exit enabling people to travel to either side with necessary travel documents-passport with valid visa. It is beginning of a new phase of movement of people between the two countries for various purposes-trade, tourism, education, cultural and sports exchange, medical treatment, etc.

India’s Act East Policy, the erstwhile Look East Policy, has a broad objective of economic and strategic goals in the South-East Asia. It is a part of the vision of India to play a bigger role globally in tune with its economic and military power. Emphasis has been laid on connectivity of the North East within itself and with the rest of the country.

In this context, Manipur enjoys an advantage as the most viable road to South East Asia passes through it. How does Manipur take advantage of the opportunities being thrown up? It is known that a number of Myanmarese are visiting the state for medical care.

Private hospitals in the state should upgrade in terms of facility to be competitive with medical facilities in Thailand, if not with Singapore. Medical tourism to Manipur will have multiplier effect in not only medical care, but also in travel and hospitality industries. If bandhs and blockades are not there, private educational institutes in the state can be destination for education for students from Myanmar.

A large number of tourists visit Myanmar. Taking advantage of proximity and with right promotional activities, it should be possible to attract tourists visiting Myanmar to Manipur by land route. The improvement of road between Kalewa and Mandalay in Myanmar being undertaken by Government of India and Government of Myanmar will boost the movement of goods and people smoothly in lesser time.

There are a lot of strengths in Manipur. We have to understand them and work on them to compete with competitors. With a shared vision of prosperity and peaceful development, Manipur when integrated with its neighbors, it should be possible to overcome the challenges of isolation and attain higher status of development. To achieve that, we will have to work harder and walk extra miles.

Views expressed are personal.

* Oinam Nabakishore Singh wrote this article for The Sangai Express
This article was webcasted on September 05, 2018.

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