Cutting of the Northeast Melon On Globalization and Global Finance Capital

Yenning *

Map of NE India

Forces bombarding against the entire Northeast region today is akin to certain historical events that took place earlier and elsewhere. Inability to forge a united resistance was in a way responsible for the downfall of China, for instance, and another tragic element was the very manner in which colonialism not only raised its ugly head but also swallowed up hitherto existing "backward" (industrially or otherwise) regions of the world by the so called advanced nations of the West and Japan.

It is generally agreed that along with the "end" of colonialism and imperialism after the World War II, industrial capital has had its own death, and that the world has become safe for democracy. But by the 1990s, a new realization dawned, and thus a new force emerged not only as a rival to colonialism but also to recover every degenerate qualities of colonialism itself and brings to bloom the insipid ideas that colonialism could not fully nourish. Some say, looking at the logic of capitalism as propounded by Marx and others, the phenomenon was bound to take birth. Some others point their fingers to the geo-political changes taking place in the form of the disintegration of the Berlin Wall and subsequently, the disintegration of the Soviet Union.

Still others reason out looking at the waves of democratization taking place across Africa, Latin America, Islamic worlds and others, that there is a necessity of inter-linkages. After all, the information technology revolution dictates that the world has become a closely knit globe, and thus, globalization is inevitable. One cannot simply escape from the integrating clutch of technology. So the advice is: mitigate risk and become a partner in the new process. The unsaid part was/is that globalization is a new force in which liberalization and privatization of economy are the central unchangeable configuration.

In place of the colonial industrial or finance capital, hitherto considered to be exploitative, today stands the global finance capital. In regions where there is lack of financial and banking institutions, it has tremendous risk factor. It does not stop here. Virgin lands and their resources remain to be exploited, and when these are exploited the natives do not stand to be benefited. Resisting such a force is a Herculean task, some say even next to impossible.

This bizarre introduction to our edition may sound odd to our readers. A poser may even crop up if we have encountered any experience with global finance capital in this part of the world. To begin with let's look back to the approach adopted by the Indian State as far as Northeast is concerned before the 1990s. The Nehruvian model, as it was known as before India undertook structural adjustment programme in the early part of 1990, was based on two edifices, security and political-economy.

From the security, Northeast was regarded as a strategically important region by virtue of it bordering many countries such as China, Myanmar, Nepal, Bhutan and Bangladesh. And thus the dictate was, it has to be a part of India and maintained through the deployment of security personnel for national security. On the other hand, the political-economy approach dictated that the people of the Northeast need preservation (like engendered species of plants and animals) as they are primitive people. Fallout of this approach was that no financial institutions were allowed to be established or institutionalized because of the apprehension that sudden implosion of modern forces of economy can wipe out the people of the region. In other words, the understanding was that economic needs should be driven by the culture of the primitive people.

Contradicting the economic logic was the modern political logic. Although the people were regarded to be primitive and leading primitive ways of lives, modern political forces were unleashed against them in an unabated manner. Modern political institutions such as political parties and modern political processes such as the periodic elections became the encountering mode of existence for these people. These forces razed to the ground traditional societal structures and institutions, if not altered its meaning altogether.

Constant political mobilizations converted the primitive people into modern ones who are supposed to understand the notions of secularism and democratic norms such as tolerance, right to dissent and value for human lives. Inability to have completely converted them into desired political entities, perhaps, might be because of the constraining model of development chosen and implemented in the region. On the economic front, they remained primitive and their hunger quenched only through dole outs from the Centre making them dependent and parasitic.

At the time when India started its structural adjustment programme, which ultimately paved the path towards globalization, liberalization and privatization, the approach adopted towards the Northeast also changed. A High Level Study under the advice of the Prime Minister was undertaken in 1991, to reform the Northeast. The second edifice of the Nehruvian model was dismantled while continuing with the first one (security).

Since then we have been hearing about Look East Policy, and as a part of it Indo-Myanmar Border Trade, Trans Asian Railway and Highway passing through Manipur, India's Free Trade Agreement with Thailand and others in the South East Asia. Opening up of the Northeast certainly bring up few issues to the centre stage. Looking at the Nehruvian model adopted, one obvious issue that crops up is the question of entrepreneurship and the know-how of competitive business sense, which are the highlight of any global business. Then there are the institutional problems of institutions of finance and banking.

The Northeast lacks them. Even if the latter is rectified as it is being done now, the former problem of the people taking part in the process of LEP is questionable. Few may prosper but the majority cannot, perhaps on account of lack of capital and asset or business sense. The new approach also dictates that we should be part of the knowledge economy as we cannot produce and in turn become consumerists.

LEP might have taken time to materialize but in terms of flow of global finance capital, the region is not new. Meghalaya's episode with Lafarge for mining of coal and direct export to Bangladesh, capital from Asian Development Bank for the exploration of the Brahmaputra River Basin for oil and natural gas and for development of agriculture in the Northeast occurred simultaneously along with the opening up of India.

Today, Reliant Energy is investing in Manipur for the exploration and extraction of oil and petroleum from Manipur, and the World Bank is funding the development of Trans Asian Railways and Highways. Germany is not far away, so is the USA. The Northeast as an unexploited region is a haven for investment in minerals, hydro-power, oil and natural gas. In all these dealings, the benefits due to the indigenous people of their land and resource are never discussed. They were neither consulted as ILO demands, and the Central Government clinches the deals without even letting the State Governments know (about the deals) at all. Thus, the issue of profit sharing has been cancelled right from the beginning.

The latest on the show is New Delhi's declaration to drop Arunachal Pradesh and Sikkim from a World Bank loan (Rs.11,000 crore) proposal to avoid running into Chinese objections over multilateral financial aid to projects in the border areas. This reminds us of the Chinese experience when western powers divided China for their own benefits.

"Cutting of Chinese melon" was a term used during the heightened phase of colonialism in the 19th Century to describe imperial powers' division of China (territory) and keep portions of China under each other's influence. Decision pertaining to who has to control a certain portion of China was arrived on the table over coffee or drinks among the western colonial powers and Japan, and China's interest was never discussed or represented.

As such each colonial power refrained from interfering into the affairs of another. Mutual respect for each other and silent understanding was the hall mark of the whole arrangement. And indeed, the imperial forces concentrated in extracting the most from the occupied colony. China as a whole did not benefit anything out of such an arrangement, and in-fact was marked by colonial backwardness. Overall, there was deindustrialization, interpolation of feudal characteristics in the so called semi-capitalist society and China remained an insipid agrarian society.

The loan proposal from World Bank is to strengthen electricity transmission and distribution in the northeastern region. After excluding the two states, the loan amount stands at around Rs.8,115 crore. The projects in Arunachal Pradesh and Sikkim are to be financed by the government. The funding has still not been approved and the finance ministry is finding ways to work around raising the headroom for Government of India.

For economic development, power is regarded as a primary requirement. But the issue is power for whom. In 2009 there was a row between India and China over a $2.9 billion ADB loan. China protested against the inclusion of a water management project in Arunachal in the lender's country assistance strategy for India.

The 2009 row forced ADB to introduce a disclaimer in its project documents which, while stating that it has no position on territorial disputes, effectively discourages the applicant from pushing for assistance for projects in disputed areas. This obviously reminds us of the cutting of Chinese melon, and similarly the Northeast as a collective entity should resist against exploitation of its resources by the global finance capital.