Some of us have been asserting consistently that the Indo-Myanmar border trade through Moreh is, considering the terms of the agreement and the manner of implementation, not simply the way border trade or trade should be allowed to happen. This view seems to be increasingly corroborated by events getting unfolded over the years.

Why border trade: Before we come to the latest evidence supporting our standpoint, let us recall why we were optimistic about the potential of the trade to begin with.

We know for sure that after becoming a part of India and with the partition of the country, the region was denied to continue enjoying the benefits of historical economic, social and cultural exchanges at one go.

This was not replaced by any other form of tangible border relationships with the rest of the country because of the very chicken-neck corridor of transport and communication. This implied that the potential for emergence of any beneficial effects of border exchange had been denied to the region for a long time while at the same time not allowing the home market effect of products to emerge.

In this context, the initial euphoria was that the opening of border trade though Moreh would usher into an era for the beneficial border effects to emerge. Further, given the cost of linking the regional economy with the other production centres or markets was such as to prohibit the arrival of investment from outside.

In these circumstances border trade and resultant border industries provide a very appropriate engine of growth. But this was not to be as it turned out that the so-called agreement was not an agreement but a cover for the convenience of operations of security forces. This simply was not an atmosphere for the proper trade to merge and start yielding the expected economic benefits.

The Contrast: It is in this context that the contrast between Mae Sot in Thailand and Myawaddy in Myanmar on the one side, and Moreh in India and Namphalong in Myanmar on the other becomes a very interesting case.

Mae Sot is a small town in the Tak Province in the north of Thailand, and a small river, the Moei, separates this from Myawaddy, a small town in the Karen State of Myanmar.

These two constitute a border gate on the East West Economic Corridor of Greater Mekong Subregion connecting Da Nang in Vietnam in the east and Mawlamyine in Myanmar in the west, and passing through Laos and Thailand. The locational similarity between Moreh-Namphalong (Tamu) and Mae Sot-Myawaddy is quite striking.

What is significant is the dramatic emergence of Mae Sot as a border industrial town after the United States of America imposed economic sanctions on Myanmar effective July 2003.

As a result of these sanctions garments exports of Myanmar to 22 major importing countries had declined from US$ 829 million in 2001 to US$ 312.4 million in 2005. This development caused decline in garment industry in Yangon and consequent unemployment of former workers in this sector.

Now Myanmar as a whole is characterised by poor business environment and prohibitive costs of inter-regional networks. Further wages are low in this country.

The complaint and worry of the Myanmar Garment Manufacturers association based in Yangon is the fast losing of their workers to the Thailand border town of Mae Sot. Thailand has lower inter-regional connectivity costs than Myanmar.

Besides, Thailand government went ahead with labour reforms allowing foreign workers to work in their country in addition to the other infrastructural advantages available compared Myanmar.

This has led to the clustering of garment industry in the small border town, instead of Bangkok or Chiang Mai, employing the relatively cheaper but highly skilled migrant workers from Yangon and other areas of Myanmar.

Now compare this with what has been made of the Moreh of our land. Instead of Moreh continuing as the traditional trade centre, its functions were replaced by Namphalong in Myanmar.

In other years, whereas Mae Sot in Thailand could emerge within a span of less than half a decade as an industrial town based on migrant garment workers from Myanmar, India lost out even on an existing trade centre.

These two contrasting scenarios speak volumes on how to conduct trade relationships. To put point in shot, trade logics are necessarily to be based on economic articulations and economic policy interventions, pure and simple.

The Indian security based trade interventions had never delivered the economic benefits in the past and would never do so in the future either.