Politics of Financing for Development in Manipur

Jiten Yumnam *

A map showing the route of Imphal Ring road :: Pix - TSE

The Ethiopian Capital of Addis Ababa will host the historic 3rd International Conference on Financing for Development from 13th till 16th July and envisaged to resolve ways and means of financing development globally, especially the new Sustainable Development Goals (SDGs), slated for UN adoption in September 2015. The conference is subjected to eclectic apprehensions among States and Civil Society organizations alike, over the content and nature of financings envisaged for adoption. These apprehensions emanate from overwhelming focus on private sector financings for development amidst absence of regulatory mechanisms to ensure their accountability and tacit lack of reference on human rights based development.

However, general consensus pervades among member states of United Nations that private sector, viz, corporate bodies and the International Financial Institutions (IFIs) be entrusted with greater responsibility to lead and finance SDGs, ranging from goals on education, health, ending inequality and hunger, combating climate change etc. The overwhelming call for accountability of private sector, IFIs or any other development actors to be involved in development financings finds much relevance and importance when it comes to places like Manipur in India's North East, riddled with prolonged armed conflict and human rights abuses amidst Right to Self Determination movement.

The 3rd International Conference on Financing for Development conference happens at a time when Manipur enters a crucial phases of uncertainty with its own financial and political order. Manipur is plagued with wide debate on the nature and form of financing its development. This assumes much prominence given the reality that the Government of India decided to withdrawn the Special Category Status of Manipur, along with several other states across India in January 2015, implying the mandatory condition of Manipur to bear 50% of all development financings in the state. The decision to withdraw SCS for Manipur was based on the recommendations of the 14th Finance Commission and the Union Budget for the year 2015-16. Manipur confronts severe challenge to even mete its 10% share in the Central assistance of 90%, under the Special Category Status.

The State Governments across India's North East region are unanimous in condemning the Indian central Government's withdrawal of Special Category Status (SCS) and in demanding the restoration of the special status. The Government of Assam even passed an Assembly resolution on 25 March 2015 condemning the withdrawal of SCS and seeking either 100% Central share assistance or the principle of 90% Central Share and 10% State Share in all development financings.

Manipur continues to reel in precarious financial situation despite five year plans in India for the last half a century. Indeed the Chief Minister of Manipur expressed concern with the new Central financial arrangements of withdrawing SCS. It is understandable, as there will be drastic cuts in social sector and social protection schemes, affecting the women, children, elderly, the diffferently abled and othe marginalized section. Objections apart, an interesting question is how Manipur will bear its 50% resource share to finance its development and where from these resources will be sourced? One wonders the process of defining such resource base and the implications for the indigenous peoples of Manipur and if there ever will be participatory processes of defining such resource base?

Downsizing of government departments, lifting of prohibition, revision of land revenue, hill house tax, restructuring of state level public enterprises are some of the measures widely discussed in the state for resource mobilization. Manipur for long insisted on interesting propositions to raise its resources. On June 2015, the State Government proposed lifting the prohibition on liquor to raise State's Exchequer. Skepticism and condemnations responded from all concerned citing health, cultural, socio –economic and other reasons. State run lotteries are other options the state is gambling for resource mobilization.

Another experiment, which the Government of Manipur emphasized for quite some time, even before the lifting of Special Category Status is to raise State's resources by leasing out its natural resources of Manipur, viz, water, minerals, oil and gas, forest etc to corporate bodies and levying taxes and royalties. Indeed, the formulation of several policies providing mining concessions and facilitating exploitation of State's resources by Multinational corporate bodies in recent years is a clear indication of the state of affair of how the State is trying to raise its financial resources.

The Manipur Hydro Power Policy, 2012, the Manipur Tourism Policy 2011, the Manipur Industrial Investment Policy, 2013 etc are all introduced sans peoples' involvement and to serve India's economic and political expansionist priorities. The Manipur Hydro Power Policy plans to build nearly twenty mega dams over the Rivers of Manipur and several MoUs were signed with several corporate bodies. Manipur's oil and gas reserve were contracted out to Multinational Corporation, the Jubilant Energy in the year 2010 with an objective to garner limited royalty without informing and taking consent of communities to be affected by such initiative. A full scale implementation of these policies will only lead to increased corporatization of Manipur's land and resources, subjecting its people with rampant displacement, land alienation and other multifaceted human rights abuses.

The challenge then is these are policies formed in clear exclusivity of communities depending on such resources for their livelihood and survival. The pursuance of mega dams is associated with adverse reality, of unresolved displacement, loss of agriculture land, forest, rich biodiversity etc. The 105 MW Loktak HEP project and the ongoing Mapithel Dam construction are testimony of community suffering and environmental devastations. With Manipur ranked as the most corrupted places in India, probably across the globe as well, there's little confidence that whatever minimal taxes or corporate royalties received will hardly reached its peoples. Rather, these will end up filling the wealth base of the rich political power or those working in clear tandem with them.

The withdrawal of Special category Status of Manipur also comes at a time when International Financial Institutions (IFIs), viz, the World Bank, the Asian Development Bank and bilateral financial institutions like the Japanese Bank for International Cooperation (JBIC), the Japanese International Corporation Agency (JICA), the German Financial Cooperation etc and other UN Agencies like International Fund for Agriculture Development (IFAD) are in bee line, providing extensive support for major infrastructure projects in Manipur and across India's North East. The World Bank is heavily investing the High Voltage Transmission and Distribution lines along with several other service oriented initiatives. The Asian Development Bank (ADB) is primarily responsible for financing much of the road infrastructure projects.

The Imphal Ring Road Project, Imphal – Tamenglong Road, the Thoubal-Kasom Khullen Road, Bishnupur – Rengpang road, the Asian Highway -1 etc are some of the major road projects in Manipur envisaged to be financed by ADB. The restructuring of power and urban sector in Manipur is also financed by ADB. The ongoing power privatization in Manipur is much an outcome of the prolong effort of ADB for power sector reform across India.

With minimal debate and focus, the impacts of power privatization, as experienced in New Delhi, of uncontrolled and unregulated power tariff hike and question of accessibility etc, will slowly descend in Manipur. The Japanese financial institutions, JBIC and JICA are currently financing the Manipur Sericulture Project and prepare to support the integrated water supply scheme from Mapithel Dam for Imphal Town. The German Financial Cooperation is preparing to finance climate change related projects targeting forest and wetlands of Manipur. These IFIs are keen on financing projects where corporate bodies are certain to reap profits and quite minimal on social sector projects. Indeed, profit guides corporate bodies' motives.

The challenge of such financial support of these International multilateral and bilateral banks is these monetary support come as loan support with obligatory interest payments. So the question of where and how Manipur will finance its development shares is pertinent? And with the new development financing arrangements for Manipur, it's highly apparent the State will be reduced to another highly indebted political entity to these International financial institutions. Nepal's prolonged status as a least developed country is primarily attributed to its substantial borrowing from these multilateral banks as a major portion of Nepal's resources generated is allocated in debt servicing. Can Manipur afford to allocate a greater portion of its resources mobilized for debt servicing to these financial institutions, and to divest from allocations in social service sectors, viz, education, health, social protection schemes etc.

Apart from loans, Manipur currently undergoes series of reforms as part of the Structural Adjustment Program, prescribed and directed by such international financial institutions as part of their financing. Manipur's power supply, urban amenities provisions, water supplies are increasingly witnessing rapid phases of privatization and corporatization, much to the resistance of communities. A larger question of accessibility to basic service provision and quality of such service persists without clear explanations.

Indeed, the withdrawal of special category status of Manipur along with several other states is an obvious extension of a continued implementation of India's neoliberal policies of rapid liberalization, privatization and globalization, an insistence of withdrawal of State's responsibility and any forms of State subsidies, transforming the entire State functioning akin to a corporate body functioning. No wonder the head of the new Niti Aayag, after revamping Planning Commission of India is led by a Chief Executive Officer, a clear superimposition of a corporate body structure, appointed in January 2015.

Manipur's search for raising its revenue for development financing is a challenging and interesting proposition. Considering Manipur's political culture rooted in exclusion and undemocratic development decision making process, high corruption and tacit efforts of those in power to amass wealth through illegitimate means coupled with its prolonged conditioning of dependency, there's less hope the State will resort to anything innovative and worthwhile. Key factors to be considered on such considerations includes how best to ensure respect of communities rights and environmental integrity and secure sustainability of generations.

The social, cultural, health, economic and environmental impacts are few other criterions for necessary integration. Any decision purely based on economic needs is a dangerous proposition as overt financial considerations of economic growth model of development is what culminates in obvious inequality, widespread hunger, social tensions and multilayered conflicts. Lifting ban on Liquor to raise state's resource for instance, will have wide health, social and even political impacts. The emergence of Nisa Band in 1980's in Manipur is key historic evidence of community response to promote necessity of enforcing prohibition ban in Manipur.

Leasing out Manipur's mineral and natural resources to garner state's revenue without involvement of indigenous peoples and taking their free, prior and informed consent and depriving their self-determined development will only led to development injustice and intensify conflict in Manipur. The destruction of natural resources and land will impoverish indigenous communities and foster inequality.

A careful consideration and conscious involvement of all indigenous peoples of Manipur on ways and means of raising State's resources is highly crucial. Experiences of how fragile States with poor governance processes reduced to perennial indebtedness from unregulated borrowings from IFIs, such as International Financial Cooperation, the World Bank, the ADB etc need be carefully assessed. The multiple impacts of privatization of essential social basic services on communities, on accessibility and quality of service etc need careful considerations. The primacy should be to ensure accountability of these IFI's and to deliver justice in all their development financings and based on the recognition of communities rights and their wishes. Delegating responsibility to manage Manipur's resources to multinational corporate bodies, driven sole by insatiable profits, will further impoverish the state, marginalize its people further, devastate its environment and complicates the multilayered conflict, within communities and with State.

All policies introduced in Manipur to facilitate corporatization and privatization of community land and resources, such as the Manipur Hydroelectric Power Policy 2012 etc should be repealed. The key concerns and proposition of community representatives and civil society organizations for a human rights based approach to development, ensuring accountability of private sector, rightful participation of civil societies and community organizations, in the run up to the 3rd Financing for Development in Addis Ababa and the ongoing negotiations for Sustainable Development Goals after September 2015 are very much relevant for integration in all decision making processes for financing for development in Manipur.

All processes for financing for development in Manipur should take the free, prior and informed consent of all indigenous peoples of Manipur as outlined in the United Nations Declaration on the Rights of Indigenous Peoples, 2007. Manipur cannot afford it have its peoples as 'scapegoat' in India's transformation as a corporate state. The State cannot survive long with economic and political dependency. The withdrawal of Special Category Status is a mixed of both concern and exquisite occasion for Manipur to explore and perform independently as an inimitable political entity.