[Assam] Los Angeles Times on Northeast India

[baruah at bard.edu]

http://www.latimes.com/business/la-fi-india29-2008may29,0,6712115.story

 From the Los Angeles Times
Northeast India is poised to tap economic potential
The eight-state area plans multiple projects to increase its trade  
with Southeast Asia.
By Shankhadeep Choudhury
Los Angeles Times Staff Writer

May 29, 2008

NEW DELHI — India's remote northeast region has been both blessed and  
cursed by its geography. The region is rich in natural resources but  
is landlocked and surrounded by China, Myanmar, Bangladesh and Bhutan,  
leaving it impoverished.

The eight-state region may finally get a chance to start living up to  
its economic potential with several projects to enhance connections  
with Southeast Asia and to increase outlets for such commodities as  
organic foods, orchids, tea, coal and oil.

Now, the only way to move major quantities of goods between northeast  
India and Southeast Asia is through Bangladesh.

But authorities in Myanmar and India are nearing final approval of a  
$100-million river project giving northeast India direct access to the  
Indian Ocean through Myanmar, said Abhijit Barooah, chairman of the  
northeastern chapter of the Confederation of Indian Industry, India's  
premier business association.

The project envisages facilitating movement of cargo from India's  
Mizoram state to Myanmar's port at Sittwe, via the Kaladan River.

In addition, talks have begun between companies in northeast India and  
Thailand after a trade-promotion conference in Bangkok in October,  
said Lemli Loyi, assistant general manager at the state-run North  
Eastern Development Finance Corp. Loyi expressed hope that the talks  
would result in increased business and possible joint ventures.

India first enunciated a "look east" policy, an economic and strategic  
orientation toward Southeast Asia, in 1992. It had its genesis at the  
end of the Cold War, after the collapse of the Soviet Union. Having  
lost the Soviet economic and political support on which it had relied,  
the Indian government embarked on a program of free-market  
restructuring at home and sought new markets and economic partners  
abroad.

Officials envisaged that the eight northeast states -- Assam,  
Meghalaya, Manipur, Nagaland, Sikkim, Arunachal Pradesh, Tripura and  
Mizoram -- would emerge as a trading hub for two dynamic regions  
connected by a network of highways, railways, pipelines and  
transmission lines. The region is home to about 40 million people.

But progress has been slow. The region's isolation dates to the 1800s.

"Nineteenth-century British colonial decisions to draw lines between  
the hills and the plains, to put barriers on trade between Bhutan and  
Assam, and to treat Burma as a buffer against French Indochina and  
China severed the region from its traditional trade routes -- the  
southern trails of the Silk Road," said Sanjib Baruah, a professor of  
political science at Bard College in New York and an expert on  
northeast India.

The British built railways and roads mostly to take tea, coal, oil and  
other resources out of Assam and into the rest of India and also to  
Europe.

The problems increased with the partitioning of India and Pakistan in  
1947. Bangladesh broke away from Pakistan in the 1970s.

Barooah said trade would be boosted by an expected move by the Indian  
and Myanmar governments to expand the list of mostly agricultural  
commodities allowed to be traded by land between northeast India and  
Myanmar, from 27 to 42 items.

"The northeast is the closest land mass connecting the dynamic  
economies of south and Southeast Asia," said Pradyut Bordoloi, Assam's  
minister for power and industries. "Besides deep-rooted cultural  
linkages, we can reap multidimensional benefits in this era of  
regional economic cooperation."

Bordoloi is closely associated with a campaign to reopen the World War  
II-era Stillwell Road, connecting Assam's town of Ledo to southwest  
China.

"If reopened, this would be the shortest surface route to Yunnan  
province of China and other Southeast Asian countries hooking onto the  
trans-Asian highways," he said.

The road served as the supply line into China during Japan's wartime  
occupation, but it was shut after India's independence from Britain in  
1947.

Bordoloi said his campaign to reopen the road, initiated after he  
became a state legislator in 1998, scored a victory when India  
upgraded the road to a full-fledged national highway, developing it up  
to the Indo-Myanmar border.

Officials say infrastructure development, power, bamboo-based  
industries, orchids and organic foods are prospective areas of  
cooperation with Southeast Asian countries such as Thailand.

But significant hurdles remain, including concerns that booming trade  
relations may fuel rises in insurgency, narco-terrorism and AIDS, all  
of which plague the northeast. Security in the region is tight, with  
the army out in force to combat armed groups battling for greater  
autonomy or independence from India.

"The official restrictions that prevail in northeast India -- in terms  
of travel, land and labor markets -- are hardly conducive to intensive  
cross-border economic relations," said Baruah, the political science  
professor.

"Both the reality of insurgencies in the region and the security  
anxiety of the government of India . . . are major obstacles to  
dynamic cross-border economic ties," he added, calling current efforts  
hardly more than "a bare beginning."

Also, Baruah said, it was difficult to imagine a big increase in trade  
given the political situation in military-led Myanmar.

India's relations with China, a country it has long regarded with  
distrust since a 1962 border war, would also have to become much more  
relaxed, Baruah said.