Northeast India’s inability to move from subsistence agriculture to a production and manufacturing economy can be solved by collaborating with Myanmar

Walking around the Bagyoke Aung San Market in Yangon gives one a personal sense of the cultural affinity between Myanmar and northeast India. Goods are stacked in a way peculiar to the northeast region and the similarity in the products on display is unmistakable. Every now and then one can hear people speaking in Mizo or some other common language. The traditional Burmese dress is worn just the way it is in the northeast and the street food and traditional food items of both the regions bear a close resemblance too. The saying that Southeast Asia begins in northeast India takes credence. The way the people of Myanmar have taken to the use of chopsticks seems like a natural phenomenon and the adoption of Indian food, including the biryani, which is believed to have travelled here with the khansamas of Bahadur Shah Zafar makes it truly a place that author Thant Myint-U calls, “Where China meets India.”

Yet, India and Myanmar have not been able to exploit these close historical and cultural connections. Recent writings and research overflow with expositions on the opportunities that exist in the developing of connectivity infrastructure, but the gap between the purported potential and what has been realised remains enormous. What is also true is that the northeastern part of India and the western part of Myanmar consisting of Chin, Sagaing and Kachin states are both underdeveloped. The neglect leading to low economic and social development in the region has often been cited as one of the causes for the insurgencies raging on both sides of the border. Indeed, even as there are shared opportunities, both regions share very similar risks and challenges.

Stagnant economy

Some of the key reasons the northeast is unable to move from a largely subsistence agricultural economy to a production and manufacturing economy include the lack of scale economies, constraints in the supply chain of raw materials and the lack of access to a market, mainly emanating from poor infrastructure and restrictions across the border. The way out of this is to explore greater collaboration with Myanmar. The weaving industries in northeast India or the food processing industries, both in Myanmar and northeast India, have not been able to grow in a limited market. The expansion of this can provide a wider consumer base that these industries desperately need to ensure profitability and sustainability.

This has to go hand in hand with the development of supply chain hubs that will foster manufacturing units across the region. These will produce goods that can be consumed within the larger region and beyond. The rest of Asia has developed a strong network of supply chain and manufacturing hubs which in turn would augur well for governments and entrepreneurs of the two regions to link with. Japan, and to a lesser extent South Korea, have been particularly significant in developing the manufacturing and production networks across Southeast Asia. According to forecasts by the Japan Bank for International Cooperation, India and Myanmar are on a trajectory which is predicted to see increased economic engagement with Japan. Today, significant investments have been made by Japan in Myanmar to help the country develop its infrastructure and in the northeast, it is one of the few countries which has been invited by the Indian government to undertake large scale investments. Singapore is another country which has significant investments in Myanmar. It is also a country that India is comfortable with inviting to invest in the northeastern part of the country.

Northeast India and Myanmar also share similar economic and business structures. The economy, which is largely agrarian and dependent on the export of unprocessed primary commodities and in which micro, small and medium enterprises are prevalent, provides for the basis of industrial development.

Trade imbalance

Yet the facts of history and the reality of borders cannot be wished away. Currently, there is trade imbalance in favour of Myanmar. Given that the development of a goods export-oriented economy may take some time to develop in the northeast, there is opportunity to step up trade in services. This is a sector where, following the relaxation of the movement of people across the border, a large number of people from Myanmar have come to educational institutes and healthcare facilities in the northeast.

Then there are concerns related to border management and security. There is a border dispute that needs to be settled by the highest levels of both governments. Even as goods move across the borders, so do drugs and arms. Human trafficking is another major issue. A secure and clearly defined border is a precursor to a peaceful and prosperous border region.

Scholars and policy makers in Naypyidaw are deeply aware of the need to engage with India. They have expressed the need to utilise well the northeast India-Myanmar connectivity project. This is however being jostled between limited capacity and multiple priorities. India’s own capacity and political will to see through the numerous projects that have been touted is under question. Yet the sense of urgency and the realisation that there is a limited window of opportunity to catch up with the rest of the world is discernable among stakeholders in Myanmar. In the northeast, stakeholders led by political leaders need to understand the opportunities that the reforms in Myanmar have presented. India and Myanmar must implement projects within their regions in a collaborative effort, while taking regional governments into confidence. They must settle outstanding border disputes.

A Manipuri folklore talks about prosperity that will fill the lands once the “eastern gates are opened.” Perhaps this foretells what is in store in the future.

(Laldinkima Sailo is at the Institute of South Asian Studies, National University of Singapore.)

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