Connecting Regions of Asia.

India’s ‘Act East’ Outreach : Implication For Northeast


The recent visit of External Affairs Minister S Jaishankar to Guwahati with the Japanese Ambassador to review a Japan funded water supply project ushered in yet another sporadic cacophony of Northeast’s centrality to looking east. 
A few days later, Prime Minister Narendra Modi fantastically proclaimed his vision of Assam and the region powering the growth of India! These jingoistic proclamations raise unrealistic expectations in the region. Certain rhetorics about the development of the region in the context of it’s neighbourhood and further eastern engagements have fallen to the trap of Goebbel’s truth. This must be rectified and a realistic framing of its economic role can pave way for progress. It is also time to update the discourse to keep up with the times. Northeast in India’s Look and Act East policy.
India embarked on an eastern orientation with it’s then Look East policy with a view to build closer economic engagement to bring in investments and eventually trade at a very peculiar point in history. Since then, it has deepened its relationship through greater trade, investments and increasingly security mechanisms. Despite operating below potential- that relationship has grown. Trade volumes have increased, maritime relations and air connectivity continues to build. Sophisticated partnership mechanisms including in technology at all levels- whether on the government to government or business to business levels have flourished. It is on a path dependent course. 
However, the part of India, its Northeast that connects on land with Southeast Asia through Myanmar continues to lag behind. Even though the cultural affinity between the two regions is clear, the economic case is not as natural. It also continues to be captive to the geopolitics of the region. From the Southeast Asia side, it is held hostage to the development of Myanmar where the recent coup will set back the development of the fledgling border trade and any prospect of a (trilateral) highway by yet more years. It is well known that the much touted Kaladan Multimodal project languishes in inordinate delays. Even once completed, the economic benefit it will bring to the region is unclear.
Next phase of development
The promise of prosperity arriving in the region through connectivity is hinged on the idea that trade will usher growth and development. The literature on this principle presupposes several pre-conditions and factors that will allow for the development of the region. 
Further, there needs to be corresponding preparation in terms of leveraging of these grand infrastructure on the ground. Much of these conversations have been stuck. The current discourse is focused around products that the region can export as a good. 
However, as we know, trade mostly takes place in the context of global value chains now. About 70% of international trade today involves global value chains (GVCs), as services, raw materials, parts, and components cross borders. Despite the set back to this process due to the pandemic, it is likely that trade will continue to take this form.
 The preparation has to be about identifying which are the areas in which products and services of the region can be integrated into regional and global chains. This is good news as it eliminates the need to built from ground up, package goods and market them in an already competitive products space. 
Numerous papers, panel discussions or conferences evoke the same type of half baked ideas around exporting agricultural produce. Some of which does not preclude the idea that capacity is poor and overall, the region’s trade must be based on a strategy around feeding into the low scale, high end products segment. For instance- high quality organic ginger that is processed with the help of a Japanese or Singaporean company or organic medicinal turmeric from Meghalaya branded by global companies! 
Any scale related products will also need to take into account the southern orientation in Bangladesh, rather than the east. Bangladesh provides a ready and huge market. It is a rapidly growing economy whose per capita income will surpass India’s soon.
 There are historical trade links and routes that can be easily revived. However, there is great anxiety and concern with opening up to Bangladesh and this has to be addressed sensitively.  Is it a lost cause?
At various investment forums looking eastward, there is a mismatch in presentation of what Southeast Asia or Japan can do and invest in the region. 
Government officials keep presenting opportunities such as a desire to engender private partnership projects- such as in the over 1000 crore integrated Loktak Lake development project in Imphal. These are better financed through bilateral deals between governments or multilateral funding agencies- with provisions for political and operational risks. 
If the interest to engage and build connections of prosperity is through the people to people route, it must take into account the aspirations, tastes, preferences of the people. It must also keep with the times. The conversation about exporting of primary products must also keep pace to pave way for new. Digital connectivity and the industries associated with the Fourth Industrial Revolution presents opportunities.
 Anecdotal and prima facie evidence suggests that the youth of the Northeast are starting to develop competitive advantages in technical and creative skills that can easily feed into the global services value chain. Take the case of the global gaming industry. It is estimated roughly at $250 billion and growing rapidly. This is similar in size to the agro-food processing industry which has received disproportionate association with the region. 
In a world of super specialization- the future could lie in picking niche markets and developing infrastructure and unparalleled skills over time. Consider the prospect of music scoring for the games and industry segment. 
It is a rapidly growing market, along with the parent industry. The undeniable music talent that lies in the region can feed very well on to this. Fancy the music scoring and graphics of the next version of League of Legends, Grand Theft Auto or FIFA games being produced by a bunch of folks collaborating and sitting in Aizawl, Shillong and Imphal- working with developers based in Silicon Valley, Singapore or Tokyo. 
These initiatives may test the waters for the precursor to the potential success of big ticket development projects. The type of success stories that these areas of collaboration throw up may be the stories that the region badly needs to give a boost to its confidence as well as a providing as an opportunity to announce itself to the wider world.
(Laldinkima Sailo is a public policy and international affairs advisor. He is Editor, ‘Connecting India to ASEAN: Opportunities and Challenges in India’s Northeast’ and has worked in leading Asian universities and research institutes) 

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