Liberalise border trade practices

Myanmar can be the gateway of India to the East

G Parthasarathy

We have not been able to take full advantage of either our shared Buddhist heritage with Myanmar or use our economic potential to our full advantage

OUR media and academics often overlook the fact that four of our north-eastern states — Arunachal Pradesh, Nagaland, Manipur and Mizoram — share a 1,640-km land border with Myanmar. Myanmar is not only a member of BIMSTEC, the Bay of Bengal Grouping linking SAARC and ASEAN, but is also our gateway to the fast-growing economies of east and south-east Asia. While successive leaders of Myanmar — all devout Buddhists — have looked on India predominantly in spiritual terms as the home of Lord Buddha, they recognise that an economically vibrant India provides an ideal balance to a growingly assertive China. Sadly, we have not been able to take full advantage of either our shared Buddhist heritage with Myanmar by facilitating increased pilgrimages, or use our economic potential to our full advantage.

The blossoming of the India-Myanmar relationship over the past two decades has nevertheless been a success story. Mechanisms are in place between the military and security agencies of the two countries, which have effectively fostered cooperation across the border. This has led to effective cooperation in dealing with cross-border insurgencies. Myanmar's Information Minister recently reiterated to India's new government, his government's readiness to crack down on Indian insurgent groups like ULFA (Assam), PLA (Manipur) and NSCN K (Nagaland). India, in turn, has acted firmly against Myanmar insurgents entering its territory.

Myanmar has steadily eased the rigours of military rule after the elections that swept President Thein Sein to power in 2011. The military, however, still has a crucial role in national life as negotiations are in progress to achieve a comprehensive ceasefire with 16 armed insurgent groups drawn from ethnic non-Burmese minorities. This is no easy task, but is a prelude to negotiations on the highly sensitive issue of federalism and provincial autonomy for ethnic minority areas. After years of extreme bonhomie during military rule, which was accompanied by international isolation, Myanmar’s relationship with China is facing strains.

China has helped in building Myanmar's infrastructure and equipping its military. India's fears of Chinese military bases in Myanmar were, however, not borne out. But differences between China and Myanmar have grown lately, especially on large projects like the Myistone Dam and a proposed railway line to connect Yunnan to the Bay of Bengal. There is also growing opposition to Chinese projects in copper and nickel mining and concern that Myanmar has not benefited from an oil pipeline linking China's Yunnan Province to the Bay of Bengal Port of Kyaukphu. There are also concerns about the Chinese involvement with Myanmar insurgent groups like the Kachin Independence Army and the United Ws Army in Shan state. Despite this, border trade across the Yunnan Province-Myanmar border reached $4.17 billion in 2013, against a mere $35 million of trade across the India-Myanmar border. The “unofficial trade” (smuggling) across this border is, however, estimated at around $300 million annually.

India's former Ambassador to Myanmar, Dr V.S. Seshadri, has authored a recent report spelling out how India has proceeded tardily in building connectivity through Myanmar to Thailand and Vietnam and in getting access for our land-locked north-eastern states to the Bay of Bengal. Or border trade regulations are crafted by mandarins in North Block and Udyog Bhavan, New Delhi, who have no idea either of the ground situation along the India-Myanmar border or the pragmatism that China shows in treating the markets across its land borders with its neighbours, not as foreign markets, but as extensions of China's own markets. Opening up such trade will also enable our north-eastern states to meet their growing requirements of rice at very competitive rates.

Unless we learn to look at our neighbours like China bearing in mind the inherent strengths of our economy, we can never match the economic influence of China across our borders in the Northeast. The new Minister for North Eastern Affairs, Gen V.K. Singh, has long experience of the Northeast. One hopes that as a pragmatist he would arrange to liberalise current trade practices and permit trade across our borders with Myanmar in currencies traders mutually agree to. Vehicles should be permitted to move freely across the borders on road networks now envisaged, through Myanmar, to Thailand and Vietnam. Moreover, the “Kaladan Multimodal Corridor” linking our north-eastern states to the Bay of Bengal through the Port of Sittwe in Myanmar will be useful only if Sittwe becomes the key port for India-Myanmar trade.

India has done remarkably well in projects in Myanmar intended for the development of human resources. It has participated in the establishment of the Myanmar Institute of Information Technology, an Advanced Centre for Agricultural Research and Education, an agricultural university and welcomed many Myanmar professionals for training in our medical and engineering institutions. But it has to be acknowledged that in project and investment cooperation, our record has not exactly enhanced our image as a dynamic, emerging economy. After having secured exploration rights for gas in the Bay of Bengal, we conducted our project planning and diplomacy so clumsily that we did not have a pipeline strategy in place for transporting gas to India across Myanmar, or by sea as LNG. China deftly stepped in and took away all the gas intended for us by expeditiously building a pipeline to its Yunnan Province.

In the mid-1990s Myanmar offered us hydro-electric projects across rivers near our borders. We took over a decade to scrutinise these projects, which companies in South Korea had earlier offered to construct. After nearly two decades, we backed off. Our private companies similarly have not been able to avail offers of land for agriculture across Myanmar. India was offered hundreds of acres of land with bamboo plantations for making paper pulp. Two private sector companies signed memoranda of understanding with their Myanmar counterparts. But Myanmar officials found our private sector was even more bureaucratic than our government organisations. India lost out on access to huge bamboo resources to a Thai company, which clinched a deal in weeks —something which our companies could not do in nearly two decades.