The North-East: Massive Economic Potential, But How Can It be Fulfilled?

The first week of this month (April) witnessed a never-before event in the north-eastern part of India—the first business summit between ASEAN countries with India’s eight states of the region (including Sikkim). The purpose of the summit which, not surprisingly, failed to find even a perfunctory mention in the ‘national press’, was to attract investments from ASEAN into North-East India.

But that is easier said than done. Speakers at the three-day Northeast-ASEAN Business Summit, held at Manipur’s capital Imphal, did dwell extensively on the rich business potential of NE India which is the pivot of the Narendra Modi government’s ‘Áct East’ policy. NE India can become a prosperous gateway to India’s future and proposed commercial links with South East Asia.

That many believe this potential is real can be gauged from the fact that Bangladesh’s Commerce Minister Tofail Ahmed, many ASEAN ambassadors to India and senior office-bearers of chambers of commerce of these countries chose to attend the summit that was hosted jointly by DoNER (the Union government’s nodal department for the development of NE India) and the Federation of Indian Chambers of Commerce of India.

To transform this enormous potential reality, many things need to be done. The first, as the Bangladesh minister pointed out, is to overhaul the pathetic infrastructure of the region. Road and rail connectivity between the North-East and the rest of the country, and within the region itself, is extremely poor. And, mostly, the NE states have only themselves to blame for this. A culture of inefficiency, sloth and massive corruption that pervades the region has held up speedy construction of roads and bridges in all the states.

Add to that the irrational fear among indigenous people of the tribal states about being swamped by ‘outsiders’ that fuels their blind and fierce opposition to extending rail links to their states. That local politicians have done little to assuage such fears and, in fact, have only stoked them for petty political gains is another chapter in the long story of how the region has been let down by its own leaders.

Governance, or lack of good and effective governance, is another issue that hobbles NE India’s pursuit for investments. The governments of all the states are, with the honourable exceptions of Sikkim and Tripura, corrupt and indolent and, in states like Manipur, have abdicated their powers and responsibilities to rapacious insurgents. In fact, many politicians and civil and police officers have close links with the insurgents who collect ‘taxes’ and extort huge sums of money from businessmen, government officials and common people.

A plethora of Raj-era rules and regulations, most of them without any justification and kept in place just to facilitate extortion and harassment of businessmen, traders and commoners by everyone from the peon up to the senior bureaucrat holds back economic development of the region. Successive governments of the NE states have steadfastly refused to junk these rules, most of which no longer exist in the rest of the country, for their own vested interests.

Potential investors, businessmen and traders in NE India not only have to negotiate a minefield of rules and regulations aimed at thwarting them, but also a host of non-governmental organisations ranging from student and youth bodies to women’s groups, organisations claiming to protect the environment and local bodies like autonomous district councils and village headmen to set up industries and businesses. Most of these bodies not only act in an extra-constitutional manner and can even hold up government clearances for projects, but often demand their share of the pie for giving their nod to industries and businesses.

There is an innate suspicion of, if not outright hostility, towards óutsiders in many of these states (exceptions are Assam, Sikkim, Tripura and Arunachal Pradesh) and one can understand why investors and businessmen have been giving the North-East, despite its huge stated potential, the miss.

Insurgency, which thrives in Manipur and Nagaland and parts of Meghalaya, Assam and Arunachal Pradesh, is yet another major roadblock for investments in the region. Insurgency in these states no longer have any popular support; the common people all over the region are actually fed up with insurgents who have become little more than criminals and extortionists. But insurgency thrives because politicians stoke it.

In Manipur (as with many other parts of the region), politicians are known to seek and get help from militants to win elections. In return, the militants not only get huge sums of money from the politicians, but also a licence to carry on their extortions and killings. The police and civil administration officers also have mutually beneficial links with militants, who often bag contracts for development projects like building roads and bridges and siphon off nearly the entire allocation for these projects.

As a result, despite the Union Government pumping in thousands of crores of rupees of taxpayers’ money for the development of North-East India and social welfare projects in the region every year, very little of that money is actually spent for development or benefit of the common people. Most of this money is siphoned off by politicians, bureaucrats and their corrupt cronies in business and trade. Thus, this noxious politician-bureaucrat-businessman-insurgent nexus has no interest in rooting out insurgency.

North-East India, with its rich natural resources and strategic position as a gateway to western China and South East Asia, has enormous potential for becoming a busy hub for manufacturing, trade and commerce that can dramatically alter the face of the region and the destiny of its people. But for that to happen, many bold steps have to be taken.

The ‘To Do’ list:

•   Root out corruption and bring in accountability

•   Speed up infrastructure development

•   Provide good governance

•   End insurgency

•   Curb the extra-constitutional powers and influence of student unions and other groups

•   Simplify official procedures and create a business-friendly environment

•   Shed the suspicion of and hostility towards ‘outsiders’

But all this, to repeat an earlier assertion, is easier said than done. Civil society groups in the region hold the inherent potential to change the order, but they have not been able to develop a larger worldview that can make them transcend petty tribal and racial barriers. Many well-meaning individuals and NGOs are doing good work, but their efforts are scattered and isolated to make much of a difference at the macro level. The existing set of politicians and bureaucrats will, obviously, resist any change.

Given this situation, it falls on the Union Government to drive the much-needed change that is required in the North-East. The existing fossilized order in the region, which is the outcome of many decades of rule by the decadent and corrupt Congress party, needs to be uprooted. True democracy needs to be ushered into the region.

And the Narendra Modi regime in Delhi is perhaps best suited to do all this. The people of the North-East have to indicate their desire to change the existing system in order to change their destinies. This is a ‘now or never’ moment for the long-suffering people of this region.