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Making the northeast a business hub of South Asia

November 30, 2014 12:34 IST

For the region to realise its full potential, New Delhi needs to start looking at the land-locked northeast as an important starting point in India's 'Act East' policy, says Nitin Gokhale  

Prime Minister Narendra Modi is on a tight schedule as he visits the northeast on a 4-day trip. He will be attending a function organised by a newspaper, flagging off a new railway link, inaugurating the annual Hornbill Festival in Nagaland and, in a balancing act, attending the closing ceremony of the Sangai Festival in Manipur, besides addressing the Director Generals’ of Police annual meeting in Guwahati.

This is not the first time a prime minister is spending extended time in the region that is often treated as an exotic destination. Eighteen years ago, prime minister HD Deve Gowda travelled across the 7 states of the region for a week to bring in major changes in policy towards the northeast. Former prime ministers’ Atal Bihari Vajpayee and Manmohan Singh, too, made occasional forays in the region.  

But circumstances in those years were different. Major insurgent groups like the Nationalist Socialist Council of Nagaland and the United Liberation Front of Asom were powerful and held sway over large areas of the region. India’s Look East Policy was still in its infancy, connectivity between the rest of India and the northeast, as well as between states within the region, was tenuous.

In the intervening period much has changed.

The region is more peaceful than before. The ULFA is a shadow of its former self. The Issac-Muivah faction of the NSCN has been in ceasefire mode with the government of India since 1997. Elsewhere too, over 18 smaller militias have signed SoO (Suspension of Operations) agreements with the Centre.

But there is a flip side too. Violence is certainly down but anyone with a semblance of knowledge of the region will admit that absence of violence does not equal peace.

Extortion, kidnapping and parallel governance administered by underground groups is still rampant in many areas. Ethnic tensions, natural calamities and poor infrastructure in many areas continue to be a major drawback in the region. Corruption and systematic siphoning off of huge central funds continues to bedevil the northeast.

These problems notwithstanding, the region needs a renewed focus given its location and a new-found emphasis on India’s ‘Act East’ policy.

Prime Minister Modi may not make any dramatic announcement during his trip but his firsthand interaction with chief ministers and officials of the northeast should give him an idea about their aspirations and their concerns.

It is all the more important for Modi to understand the issues of the region since India is now transforming its earlier ‘Look East’ policy into ‘Act East’ policy. It’s a given that rapid development of the northeast would be integral to India's Act East policy since the region is a corridor and a transit route to South East Asia.

India is already upgrading an extensive network of roads and bridges in Myanmar that would effectively connect the northeast (and the rest of India) to Thailand as soon as 2016. Facilitating border transit would make the northeast a gateway to Myanmar -- a potential boon for trade as well as tourism.

Manipur, for instance shares a 398-km border with Myanmar. But more importantly the border town of Moreh has been a traditional trading hub with Myanmar and therefore has potential to become a major export centre from India for the South-East Asian region.

With better connectivity and implementation of various development projects, the Asian Highway would enable the northeast region to become a business hub of South Asia. According to a recent report by Ficci and Price Waterhouse Coopers, the northeast region has a trade potential of between Rs 35,000 crore and Rs 180,000 crore, and could very well become the new growth engine for the country. For that to happen, however, quick resolution of long-standing ethnic insurgencies is a must. Now is the time to press for peace and security in Nagaland and Manipur by setting realistic deadlines for possible solutions.

Manipur and to a lesser extent Nagaland must take advantage of the Act East policy. But that potential can be fully realised only if New Delhi starts looking at the land-locked northeast as an important starting point in India's 'Act East' policy instead as a dead end of the country's road network. Therein lies the challenge for the prime minister and his team.

Nitin Gokhale has lived in and reported from the northeast between 1983 and 2006.

Nitin Gokhale