Since
Indian Prime Minister Narendra Modi came to power in May, he has sought
to project to foreign-policy watchers a renewed commitment to India’s
Look East Policy (LEP) – or, as Modi’s administration has renamed it,
the “Act East Policy.” The LEP was put forward in 1991 to reorient
Indian foreign policy towards East Asia and Southeast Asia. But
half-hearted commitment to the policy has severely restricted India’s
footprint in these regions, even as Chinese influence destabilizes
Indian hegemony in South Asia. Major deals with Bangladesh and Japan, in addition to a
flurry of meetings
between top Indian officials and their regional counterparts, have been
taken as early signs that Act East represents a genuine shift in Indian
foreign policy.
With Myanmar, deliverables under Modi thus far have been fairly modest: an agreement to crack down on
regional insurgencies, a
route-mapping exercise for the long-awaited Imphal-Mandalay bus service, and continued progress on the
India-Myanmar-Thailand Trilateral Highway and
Kaladan Multi-Modal Transit Project.
The LEP framed Myanmar as India’s overland bridge to the dynamic ASEAN
belt, and Modi’s rhetoric on Myanmar has stressed his dedication to
realizing this vision. But the two countries have no rail links; the
only road link (Asian Highway 1, or AH-1) is insecure and poorly
maintained; and there are no flights to Mandalay, northern Myanmar’s
most important city. India-Myanmar bilateral trade has grown steadily
over the past several decades, from Rs9.8 billion ($163 million) in
1997–98 to Rs131 billion in 2013–14. But those gains have been made
entirely through sea trade. Whereas Myanmar’s overall border trade
volume jumped from 8 percent in the late 1990s to almost 14 percent 10
years onwards, border trade with India actually
regressed during the same period: from $72 million (cumulative, 1995/96–1999/2000) to $38 million (cumulative, 2005–06/2009–10).
The deficits in India-Myanmar overland connectivity reflect a complex
array of factors: Yangon’s limited control in northern Myanmar, Delhi’s
fixation on transnational and internal security threats in the
Northeast, and uneven bilateral relations over the tenure of Myanmar’s
erstwhile military junta. But within India and Myanmar, Delhi and Yangon
are not the only players influencing the progress of bilateral
connectivity. If Modi wishes to live up to his rhetoric on boosting
Indian ties with its eastern neighbors, he will need to work closely
with local actors in the four states on the India-Myanmar border:
Arunachal Pradesh, Nagaland, Manipur and Mizoram. Of these, Manipur is
the most important. Manipur’s border post at Moreh, on Asian Highway 1,
handles 99 percent of formal overland trade between India and Myanmar,
and also the bulk of the far vaster category that is India-Myanmar
informal and/or illegal trade.
On a mid-January visit to Manipur, I had formal and informal
conversations with an array of academics, journalists, activists,
entrepreneurs, and current and former politicians and bureaucrats about
Manipur and the future of India-Myanmar connectivity. I heard plenty of
optimism there about the sincerity of Modi’s ambitions for boosting
cross-border connectivity, but also major questions about the practical
scope for change. Policy implementation in Manipur involves engaging
with a variety of actors – the state government, insurgents from
Manipur’s 30-odd insurgent (“underground”) outfits, the Indian Army
units stationed to fight them, central infrastructure bodies – whose
agendas do not always align with the needs of cross-border trade. These
issues are of particular concern because India is not necessarily
operating from a position of strength in border trade here. Present-day
patterns favor Burmese businessmen, and Chinese and Southeast Asian
manufacturers, more than they do their Indian counterparts. What’s more,
even if India’s border trade position improves, it is an open question
to what extent Manipur’s economy will benefit. The state’s economic
struggles drive many of the dynamics that interfere with connectivity
initiatives today; these dynamics will continue to cause trouble so long
as those struggles persist.
Overland connectivity with ASEAN has long been presented as priority
for the LEP and for developing the Northeast. But those expecting that
Modi’s emergence will spark a rapid transformation in the connectivity
scenario – for the benefit of Manipur, and of the rest of India – would
do well to temper their hopes. Reshaping Indo-Myanmar connectivity
requires rewiring basic features of the development environment in
Manipur, through persistence, attention to local perspectives, and
skillful bureaucratic management. Success in this matter will prove a
stern test of the substance of the Act East pledge.
Connectivity and the State in Manipur
Both Delhi and Imphal have sought over the past few years to
demonstrate a serious commitment to strengthening Indo-Myanmar
connectivity via Manipur. For Delhi, at least, this is a somewhat new
development, and certainly not an uncontested one. For most of the past
seven decades, what attention the Northeast has received from Delhi has
mostly come in the sphere of security: The region’s active insurgencies,
and their links with Bangladesh, Myanmar, and China, provoked a
policy framework
that prioritized border security and anti-insurgent crackdowns. Since
the early 2000s, Union (Central) Government agendas have placed greater
emphasis on development and international connectivity in the region.
Prime Minister Manmohan Singh’s 2012 visit to Myanmar focused on
trade promotion, with deals
signed
to boost air and road links between Manipur and Myanmar. Manipur Chief
Minister Okram Ibobi Singh took a delegation to Myanmar in
May 2013
to liaise with Burmese officials on ways to boost cross-border trade.
Modi’s administration has even put forward the improbably bold idea of
developing Moreh as one of its 100 new “smart cities” around India.
But if government-to-government initiatives suggest enhanced support
from Delhi and Imphal for stronger connectivity, the actual workings of
Manipur’s state apparatus – not just local authorities, but also the
Union bodies engaged in the state – are far less helpful. Failures of
governance have produced major levels of corruption and insurgency that
generate an ugly gap between policy formulation and implementation.
Corruption and Infrastructure
As noted above, cross-border transit infrastructure deficits are a
major drag on India-Myanmar trade. Redressing this issue on the Indian
side will require substantial investment, especially in railways and
roads, the most natural channels for large-volume trading in this
region. In the railway sector, such efforts are ongoing, but progress is
slow. A November 2014
presentation
by India-ASEAN connectivity expert Prabir De suggests that efforts to
connect Imphal to India’s railway map, initiated in 2003, are slated to
be completed by March 2018. An extension from Imphal to Moreh, likewise
set in motion during the mid-2000s, finished its engineering survey
only this year, according to the
Bangkok Post;
and links from Moreh into Myanmar are further off.
For roads, at least, the basic infrastructure of trade already
exists. Manipur connects to mainland India via two major highways.
National Highway 102 (NH-102) is the extension of AH-1; it goes
northwards into central Assam. National Highway 37 (NH-37) runs
westwards into southern Assam. These two highways are essential not just
for overland trade to Myanmar, but also for providing Manipur with the
rice, petrol, cement, and other basic commodities which the state
imports from other parts of India. However, both highways are plagued by
shoddy construction, especially NH-37: Even in the dry season,
traveling the 220 km from Imphal to Jiribam on Manipur’s western border
can take 13–14 hours.
The border trading environment itself is characterized by a
combination of weak basic infrastructure and byzantine bureaucratic
procedures. A June 2014 report by Manipur-based Hueiyen News Service
notes that the town
struggles to guarantee
five hours’ power daily – a major obstacle to state government plans
for establishing a cold storage center, a must-have for high-volume
trade in a host of food products. In 2006, central government
authorities
approved the development of an Integrated Check Post (ICP) at Moreh – a
single complex
for border management authorities, intended to improve inter-agency
coordination. Construction is currently halted on account of Myanmar’s
claims, announced in December 2013, that the ICP site lies on its territory. In the meantime, a 2011
report
on border infrastructure at Moreh suggested that maintenance of current
customs facilities had dropped off since ICP development began. Such
deficits work against the sort of professionalized trading operations
that Delhi policymakers seek to encourage, and in fact, the vast
majority of Moreh’s trade goes through informal and illegal channels.
Official statistics for these channels do not exist; but estimates I
have heard – both publicly available (as in
these reports)
and in my own conversations with experts in Manipur – indicate that the
annual volumes moving through each of these channels today stands
somewhere in the billions to tens of billions of rupees, far above the
hundreds of millions of rupees in annual formal trade.
Indeed, the volume of informal trade can be understood to indicate
the mismatch between the infrastructure of formal trade and the demand
for trade at Moreh. Informal trade here consists primarily of “headload
trade” – goods carried across the border on one’s head, which are
largely exempted from standard customs procedures. But much of this
trade is actually coordinated by high-volume traders, who hire large
armies of coolies to carry goods across the border. Ch. Priyoranjan
Singh, an economist at Manipur University, says that, of the forty
traders who obtained licenses to operate at Moreh’s formal customs
station upon its establishment in 1995, just three still use them.
The issues of slow execution and unsatisfactory results in
connectivity infrastructure projects in Manipur follows from the
authorities who implement the projects: a nexus of central and state
bodies with a nasty track record of corruption and poor performance. I
heard estimates of standard graft levels on road projects in Manipur
reaching 66 percent of project fund allocation, with skims demanded
variously by Delhi mandarins, local politicians and bureaucrats, and
underground groups, among others. The most functional road in the region
is actually the 160 km Indo-Myanmar Friendship Road in Myanmar, built
from 1999–2001 by India’s Border Roads Organisation as the easternmost
link in a longer intended road between the Myanmar border town of Tamu
and Mandalay. But the Border Roads Organisation is now facing a central
inquiry into major non-performance of maintenance and construction tasks on NH-37.
Some observers offer examples of interest groups positioning
themselves on connectivity issues according to their prospects of
financial gain. The Indian army, for instance, has long expressed
concerns that steps to boost India-Myanmar connectivity, by loosening
the border, could undermine efforts against Manipur’s insurgent groups, a
number of whom have permanent camps in northern Myanmar. But
Priyoranjan of Manipur University questions the army’s motivations. He
notes that local army figures are also important sponsors of nighttime
smuggling operations whose traffic is worth billions rupees annually.
Managed Insecurity: Insurgent-State Relations
The politics of insurgent-state relations in Manipur have also
generated serious obstacles to connectivity. Ethnically speaking,
Manipur’s three major ethnic groups – Meiteis, Nagas, and Kukis – are
closer to the peoples of northern Myanmar than they are to those of
mainland India, and the accession of the state into India in 1949
occurred under heavy pressure from the Indian government. These issues
were aggravated by economic alienation, as Partition severed Manipur
from most natural trading links to the outside world, on the coast of
modern-day Bangladesh. Violent Meitei insurgencies had emerged in Imphal
and the surrounding valley areas by the late 1970s. Delhi responded
with aggressive paramilitary campaigns backed by the
Armed Forces (Special Powers) Act,
which sanctioned the use of deadly force by central security forces
against citizens “acting in contravention of any law or order.” The law
has weakened the foundations of criminal justice in counterinsurgency
operations in Manipur while also generating what
many observers have called a “culture of impunity” extending into state security personnel as well.
This governing strategy has worked as ideological justifications for
underground groups, as organizations fighting back against maltreatment
by the Indian state. Like many other Northeastern insurgencies, the
Manipur underground’s penchant for criminality has seriously weakened
their legitimacy in recent years amongst large segments of Manipur’s
population. But the insurgencies’ persistence and strength owes much to
the fact that, for decades, they have found popular support on these
grounds. The underground forces have declined in manpower over the past
several decades, but the security establishment has
fought aggressively against revisions to AFSPA. In late 2014, Home Minister Rajnath Singh
ruled out revisions to AFSPA in the near future. Given the BJP’s assiduous courting of key security players, a change seems unlikely.
In the meantime, the insurgents, and their appointed state handlers,
create major hassles for cross-border traders. Insurgents’ influence
today follows partly from their use of violence. Fatalities in the state
have
declined substantially
over the past several years, but the threat of violence still forces
traders to invest time and money (and take personal risks) forging and
reforging links with different players in the ever-shifting insurgent
landscape. Strikes and blockades targeting NH-37 and NH-102 are another
source of trouble. The most frequent instigators are the National
Socialist Council of Nagaland (Isak-Muivah), a Nagaland-based insurgency
with a strong presence in the Naga-dominated hill districts of northern
Manipur. The NSCN-IM uses these tactics to press for the integration
these districts into “Greater Nagaland,” a vision fiercely opposed by
the Imphal Valley-based Meiteis who form the majority of Manipur’s
population. Calculations based on data from a 2014 Observer Research
Foundation
report
by Subir Bhaumik indicate that, between 2004–2005 and 2011–2012,
strikes and blockades shut down one of NH-102 or NH-37 for a cumulative
average of 129 days annually. (Students associations and other civil
society groups also carry out strikes and blockades, but such
organizations are often themselves close collaborators with the
insurgencies.)
Even when the roads are open, passengers and truckers along these
roads contend with an extensive series of extortion checkpoints set up
by the underground or army and police officials. Fieldwork presented in a
recent thesis by Sanabam Gunjait Mangang of the University of Calcutta
claims the existence of 20 such checkpoints along each of NH-37 and the
Imphal-Moreh stretch of AH-1, as well as another 15 along NH-102 from
Imphal to the city of Dimapur in Nagaland. Security officials use bribes
and political connections to jockey for position along these routes,
with Imphal-Moreh the most desirable, followed by Imphal-Dimapur.
Insurgent extortion often occurs with the blessing, tacit or otherwise,
of local officials.
As regards the impacts of corruption and insurgency on connectivity,
the stakes for improvement are high. At Moreh today, the most powerful
traders are businessmen from not India but Myanmar, selling Chinese and
Southeast Asian goods. Dulali Nag’s 2010
report
for the Calcutta Research Group describes how the Burmese military’s
establishment of Namphalong market in the 1990s, right by the gate for
headload trade on the border, undid the patterns of trade that had ruled
Moreh since the early 1960s. Historically, imports into India were
coordinated by Moreh-based Indian businessmen with diasporic connections
in both Myanmar and India. But wholesale and retail customers now skip
the middlemen at Moreh to purchase directly from Namphalong market,
whose shops stock mostly Chinese and Southeast Asian goods – cheaper,
and often of better quality, than their Indian counterparts across the
border. More
recent writings on Moreh confirm the persistence of these basic dynamics.
A major part of the blame for Indian goods’ price disadvantage lies
with poor infrastructure and endemic extortion along the transit
corridors running up through Moreh. The existing imbalance means that
Indian goods will not gain competitive edges by steps that nibble around
the edges of the connectivity deficit; such edges will follow only from
major progress.
Manipur’s 2017 Elections: Hopes for Change?
Could a change in local government improve conditions for boosting
cross-border trade? Congress’s Okram Ibobi Singh is enjoying his third
term as Manipur’s chief minister, and his second at the head of a
simple-majority Congress administration. His reputation for graft earned
him the nickname “10 Percent Ibobi,” for the cuts he demanded from
sundry projects; a number of people in Manipur joked with me that the
nickname was outdated, his takes had increased. Singh’s long tenure owes
also to good ties with the insurgencies and the local security
establishment.
The next two strongest parties in the current legislature, the
Trinamool Congress (seven seats) and the Naga People’s Front (four
seats), pose no threat to Congress’s rule; neither have the capacity to
be more than side players. Instead, the most likely challenger is Modi’s
Bharatiya Janata Party, whose share in the legislature has never
exceeded 10 percent. Its capacity suffered in the early 2000s under a
ban in the Valley imposed by the Meitei underground, in retaliation for
gestures by the BJP-led central government in 2001 that signaled (very)
tentative acknowledgment of the NSCN-IM’s demand for Greater Nagaland.
The BJP did not win seats in either 2007 or 2012, even as enforcement of
the ban was already waning.
Nonetheless, most observers I spoke to in Manipur suggested that the
BJP stands a real chance of forming a coalition government in the 2017
elections. State BJP figures have based their appeals on an
anti-corruption message
and on their association with Narendra Modi, whose message of
development-based governance seems to have been met with cautious
interest in the state. Such is their public message. But there is good
reason to question whether a BJP-led administration would do much to
change the politico-economic environment that constricts cross-border
trade through Manipur. As regards the anti-graft platform, the state BJP
leadership’s reputations are not necessarily much better than the
targets of their criticism: reporting by Imphal-based journalist Yambem
Laba, for instance, has raised questions about
corruption by state BJP president Thounaojam Chaoba Singh. The leadership is also riven with infighting, a issue which
helped derail
the BJP’s efforts in the most recent legislative election in Manipur, a
state legislature by-election in October 2014. A number of people I
spoke to in Manipur suggested that the BJP may end up relying on efforts
to convince sitting Congress legislators to switch parties in the
months before the poll. Such a strategy, of course, involves inheriting
many of the networks that make meaningful changes in the state’s role
with the political economy of Manipur even more unlikely.
For these reasons, the significance of a BJP administration for
Manipur may ultimately depend upon the sort of relationship it builds
with the national BJP – that is, whether Modi and his party are content
with just having another state in its pocket, or whether they see BJP
control in Manipur as a tool for reshaping local governance. Still, even
if Congress holds its majority, New Delhi has a powerful tool for
shaping its behavior: money. The state government is helpless without
central government transfers, which constituted
89 percent
of state revenues from 2010-13. Central government monitoring of state
government projects (and those of the Border Roads Organisation, a
central government body) has long suffered on account of a combination
of influences in Delhi: graft, indifference towards the Northeast,
political deal-cutting. Focused leadership could weaken the hold of
these influences and make space for heightened accountability.
Connectivity for Whom?
Modi’s signals on Act East have spurred cautious optimism among many
of Manipur’s elites that the new prime minister is genuinely committed
to boosting regional connectivity. But my interviews in Manipur pointed
to a complementary pessimism over the significance of pro-connectivity
initiatives for Manipuris. Many observers fear that the benefits of
greater connectivity will accrue far more to mainland Indians than to
Manipuris.
Manipur’s weak economic base is the main cause for concern. Manipur’s
proximity to Myanmar gives its one edge in supplying goods for, or in
attracting businesses with an interest in, cross-border markets. But
even as that proximity becomes more valuable, the state’s weak economic
performance points to a host of other factors that will discourage
capital from locating here. Gross state domestic product in Manipur
averaged
5.19 percent annual growth rates between 2004–05 and 2012–13, well
below the all-India average of 7.96 percent. Average output growth in
Manipur’s industrial sector (from 2005–06 to 2013–14) was especially
weak: 1.69 percent, versus the national average of 6.87 percent. Union
government statistics on
state industrial sectors in 2007–08, taken against
2011 population figures,
allow for rough calculations on per capita factory density in each
state; Manipur is securely in the bottom quintile. The sector is heavily
constrained by poor infrastructure, most dramatically in terms of power
supply. Manipur’s electricity transmission and distribution loss in
2007–08 and 2008–09 hovered around
50 percent – only Jammu and Kashmir are worse. Meanwhile, agriculture, per
2008–09 state statistics,
employs more than half of the state’s labor force. But a preponderance
of small-holding subsistence farmers means that the state relies upon
imports for a variety of essential foodstuffs. Commercially-minded
growers in more vibrant sectors like horticulture are held back by basic
infrastructure bottlenecks – for instance, a statewide absence of cold
storage facilities. In terms of human capital, literacy rates in the
state are
strong: 79
percent as of 2011, as opposed to the all-India average of 73 percent.
But the lack of economic opportunities restricts the development of what
one might call commercial human capital—business acumen and experience.
Even in the border trade sector itself, Manipuris have traditionally
been marginal players. Moreh has long facilitated small-scale exchange
between locals, but the town has served an important node in larger
trading networks ever since the early 1960s, when traders from mainland
India’s oppressed diaspora in Myanmar settled here. Most significant
were the Tamils, who had grown from just 200 in the early 1960s to
13,000 in 1980, though Marwari and Punjabi families also played an
important role. The mainlanders’ reliance upon kinship ties made these
networks inherently difficult for Manipuris to penetrate. Manipuris also
suffered from a lack of commercial human capital; the state had no
tradition of capitalist commerce or of large-scale trading, and its
economic isolation in post-Partition India had exacerbated these
deficits.
In the past two decades, mainland Indian populations have declined significantly, and Nag
says
that Namphalong’s emergence has boosted the position of aspirant Meitei
traders, who can leverage their diasporic links in Myanmar. But my
interviewees suggested that any inroads by the Meiteis should not be
exaggerated, and that, in regards to formal and informal trade
coordinated from the Indian side, mainland India communities are still
far more powerful. Instead, the Manipuris most effectively integrated
into the local political economy of trade are largely those in the
insurgencies and in army or state government positions, via highway
extortion, graft, and illegal trade.
Left unresolved, the state’s weak economic base will restrict avenues
for Manipuris to take advantage of the opportunities that stronger
connectivity brings. My interviews suggested that some sectors are in
relatively better positions – niche ones like medical tourism from
northern Myanmar, and also potentially broader ones like horticulture,
mentioned above, and standard-issue tourism. (Elevated investment in
tourism has run into trouble with the sudden cancellation of the 2007
North East Industrial and Investment Policy and its investment
incentives; but New Delhi assures that the cancellation is only
temporary.)
The best-case scenario would see such sectors survive the state’s
formidable deficits in infrastructure and law and order to lay a
foundation for a more competitive economy. Judicious central government
engagement here will be essential: targeted infrastructure funding,
steady incentives for investment, and somehow, some way, improved
mechanisms of accountability.
Connectivity may not deliver much for Manipur without concurrent
improvements in the state’s economic base. But local development will
also be a boon for connectivity, by weakening the nexus of corruption
and insurgency outlined above. With the underground’s ideological
underpinnings corroding, their strength rests more and more upon their
ability to offer Manipur’s youth access to income amidst a bleak local
economy. Meanwhile, local underdevelopment boosts corruption’s hold on
the local economy: Almost all large-scale investment in the state, and
hence almost all opportunities for accumulating wealth, comes through
public expenditure.
Connectivity: Why Manipur Matters
The place of Manipur within Indo-Myanmar connectivity represents a
serious test for Modi’s government – of its ability to impose its
agenda, and of its sensitivity to local concerns. Stronger connectivity
requires major infrastructure initiatives: In one of India’s most
corrupt states, can rails and roads be done right? Stronger connectivity
also requires recognition of the development needs of Manipuris: To
what extent will such issues feature on Modi’s connectivity agenda?
The Indian government, in policy design and implementation, does not
have a sterling record on these questions. And its leverage is greater
over some bodies than others. But only the central government has the
combination of resources and responsibilities to coordinate between, and
try to shape the behavior of, the various players of Manipur’s
political economy – interest groups in the central government itself,
state authorities, the security establishment, and local underground and
civil society players. Success in these efforts would demand special
persistence and focus from Modi and his team, and from those who follow
them. But the benefits could be enormous: a more stable and prosperous
Manipur, emerging overland trade corridors to ASEAN, and new diplomatic
leverage in East and Southeast Asia for other priorities. That is truly
Acting East.
Edmund Downie is a Yale University Gordon Grand Fellow at the
Calcutta-based Centre for Studies in International Relations and
Development, studying Indian regional integration with East and
Southeast Asia.
Mizoram keeps its fingers crossed for the the third consecutive national gold. 
