LOOKING EAST FROM THE NORTH EAST: NOISES FROM THE GROUND
This article by Prof E. Bijoykumar Singh (Economics Department, Manipur University), was originally published by the Hueiyen Lanpao and posted by E-pao on April 12, 2014.
Looking east from the north east has become fashionable. Questions like - what is there for us? Are we prepared? Are we adopting the right approach? These are some questions we have been trying to answer through seminars and conferences. During March two important seminars on India's Look East Policy were held in Manipur University. One was the one day national seminar on Indo Myanmar Border trade and its emerging pattern organised byThe department of Economics, Manipur University and Manipur Economic Association. The department has been studying several aspects of Indo Myanmar border trade at Moreh as part of a UGC Special Assistance programme. This was the third seminar organised by the department.
After innumerable seminars and conferences on this issue I got this gut feeling that we were not actually looking at the real thing. Our outputs were far divorced from the emerging pattern. This inability to connect made me look towards non conventional sources of information. Through our projects we collect information on border trade. Yet, I felt it was time to listen to the noises on the ground and try to make sense of the rumblings at the ground level. For that we invited three veterans- Shri R.K. Shivachandrasingh, Indo Myanmar Fraternal Alliance, Shri W. Nabachandra Singh, Indo Myanmar Border Traders Union and Shri A. Puninkumar Singh, Manipur Chamber of Foreign Trade and Investment to express their views on three issues: hindrances to trade, changing pattern and future of border trade.
We believe that they belong to group of the most knowledgeable persons in border trade at Moreh. Shiva had crisscrossed Indo Myanmar borderland moving with the people. There is a difference between moving with official delegations and moving with the people. Nabachandra had tested the official regulations controlling border trade rigorously and had a rich experience of the vagaries of officialdom. Punin had been keenly observing, in the last few years, the possibilities of Border trade and its potential for transforming the entire economic landscape of Manipur. Though it was not for the first time that we have interacted, the manner of interaction was new. Unlike many seminars where speakers would be asked to wind up, we gave them time to speak on some issues.what they told us were indeed very revealing posing a question mark on governance. That convinced us that the information content of their experience should be widely disseminated for our benefit.
Border trade has to very knowledge intensive if we are thinking in terms of getting the maximum benefits. Striking properbargain and transporting the goods to the most profitable destination on time are no child's play. The risks of trade are to be born by the trader entirely. There is no insurance market in this sector. We need a number of documents for engaging in trade and the most unfortunate part is that most of our traders have no idea how to get them. In the absence of nine documents required for export and import we are bound to informal trade. That explains the death of foreign trade and growth of informal trade in this sector.Thus the bravado for doing foreign trade evaporates when one gets stranded at Moreh due to lack of documents.
The "fit for human consumption" certificate which used to be available in Gauhati is now available from Imphal. Even the tradeable items approved by DGFT cannot be imported if Customs department has not approved it. On the highway it is extremely difficult to contest any lawmaker. One can be easily stumped by the ignorance of the people concerned. If they say they have not received the document, you have to believe them. One has to take their words as the truth. For importing one truck load of betel nuts worth Rs one lakh one has to pay a tax of Rs 9000 plus another twenty thousand odd rupees to various state and non state actors. That reduces our competitiveness.
If we bring in goods without paying tax as many of us do regularly through our contacts we cannot sell that outside the state. Even the market in Manipur is not growing as is evident from the longer time it takes to dispose off a consignment. The trader has to bear all types of risk. How can we compete with states where the transaction costs are much lower than us? The exhortation of the government is like pushing soldiers into battles without arms. We have no proper trade policy. Trade should not mean exchange of a few items only. If trade is to be the engine of growth it should be very broad-based. Our policy makers do not seem to genuinely interest in foreign trade. Under these circumstances there is no future for Indo Myanmar border trade at Moreh.
No amount of coaxing can reverse the gradual death of formal trade at Moreh. On the other hand informal trade has been growing by leaps and bounds. Though it is not the only possibility, Indo Myanmar border trade has become more and more informal over the years. Many things are responsible for this situation and the emerging political economy cannot come up with any other alternative scenario. The people in power have come to develop vested interest in the emerging pattern of border trade. We have not exploited the possibility of people to people contact and the ethnic line in furthering Indo Myanmar trade.
Siva has visualised the opportunity. According to Siva, the Meiteis in Muse and Mandalay are very reliable transporters. They can be persuaded to connect Mandalay with Tamu by road. Goods from Bangkok can be brought to Moreh with their help at half the price one has to pay when these are brought by flight via Kolkata. To the Shans in Myanmar we are Kathais, their 'broken race' and the intangible capital of ethnic affinity is available.Trade in Myanmar cannot be pursued in China-Myanmar and Thailand-Myanmar border without their support. Can't we dream bigger dreams with their support?
A Marwari trader can dream of multi-crore business with a few lakhs because there is a social network. Other Marwari traders will underwrite his loan mainly because they belong to the same community. When we compete with Marwari traders for loans from Chinese financiers, the affinity is bound to play a role. There is a huge demand for pork in Nagaland and the pigs reared in clean environments are in demand.
Currently pigs are brought from Bihar and UP. According to Siva, who had transported such a prized pig from Monywa to Kohima,Nagaland has a market for 7000 such pigs daily. We can even take up this occupation in Manipur to provide hygienically reared pigs to Nagaland. If we take it to Nagaland either from Myanmar through Moreh or straightaway from our farms, the symbiotic relationship between Manipur and Nagaland will grow and a time will come when we have to relook at our blockade culture. It will be in everyone's interest to keep the traffic moving.
What Ngari, the fermented fish is to us, is pork to Nagas. Unfortunately we have not tapped this social capital. Siva's experience is yet to be critically examined. The possibilities emerging out of intense people to people contact cannot be captured by the limited tools of an economist. Yet where are the institutions? Traders will miss our former principal secretary who had begun to pick up the nuances of border trade. With his departure we are back to square one. Whoever comes will take years to reach where we were. There is no border trade ministry and we are trying to manage with an OSD.
We frequently wake up to the need of a passport and immigration office. The ICP is another idea for the future. The importance attached to border trade is not in proportion with our expectation of Look East policy. The point is that we have no institution to develop people to people contact. We are missing out on an important driver of Indo Myanmar Border trade.
Why has the informal trade grown at the cost of formal trade? What else do you expect when circumstances have nurtured an environment conducive to the growth of informal trade? We reap what we have sown.Why bother about the documents needed for formal trade when we can achieve the target through informal trade where the paper requirements are nil? Foreign trade is no child's play. Vested interests operate to maintain the status quo. Clerical staffs insist on bribes for the little information they have.
For the Officials, formal border trade is a nightmare because then there will be a drastic fall in their side incomes and without their hefty side income they will be reduced to genuine government servants. I feel really sorry for the institution of VDF which has become the hotbed of corruption. How can they survive in our competitive society without the little collections from the footloose vendors in the market? The system makes them what they are as of today. When you have operators always on the lookout for easier options and rent seeking officials interested more in the continuation and thriving of informal trade, can we expect anything else? The institutions are yet to be developed. We know that transaction costs are exceedingly high, yet the profit margin is high enough to attract more and more operators. Namphalong is a model of market which takes care of emerging demand. When we have power shortage the Namphalong market is flush with power saving appliances. It comes up with improved chulhas.
It has been a long story and our entrepreneurs have failed to catch up with our times. The proportion of women traders operating at the border has been rising and needless to say most of them are small traders with neither the financial resources nor the technical knowledge for pursuing formal trade in any meaningful manner. Puninkumar claimed that only women who had failed everywhere actually enter this profession.
Our crorepati contractors should become entrepreneurs. The samurais of pre Meiji Japan became the technocrats of modern Japan. Similarly our contractors should be transformed into entrepreneurs, not politicians. About the ICP, the post could have been planned near Kondo Lairembi. The controversy about the border and contested ICP is highly significant as most of the promised benefits of our Look East policy for this state would start accruing after its completion. Our experiences with such promises have made us wary and see a hidden agenda even in inaction.
The time has come for dharnas and rallies for a proper foreign trade policy if we are keen to get the most out of the emerging scenario. 'Frontier' intellectuals should provide a vision and the players should do the jungle cutting for the emerging path. The ad-hocism should go and foreign trade should be given its due importance. We should dream bigger dreams keeping an eye on ground level reality. More meaningful policies may emerge from such 'noises'. We should learn to listen. To the discerning minds such noises are music.
Looking east from the north east has become fashionable. Questions like - what is there for us? Are we prepared? Are we adopting the right approach? These are some questions we have been trying to answer through seminars and conferences. During March two important seminars on India's Look East Policy were held in Manipur University. One was the one day national seminar on Indo Myanmar Border trade and its emerging pattern organised byThe department of Economics, Manipur University and Manipur Economic Association. The department has been studying several aspects of Indo Myanmar border trade at Moreh as part of a UGC Special Assistance programme. This was the third seminar organised by the department.
After innumerable seminars and conferences on this issue I got this gut feeling that we were not actually looking at the real thing. Our outputs were far divorced from the emerging pattern. This inability to connect made me look towards non conventional sources of information. Through our projects we collect information on border trade. Yet, I felt it was time to listen to the noises on the ground and try to make sense of the rumblings at the ground level. For that we invited three veterans- Shri R.K. Shivachandrasingh, Indo Myanmar Fraternal Alliance, Shri W. Nabachandra Singh, Indo Myanmar Border Traders Union and Shri A. Puninkumar Singh, Manipur Chamber of Foreign Trade and Investment to express their views on three issues: hindrances to trade, changing pattern and future of border trade.
We believe that they belong to group of the most knowledgeable persons in border trade at Moreh. Shiva had crisscrossed Indo Myanmar borderland moving with the people. There is a difference between moving with official delegations and moving with the people. Nabachandra had tested the official regulations controlling border trade rigorously and had a rich experience of the vagaries of officialdom. Punin had been keenly observing, in the last few years, the possibilities of Border trade and its potential for transforming the entire economic landscape of Manipur. Though it was not for the first time that we have interacted, the manner of interaction was new. Unlike many seminars where speakers would be asked to wind up, we gave them time to speak on some issues.what they told us were indeed very revealing posing a question mark on governance. That convinced us that the information content of their experience should be widely disseminated for our benefit.
Border trade has to very knowledge intensive if we are thinking in terms of getting the maximum benefits. Striking properbargain and transporting the goods to the most profitable destination on time are no child's play. The risks of trade are to be born by the trader entirely. There is no insurance market in this sector. We need a number of documents for engaging in trade and the most unfortunate part is that most of our traders have no idea how to get them. In the absence of nine documents required for export and import we are bound to informal trade. That explains the death of foreign trade and growth of informal trade in this sector.Thus the bravado for doing foreign trade evaporates when one gets stranded at Moreh due to lack of documents.
The "fit for human consumption" certificate which used to be available in Gauhati is now available from Imphal. Even the tradeable items approved by DGFT cannot be imported if Customs department has not approved it. On the highway it is extremely difficult to contest any lawmaker. One can be easily stumped by the ignorance of the people concerned. If they say they have not received the document, you have to believe them. One has to take their words as the truth. For importing one truck load of betel nuts worth Rs one lakh one has to pay a tax of Rs 9000 plus another twenty thousand odd rupees to various state and non state actors. That reduces our competitiveness.
If we bring in goods without paying tax as many of us do regularly through our contacts we cannot sell that outside the state. Even the market in Manipur is not growing as is evident from the longer time it takes to dispose off a consignment. The trader has to bear all types of risk. How can we compete with states where the transaction costs are much lower than us? The exhortation of the government is like pushing soldiers into battles without arms. We have no proper trade policy. Trade should not mean exchange of a few items only. If trade is to be the engine of growth it should be very broad-based. Our policy makers do not seem to genuinely interest in foreign trade. Under these circumstances there is no future for Indo Myanmar border trade at Moreh.
No amount of coaxing can reverse the gradual death of formal trade at Moreh. On the other hand informal trade has been growing by leaps and bounds. Though it is not the only possibility, Indo Myanmar border trade has become more and more informal over the years. Many things are responsible for this situation and the emerging political economy cannot come up with any other alternative scenario. The people in power have come to develop vested interest in the emerging pattern of border trade. We have not exploited the possibility of people to people contact and the ethnic line in furthering Indo Myanmar trade.
Siva has visualised the opportunity. According to Siva, the Meiteis in Muse and Mandalay are very reliable transporters. They can be persuaded to connect Mandalay with Tamu by road. Goods from Bangkok can be brought to Moreh with their help at half the price one has to pay when these are brought by flight via Kolkata. To the Shans in Myanmar we are Kathais, their 'broken race' and the intangible capital of ethnic affinity is available.Trade in Myanmar cannot be pursued in China-Myanmar and Thailand-Myanmar border without their support. Can't we dream bigger dreams with their support?
A Marwari trader can dream of multi-crore business with a few lakhs because there is a social network. Other Marwari traders will underwrite his loan mainly because they belong to the same community. When we compete with Marwari traders for loans from Chinese financiers, the affinity is bound to play a role. There is a huge demand for pork in Nagaland and the pigs reared in clean environments are in demand.
Currently pigs are brought from Bihar and UP. According to Siva, who had transported such a prized pig from Monywa to Kohima,Nagaland has a market for 7000 such pigs daily. We can even take up this occupation in Manipur to provide hygienically reared pigs to Nagaland. If we take it to Nagaland either from Myanmar through Moreh or straightaway from our farms, the symbiotic relationship between Manipur and Nagaland will grow and a time will come when we have to relook at our blockade culture. It will be in everyone's interest to keep the traffic moving.
What Ngari, the fermented fish is to us, is pork to Nagas. Unfortunately we have not tapped this social capital. Siva's experience is yet to be critically examined. The possibilities emerging out of intense people to people contact cannot be captured by the limited tools of an economist. Yet where are the institutions? Traders will miss our former principal secretary who had begun to pick up the nuances of border trade. With his departure we are back to square one. Whoever comes will take years to reach where we were. There is no border trade ministry and we are trying to manage with an OSD.
We frequently wake up to the need of a passport and immigration office. The ICP is another idea for the future. The importance attached to border trade is not in proportion with our expectation of Look East policy. The point is that we have no institution to develop people to people contact. We are missing out on an important driver of Indo Myanmar Border trade.
Why has the informal trade grown at the cost of formal trade? What else do you expect when circumstances have nurtured an environment conducive to the growth of informal trade? We reap what we have sown.Why bother about the documents needed for formal trade when we can achieve the target through informal trade where the paper requirements are nil? Foreign trade is no child's play. Vested interests operate to maintain the status quo. Clerical staffs insist on bribes for the little information they have.
For the Officials, formal border trade is a nightmare because then there will be a drastic fall in their side incomes and without their hefty side income they will be reduced to genuine government servants. I feel really sorry for the institution of VDF which has become the hotbed of corruption. How can they survive in our competitive society without the little collections from the footloose vendors in the market? The system makes them what they are as of today. When you have operators always on the lookout for easier options and rent seeking officials interested more in the continuation and thriving of informal trade, can we expect anything else? The institutions are yet to be developed. We know that transaction costs are exceedingly high, yet the profit margin is high enough to attract more and more operators. Namphalong is a model of market which takes care of emerging demand. When we have power shortage the Namphalong market is flush with power saving appliances. It comes up with improved chulhas.
It has been a long story and our entrepreneurs have failed to catch up with our times. The proportion of women traders operating at the border has been rising and needless to say most of them are small traders with neither the financial resources nor the technical knowledge for pursuing formal trade in any meaningful manner. Puninkumar claimed that only women who had failed everywhere actually enter this profession.
Our crorepati contractors should become entrepreneurs. The samurais of pre Meiji Japan became the technocrats of modern Japan. Similarly our contractors should be transformed into entrepreneurs, not politicians. About the ICP, the post could have been planned near Kondo Lairembi. The controversy about the border and contested ICP is highly significant as most of the promised benefits of our Look East policy for this state would start accruing after its completion. Our experiences with such promises have made us wary and see a hidden agenda even in inaction.
The time has come for dharnas and rallies for a proper foreign trade policy if we are keen to get the most out of the emerging scenario. 'Frontier' intellectuals should provide a vision and the players should do the jungle cutting for the emerging path. The ad-hocism should go and foreign trade should be given its due importance. We should dream bigger dreams keeping an eye on ground level reality. More meaningful policies may emerge from such 'noises'. We should learn to listen. To the discerning minds such noises are music.