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Indo-Myanmar Trade And The Economy Of Manipur

Following the signing of Indo-Myanmar Border Trade on January 21st, 1994 and operationalised on April 12, 1995 through Moreh Border, trading activities have assumed importance in the State of Manipur. Indo-Myanmar border was formally opened by the Commerce Ministry of the both the countries. Subsequently, 22 items have been allowed as exchangeable by the residents across the border. The main role of the Department of Commerce and Industries is to act as a link agent for promotion of border trade between India and Myanmar. It can be said that Indo-Myanmar Trade can help in increasing the economic growth of the economy of Manipur. Northeastern States of India altogether share 1643 km long with Indo-Myanmar border. Arunachal Pradesh, Mizoram, Manipur and Nagaland share 520 kms, 510 kms, 398 kms and 215 kms long respectively with Myanmar borders.

This paper is the result of an attempt made to examine the nature and scope of trading activities across the borders between Northeast India and Myanmar against the theoretical background of international trade between the two countries. Attempts have been made to understand as to whether there exists any basis for trade in terms of compatibility between the resource structure of the north-eastern region and the demand structure of the neighboring countries.

It would be quite relevant here to examine that trade is an engine of economic growth. It is widely admitted that low income countries are characterized by small size of market. The small size of market fails to absorb sufficient volume of output that leads to low inducement to invest. International trade can expand the size of market because it increases the inducement to invest, promote the growth of income and saving through more efficient allocation of resources. It also helps to transform the subsistence sector into a monetized sector by providing market for farm produce and raises the income level and standard of living of the people. International trade also leads to specialization and division of labor. When a country specializes in the production of a few goods, it exports those goods that have comparative cost advantage in exchange for what others can produce at a lower cost. Thus it gains from trade and there is increase in national income, which in turn, raises the level of output and the growth rate of economy. Hence higher level of output and income achieved through trade tends to break viscous cycle of poverty and promote economic development.

Many economists pointed out that Indo-Myanmar Trade can play a vital role in promoting speedy development of Manipur. In this connection, B.K. Sharma & S.N. Goswami (2000) pointed out that with the liberalization of the border trade, the activities like trade and commerce, banking and insurance services transport and communication, warehousing facilities, etc., would be increased in Northeastern region which in turn would accelerate the economic activities of the region. Border trade can also create external economies which could be reaped by the State. In this regard, Baruah (2000) supported that the decision of the SAARC nations to have a regional liberalization to move towards a South Asian Free Trade (SAFTA) by the end of the year 2000 A.D would definitely have certain positive implications on the economic prospect of Northeastern regions India having about 98 per cent of its border with neighboring countries- Bhutan, Bangladesh, Myanmar and China.

Following the liberalization of border trade, the volume of trade has risen significantly as compared with pre-border trade liberalization. For example, the trade between India and Myanmar rose from Rs. 894 million in 1989-90 to Rs. 2828 million in 1997-98. India’s exports consist mainly of cement, cycle, drugs and pharmaceuticals, auto parts and accessories and cotton yarn.

It was estimated that border trade amounted to Rs. 1600 crore per year (S.B.Singh & Goswami, 2000). Major items entering India are blankets, electronic goods, betel nuts, pulses, teaks, teak, groundnuts, iron scrap, gold, silver and precious stones. Major items entering Myanmar from India cotton yarn, cycles, food products, textiles, kerosene, diesel and drugs and pharmaceuticals. A study made by Indian Institute of Foreign Trade (IIFT) reveals high volume of informal trade on illegal basis with neighboring countries. It has estimated at around Rs. 600 crore value per annum in terms of exports from Assam, Meghalaya and Tripura to Bangladesh and Myanmar through Moreh and Champai and Lungwa in Nagaland is estimated at Rs. 2000 crore per annum. Although the large volume of illegal trade is a problem, it exhibits export potential of the Northeastern region. According to the recent annual report, 2001, International Narcotics Control Bureau, the 1643-km Indo-Myanmar border has been utilized as a transit point between the Golden Triangle and the Golden Crescent. The amount of ephedrine seized in the border areas rose from 1000 kgs in 1998 to 7000 kgs in 1999. With the opening of 160-km long Tamu-Kalewa-Kalemya road the trade could increase significantly for local products.

Recently, the volume of export and import for Manipur has been significantly increased. For instance, the volume of export recorded an amount of Rs. 25, 16, 67,199.00 while the volume of import registered an amount of Rs. 37, 16, 39,991.00 in 1997-98. (Custom House, Shillong). The exports mainly consist of Mustard/Rape seed, Pulses and Brans, Fresh Vegetables, Fruits, Garlic, Onion, Chilies, Spices, Bamboo, Minor Forest Products excluding Teak, Betel Nuts and Leaves, Food Items for Local Consumption, Tobacco, Tomato, Reed Broom, Sesame, Resin, Coriander Seeds, Soya bean, Ginger, Roaster Sunflower, Seeds and any other commodities as may be agreed between the two sides.

Development of road transport will also promote travel and tourism between the two neighbors. Both the countries have agreed to open four checkpoints for increasing trade between the two countries. These include the Pangsau Pass, Paletwa, Lungwa-Yanyong and Pangsha-Pangnyo. This would make official the trade between the two countries. It has been decided to develop banking, immigration and customs facilities at the border checkpoints. The land opening could also make possible India in reaching ASEAN countries through land front line because Myanmar is the only ASEAN country having a land border with India. Interaction with Myanmar has received an impetus with the initiation of Bangladesh, India, Myanmar, Sri Lanka, and Thailand Economic Cooperation and Mekong-Ganga Cooperation. Under the initiation of NEC, the Rail India Technical and Economic Service (RITES), New Delhi had visited Moreh during March, 1996 to assess potential for creating infrastructural facility and submitted a consultancy proposal to NEC for establishment of an EPZ near the hills of Kondong Lairenbi Temple about 3 Kms. from Moreh on NH No.39.

The proposed project report will consider facility relating to Power, Transport, Warehousing/Handling, Research, Development and Training Institutes, Telecommunication, Civic facilities, Business Centre, Employment Generation Institutional arrangements and linkage, Financing Agencies. The Stale Government has also approached the North Eastern Council for assistance in setting up one EPZ project but so far there is no positive response. The total cost of EPZ is estimated at Rs.100.00 crores. H.E Jaswant Singh also recommended the enthusiasm of his Government to assist with the Myanmar Government in accomplishing other mutually useful infrastructural projects including the proposed Tamanthi Hydro-Electric Project near the India-Myanmar border across Naga land, the proposed Kaladan River navigation, Road and Pipeline Project in the Rakhine State providing a link to southern Mizoram state in India and India’s North East as a whole.

Dr. Khin Maung in his, A New Chapter in Indo-Myanmar Relations advocated that “In the fields of trade and industry there are ample openings for Indian investors and entrepreneurs. Myanmar people have a traditional liking for Indian textile goods especially pulicat and calico materials for men’s wear and women’s wear respectively. There are Indian leather goods, light machineries for domestic use and heavy machineries especially for rail train locomotives and carriages and ships that had made their brand names known in Myanmar. What about Indian luxuries – cosmetics, costume jewellery, finery and what not that have both attraction and competitiveness in any market? There is also the entertainment world in which Indian film, music, song and dance have enjoyed their heyday in Myanmar. Reciprocally Myanmar agricultural products like pulses, mineral products like precious stones, ruby & sapphire and other semi-precious stones and many other products have their market in India. Such are the fields the new generations of Indian and Myanmar businessmen, industrialists and investors should explore in consultation with old generations in both countries that have vast experiences.”

In the light of the above, it is quite evident that there is large scope for increasing the volume of export for Manipur with the removal of various existing infrastructural constraints. The economy of Manipur can also maximize the net state domestic product by increasing the share of trade. This can be possible by specializing in the production of few goods which have comparative advantage and import those goods which have comparative disadvantage. A State intervention in this area for providing a congenial atmosphere is desirable for making Investment friendly and at the same time a strong political will is highly needed.

*The article is written by Thiyam Bharat

* The author has a Ph.D. in Economics from Manipur University, Imphal, Manipur, India. His specialization is in Poverty Economics. He writes on various topics relevant to the state economy and its relationship with the neighboring states and countries.

* The author can be reached at thiyam_bharat@yahoo.com

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