An Octagonal Economic Forum Can Secure Northeast India’s Economic Growth
After the conclusion of the 68th plenary session of North Eastern Council (NEC) on September 9, 2019 the growth and development of North Eastern (NE) states has been brought to limelight, which otherwise is quite neglected. The NEC is the nodal agency for the socio-economic development of eight NE states- Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim (added in 2002) and Tripura. These states share boundaries with Bhutan, Bangladesh, Myanmar. To leverage their geopolitical position as well as for creating inclusive India, internal economic growth, development, and stability of these states are the prerequisites.
Why do these states need special attention and extra effort?
North-eastern states have only 3 percent of India’s population and 8 percent of the country’s area. They fall back in terms of economic growth when compared to western states. Another grave concern is the unevenly varying rates of growth, poverty, and unemployment among these states. Ignorance towards the issues and concerns of NE states over the years has aggravated the situation.
Poor infrastructure is one of the biggest constraints of economic growth and development in these states. Infrastructure can be classified into social or institutional infrastructure and physical infrastructure. Inadequate institutional or social infrastructure in NE states led to illegal migration resulting in political unrest, unutilised and under-utilised natural and human resources, and low industrialization. Distant location and hard terrain plus a dearth of physical infrastructure i.e. lack of connectivity resulted in low investment, low growth, and increased disparity between the NE region and rest of India. Ultimately, it is resulting in imbalanced economic growth and development of India. Therefore, the country needs to tap the unutilised and under-utilised natural and human resources in NE states.
In order to develop the social or institutional and physical infrastructure in NE states, the NDA-II government through the Ministry of Development of North Eastern Region (DoNER) and NEC has initiated various activities related to finance, social development, infrastructure, and industries. Funds amounting to Rs.1096.36 crore and Rs.1156.00 crore have been allocated for financial years 2017-18 and 2018-19 respectively for development of the NE states. Furthermore, some sectors have been identified as priority for development such as bamboo, piggery, regional tourism, higher education, tertiary healthcare, livelihood projects in NER to name a few.
These initiatives and agendas for development were discussed in the plenary session of the NEC where, Dr Jitendra Singh, Minister of State of DoNER also highlighted its achievements. It emphasised the NEC as a regional planning body and a resource centre that played a major role in guiding these states towards achieving the goal of development at par with the rest of the country.
How can NEC as a resource centre steer the progress of the NE states?
It can be done by learning from countries who have successfully implemented policies to reduce regional imbalance and attained inclusive growth and development.
Russia is the country from which the NEC can learn policies to promote inclusive growth through the ‘East Economic Forum’ (EEF), an initiative to encourage foreign investment in the far eastern region of Russia since 2015. The most important takeaway from the EEF is that the Far Eastern Federal District (FEFD) has grown at twice the rate than the average Russian national economic growth. Multiple targets related to economy, society, investment, infrastructure, etc. have been achieved over five years.
There are two points which should be taken into consideration. Firstly, the successful way of the Russian Government to develop its Far Eastern region and secondly, the similarities in challenges and opportunities between Far East Russia and the NE states. Other than regional imbalances and growth disparity between the west and east side of the countries, similarities between Far East Russia and the NE states include very little attention despite their imperative geopolitical position, habitation of varied ethnic groups, illegal migration from China to Russia and from Bangladesh, Myanmar and some from Tibet to India’s NE, areas rich in natural resources such as oil, coal, and not to forget, both have faced severe wars and attacks like World War II.
By observing these two points, one can infer that learning from the growth experience of Far Eastern Russia, the NEC should initiate a similar kind of economic forum. For example, an ‘Octagonal Economic Forum’ to extensively focus on the development of social and physical infrastructure in the NE states. The main office or resource centre should be in the NEC office in Shillong and co-ordinated eight state centres in the capital of each state. Citizens from respective NE states should be hired in these offices for generating employment, understanding local issues better and involving the public in their own development process.
Under the EEF’s umbrella, the Government of Russia annually conducts panel sessions, roundtables, televised debates, business breakfasts, and business dialogues on numerous topics such as public-private sector, laws, governance, and social and physical infrastructure to name a few.
Discussions in the EEF on numerous topics such as laws, governance, infrastructure and so on have led to impressive developments in East Russia, including 40 legislations on easing investments, 20 advanced special economic zones, and 5 free ports. These have helped East Russia acquire 1,780 new investment projects worth over RUB 3.8 trillion, and 230 new enterprises.
In order to receive policy pointers, the ‘Octagonal Economic Forum’ should hold discussions on pressing issues of shortage of infrastructure in the NE states. It should conduct deliberations on a wide range of topics such as irrigation, roadways, health centres, educational institutes, social security to advance technology such as AI, robotics, IoT, and so on. Experts and practitioners from various fields should be invited to deliver the best possible solutions. Moreover, these discussions and deliberations should be open for students from schools and colleges in the NE states to generate awareness and build capacities.
After receiving policy recommendations, raising funds for investment would be the next challenge for the NEC. And another lesson to learn is the EEF’s strategy for attracting investment. The EEF has been inviting various countries to participate in the forum. The result is that since 2014, nearly 32% of all foreign direct investment from 17 countries came to the eastern region of Russia; including those from China, Japan, the Republic of Korea, Australia, New Zealand, Vietnam.
This year, President Vladimir Putin invited PM Narendra Modi to be the Chief Guest at the recently concluded Fifth Eastern Economic Forum. India announced a USD 1 billion credit line for Russia’s far east. On the same grounds, India had sought help from Japan to develop the physical infrastructure in NE states. Some of the important projects in which Japan will collaborate with India include water supply, sewage, road connectivity projects, agriculture and irrigation, biodiversity and sustainable management projects. Similar to Japan’s plan of investing Rs. 13,000 crore in several ongoing as well as new projects in Assam, Meghalaya, Sikkim, Mizoram, Tripura, and Nagaland, other countries should also be invited through the forum to directly invest or collaborate with the NE states, not only for physical infrastructure but in social and institutional infrastructure, and across different sectors to promote holistic development.
For the Octagonal Economic Forum, the NEC under the Government of India should invite representatives of France, Israel, Singapore, Thailand, BRICS and ASEAN nations along with our neighbours to discuss and contribute to the NE states’ development. We have already initiated various infrastructure projects in tie-up with ASEAN nations, and other neighbours such as Bhutan and Bangladesh. Strengthening relationships with eastern neighbouring countries will help India to propose a Free Trade Zone with Bhutan, Bangladesh and Myanmar – to leverage existing trade relations, to access markets of ASEAN nations, and extend it with their aid to the Indo-Pacific region.
To promote investment and boost the NE economy, industries from across the world must be invited to participate in the Octagonal Economic Forum. It should hold networking sessions and exhibitions to maintain transparency and efficiency, each year’s investments and projects undertaken through the same should be declared in the exhibition organised by the forum. There can be an exclusive exhibition illustrating the diverse cultures of NE states, promoting cultural ties, especially with Southeast Asian countries.
Annually organised Octagonal Economic Forum will expand the NEC as a resource centre and also strengthen ties with neighbours. It would help in attracting a large amount of foreign investment in NE states and attaining higher economic growth and development. This would definitely constitute a concrete step towards an Inclusive India which we should dream of!
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