Globalization and North East India Essay

I.Introduction Ever since the term ‘globalization’ appeared for the first time in the second half of twentieth century no other word has meant so many different things to different people and has evoked as much emotions. The forces of globalization affect virtually every country in the world. It has opened the door of many new opportunities as well as formidable challenges. All spheres of life–social, political, cultural and economic–have been subjected to both the positive and negative elements of globalization. With all its promises on the overall qualitative improvement of life and social harmony, some see it as the saviour of universal peace and prosperity. On the other hand, rising mercury of its negative elements some condemn it as a new kind of chaos. While everyone welcomes the new opportunities that has emerged one cannot simply leave those negative elements unattended. Therefore, the main task now is to analyze, understand and manage globalization doing our best to harness its benefits and keep those negative consequences at bay. 1 India joined the club of globalized economy in 1991when its economy is under the spell of fiscal and balance of payment crisis which compel her to initiate several structural adjustment programme and economic liberalization. Since then, India’s share to the global economy is getting larger. Today, looking at overall health of the economy and growth performance2, India seems to have struck the right note of the globalization string. With its vast natural and human resources and ability to synchronize the speed of change taking place in the international market, many have considered the India’s economy as one of the most resilient economy in the world. Now, the most pertinent question arises in the recent years is; has the benefits of globalization disbursed to all the regions of the Indian union? Certainly the answer is NO. India’s attempt to tackle the problems of income inequalities has been going on since independence under the centralized planning system. It, however, failed to provide the necessary growth impetus to the poorer states to reduce regional disparities in any meaningful manner in spite of four decades of economic planning. In the post globalization era, considering the size and diversity of the country, shrinking role of government would ultimately be a failure to achieve the set objective. With the opening of economy, states with better infrastructure facilities, better skill labour and work culture, investor friendly environment and more importantly states which can reform themselves in accordance to the need of the market oriented economy have attracted much of the private investment–both national as well as foreign. These states have grown much faster than states which are not, leading to widening disparities.3 This has posed a great challenge to academicians and polic y makers, even though globalization is an uneven process with unequal distribution of benefits and losses, who must ensure the benefits of globalization be distributed to all the regions/states of Indian union. Secondly, to what extent the high growth rate achieved so far has been translated into development for the well-being of its people? It is all the more necessary to ascertain the magnitude of development because development shouldn’t be seen as mere enhancement of national or personal income as it alone cannot serve the objective of securing the socio-economic equality. High growth rate achieved so far is a big accomplishment as the resources so generated could be utilized for developmental purposes to meet the desired social ends.4 It would, however, be highly injustice and misleading to interpret economic growth and economic development synonymously, yet a popular cynicism among the political circle in particular, as development covers much wider range and value. In short, achievement of higher growth rate should be reflected in terms of quality of life of the people. The failure to realize the value of high growth is the main reason for the rejection of ‘shining India/feel good factor’ slogan of the ruling party in 2004 general election. This implies that the higher growth rate achieved so f ar in the post globalization period could not be translated in terms of improvement in the quality of life of the common people. According to Sen any reform programme should consists of three R’s–reach, range and a reason–which every responsible individual should analyze, understand and act accordingly. The values of high growth often depend on what the size, composition and nature of that growth do to the lives and freedoms of the people involved.5 With the increasing concern of widening of inter-state disparities and lack of development, it is highly imperative to assess the effects of globalization on North East India-a relatively uncharted region of the country-as fifteen years is long enough to give some clear pictures. With this objective, the present study attempts to locate the clues of the following quarries; has the region been able to gain from the benefits of globalization? What are the major issues and challenges confronting or likely to confront in the coming years? What are the unexplored opportunities that can be harnessed? This would require examining the prevalent scenario of the region in the pre and post globalization period. The present study shall cover 1980 to 2005 considering 1991 as the dividing year of the two periods. The study has been organized into five sections including introduction. In section II, a brief profile of NE states has been sketched. In section III, some of the issues and formidable challenges needed to be addressed sooner than the later has been discussed. In section IV, discussed the unexplored opportunities in the region. Finally, we conclude the study in section V . II.North East Profile The North East India comprises of eight contiguous states6 of highly undulating hilly terrains, covering 263,179 sq km which is about 8% of the total geographical area of the country. The region is one of the landlocked regions of South Asia. About 4500 km i.e. 98% of its border is with five different countries of South Asia–Nepal, Bhutan, China, Myanmar and Bangladesh. No other region of the Indian union share common border with so many different countries connecting with the heartland through the tenuous 22 km Siliguri corridor. The region is the home of extraordinarily diverse mosaic of ethnic groups having distinctive social, cultural and economic identity, more akin to their South Asia neighbours than main land India. The total population of the region is about 38 million, 3.8 per cent of the country’s total population, of which Assam contributes 68 per cent of the total population. Assam recorded the highest density of population with 340 per sq. km., which is also higher than the national average of 313 per sq. km., followed by Tripura with 305 per sq. km. Otherwise, the region is sparsely populated with an overall density of population of 149 per sq. km. Table 1 The decennial growth rate recorded in most of the states during the previous decade is higher than the national level of 21.54 per cent. Nagaland recorded the highest growth rate (64.46 per cent), also highest among the states of the Indian union, followed by Sikkim (33.25 per cent) and Meghalaya (30.65 per cent). Only Tripura (16.03% per cent) and Assam (18.92 per cent), two of the most populated states, have recorded lower growth rate than all India level. The region is richly endowed with bio-diversity, hydro-potential, minerals like oil and natural gas, coal, limestone, dolomite, graphite, quartzite, sillimonite etc. and forest wealth. Over 10 per cent of forest products requirement in the country are met from this region only. The region has a very high potential to generate hydropower i.e. about 80 per cent of the total hydropower potential in the country. Arunachal Pradesh alone is expected to generate 2,67,474 MW i.e. 30 per cent of the total available in the country. With varied geo-climatic condition, the region is ideally suited for horticulture, floriculture and other plantation crops. A variety of fruits like pineapples, banana, orange, lemon, mango, papaya etc. grow abundantly in the region. The region is famous for most number of orchid varieties in the country. Tea is the major plantation crop grown in the region and is the largest producer in the country contributing over 95 per cent of the total production. The region is also richly endowed with varieties of medicinal plants having high value in the international market. But, due to the lack of proper infrastructure, transport and communication system and geo-political condition of the region these resources largely remained untapped. Source: Report of the Twelfth Finance Commission, p 61. The region is grossly deficient of infrastructure to tap the available resources and push the economy forward. An examination of the infrastructure index–a composite profile of the availability of physical, social and institutional infrastructure available in the states revealed that all the states of the region are at the lowest rung of the infrastructure index ladder. It shows that the level of infrastructural development in the region is almost negligible. In terms of human development index–a composite index capturing the three dimensions of human development viz. economic, education and health-the region have done reasonably well than most of the states of Indian union. Among the eight states, Assam ranked the lowest, which has been placed in lower middle category and Mizoram in high category while rest of the states are either in high middle or middle category. The success of these states in this regard is mainly induced by the education sector. Apart from Arunachal Pradesh, Assam and Meghalaya the literacy rate in the remaining states, as shown in Table 1, are higher than the national average. The economy of the region primarily depends on agriculture sector contributing over 40 per cent of the income and employ about 70 per cent of the total working population. Although NSDP share of agriculture sector has declined to about 30 per cent, the number of population dependent upon this sector continued to remain high even in the post globalization period. The decline in the NSDP’s share of agriculture sector has been more or less compensated by the increase in the share of service sector. That is, the service sector growth rate during the corresponding period is commendable. Nevertheless, the industrial sector in the region continued to be in pathetic condition. Industrially the region is one of the most backward regions in India. Only Assam, and to some extent Meghalaya, have moved ahead of the rest of the states in terms of industrial development whose industrialization centered on tea, oil and timber. An examination on the overall annual compound growth rate of NSDP in the region revealed that there is a slight improvement in post globalization period though varies from stat to state. Source: http://mospi.nic.in/rept%20_%20pubn/ftest.asp?rept_id=nad03_1993_1994&type=NSSO Note: * At 1980-81 prices, ** From 1993 to 2002 only, †  at Current Price, a denotes Acceleration, d denotes Deceleration During the decade of 80s only Arunachal Pradesh and Nagaland experienced higher annual compound growth of NSDP than the national level. However, in the post globalization period i.e. 1991-2002, Meghalaya, Nagaland and Tripura have performed better than the national level. The growth rate experienced in these states is not only higher but also accelerating. Though the NSDP growth rate of Manipur is lower than the national level but higher than the previous decade and is accelerating. While Assam’s growth rate is lower in the post globalization but grows at an accelerating rate which is a positive sign. In the post globalization period the growth performances in the region have improved marginally. The higher growth rate of NSDP in the region is mainly induced by higher and accelerating growth rate of service sector. The higher growth rate of NSDP experienced in some of the states is not commensurate with the growth rate of per capita income. The per capita income growth rates of all the states, baring Tripura, falls below the national level in the corresponding period. While Arunachal Pradesh, Assam and Nagaland have worsened, the performance of Manipur, Meghalaya and Tripura seem to be relatively better than the previous decade. The lower growth rate of per capita income experienced may be attributed to high growth rate of population, particularly poorer section of the society. The percentage of population living below the poverty line in the region continued to remain high. Only Mizoram seems to have done exceptionally well in poverty eradication where the percentage has declined from 36 per cent in 1983 to 19.47 per cent in 1999-2000. In the remaining states there is only a marginal decline in poverty ratio. In 1983, the percentage of population living below the poverty line at national level is much higher than that of all the states of the region. It is just the reversal in 1999-2000-all the states other than Mizoram have higher percentage than national level of 26.1 per cent. Over one-third of the population is still consists of the most vulnerable section of the society. Further, an examination on the per capita per month consumption expenditure revealed that the inequality in the per capita monthly consumption expenditure has also increased in spite of the improvement in the growth performance in the post globalization period. In 1993-94, Assam has the lowest per capita per month consumption expenditure followed by Manipur and Sikkim. These three states are even lower than the national level of Rs. 328.18 per month. However, in 1999-2000, only Assam and Sikkim experienced lower per capita per month consumption expenditure than that of national level of Rs. 590.98 per month. The increase in consumption expenditure in the globalization era is quite impressive. At the same time, inequality in consumption expenditure, as revealed by the Gini coefficient8, has also increased in most of the states which is an indication of widening disparities among different sections of the society. This implies that the benefits of higher growth rate experienced, though marginally, in the post reform period have not been tickled down to the poorer sections of the society in the desired pace and the problem of income inequality within the state has worsened. An overall scenario of the region in the post globalization period is not very impressive as in the case of other region of the Indian union. This may be attributed to the prevailing geo-political condition in the region and attitude of the central government in tackling the issues of the region. In the following section we shall examine some of the issues and challenges which required an immediate attention. III.The Challenges Being one of the most neglected regions of the Indian union, overall state of affairs in the region is quite alarming. The unattended issues and problems of the past are being accumulated, multi-layered and have become multifarious. Over and above, the mounting pressures of emerging challenges of rapid transformation need to be countered. The clock is ticking fast and situation in the region is very delicate which may explode anytime from now if not tackled carefully. At this juncture the old habit of alibis and hinting would only aggravate the maladies of the past and swell negative elements of the globalization. Instead, it is the time to think and act collectively. The region has more issues to be addressed and challenges to face than any other parts of the country. Of which, the three most important areas which require immediate attention are insurgency, infrastructure and governance. All the other issues are derivatives which would dry up once these three are addressed. a.Insurgency The problem of insurgency in the region has a long history. The insular politics and Delhi centric approach of the Indian government is at the core of much of the discontents, widespread criticism, feelings of subjugation and notion of being colonized. There is a constant fear in the minds of the people that their identity is being eroded due to the submergence into the vast ocean of Indian humanity.9 The people of the region started alienating themselves and the feeling of self-determination started to germinate. With the aim of preserving their own identity various ethnic groups inhabiting in the region, undisturbed for centuries, began to differentiate among each other severing the local ties and affinities and started to struggle with arms.10 Thus, insurgency has mushroomed in the region and the secessionist movements, either for sovereignty or for separate homeland, began to lock horns leading to a vertical division among various ethnic groups. Therefore, prior to any policy pro gramme to resolve the problem of insurgency in the region, the political processes that has been framed and pursued to convert a breeding ground of insurgencies must be reversed first. Simultaneously, the attitude and security obsess mindsets of the central government should also change and embrace the region with open arms so as to restore the lost confidence of the common people. Insurgency is the major problem inflicting the region. With the passage of time it has increasingly become more complex and difficult to understand as their objectives, role and activities varied widely.11 In the name of nationalist movement they were involved and interfered in every state’s affairs including household chores, like a moral police, of their people. Each insurgent group runs parallel government. In a way, apart from Sikkim and Arunachal Pradesh, all the remaining states have multiple governments. The problem of insurgency has become the stumbling block in the course of development. It foundered every development strategy and hampered all the developmental works. Kidnapping, extortion, killing, bandh, strikes and curfews have become the order of the day. At the same time, the numbers and activities of the plain criminals masquerading as insurgents have also increased alarmingly. Today, the region has become the killing field and specialized in the export to death bodies, if not the manufacturing products. In short, the region has reached the pinnacle of the industrialization of insurgency and criminalization process. It would not be easy to find the solution. However, keeping in mind the rising global terrorism, it would be wise to work on a holistic approach for amicable solution sooner than the later. At the same time, what every insurgent group, operating in the region, should realize is that the formation of separate homeland or attainment of more autonomy or sovereignty is not the solution because within itself formation of new group with new demand can not be ruled out. b.Infrastructure The rich natural and human resources available in the region could not be utilized to the full extent mainly due to the geo-political condition, including ever-deteriorating law and order, which has a lot of implication on the development of must needed infrastructure. The negligence of the central government in the past and due to the problems of insurgency at present resulted into the gross deficiency of infrastructure in the region. This has crippled the free flow of factors as well as products. In such a situation, it would be hard for the region to accrue the benefits of globalization. It is also not surprising to find the lack of FDI inflow in the region. During January 2000 to Mach 2006 the region received only 9 million US dollar i.e. 0.04 per cent of the total FDI inflow in the country. The lack of infrastructure, as revealed by the infrastructure index given in Table 2, has not only spoiled the prospect of economic development but has also created a horizontal division amon g various ethnic groups affecting the fabrics of social harmony in the region. All the â€Å"constituent states of the region are internally locked–themselves locked and locking out others, unable to connect with each other physically in terms of poor transport links, and more seriously, unable to make connections intellectually and emotionally with their closest neighbours, or even with and among their own people.†12 It has displaced the common understanding and linkages for peaceful coexistence and regional cooperation. In order to reconnect the lost connectivity, trade and commerce and more importantly to foster emotional attachment among various ethnic groups inhabiting in the region infrastructures like roads, transports, communications electricity, banking etc. must be developed adequately. Such exercise would not only enlarge the base for the growth of the economy in the region but also enhance the regional cooperation-an engine of growth in this era of globalization. Underdevelopment breeds insurgency and insurgency retards development. Th is two are mutually reinforcing. This is a classic case of vicious cycle of underdevelopment-insurgency-underdevelopment. Therefore, any policy programmes either to resolve the problems of insurgency or development of much needed infrastructure should go concurrently and not sequentially as it hampered the progress of one another. Further, as it has been asserted in the Planning Commission report on Transforming the North East, the approach of the central government should change from â€Å"planning for the North East to planning with the North East†.13 This implies that, under the prevailing circumstances mere allocation of funds or implementation of new policy would not suffice to tackle the problems in the region. Considering the emotional sentiments of the inhabitants and sensitivity of the issues, the region must be handled with care. Every developmental programme for the region should have the consent of the inhabitants and needs to be executed with sincerity without delay. c.Governance â€Å"The state is responsible for the creation of conducive political, legal and economic environment for building individual capabilities and encouraging private initiatives.†14 It would, however, depend on the quality of the governance–mechanism, processes, systems, structures and institutions that guide the social, economic and political relationship. Good governance exercises its legitimate political power in a manner that is perceived as equitable, non-discriminatory, socially sensitive, participatory, transparent and accountable to the people at large. This includes not only the process of transformation of human and natural endowments to a socially desired ends but also reveals the long term vision and commitment of the state to secure human well being and sustained development of the people.15 The state of governance in the region is in pathetic condition. Government machinery is on the brink of collapse. Corruption, squandering of public funds, deteriorating law and order, lack of transparency and accountability, bureaucratic rigmarole, insensitivity and so forth are quite rampant in the region. There is widespread allegation of insurgency-government officials-bureaucrats-politician nexus, including law enforcing agencies, and siphon off public funds. All this has eroded the individual capabilities and institutional capacities to meet the social objectives. Until and unless the quality of governance has been improved, no matter how much is the fund earmarked for whatever the policy programme initiated would not be successful and only the common people have to bear the brunt. Taking into consideration of the paradigm shift in the development strategy and the amount of funds allocated16 in recent time, we may no longer be able to blame the central government in the near future. The present state of affairs in the region is past deed of the central government and what the future generation will face would be decided by what our government has done today. IV.Opportunities The economy of the region has been disrupteded by the forces discussed in the preceding section in spite of her rich natural resources. Besides the natural resources, many new opportunities have also emerged with the changing contour of world economy that can boost the economy of the region. But, the need of the hour is to focus on those areas which would lead to growth of the economy, develop the sense of participation and can extinguish the social and political chasm. The two main areas that can boost the economy are as follows: a.Tourism Tourism is one sector where the region has comparative advantage. This industry is highly competitive where the tourists have a wide range of choices and look for good value of their money. With bountiful nature’s breathtaking scenic beauty, salubrious climatic conditions, extraordinarily diverse rich art and cultural heritage of the people, this region can become a hotspot for eco and adventure tourism. Tourism industry involves a vast network of business activities relating to attracting, receiving, accommodating, managing and servicing of tourists. These include hotels, restaurants, transport agency and several other related activities. The development of this industry would promote national integration and international understanding, generate employment and revenue and provide prospective buyers for local manufactured products especially handloom and handicraft products–a dyeing industry due to lack of access to market. Tourism can generate more employment per million of rupees spent than any other activities. It can generate jobs in the remotest corners for unskilled to highly specialized skilled workers which would help in the realization of plan objectives. It would also enlarge the base of locally manufactured products. All this, however, would be possible only when there is well-developed infrastructure like transport and communication and sense of participation of the people of the region. b.Border trade The lack of connectivity and access to market, the main causes for under utilization of resources and weak resource-industry linkages, have set the economy of the region by half a century behind. The region has lost the markets in her neighbourhood, particularly in Bangladesh, due to partition, insurgency and diplomatic strains and tensions. Due to the peripheral location and stiff competition from mainland industries having better access to critical inputs like finance, technology and management, the base of traditional manufacturing in the region has been eroded leading to deindustrialization. While resource base can support a variety of industries at all scales, the existing industrial structure, dominated by small-scale demand based industries has not been developed proportionately. This has widened the gap between resource base and industrial structure in the region. Further, due to the restriction of free movement of men and material across the border, the notion of isolation h as developed in the minds of the people. It is in this context, there is a strong argument to develop border trade. In this increasingly borderless world, establishment of border trade would not only provide an opportunity to revive the local manufactured units but also serve as a transit corridor for the mainland big industrial units to explore the vast Asian market. This would also bring the centrality and visibility of the otherwise peripheral north eastern region.17 It is with this vision that ‘look east policy’ was initiated in 1991. Unfortunately, as old habits die hard; the central government still continues to live in the shadow of security obsessed mindset and prefers inward looking approach. As a result, even after fifteen years of implementation of border trade agreement, it has failed to invigorate the region’s trade with their neibhouring countries. As a result, India’s look east policy has, by and large, bypassed the region. The percentage of trade with neighbouring countries have zoom up to 8 per cent of the country’s total volume of trade in 2003-04 from a mere 1.7 per cent in 1987-88. However, over two-third of the total volume of trade with these countries flow via Bay of Bengal while the land borders of the region have been left for transit corridors for illegal trade . The tepidity of the central government in implementation of the policy has only led to rise in the porosity of these borderlands. An impressionistic assessment reveals that there is a rise in negative activities like cross-border insurgency, gunrunning, smuggling drugs, narcotics and AIDS, money laundering, trafficking women, illegal immigration etc. which further add to the existing multifarious problems in the region. Conclusion Globalization has become the most potent force emerged in recent time. It virtually affects every walk of life–positive or negative. Unlike other regions of the Indian union, North East India is more likely to swamp by its negative effects. The region is at the throes of discernible crisis. Since 1991, there has been increase in inequality and unemployment, decline in the quality of the governance, rise in smuggling, trafficking, illegal immigration, corruption, squandering of public funds, escalation in insurgency related activities, etc. These have led to underdevelopment and erosion of the capacity of the individual and quality of life. A sense of deprivation has developed particularly among the educated youths of the region. The clock is ticking fast and fuse is not long. It is time to work on a holistic approach to resolve problems in the region. Notes 1. Chanda, Nayan, 2003, â€Å"What is Globalization? Coming Together: Globalization Means Reconnecting the Human Community†, YaleGlobal Online, http://www.globalenvision.org/library/8/567. 2. Recently it has been argued that the turning point of higher growth rate in India was 1980 but not 1991 as perceived by many. For more details see Nayyar, Deepak. 2006. â€Å"Economic Growth in Independence India: Lumbering Elephant or Running Tiger?†, Economic and Political Weekly, vol. 41, no. 15, pp. 1451-1458. 3. Some authors even argued that coastal states with open port facility have outperformed non-coastal states in the post globalization era. For more detail see Kishore, Adharsh. 2002. Towards an Indian Approach to Globalization, http://www.rba.gov.au/PublicationsAndResearch/Conferences/2002/kishore.pdf. 4. Sen, Amartya, 2005, â€Å"The Three R’s of Reforms†, Economic and Political Weekly, vol. 40, no. 19, p. 1. 5. ibid., p. 1. 6. Sikkim becomes the member of North East Council on December 2002 after an amendment of the NEC Act 1971. Since then all development purposes of the state has been treated at per with the other seven states of the region. However, the addition of Sikkim in the North Eastern Region is yet to be reflected in the literature of NER. 7. The Report of the Special Group on Targeting Ten Million Employment Opportunities per Year over the Tenth Plan Period has viewed that Current Daily Status (CDS) is the better measure to capture unemployment than Usual Principal and Subsidiary Status (UPSS). 8. The National Human Development Report 2001 provides the estimate of Gini Coefficient for rural and urban area only. It does not provide the combine estimate of the two. 11. For more detail analysis see Roy, Sanjay K. 2005. â€Å"Conflicting Nations in North-East India†, Economic and Political weekly, vol. 40, no. 21, pp. 2176-2182. 12. Prabhakra, M. S. 2004. â€Å"Is North-East India Landlocked?†, Economic and Political Weekly, vol. 39, no. 42, p. 4608. 13. GOI. 1997. 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