India-Japan Partnership for Economic Development in NER

India Foundation and Indian Council for Research on International Economic Relations (ICRIER), jointly organised a Workshop on ‘India-Japan Partnership for Economic Development in NER’ on March 29-30, 2017 at Kaziranga in Assam. The workshop was structured on three themes: Economic Development Trends in NER and Current Status of India-Japan Engagement; Imperatives of Cross-Border Connectivity and Market Linkages for NER with ASEAN and Generating a Long-Term Vision for India-Japan Partnership for Economic Development in NER. This was the second workshop organised on the theme of economic development of the NER through India-Japan cooperation, the first workshop having been organised in Dimapur in March 2016.

Inaugural Session

The inaugural session was graced by Shri Sarbananda Sonowal, Chief Minister of Assam. In his welcome remarks, Shri Rajat Kathuria, Director and Chief Executive, ICRIER spoke of India-Japan relations, with specific reference to economic engagements in the development of the North-East region (NER). He said that India is one of the fastest growing regions in the world today. Now that India is catching up with the world in its growth rate, there needs to be convergence within the country, particularly between the central government and the states which are gradually growing economically. Emphasis therefore, has to be made on infrastructure, institutions and governance. In the era of competitive federalism that the Indian Prime Minister has unleashed in the country, great opportunities exist for the states in NER as well as other states across the country to unleash their productivity for rapid growth.

In his opening remarks, Mr. Hideki Asari, Minister (Political), Embassy of Japan, New Delhi, said that Japan appreciates the importance India attaches to its North-East region and mentioned that the Japanese Ambassador to India had over the previous year, paid visits to Imphal, Kohima, and Assam. He said that Assam and its tea are very well known among the Japanese people and that Imphal and Kohima are also well known names, due to the fierce battles which were fought there more than 70 years ago. While speaking of India-Japan relations Asari said that the term North-East region in India is given special meaning when we think about our special relations between Japan and India, which is termed as special global and strategic partnership. He said that PM Abe announced his foreign policy strategy as a ‘free and open Indo-Pacific strategy’. This strategy treats Pacific and Indian Ocean as a wide region which is covered by this one strategic domain and can be used to improve intra and inter-region connectivity to promote flow of people and goods. To ensure maritime security to protect such flow of people and goods, there is a synergy between the Japanese strategy and PM Modi’s Act East Policy. Already, Japan and India have had strategic and political dialogues at various levels, to include meetings at the summit and ministerial levels and also 2+2 meetings of foreign and defence secretaries in Tokyo. Asari said that both Japan and India have been working closely on improving connectivity in India, and between India and its vicinity and added that the cooperation on North-East region between Japan and India can be placed in this wider strategic context. It is often pointed out that the biggest impediment of economic development in the North-East is the state infrastructure and connectivity. He said Japan is an active partner which can help in improving connectivity and added that in Japan’s cooperation on infrastructure improvement in India, ODA (Official Development Assistance) plays an important role. Japan is already promoting qualitative infrastructure covering these aspects and its cooperation with India is no exception. The North-East region of India, like Japan is very mountainous, and also very vulnerable to the damage caused by heavy rain and natural disaster. He said that this is one area where both countries can work together, particularly on the improvement of roads. Speaking of investment, he said more and more Japanese companies are interested in investing in India and that Japanese direct investment in India has grown significantly in the last 10 years. The North-East region, including Assam, has vast economic potential- agriculture, food processing and many other industries – and by exposing certain potential, the region can benefit. Asari quoted Prime Minister Abe that ‘a strong India is in Japan’s interest’ and said that cooperation in NER will contribute to a stronger India, which will lead to more prosperous region covering India and its vicinity and beyond and eventually prosperous and peaceful region.

The Keynote Address at the workshop was given by the Chief Minister of Assam, Sarbananda Sonowal. Sonowal said that the three sessions in the workshop clearly showed a new resurgence of Japan’s partnership in the NER and that the India-Japan engagement with focus on development of the NER is going to be on the permanent agenda of the development strategy of the seven sister states and Sikkim. He said that States should become proactive and mobilise the people and all the stakeholders in trade and commerce. Accordingly, the Government of Assam has announced a separate department for Act East Policy. NER, he said, is not just a window for ASEAN in the context of Act East Policy. His vision, he said was “to turn this corridor into the epicentre of the Act East Policy with three Cs as three pillars: Communication, Commerce and Culture. If this is ensured, then this corridor will become a golden corridor. Any partnership between Japan and India will find a sound foundation with North-East as a springboard”. He said that there were many similarities between Japan and the region but the only difference would be the current level of economic development. He gave emphasis to the vision of PM Modi to see NER as an organic hub of the country and conveyed his intention to grow the economy without preserving the ecology. He said that Assam will create a global business hub in Guwahati which will be the business hub of the entire North-East region. He concludes his address reiterating that the time is ripe for exciting times for both NER and Japan through economic partnership.

The Vote of Thanks was delivered by Maj Gen. Dhruv C Katoch, Director, India Foundation.

Session 1: Economic Development Trends in NER and Current Status of India-Japan Engagement

This session was chaired by Shakti Sinha, Director, Nehru Memorial Museum and Library. The speakers were Prof Manoj Pant, JNU; Akio Okamura, Director, Planning Division, South Asia Department, JICA and Anand Kumar, MD, NHIDCL.

The Chair reflected on the India-Japan partnership and on the convergence of strategic interests between the two countries which face common challenges and spoke of common interest in economic growth and complementarities, both in terms of demography and skill profile of the people. Over the years, Japan has evolved as an important development partner. Japanese investments in infrastructure is important for North-East region, massive flagship projects which are undertaken in the region are to be marked but for larger a series of local initiatives are needed to promote local economic development. Involvement of the Government to bring in private sectors and talking ‘Act East’ are fine, but implementation of the policy remains a major issue. Bangladesh can emerge as hub for development in India’s North-East.

Prof. Manoj Pant said that the concept of NER must be deconstructed. Assam is a large state but was not very wealthy whereas Sikkim was a tiny state with a high per capita income, not needing any handouts from the Centre. In terms of economic development, therefore, the region cannot be considered as one entity. The other difference is the multiplicity of social systems prevalent in the region asdevelopment becomes difficult in States which are very heterogeneous. Manipur has a very large plain area and the tension between plain and hill has been there for so long. When one thinks of economic development of NER, this social and economic diversity must be taken into account. Prof Pant opined that peace is pre-requisite for the entry of the private sector into the region. Besides Assam, Arunachal Pradesh would perhaps attract the private sector because of this reason. He said that commonality among the states is very low population density and a development strategy in this region has to begin from the agricultural sector. To enable the farmer to come to the market should be the motive of the agencies, and therefore the issues of connectivity between states assumed greater import.

Akio Okamura spoke of how to develop infrastructure and hydro power projects in North-East region and the rationale for Japan to extend its support. He was of the view that in order to attain inclusive sustainable development of whole of India, North-Eastern region should be the focus. He said that development of the NER could act as a catalyst for BBIN region and is also important as a gateway between India and ASEAN. Two projects specifically mentioned were rural roads and forest projects. He said that as the region is mountainous, it is difficult to widen existing roads, and even the existing road transport network was limited. The importance of connectivity between the states of NER was highlighted and mention was also made of connectivity with Myanmar and Bangladesh. Making a mention of Motor Vehicle Agreement (MVA) in BBIN, he said that National Highway development in Myanmar will actually benefit the NER. He added that in order to secure technology for maintenance of soil and structures, JICA is implementing capacity building projects in mountainous region.

Anand Kumar said that in infrastructure development, India has been a late starter and with particular reference to the NER, it lags behind. He said that the reasons for the slow pace of development were geological issues, the soft soil, undulating terrain, law and order issue and the lack of resources to include equipment and human resources. He said that the NHIDCL was set up to fast-pace and improve national highways and cover strategic areas to include the NER and its aim was to give an economic boost and enhance the transport efficiency in the region and between the region and South-East Asia. Infrastructure development will unleash the potential of land, resources, be it agricultural produce or the minerals and also enhance the use of human resources. Capacity and skills of the contractors however have to be developed and involvement of the community in infrastructure development was important.

Session 2: Imperatives of Cross-Border Connectivity and Market Linkages for NER with ASEAN

This session was chaired by Prof. Nisha Taneja from ICRIER. The speakers were Naoyuki Yoshino (ADBI), Mishra (Knowledge Foundation, Kaziranga University), Dr. So Umezaki (JETHRO) and Prof.  Gurudas Das (National Institute of Technology, Silchar).

The Chair posited that connectivity cannot be looked at in isolation; a lot of other issues come into perspective. There was a need to look into both physical and non-physical connectivity, financial connectivity, people to people connectivity and also tele-communications connectivity. Naoyuki Yoshino said that infrastructure has three effects- one direct and two other indirect effects. If infrastructure is completed, then private businesses will come into the region. High quality is required otherwise maintenance costs over the years will be exorbitant. Cross border infrastructure too is very important in many Asian countries. It is also important for finance to be provided to small businesses along the highway and railways, called as home town investment.

Mishra, posited that education plays a very vital role in people to people connectivity. Private and personal education is important and the entire NER could become a hub for education with the ASEAN countries. He suggested the establishment of linkages with our Japanese counterparts to increase the quality of delivery of technical and professional education system.

Dr. So Umezakiwas of the view that the biggest difference can be made through the strong will of the governments of India and Japan. He said that ASEAN countries are very diverse, and added that economic integration between ASEAN has been driven by this diversity, without which it would be difficult to maintain the momentum of economic integrity. He also briefly delved on the Mekong India Economic Corridor (MIEC). In Dr. Umezaki’s view, the lack of a vibrant economic agglomeration in the NER throws up expectations for some cities in this region to grow as economic centres. Enhanced connectivity between Guwahati and other parts of the region would help the region grow. He said that the larger impact of the trilateral highway can be observed mainly in Manipur, Nagaland, Mizoram and that MIEC economic benefits will have an impact on a large scale.

Dr. Gurudas Das said that public sector investment could not come in the NERin a big way due to state-centric security reasons. In his view, the triadic linkage between resource, production and trade could not take place, which was the reason why the area remains underdeveloped. He posited that the markets of the neighbouring countries were more important for the region and said that the main obstacle in the NER thus remained market connectivity. He was of the view that this could be established in two ways – either through Bangladesh or through South-East Asia. As of now, the NER has not benefitted as the whole trade takes place through the maritime route. Great potential for trade however exits, like export of items such as pineapples, ginger and fish from the NER.

Panel Discussion: Generating a Long-Term Vision for India-Japan Partnership for Economic Development in NER

The panel discussion was chaired by Dipok Kumar Barthakur, Vice Chairman, State Innovation and Transformation Aayog (SITA). The eminent panelists for this session were Yaduvendra Mathur from NITI Ayog; Shinichi Nakabayashi, ADBI; V.B. Pyarelal, Additional Chief Secretary (Finance), Assam; Takashi (JETHRO, Mumbai) and MrityunjayJalan (ChotaTingra Tea Estate). The Chair highlighted the fact that the NER is an agriculture-based economy. He said that the agriculture revolution preceded the industrial revolution and that India’s Act East Policy makes Myanmar and Japan its natural partners.

Yaduvendra Mathur opined that the PM of India has given vision not only for change but also for transformation. He said that the country, particularly the North-East, is looking for transformation as people of the NER have their own aspirations.

Shinichi Nakabayashi said that agriculture is a very creative industry and that ADBI promotes regional cooperation and connectivity and also small and medium enterprise. He said that the NER is a good region to implement ADBI’s idea of finance, cross-connectivity, and SMEs promotion. As a multilateral institute, ADBI has a mandate to promote cross-border trade so that NER could be connected to Bangladesh and its vicinity. He further said that the NER is strategically important for India to preserve the territorial integrity of the country and Japan is aware of this importance and is willing to work with India to develop the region.

V.B. Pyarelal emphasised the need to upgrade modern infrastructure with help from Japan. There is a scope, he said, for hydel power in the NER. Assam is the first state to use Sustainable Development Goals (SDGs) in the State budget and so the allocation is also done for it.

Takashi made a comparison about people seeking job opportunities in India and Japan and said that from a complementation in resource point of view, India and Japan can be very good partners and human resources, experience and technology can be complemented between the two nations. From the infrastructure point of view, the aim of the project for the Delhi-Mumbai industrial corridor was job creation, industrial development and export expansion in the long term.

Mrityunjay Jalan spoke of his experiences in the tea industry and collaboration with the Japanese in the techniques of tea production.

Valedictory Address by Shri P B Acharya, Honble Governor of Nagaland with additional charge as Governor of Tripura

In his Valedictory Address, P.B. Acharya stressed the need for workshops like these and made an emotional appeal to the delegates to have a result oriented focus in such deliberations. He lauded the richness of North East India, calling it a region which welcomes others with a NAMASTE (N-Nagaland, A-Arunachal Pradesh, A-Assam, M–Meghalaya, Mizoram, Manipur, S-Sikkim, T-Tripura) and talked about the need to invest in areas of education, energy and employment. The situation in the NER is not the creation of the local population but perhaps the deficiency of the people from the other parts of the country being unaware of the region. He said that friendship with Japan is time immemorial and made a mention of Japanese soldiers reaching India for the first time at Moirang in Manipur and Kohima in Nagaland. He gave the mantra for development of the state as the three Es – Education, Electricity and Employment.

The vote of thanks was thereafter delivered by Maj Gen. Dhruv Katoch, Director, India Foundation.