Northeast India: Where is the Chinese Investment?

20 Nov, 2014    ·   4750

Ruhee Neog questions the legitimacy of the narratives commonly used to justify the lack of investment in Northeast Indian states

Ruhee Neog
Ruhee Neog
Much has been written about Chinese President Xi Jingping’s visit to India and his camaraderie with Indian Prime Minister Narendra Modi. Irrespective of the final pronouncements on the success or failure of the meeting, the areas identified as recipients of Chinese investments were found to be particularly jarring by some analysts due to the absence of India’s Northeast in the new administration’s calculations. This exemplifes a recurring problem, and one that deserves a balanced approach - can only the Centre be ‘blamed’ for the lack of investment in the region, especially those of a Chinese nature? Or should the Centre be singularly castigated for what could be a deliberate denial regime? In such an event, what could the government’s logic be? Can the state governments also be held partially responsible?

The problem here has two sides. To begin with, this has been India’s traditional approach to its peripheries. In that sense therefore it is not a targetted campaign against one particular region. It appears that the development of the Northeast, especially investments in infrastructure, has long been side-lined due to the government’s security considerations, with an eye on China. This same logic has applied to the development of India’s other border regions. In an article for The Telegraph, Subir Bhaumik writes that the Modi-Jinping meeting fell short of the pre-visit hype because the Chinese were keen on locating a significant amount of investment in the areas corresponding to the BCIM (Bangladesh China India Myanmar) Economic Corridor.

In China’s case, this makes immense sense: it is a geographically contiguous area that would grant it land to sea access, thus serving its geo-strategic and economic purposes. Although this also holds great economic potential for India’s Northeast, the government’s reservations about China gaining a foothold in the area through an entry point into the Bay of Bengal could perhaps be understood.

However, in the same vein, some rather counter-intuitive moves have also been made that question this logic of security often offered to explain the second-tier status that seems to be accorded to the Northeast's development. It is often alleged that Arunachal Pradesh’s infrastructural growth has been deliberately ignored to not allow ease of access to China across the border. Why then have 157  hydel power schemes been planned for the state? In isolation, this kind of attention is nothing if not a good thing - but how is it to be reconciled with the refrain of India’s security considerations? As Bhaumik writes, have these hazy security concerns been trumped by the rest of India’s power demands? If this the case, it can be argued that the impression is that any project deemed suitable for the Northeast would be on the basis of whether it serves the entire country’s needs - if not, then the tired threat of Chinese incursions would be resorted to.

Another instance is Indian objections to the reopening of the Stilwell Road that connects India through Ledo in Assam, Pansau Pass in Arunachal Pradesh, onto Myitkina in Myanmar and Kunming in China – security is at play here again. Only 65 km of the road is in India, the rest in Myanmar and China. Myanmar has awarded the construction of the stretch between Myitkina up to Pansau Pass on the border to China’s Yunnan Construction Engineering Group. If, in theory, China wished to arrive on India’s doorstep, and perhaps even step in, it could do so with little difficulty. Whether or not the road is developed on the Indian side would be largely irrelevant.

Another refrain, that of Chinese goods flooding the Indian market if connectivity is enhanced and a fillip given to cross-border trade, is also redundant. Informal cross-border trade, in which Chinese goods play starring roles, are already well underway. In this scenario, the overwhelming sense is that the security of India’s border areas as a reason to justify the underdevelopment of the Northeast Indian states lacks substance.

As previously stated, this is however only one side of the problem. In a federation such as India, unequal attention is paid to states. Individual states, or regions, as in the case of the Northeast, have to make sustained collaborative efforts to make their presence felt at the Centre, and do their own legwork in attracting investments, both domestic and international. Investment potential is determined after a cross-benefit assessment of a wide variety of factors: resource availability, local risks, infrastructure development, physical connectivity etc. While the Northeast has a vast pool of untapped natural resources, it is understood that either the circumstances for investments are not ripe or that the governments are not doing a good enough job in marketing their states as investment-friendly destinations, if the situation has indeed improved.

The course has to corrected from both ends - from the Centre, but also from the Northeastern states - both individually and collectively.