indo myanmar border trade bulletin

6 downloads 0 Views 2MB Size Report
The author has also given us another historical ..... 203, CDE, Delhi School of Economics (http://www.cdedse.org/pdf/work203.pdf). .... Shwedagon Pagoda has.
iNdo-myXeNmAr bordr trXex bUletIN Vol. No. I Issue No. IV & V, September, 2013

INDO MYANMAR BORDER TRADE BULLETIN A Bi-monthly e-publication

Published by: - Department of Economics, Manipur University.

DEPARTMENT OF ECONOMICS, MANIPUR UNIVERSITY

INDO MYANMAR BORDER TRADE BULLETIN

INDO-MYANMAR BORDER TRADE BULLETIN A Bi-monthly e-publication Published by: - Department of Economics, Manipur University

Editorial board

Prof. E. Bijoykumar Singh

Dr. Damodar Nepram

Dr. Ksh. Jhaljit Singh

Ms Sophia Arambam

Dr. M. Hemanta Meitei

Dr. M. Bobo Singh

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 2 of 57

INDO MYANMAR BORDER TRADE BULLETIN

Advisory board: Prof. H.N.K. Sarma, Vice Chancellor, Manipur University Prof. L. Tombi Singh, Centre for Exclusive & Inclusive Policy studies Prof. Amar Yumnam, Prof.,Economics department Prof. W. Nabakumar Singh, Centre for Myanmar Studies Dr Ch. Priyoranjan Singh

Graphic designer: N.K. Jotin Singh, Technical Asstt. UGC-SAP-DRS1

Objective: The purposes of the bulletin are as follows: 1. To develop the information base of Indo Myanmar trade with special reference to border trade 2. To provide a forum for exchange of ideas on a regular basis on issues related with Indo Myanmar trade with special reference to border trade. 3. To disseminate information on Indo Myanmar trade on a regular basis.

Map of Sagaing Division, Myanmar bordering Manipur

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 3 of 57

INDO MYANMAR BORDER TRADE BULLETIN

Vol. No. 1 Issue No. IV and V, September 2013. CONTENTS

5

Editor’s desk

6

Outsourcing: Some Strategic Aspects Tarun Kabiraj Indian Statistical Institute, Kolkata

18

Book Review

28

Book Review

40

My Experience in Multilateral Trade negotiations Prof. Biswajit Dhar Director General, RIS, Delhi

49

Tales from Myanmar 2 (Moreh Business)

56

News (Smuggling of rice along Indo Myanmar border)

57

PHOTOS

LADY AND THE PEACOCK The Life of Aung San Suu Kyi of Burma By: Nongmaithem Sulochana Devi

GREAT GAME EAST India, China and the struggle for Asia’s most volatile frontier By: Hanjabam Isworchandra Sharma PhD

All queries may be directed to: ebksingh @gmail.com [email protected]

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 4 of 57

INDO MYANMAR BORDER TRADE BULLETIN

FROM THE EDITOR’S DESK

Myanmar is moving at breakneck speed in many directions and is yet to stabilise. It is indeed highly challenging to keep tract of developments in Myanmar with special focus on Indo Myanmar trade. This issue has the two keynote speeches delivered by Prof. BiswajitDhar and Prof. TarunKabiraj in the two national seminars held by the department under the UGC- SAP . The speech by Prof. BiswajitDhar was transcribed from his speech and it has taken unduly long. There are two book reviews –one on the challenges of the region and the other on the icon of Myanmar: Aung San Suu Kyi. Both are expected to be very useful in contextualising the developments in and around Myanmar. There is also a translation of an essay written in Manipuri published in Sanathong, a popular journal in 1998 and this has an interesting account of the emergence of Moreh trade. The author has also given us another historical account of Indo Myanmar trade at Moreh from its inception . The translation of the account will be published in the next issue of the journal. We have also included a small write up on a major event-export of rice to Myanmar from India at Moreh. From the next issue onwards we will publish a comparative picture of prices of many commodities in Namphalong and Tamu in Myanmar and Moreh and Khwairamband bazar in Manipur.

Prof. E. Bijoykumar Singh

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 5 of 57

INDO MYANMAR BORDER TRADE BULLETIN

Outsourcing: Some Strategic Aspects

Tarun Kabiraj* Indian Statistical Institute, Kolkata E-mail: [email protected]; [email protected]

(July, 2013)

*This paper is (partly) based on my presentation at the National Seminar on `Indo-Myanmar Border Trade: Composition and Volume‟ held during 25-26 March, 2013 at Manipur University. I am greatly indebted to the organizers and, in particular, to Professor E. Bijoykumar Singh for inviting me to deliver a key note address at the Seminar.

Outsourcing: Some Strategic Aspects Tarun Kabiraj Indian Statistical Institute, Kolkata

Abstract: A firm faces a choice between outsourcing a crucial input and producing it inhouse within the vertical structure. This paper discusses strategic motives behind the outsourcing decision.

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 6 of 57

INDO MYANMAR BORDER TRADE BULLETIN

1. Introduction Outsourcing is now practised by almost all firms and business organizations all over the world. Initially, the activity was limited to unimportant or non-core activities (say, for instance, janitorial or gardening activities), but nowadays almost every function, from product design to final production, distribution and marketing, to research and development, are being outsourced. Grossman and Helpman (2005) have rightly said, “We live in an age of outsourcing”. What is outsourcing? Broadly speaking, outsourcing is a contracting by a company or firm with another company or organization to delegate some specified function to be ultimately purchased back as a service. Thus when a firm writes a contract with an independent firm or organization regarding performing some business function (say, purchasing of inputs), this is an act of outsourcing. The opposite of outsourcing is `insourcing‟, that is, producing in-house, and this is accomplished via vertical integration. If the outsourcing function is relocated across borders, it is `offshoring‟. The firm which provides the necessary services is called a service provider, vendor, subcontractor, supplier or an upstream firm, and the outsourcing firm is called a buyer, acquirer or a downstream firm. The outsourcing activities got impetus and became popular with the advent of information technology (IT). As a consequence, business process outsourcing (BPO) has increased at a high rocketing speed. This encompasses a wide range of activities including banking,

finance, accounting, insurance, medical and various consultancy services, various data entry and computing services, etc. Data Outsourcing India has emerged to be the India‟s best IT enabled service provider company. It helps clients to improve their business growth with different kinds of IT services such as, data entry, online data entry, data computing from the web, data mining and cleansing, data conversion, catalogue processing, website design, graphics editing, logo design and similar other services. During the last two decades the magnitude of outsourcing activities has been growing at a fast rate, not less than 30% per annum. For example, Nokia alone makes use of more than 300 domestic subcontractors and similar number of foreign subcontractors. In computer industry Sun purchases about 75% of components from other companies. The aircraft giant Boeing outsources products of over 34000 components from different manufacturers and then assembles these into its production of 747 passenger aircraft. The 1998 Annual Report of WTO estimate shows that only 37% of the production value of a representative American car is generated domestically in the US. A little search in the internet will reveal many more such information. Recently, R&D outsourcing is also growing fast.1

1

Frost and Sullivan (2004) have analysed the prospect of growing R&D outsourcing market for information technology in India and policy regulation in the R&D domain in Asia. Marjit and Mukherjee (2008) discuss why international outsourcing and R&D by the outsourced firm may be either substitutes or complements. The paper also derives welfare implications for the

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 7 of 57

INDO MYANMAR BORDER TRADE BULLETIN Next question that naturally follows is: why is outsourcing? Typically a firm is confronted with the choice of inhouse production versus outsourcing. It‟s a `make or buy‟ decision --- a decision whether to integrate or separate. Traditional theories take care of the cost consideration only; hence the problem is explained in terms of transaction costs, specificity of factors and incomplete contracting. In the next section we discuss this very briefly. However, beyond this boundary, outsourcing often occurs and that is so because the firm gains by outsourcing strategically. So the purpose of the present paper is to focus on some strategic aspects of outsourcing. This is presented in section 3. Then a conclusion follows.

2. Outsourcing: Consideration

Least

Cost

When a business organization goes for outsourcing instead of getting the work done in-house, this is either to make a strategic gain or to get the services from outside at a lower cost. In this section we focus on the cost consideration. The firm may not be capable to produce those services most efficiently or at a least cost, or even if it is capable, it involves a large amount of fixed costs including training of the personnel and staff, whereas the service providers are already specialized in that service. If the firm wants to produce every item it needs, the size of the firm has to be too large to be effectively controlled and managed, consumers. Then Marjit, Xu and Yang (2009) have provided a theoretical model on the role of intellectual property in developing countries in offshore outsourcing of R&D.

whereas outsourcing can offer a greater budget flexibility and control. Outsourcing allows organizations pay for only the services they need. The firm can fully focus on its core sectors/activities. It also eases cash flow constraint and makes business more flexible to the changing demand and environment. Also by means of outsourcing the company can avoid some taxes and regulations, and the troubles and conflicts due to labour union.

Traditionally, this is discussed in terms of theories of transaction costs, incomplete contracts, asset specificity, property rights, etc., which define the boundaries or limitations of the firm.2 This ultimately leads to the choice of production organization based on cost consideration. Important contributions have been made by Williamson (1985), Grossman and Hart (1986), Hart and Moore (1990), Bolton and Whinston (1993), Antras (1993), and Grossman and Helpman (1999), among others. Holmstrom and Roberts (1998) have provided a survey on the determinants of the boundaries of firms. Decentralised markets are presumed to perform more efficiently in allocating resources. Then why do the firms go to produce within the vertical structure of the organization? Williamson (1985) is the champion of the transaction cost based analysis.3 Grossman and Helpman (2002) have analysed why costs of producing under vertical structure can be very high because of incomplete contracting and large organization. However trade-off arises because 2

Coase (1937) provides a pioneering work in this field. 3 For a review of the Williamson (1985) work see Masten (1986).

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 8 of 57

INDO MYANMAR BORDER TRADE BULLETIN outsourcing is also subject to various costs. For example, international outsourcing often involves significant costs in the process of selecting venders and writing contracts, then the cost of transferring technologies, the cost of training of the employees and management, so on and so forth (see, for instance, Grossman and Helpman (2002), and Glass and Saggi (2001)). McLaren (2000) studies the impact of international opening up on the vertical integration decision. Given `hold-up‟ problem under outsourcing, vertical integration may be the chosen option provided the cost of management and governance under integration is not too high. Then Antras and Helpman (2004) explain whether under outsourcing foreign or domestic suppliers are to be chosen. There is a trade off between selecting partners from the north and the south, because the south has a lower variable cost whereas the north has a lower fixed cost. A further insight has been provided by Grossman and Helpman (2005). Accordingly, the outsourcing decision also depends on the consideration of thickness or size of the domestic and foreign markets for input suppliers.

3. Outsourcing: Consideration

Strategic

From the previous section analysis it follows that outsourcing is likely to be preferred over in-house production or vertical integration if the firms can buy inputs from outside at a bargain price. There are, however, evidences to prove that sometimes outsourcing occurs not because that in-house production is costlier, but for the simple reason that

outsourcing generates some strategic advantages that ultimately benefit the firm. Firms may opt for outsourcing because it may give the firm competitive advantages over the rivals, it may act as entry deterrence, it may raise rivals‟ costs, or it can alter the market structure in its own favour. Below we discuss contributions of some selected papers in this context. First consider the work by Shy and Stenbacka (2003). This paper shows how the competing firms may manipulate their design of production mode as a strategic instrument. In a Hotelling model of differentiated duopoly they have investigated how the degree of competition in the final goods market affects the incentive to outsource production of key components. Here firms have the option to produce in-house or outsource an input from a third firm or market. In-house production requires an irreversible investment F > 0 to produce the input inhouse at a cost c < PS (outsourced price). Then it becomes the trade off between irreversible investment and the gain in marginal cost. Depending on the size of fixed investment relative to the size of the consumer population, in equilibrium both firms may outsource, or only one firm may outsource or none may outsource. In particular, if F is small, none will outsource, and if F is large, both may outsource. Higher input price reduces competition in the final goods market, and it becomes profitable to outsource. When there is a (joint) monopoly input producer, the paper shows that outsourcing to the monopoly input producer is welfare improving relative to in-house production. As in Shy and Stenbacka (2003), the Buehler and Haucap (2006) model also

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 9 of 57

INDO MYANMAR BORDER TRADE BULLETIN assumes that the firms making an irreversible investment can reduce their variable costs to produce in-house, otherwise they can outsource inputs at a higher price. But in Buehler and Haucap (2006) the firms take the outsourcing decision sequentially. Since the model assumes reduced form payoffs, it can deal with various forms of market competition including price competition. The paper analyses how one firm‟s outsourcing decision induces other firm‟s outsourcing decision. In particular, the paper discusses why it may be advantageous for a firm to give outsourcing order to a supplier to whom its rival has already gone. By giving outsourcing order it raises input prices (hence the downstream cost) and this can be mutually profitable in the downstream competition where it softens competition.

In a recent paper Chen (2011) constructs a model to show that by sourcing key intermediate goods to a potential entrant, an incumbent firm can credibly and observably commit to an intensive post-entry competition, thereby deterring the entry. The incumbent monopolist initially possesses both technologies of producing inputs and then converting inputs into final goods. There is an entrant which holds at present an inefficient technology to produce inputs (ce  cm ) . Moreover, if it likes, it can acquire the same final goods producing technology by investing a fixed amount, K > 0. They play the following game. First, the incumbent negotiates with the entrant a sourcing contract, i.e., writes a contract to buy a certain amount of inputs from the entrant at the contracted

price. Then, in the second stage, entrant decides whether to invest on final goods technology and enter the product market. Finally the active firms compete in quantities for the final good. The paper shows that in a unique equilibrium there is a quantity to be outsourced by the incumbent to the entrant in which the entrant stays out. The outsourced quantity constitutes an entry deterring capacity. By producing within the established capacity, the incumbent is granted a Stackelberg leader‟s advantage signifying that it can behave aggressively if entry occurs. The entrant, if enters, is forced to act as Stackelberg follower. Then there exists a threshold quantity for the incumbent to order from the entrant which reduces the entrant‟s post-entry Profit to the point of entry deterrence. This means such outsourcing facilitates tacit collusion. With entry deterred, the final good market is kept monopolized and the entry cost is avoided. Whenever the benefit of outsourcing is more than offsetting its cost, a joint surplus is generated and both the firms are better off through their sourcing transaction. The paper by Arya, Mittendorf and Shappington (2008a) constructs a threefirm model with one wholesale input supplier (of an essential input), and two product market competitors, of which one firm, say firm 1, has capability to produce the input in-house. The paper shows that even though firm 1 can produce the input at a cost less than the input price charged by the whole sale input supplier, firm 1 will outsource for strategic advantages. The whole sale input supplier fixes an input price W1 for firm 1 who decides whether it will outsource or produce inhouse. Then the whole seller decides W2

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 10 of 57

INDO MYANMAR BORDER TRADE BULLETIN for firm 2. Finally, the firms 1 and 2 compete a la Cournot. Here strategic effect is that W2 directly depends on W1 if firm 1 buys a positive quantity, i.e., W2(W1), with

W2  0 . So firm 1 strategically opts for outsourcing that raises rival‟s cost.4 The discriminative treatment to firm 2 benefits firm 1 although firm 1 could produce at a lower price. The idea that outsourcing may raise rival‟s cost for strategic gain is further extended by Kabiraj and Sinha (2011). In their model therefore outsourcing occurs even when in-house production is cheaper. They have also constructed a model of three firms. The novel thing of the work is that they have introduced technology transfer in the context of outsourcing. One of these three firms, say firm 0, has only input production technology. The other two firms, firm 1 and firm 2, compete in the final goods market, but firm 2 does not have input production technology; so it has to depend on input market for inputs. On the other hand, firm 1 has both input and final goods production technologies; moreover, it has superior input production technology compared to that of the independent input producer. Firm 1 then has the option to decide whether it will compete with firm 0 to supply inputs to firm 2. It is shown that in the sub game perfect equilibrium firm 1 must compete in the input market and in fact grab the whole market share under price competition. And when it takes outsourcing decision, as a commitment device it sells out the patent right of its superior input production technology to firm 0 and in turn buys inputs from firm 0. Since firm 0 now

becomes a monopoly in the input market, both downstream competitors buy inputs at monopoly price. Then outsourcing decision can be optimal if the outsourcing firm (firm 1) can over-compensate the loss of payoff in the final good market by the price it charges for selling its patent rights. The paper shows that firm 1 opts for outsourcing the key input if the gap between its input production technology and that of the independent input supplier is small. If the input production technological gap is large, firm 1 will do better by means of in-house production along with input market competition. The strategic advantage of outsourcing stems from softening of competition in the final goods market and the benefit in turn accrues to firm 1 through a payment for the patent sale to the independent input supplier. Thus Kabiraj-Sinha (2011) paper, in a sense, complements the works of Arya et al. (2008a) and Chen (2011). This is not vacuous that a firm outsources crucial inputs even when its inhouse cost of input production is low. For example, Boeing had entered into outsourcing contracts with three industrial giants Mitsubishi Heavy Industries, Kawasaki Heavy Industries Ltd., and Fuji heavy Industries (called Japanese 5 consortium). This happened when these companies showed interest in entering the market for commercial aircrafts. Consequently, a series of agreements occurred between Boeing and those firms regarding supply of some goods related to aircraft production, together with related R&D during the 2000s. News weak International Edition (May 15-22, 2006) observed, Boeing‟s outsourcing cannot be

4

On the literature of `raising rivals‟ costs, see Salop and Scheffman (1983, 1987).

5

See in Chen (2011)

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 11 of 57

INDO MYANMAR BORDER TRADE BULLETIN justified based on cost-saving, since in the aircraft industry costs in Japan were no less. Another example is the contract between Boeing and Lockheed. The latter exited the commercial aircraft market after 1981 and thereafter never entered although it was capable to compete with Boeing. On the other hand, Boeing signed a contract with Lockheed for purchasing certain parts of commercial aircraft.6 Two papers that talked about technology transfer and outsourcing are by Pack and Saggi (2011) and Peirce and Sen (2012), but their focus was completely different. The paper by Pack and Saggi (2001) considers transfer of DC technology to an LDC firm which produces the product but sells it to the DC firm which markets the product. However, some knowledge may be leaked out or spilled over to other LDC firms which may directly compete with the DC firm in its markets. If the DC and LDC firms are vertically integrated, how this affects diffusion and profitability are discussed. In this model, outsourcing is akin to licensing of an innovation to another producer that has a lower cost of production. The paper derives implications to diffusion and competition. On the other hand, Pierce and Sen (2011) have constructed a Hotelling duopoly with one firm possessing a superior intermediate good producing technology. The paper considers and compares two alternative regimes, viz., outsourcing (when the high cost firm outsource its order to the low cost firm) and technology transfer (from the low cost firm to the high cost firm). Outsourcing acts as a credible commitment on the part 6

See the Wall Street Journal, May 10, 1989.

of high cost firm to maintain a specific market share (thus acting as Stackelberg leader). Since strategic interactions under technology transfer and outsourcing are different, it has different implications to the firms and consumers. Under outsourcing, consumers are benefited, but not is the case under technology transfer with royalty contracts. However, under both outsourcing and technology transfer each firm uses the cost efficient production process.

Chen, Dubey and Sen (2011) have constructed a model of N firms which are competing in the product market; however only a subset of firms has access to intermediate input technology, and the other firms either get inputs from the remaining insiders or from the outsiders. The paper portrays situations when intermediate goods can be sourced to firms on the outsiders even when there are no economies of scale or cost advantages for these firms. Insider firms when accepting outsourcing orders incurs the disadvantages in the ensuing competition to sell the final product. Thus they have incentives to quote high provider prices to ward off future competitors, driving the latter to source outside.

Some papers have focused on scale economies. For example, Cachon and Harker (2002) have constructed a model with two competing firms when each firm‟s cost per unit is decreasing in demand. The paper shows that even if the supplier‟s technology is no better than the firms‟ technology and the supplier is required to establish dedicated capacity (so the supplier‟s scale can be no greater than

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 12 of 57

INDO MYANMAR BORDER TRADE BULLETIN either firm‟s scale), the firms strictly prefer to outsource. Then Chen (2005) has provided a model of dynamic scale economics through learning by doing. Given an upstream and downstream structure, a vertically integrated firm can reduce its upstream cost by supplying downstream competitors. However, the downstream competitors may strategically decide not to purchase from the integrated firm unless the price of the integrated firm is sufficiently lower compared to alternative sources of supply. The paper portrays situations when in equilibrium vertical disintegration occurs.

Many sourcing firms are observed to practise multiple outsourcing, that is, a firm simultaneously buying inputs from many sources. But the theoretical literature on it comprises only a few papers. In Pack and Saggi (2001), by means of multiple outsourcing a firm can reduce the effect of double marginalisation problem. Andrabi, Ghatak and Khwaja (2006) consider multisourcing as an outcome in the presence of uncertainty. It actually reduces the problem of supply bottlenecks. Mukherjee and Tsai (2013) consider a scenario when outsourcing embodies technology transfer from the input buyer to an input supplier because the latter can produce at a lower cost than the former. But there is a threat of imitation by the transferee, that is, if the transferee is capable to imitate the technology it can enter the technology seller‟s final goods market. Given this threat, by making outsourcing contracts with a number of input suppliers, the outsourcing firm can, in fact, eliminate the threat of entry.

In another paper Mukherjee and Tsai (2010) have shown that an international outsourcing can be employed as an entry deterring strategy. Such an outsourcing is also welfare reducing for the outsourcing country. The paper focuses on the cost asymmetry between the incumbent and the entrant in respect of outsourcing. Since the entrant requires, in addition, to incur an entry cost, the incumbent can prevent the entrant from entering.

Bandhopadhyay, Marjit and Yang (2013) have drawn attention to an important aspect of outsourcing, viz., the impact of barriers to international outsourcing on domestic employment in an oligopoly framework. International outsourcing implies, in a sense, transfer of job creation from home to foreign country. It has also adverse implication for home tax revenue. In US, offshore outsourcing has been so vast in size that it has been a big political (debatable) issue in the last consecutive US presidential elections. Some study found that about 71% of American voters believe that outsourcing jobs overseas hurt the economy and about 62% believe that US government should impose some legislative action against companies that transfer domestic jobs overseas, possibly in the form of increased taxes on companies that outsource. US policy makers have, in fact, proposed to reform tax codes to reduce incentives for US companies to outsource jobs.7 Bandyopadhyay et al. seem to be sceptical about the desired effect of the policy. Their paper shows that market share losses of domestic firms due to outsourcing barriers may indeed end up hurting domestic 7

See the White House press release dated 9/8/2010 (www.whitehouse.gov).

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 13 of 57

INDO MYANMAR BORDER TRADE BULLETIN employment. While outsourcing tax makes domestic labour cheaper, its employment effect is ambiguous due to strategic considerations and interdependent nature of international policies. They claim that their results are robust to both Bertrand and Cournot modes of competition.8

and investment effect on trade flows, but also it induces vertical integration to occur between domestic buyers and foreign suppliers and hence incentives to invest go up further.

4. Conclusion Then a number of papers on outsourcing are prepared in the context of trade liberalization.9 Consider the papers by Chen, Ishikawa and Yu (2004) and Ornelas and Turner (2008). Chen et al. (2004) focuses on strategic outsourcing in a period of trade liberalization in intermediate product market and draws attention to the observation that an outsourcing firm sometimes purchases key intermediate inputs from its efficient rival in the final goods market. In such a situation the usual cost-saving motive is accompanied by a strategic motive. Then trade liberalization in intermediate goods may lead to higher prices for both intermediate and final goods. On the other hand, Ornelas and Turner (2008) draw attention to the effect of trade costs on outsourcing, investment and integration decision as well as on trade flows. The paper shows that as tariffs fall under liberalization, not only it has positive price

This paper discusses the choice between outsourcing and producing inputs under vertical structure. Theories based on transaction costs, asset specificity, and incomplete contracting mainly focus on the boundaries of the firm. Within this orbit therefore outsourcing occurs because producing inputs in-house is costlier. The present paper draws attention to strategic factors. So outsourcing can happen even when the outsourcing firm has no apparent cost advantage. We discuss how by the decision of strategic outsourcing a firm can affect the cost and entry decision of its rivals, thereby can alter product market competition in its favour. This paper however provides just an overview rather than a thorough survey on the subject.

8

In a differentiated duopoly model, Arya, Mittendorf and Shappington (2008b) derives implications of outsourcing from low cost competing firm under price competition and Cournot competition. It is shown that Singh-Vives (1984) results undergo a drastic change. For instance, Bertrand competition can produce higher prices, higher industry Prof.its, lower consumer surplus and lower total surplus than Cournot competition. When the supplier of an input is also a retail rival, the vertically integrated production may set a higher input price under Bertrand competition than under Cournot competition. 9 We have already discussed the contributions of McLaren (2000), Antras and Helpman (2004) and Grossman and Helpm,an (2005).

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 14 of 57

INDO MYANMAR BORDER TRADE BULLETIN

References Andrabi, T., Ghatak, M. and Khwaja, A.I. (2006), “Subcontractors for tractors: theory and evidence on flexible specialization, supplier selection, and contracting”, Journal of Development of Economics, 79, 273-302. Antras, P. (1993), “Firms, contracts, and trade structure”, Quarterly Journal of Economics, 118, 1375-1418. Antras, P. and Helpman, E. (2004), “Global sourcing”, Journal of Political Economy, 112, 552-580. Arya, A., Mittendorf, B. and Sappington, D.E.M. (2008a), “The make-or-buy decision in the presence of a rival: strategic outsourcing to a common supplier”, Management Science, 54, 1747–1758. Arya, A., Mittendorf, B. and Sappington, D.E.M. (2008b), “Outsourcing, vertical integration, and price vs. quantity competition”, International Journal of Industrial Organization, 26, 1-16. Bandyopadhyay, S., Marjit, S. and Yang, L. (2013), “International oligopoly, barriers to outsourcing, and domestic employment”, Canadian Journal of Economics (forthcoming). Bolton, P. and Whinston, M.D. (1993), “Incomplete contracts, vertical integration, and supply assurance”, Review of Economic Studies, 60, 121-148. Buehler, S. and Haucap, J. (2006), “Strategic outsourcing revisited”, Journal of Economic Behaviour and Organization, 61, 325-338. Cachon, G.P. and Harker, P.T. (2002), “Competition and Outsourcing with Scale Economies”, Management Science, 48, 1314-1333. Chen, Yongmin, (2005), “ Vertical Disintegration”, Journal of Economics and Management Strategy, 14, 209–229. Chen, Yongmin, Ishikawa, J. and Yu, Z. (2004), “Trade liberalization and strategic outsourcing”, Journal of International Economics, 63, 419– 436. Chen, Yutian. (2011), “Strategic sourcing for entry deterrence and tacit collusion”, Journal of Economics, 102, 137 – 156. Chen, Yutian, Dubey, P. and Sen, D. (2011), “Outsourcing induced by strategic competition”, International Journal of Industrial Organization, 29, 484-92. Coase, R. (1937), “The nature of the firm”, Economica, 4, 386-405. Glass, A. and Saggi, K. (2001). “Innovation and wage effects of international outsourcing”, European Economic Review, 45, 67–86.

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 15 of 57

INDO MYANMAR BORDER TRADE BULLETIN

Grossman, S. and Hart, O. (1986), “The costs and benefits of ownership: a theory of vertical and lateral integration”, Journal of Political Economy, 94, 691–719. Grossman, G. and Helpman, E. (1999), “Incomplete contracts and industrial organization”, National Bureau of Economic Research, Working Paper No. 7303. Grossman, G. M. and Helpman, E. (2002), “Integration versus Outsourcing in Industry Equilibrium”, Quarterly Journal of Economics, 117, 58–119. Grossman, G. M. and Helpman, E. (2005), “Outsourcing in a global economy”, Review of Economic Studies, 72, 135-159. Frost and Sullivan (2004), “Outsourcing technology in Asia – analysis of the changing face of R&D (technical insights)”, Frost & Sullivan Research Service Hart, O. and Moore, J. (1990), “Property rights and the nature of the firm”, Journal of Political Economy, 98, 1119-1158. Holmström, B. and Roberts, J. (1998), “The boundaries of the firm revisited”, Journal of Economic Perspectives, 12, 73–94. Kabiraj, T. and Sinha, U. (2011), “Strategic outsourcing with technology transfer”, Working Paper No. 203, CDE, Delhi School of Economics (http://www.cdedse.org/pdf/work203.pdf). MacLaren, J. (2000), “Globalization and vertical structure”, American Economic Review, 90, 1239-1254. Marjit, S. and Mukherjee, A. (2008), “International outsourcing and R&D: long-run implications for consumers”, Review of International Economics, 16, 1010–1022, Marjit, S., Xu, X, and Yang, L. (2009), “Offshore outsourcing, contractual R&D and intellectual property in developing countries”, MPRA Paper No. 19362 ( http://mpra.ub.unimuenchen.de/19362/). Masten, S.E. (1986), “The economic institutions of capitalism: a review article”, Journal of Institutional and Theoretical Economics, 142, 445-451. Mukherjee, A. and Tsai, Y. (2013), “ Multi-sourcing as an entry deterrence strategy”, International Review of Economics and Finance, 25, 108-112. Mukherjee, A. and Tsai, Y. (2010), “International outsourcing and welfare reduction: an entry deterrence story”, The Manchester School, 78, 647-659. Ornelas, E. and Turner, J. (2008), “Trade liberalization, outsourcing, and the hold-up problem”, Journal of International Economics, 74, 225-241. Pack, H. and Saggi, K. (2001), “Vertical technology transfer via international outsourcing”, Journal of Development Economics, 65: 389-415

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 16 of 57

INDO MYANMAR BORDER TRADE BULLETIN Pierce, A. and Sen, D. (2012), “Outsourcing versus technology transfer: Hotelling meets Stackelberg”, Journal of Economics (forthcoming) (DOI 10.1007/s00712-012-0328-y). Salop, S. and Scheffman, D. (1983), “Raising rivals‟ costs”, American Economic Review, 73, 267-271. Salop, S. and Scheffman, D. (1987), ”Cost-raising strategies”, Journal of Industrial Economics, 36, 19-34. Shy, O. and Stenbacka, R. (2003), “Strategic outsourcing”. Journal of Economic Behavior and Organization, 50, 203-224. Singh, N. and Vives, X. (1984), “Price and quantity competition in a differentiated duopoly”, Rand Journal of Economics, 15, 546-554. Williamson, O. (1985), The Economic Institutions of Capitalism, Free Press, New York.

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 17 of 57

INDO MYANMAR BORDER TRADE BULLETIN

BOOK REVIEW

THE LADY AND THE PEACOCK The Life of Aung San Suu Kyi of Burma By Peter Popham 448 pp, Rider Books, Rs. 335

During the time of unrest in Burma in 1988, Aung San Suu Kyi, the only daughter of Burma‟s independence hero Aung San, happened to visit Burma to take care of her sick mother. Following the announcement by the Junta to hold a multiparty election, Aung San Suu Kyi and other likeminded colleagues founded the National League for Democracy (NLD). Despite NLD‟s landslide victory in the 1990 general election she was detained under house arrest for 15 years making her one of the most „prominent political prisoners‟. Suu Kyi was finally released from house arrest in November 2010. After more than two decades of struggle, she has won a seat in Parliament in 2012 byelection and she is currently a Member of Parliament. In fact, this extraordinary journey undertaken by Suu Kyi in the sphere of Burmese politics and her role as an

„exponent of non-violent political defiance‟ has been a subject of interest to many, and there has been some notable written works published in the recent past. The Lady and the Peacock by Peter Popham is the most recent work on Aung San Suu Kyi which is published by Rider Books. Before going further, let us very briefly take a quick look at the organization of the contents in the book. The book has been divided into twenty two chapters which are further grouped into five different parts and each part deals with different phases of her life. And then in a separate section, the author has included some useful features like glossary of some Burmese terms like aingyi, anicca and bhaya which are used in the book. You will also find a list of names e.g. names of person in Aung San Suu Kyi‟s family and names of foreign diplomats amongst other. Then you will find a list of books for further reading on specific areas like Burmese History or Religion. This is something which will be highly useful to students or experts in the Burmese Studies. The first part titled „Her Father‟s Child‟ gives a short biography of Aung San, the hero who didn‟t live long enough to see Burma become independent. Even though Aung San Suu Kyi had lost her father when she was just two years old, „she had never forgotten who she was and who her father was, had never renounced the idea that sometime, at some unimaginable future date, her country might need her.‟ The author has covered the early phase in Suu Kyi‟s political and public life under the second part titled, „The Peacock‟s Fan‟ which also happens to be the longest part in this book. Here, the author takes the reader through one of the most important phases in the political history of Modern Burma.

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 18 of 57

INDO MYANMAR BORDER TRADE BULLETIN

Many years ago, Suu Kyi had declared that if she were to engage in any political movement, she would do it from Burma and not from abroad. Although, for an entirely different purpose, Suu Kyi arrived in Burma in 1988 in the midst of the turbulent and charged atmosphere prevalent at that time. She was aware of the violence and slaughter committed against the Burmese people by their own military government. „But she didn‟t take part in any demonstrations.‟ According to the author, „Suu Kyi had not closed her eyes to the suffering of her people,‟ but the truth is that „she was thinking very hard about what role she could and ought to play.‟ The author has given a well researched account of how Suu Kyi came to find her way, the purpose of her existence, in the subsequent chapters. The description of the events that led to Suu Kyi‟s decision to deliver her historic speech on 26 August 1988 at the Shwedagon Pagoda has been done with such details and accuracy. It was at the same place that her father Aung San had delivered some of his „most inflammatory speeches.‟ Like her father, Suu Kyi declared

that „Democracy was the only ideology which is consistent with freedom...an ideology that promotes and strengthens peace.‟ The book addresses the question of how Suu Kyi, an Oxford housewife who wanted to be a scholar, came to be involved into politics and how Suu Kyi, the „Boyoke‟s daughter‟ realized what role she could play in this national crisis which she had once referred to as „the second struggle for national independence‟. It was after the Shwedagon speech that the people of Burma began to look at Aung San Suu Kyi as the leader they were waiting for. „She was the true leader!‟ The book then takes the readers to one of the most important episodes where on 24 September 1988, amidst the terror and bloodshed, the announcement to form a political party was made by Suu Kyi and her allies. At the time of the formation of the party, it was declared that the basic objective of the organization was to achieve a „genuinely democratic government.‟ The author has also written elaborately on the 18th and 19th September massacre and the events revolving around the attack that took place before Suu Kyi‟s announcement. It was shortly after the massacre that soldiers were renamed: the State Law and Order Restoration Council (SLORC). Soon, the author introduces an important figure called Ma Thanegi, the one who had the opportunity to observe Suu Kyi at her close quarters during the campaign days. She had worked as Suu Kyi‟s associate and had been a close friend until their friendship came to an end at the later stage. On Suu‟s husband Michael‟s request, she had maintained a personal dairy of the campaign which Suu and her party undertook after the formation of NLD. Besides other inputs, the author has relied heavily on Ma Thanegi‟s campaign diary. From this point onwards the readers will find that a significant part of the text comprises of extracts from her campaign diary. The book also touches upon one of the most emotional phases in Suu‟s life when she lost her mother who was the last surviving link to her father. Following Suu‟s appeal to the public, her mother‟s funeral was held peacefully without any disturbances. This occasion made her conviction stronger with regards to the fact that with cooperation and understanding, things can be done peacefully, without violence. In fact, the one thing that the author has consistently laid emphasis upon is Suu Kyi‟s commitment to nonviolence, more so when she began to directly involve in the

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 19 of 57

INDO MYANMAR BORDER TRADE BULLETIN revolt. At one point, the book mentions that it was partly Gandhi and partly Buddha, but it was also common sense that led Suu Kyi to believe that their movement must be strictly non-violent. Especially when the „military regime had decided to treat the democracy movement as a military threat‟ which means that „they were to be gunned down, eliminated, exterminated.‟ From the title of the book, one can guess the importance that the author places on Suu Kyi‟s role in the party once the NLD came into existence. As one turns through the pages of the last three chapters in the second part of this book, one will find that the author has presented a highly detailed and elaborate account of the 1989 campaign by her party. It is at this juncture that the book tries to capture Suu Kyi‟s unfailing courage and uncompromising commitment towards the greater cause of her party and people, and also marked the beginning of her direct involvement in Burma‟s democracy movement. Though in the beginning of her journey Suu Kyi was not sure if she had chosen the right path or not, the author

points out that Suu Kyi had felt that „it was her duty to get involved‟ and she wanted to stay and finish what she had started. In the process, she had sacrificed few but things that meant most to her like her family – „the agony that she felt in being separated from her family and the fact that the care and nurture she owed her sons, both at crucial, tender ages had been cast off.‟ The author at one point compares Suu Kyi‟s attitude to that of a sannyasin. With her mother and father having passed away, she had forsworn both the duties and the pleasures of family for a worthy cause. Nevertheless, Suu Kyi had made her choice to live with her „new commitment‟ to the full. Since 20 January 1989, Suu Kyi and her party members have continuously travelled from place to place educating the people about the new thing called democracy. The author writes that wherever she went, she and her companions were met by huge ecstatic crowds which had often taken great risks to come out and greet her, defying the orders of the authorities to stay away. In the chapter titled, „Her Father‟s Blood‟, the author narrates one particular campaign trip giving greater significance than other such trips which are mentioned in the book. Suu Kyi and her group was returning back from a nearby village to Danubyu; a town in Ayeyarwardy Division of south-west Burma. On their way, they encountered a group of soldiers headed by an army captain who warned them that he would shoot if people blocked road. So, her group moved to the side of the road and continued to walk. But, the captain said he would still shoot even if they were walking at the sides of the road. At this point, Suu Kyi „walked out into the middle of the road, the boys after her, and by that time she was so close to the soldiers that she brushed past them. They stood petrified, clutching their arms to their chests and looking pale,‟ so the author quoted from Ma Thanegi‟s diary. Here the author didn‟t miss to draw a comparison between Aung San‟s fearless act of standing up and facing the assassin‟s bullets and Suu Kyi‟s daring act of „returning to the middle of the road and keeping on walking.‟ The author thus declares that both acts are acts of heroism and that Suu Kyi was her „father‟s daughter, a true-born child of the man who had defied both the British and the Japanese.‟ As the author said, this particular incident indeed helped create the mystique of Aung San Suu Kyi. Though she refused to accept her status of a „personality cult‟, those deeply superstitious Burmese public began to think of her as a divine being.

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 20 of 57

INDO MYANMAR BORDER TRADE BULLETIN

As has been pointed out, Suu Kyi wanted to finish what she had started – her nonviolent movement against the existing one-party, military controlled government and to establish a multi-party, „genuinely democratic government‟. On the other side is the regime that wanted to stay in power at any cost. It is in the chapter titled, „Defiance,‟ that the author writes about the immediate events that led to the arrest of Suu Kyi and other key members of NLD. Breaking the martial law, Suu continued to hold public meetings attended by thousands. „Wherever they went the masses of supporters and wild acclaim was the same.‟ The author has cited two factors – one, who Aung San Suu Kyi was, and two, her familiarity with outside world - which became important reasons of why the regime could not simply eliminate her. The book also deals with how the army fought back after having gotten squeezed from all sides and how it tried to unhitch itself from Aung San, the independence hero who finally became the problem for the regime. The regime even

attacked Suu Kyi calling her a „vassal of the colonialists and a sexual libertine.‟ Burma became Myanmar, Rangoon became Yangon. According to the author, these changes were meant for international consumption - a way to insist on international respect and recognition. The regime further tried to build a bridge to the line of kings in order to claim their right to rule. The author has also narrated the happenings on 19th July 1989, the Martyrs‟ Day in details giving due importance to the protest march undertaken by the students. It was in the evening of the same day that Suu Kyi was arrested and kept in detention. It was the day that was to change her life again forever. After having covered the most crucial point in Suu Kyi‟s life which also happens to be the most important phase in Burma‟s political history, the author decides to take the readers back to the early phase of Suu Kyi‟s personal life – her early childhood, college years and marriage in the third part of the book, titled „The Wide World.‟ Though the book does not follow the phases in Suu Kyi‟s life chronologically, I think that the author has a sound reason for it. By the time one finishes the second part, readers will have known what role did Aung San Suu Kyi played in the early phase of her political life. Now one probable question in mind would be: who is Aung San Suu Kyi? One logical way to go about it would be to find out about her past. Suu Kyi had lost two most important men in her life - her father and a brother. Even as a child Suu Kyi wanted to follow her father‟s footstep. The author talks about the close relationship that she shared with her mother with whom she arrived in India when her mother was sent to India as an ambassador. According to the author this assignment was just an excuse to send Aung San‟s widowed wife as far away from Burma. The author then shifts his focus from Burma‟s political scene to Suu Kyi‟s life in India. The book not only mentions the „Nehru Connection‟ of her family in Delhi but also hovers around the „Gangs of Five‟ which is what Suu Kyi and her circle of friends called themselves. Here, the author has recreated a picture of Suu Kyi‟s life through the inputs from her close friend Malavika amongst others. The author points out that it was during her stays in Delhi that Suu Kyi discovered the writings of great minds like Gandhi and Tagore. In fact watching her homeland from a neighbouring country where she discovered the cry of freedom through Tagore‟s poem also helped her gain a „perspective on the land of her birth.‟ During the one year

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 21 of 57

INDO MYANMAR BORDER TRADE BULLETIN she had spent studying political science at Lady Sri Ram College, she also wrote plays in which her friends had acted. One thing the author takes note is how Suu, at such a young age, would often plunged with such ease into conversation about politics. The book then looks at Suu Kyi‟s first experience of the western world when she landed in Oxford to attend St. Huges‟ College where her friends found her beautiful and exotic. For most part, she felt that Britain, the homeland of Jane Austen and George Eliot turn out to be disappointing. Most people, according to the author, failed to understand the world she came from. Her early days at Oxford became a moment of self-definition and finding meaning to her life. But Suu Kyi was „determined to master the exotic customs of the new country‟ where later, she was to live for a significant part of her adult life. The author also touches upon subject like Suu Kyi‟s relationship with her friends including one Dora Than E, a Burmese woman from whom she drew some sort of an inspiration and decided to follow her path when she fell in love with Michael Aris. „Her mother was firm in her

view that Suu should marry someone Burmese.‟ But Suu Kyi found that Michael Aris, who was to later become an expert on Tibetan Studies, knew more about Buddhism than any Englishman she had ever met. The author has also included in one of the chapters about Suu Kyi‟s short stint at the UN when U Thant, the most famous Burmese ever, was the Secretary General. At that time, the regime held a „Genteel Court Martial‟ with the issue of Suu Kyi‟s passport. Here, the author takes a note of Suu Kyi‟s courage in her conduct and further assert that „what her father said or done or believe were important and mattered to her.‟ In a sense, she had always carried on her shoulder „the weight of her father‟s legacy.‟ Before she married Michael Aris, the author mentions, she had put forth some terms and condition to which „Michael accepted without demur.‟ „There could be no finer proof of his love‟, claims the author. The chapter titled „Superwoman‟ which is the last one in the third part is about Suu Kyi‟s busy life after marriage. She was always practical in approach. At some point she found her life in Oxford a bit frustrating. But she managed to turn herself into a writer. She also spent a year studying Burmese Literature at School of Oriental Studies (SOAS) and another one year at Kyoto University in Japan to study Burma‟s Independence Movement. According to the author, Suu Kyi‟s short stay in Japan brought a transformation in her and somehow played a role in her entering politics. The author has also written in details the episode of U Thant‟s funeral that happened in Burma around the same time. It is mentioned that the dead body of former UN Secretary General was hijacked twice by the angry students who were not only protesting against the regime‟s treatment given to the dead body of U Thant but also their repression of dissent and their disastrous economic policy. In the fourth part, the book comes back to the point where Suu was arrested and was to remain under house detention. Out of those many NLD members arrested and sent to jail, most important ones were locked up in isolation. This is when Suu Kyi realized that „it is not power that corrupts but fear.‟ During the time of her house detention when she was alone, „she began to learn how to go deeper into what she already knows.‟ The author observes a striking contrast: „the hubbub then and then silence now.‟ She was never really alone with the soldiers watching her compound but „she was more alone than ever before‟. Her family was with her for some time but now

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 22 of 57

INDO MYANMAR BORDER TRADE BULLETIN that she is alone and with the regime‟s crackdown on her party, it is nothing but defeat if we look at her life as a „conventional political narrative‟. But the author stresses that doing so would mean overlooking other aspects like „the way her thinking developed during the years of house arrest, especially during the very harsh period with which her detention began…‟ A large part of Suu Kyi‟s journey during this period is intellectual and spiritual in nature. According to the author Suu Kyi, who still enjoys the allegiance of the great mass of Burmese people, hoped to lead the country out of the „trap, the bunker, the labyrinth‟ into which Ne Win, Burma‟s head of the military regime at the time, had turned into. It is also mentioned that the only outside contact Suu Kyi was allowed was a radio and the letters and some food sent by her family. When she found out that the regime had spoken of it as a favour which Suu Kyi claimed as her right, she decided to accept no such favours from the regime anymore. While most NLD leaders were still in jail and Suu Kyi under house arrest, election was held in 1990. The author has

chosen „Landslide Victory‟ as the title of the chapter that deals with this episode. As a matter of fact, the NLD fared victoriously in this election despite the diametrically opposite allegation from the head of the Military Intelligence (MI) that „Suu Kyi and her party were at the heart of an international rightist conspiracy involving powerful foreign countries‟. The author also raises the question of whether the NLD was aware or not that the election was held not to form a government but to form a constitutional convention which was to be responsible for writing a constitution as was claimed by the junta. But no conclusive answer has been given. The regime‟s choice to stay in power is evident from the many incidents which the author has described. One particular incident was when tired of waiting after its landslide victory; the NLD gave the junta a deadline of 30th September to transfer power, the regime responded by arresting Kyi Maung and his deputy on charges of treason and sentenced them to ten year‟s jail term. Further, as a reply to their enquiry about the situation, the SLORC told the foreign diplomats in Rangoon that Aung San Suu Kyi would be freed only if she agreed to give up politics and leave the country forever. This means the regime has no plan to part any of its power with the NLD. It is when the people saw now hope that the National Coalition Government of the Union of Burma (NCGUB) was formed in Manerplaw with Sein Win as its Prime Minister. Apart from what has been mentioned above, the main thing that the author wants to stress upon in the chapter titled „ Long Live Holiness‟ is Suu Kyi‟s rising popularity as a religious figure, some sort of angel or spirit that has come to help the people rise against the harsh, authoritative military regime. Right from the campaign days, Suu Kyi and her colleagues had established good relation with the Sangha. She also spent much of her time on meditation which she was able to master. Moreover, as has been mentioned earlier, the life she was living was comparable to a monk or a Sannyasin and pondered upon things like „Compassion‟. During this period, another thing which the author finds interesting and new was the peaceful participation of the monks in the struggle. The regime reacted by raiding about a dozen monasteries and dissolution of the three monastic sects. Such a rise will again be seen during the Saffron Revolution later. Another matter which the author has dealt with tactfully in this book is the question of „legitimacy‟. As in ancient times when the King shared a symbiotic

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 23 of 57

INDO MYANMAR BORDER TRADE BULLETIN relationship with the Sangha to derive its legitimacy to rule, the regime also felt the need to establish the same kind of relationship with the Sangha to obtain the legitimacy to rule from the people. Another angle from which the regime approached this matter was by raising the status of the military to more than just an armed organization. They laid high importance to the role played by the „Defence Forces‟ which was there before and after independence and protected the country from any possible foreign invasion.

Suu Kyi received a number of international recognitions, the Nobel Peace Prize being the most important one. Under the chapter titled „The Peace Prize‟, the author talks about the many international supports that Suu Kyi‟s struggle had garnered and its impact on the regime. At the same time the author does not lose track of what was happening in the Burmese political sphere like „the setting up of the USDA which proved to be the most effective tool for combating its postelection unpopularity‟ and the setting up of the National Convention which, according to the

author, was a „device to put a legalistic gloss on the military‟s refusal to acknowledge the election result, and to legitimise their rule‟. The author also touches upon Japan‟s reminder to the generals the „need to overcome the human hurdles‟. It also mentions the regime‟s effort to make Suu Kyi disappear from the Burmese political scene. They first asked her husband to write to persuade her to come back to Britain which he politely refused to do. Then, a monk whom Suu Kyi knew since her days abroad was asked to request her to leave the country. One issue that author has dealt with in this book is that of investment and sanctions which according to him continues to provoke fierce debate in Burma. He writes that Ma Thanegi had claimed it was their conflicting views on sanction that caused the permanent riff that opened up between her and Suu Kyi. „To be Suu‟s friend and supporter in London or Oxford or Washington DC is easy. To be her friend in Rangoon or Mandalay is one of the toughest decisions you can take,‟ says the author. „The question of whether or not tourists should visit Burma‟ was the other issue raised by Suu Kyi during her interview with Harriet O‟Brien. According to the author this issue is just as hotly debated as trade sanction. The book also looks at the NLD‟s change in its policy on tourism, a change which Suu Kyi had endorsed later. The author quoted a member of the Central Executive Committee who said that the NLD „wants the people to come to Burma, not to help the junta but to help the people by understanding the situation...For the outside world to see, to know our situation‟. The book then looks at the relationship between Michael Aris and Suu Kyi during those years when she was under house arrest. „If ever there was a case of true friendship being tried in the fire of adversity it was their marriage‟, claims the author. „Michael Aris played a shadowy but at the same time a central role in Suu‟s story‟. Michael was magnificent when the real test came. „If Suu was born to do what she found herself doing in Burma, Michael was born to be her perfect foil, her perfect other half.‟ Michael understood why it was an unavoidable decision for Suu Kyi to choose the path she had gone down. He realized that the family‟s life had entered a new phase but never showed any sign of resentment. The author writes about how Michael became her other half in the world outside. He was marshalling support, passing on news, giving interviews. When Suu Kyi‟s defiance became a global phenomenon, he began travelling tirelessly as her

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 24 of 57

INDO MYANMAR BORDER TRADE BULLETIN personal envoy to collect awards and pass on messages. The author quotes one friend who said, Michael was „a knight in shining armour the one who was defending and fighting for her and trying to slay the dragon for her‟. After Michael was diagnosed with prostate cancer and with his health condition deteriorating quickly, he applied for a visa hoping to meet his wife for one last time. But with a hidden motive as expected, the regime rejected his application, despite request from influential people like Prince Charles and Countess Mountbatten. The author quotes a foreign diplomat who was close to Suu Kyi who said, „They not only said no to the appeals – in fact they never replied – but they cynically used it in psychological warfare‟. The regime had miscalculated by thinking that they might get Suu Kyi to leave the country. „Their attempt to exploit her love and grief to get her to fly to Michael‟s deathbed was their last throw of the dice‟, writes the author. The last part of the book is titled „The Road Map‟ and comprises of four chapters. In the chapter „Meeting Suu‟, the author talks about his

meeting with Aung San Suu Kyi, and also looks at the changes that was taking place in Burma at that time. For example, the author sees the launch of „Myanmar Times‟, an English language weekly as a component of change. In May 2002, the author met Suu Kyi during which she agreed with the author that Burma and Rangoon were making some changes. At the same time she emphasised that „the more important thing is where we‟re going to, and how quickly‟. The author notes that the concern of Suu Kyi and her party is the „democratic principle and not so much the question of who holds power‟. He also talks of the analysis of Burma by Ingrid Jordt, an American anthropologist according to whom „political legitimacy is not based on regime performance but is based on the idea of whether rulers have accumulated the spiritual potency – hpuon in Burmese - that sustains power, even if rulers are cruel and oppressive‟. According to the author, Suu Kyi‟s claim to significance rested on her party‟s overwhelming victory in 1990 and the continuing popularity which she and the NLD enjoys with the Burmese masses. That‟s why after regaining freedom from her long years of isolation, it became an „urgent priority for her to pick up where she had left off in May 1989 and go back on the road‟. On the other hand, regime was developing a very different strategy for dealing with Aung San Suu Kyi‟s popularity once and for all. This is what the author talks about in the chapter „Nightmare‟, which is indeed a fitting title. The incident of the „Depayin Massacre‟ carried out by the USDA thugs, which happens to be the „worst, bloodiest and most perilous moment in Suu Kyi‟s career and her entire life‟ has been described in minute details. The „Seven-Point Road Map to Democracy‟, is a plan that has dominated political discourse in Burma ever since, but to the author, this plan is just an „attempt to tackle the bogey of legitimacy which had bedevilled the junta ever since the army crackdown of 18 September 1988‟. The fate of the plan and that of the man who had announced has been dealt with elaborately. The author says that the development of democracy or lack of it only partly reflected Suu Kyi‟s impact on Burma. „Her appeal to the people of Burma at the outset was nothing to do with her principles or democracy and everything to do with her name.‟ The book considers her more individual outlooks like her courage to defy Ne Win‟s anger, her commitment to non-violence, her willing to

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 25 of 57

INDO MYANMAR BORDER TRADE BULLETIN undergo bitter personal suffering for her cause and her refusal to give in. The author‟s take on how Aung San Suu Kyi‟s political journey so far has been compared with that of Mahatma Gandhi is interesting. The author also gives two historical narratives – one is the official story and the other is the alternative history - of the period from 2003 to 2010 when Suu Kyi again disappeared from the political scene in Burma. The book also talks in detail about an important incident popularly known in the West as the „Saffron Revolution‟. The Peace Walk by the members of the All Burma Monks‟ Alliance began small but grew day by day. On 24th September about thirty thousand to hundred thousand people had marched in Rangoon making it the „largest show of popular strength since 1988‟. The procession reached its climax when on 24th October the monks reached just outside the home of Suu Kyi who came out of the gate and saluted them with tears in her eyes as the monks continued chanting. As always, the regime „threatened violence if the marches did not cease‟.

Soon the soldiers began „raiding monasteries, beating, arresting, forcibly defrocking and killing monks‟. The author also talks about the impact that Aung San Suu Kyi and her story had on the outside world. The last chapter „The Peacock‟s Effect‟ begins with the story of John William Yettaw, a Vietnam War veteran who made his way twice to Suu Kyi‟s well guarded home to warn her that terrorists planned to assassinate her. The author then talks about how „the whole world wants a part of Suu Kyi, wants to warn her, award her, co-opt her, write about her, possess her, exploits he, empathise with her, love her, beloved by her‟. Here, the author makes a very interesting observation about Suu Kyi‟s celebrity status - „it is her inaccessibility that keeps her celebrity voltage so high‟. It is also true that Suu Kyi‟s fame indeed gives Burma‟s democracy struggle a prominence in newsrooms around the world. She threw open the windows to the outside world. It also talks about former US Army officer Robert Helvey and the American academic Gene Sharp who came to be involved in the Burmese democracy struggle. The two ran introductory courses on „political defiance‟ for everyone in Manerplaw, the jungle camp on the Thailand-Burma border. Here the author has quoted Gene Sharp who said that „for all her wonderful qualities, and her heroism and inspiration for those who believe in democratic rights and the rights of the Burmese people, Aung San Suu Kyi is not a strategist, she is a moral leader‟. But the author claims that Helvey and Sharp would never have made that trek to Manerplaw without Aung San Suu Kyi‟s „heroism and inspiration‟. At the end, the author has included a small section titled „Afterwards‟ that talks about the recent developments and happenings in Burma‟s political scene after the release of Aung San Suu Kyi in November 2010. It takes note of the initiatives taken by the Burmese Government under President Thein Sein. For example, the release of political prisoners and the announcement of its first ever cease fire with the Karen National Union. The author also mentions Hilary Clinton‟s visit to Burma in December 2011. Suu Kyi finally resumed her campaign after her announcement to run as parliamentary candidate. Here the author recalls the 1989 campaign saying that „Everywhere she went her reception was as warm and enormous as in 1989 when Ma Thanegi was at her side to shove and punch away her more ardent admirers‟. After having won 43 of the 45 seats the NLD had contested, on 2 May 2012 Suu Kyi and other MPs-elect for the first time took their seats in Naypyidaw‟s parliament. The author reminds the readers that „Hope of

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 26 of 57

INDO MYANMAR BORDER TRADE BULLETIN change was all the Burmese had to cling to, and Suu, with her calm resolve, was the embodiment of that slim, stubborn hope‟. Now that Aung San Suu Kyi has made the transition from icon to law maker, the book ends by urging the readers not to come to conclusion too soon but to wait and watch how Suu, as the author calls fondly, walk through the challenge that lay ahead of her, one for which she has been working towards for a very long time with „steadfastness‟. The Lady and the Peacock is a compelling, authoritative and highly readable biography which has tried to bring out the more personal aspects of Suu Kyi. The author has stated that it is his intention to show that Suu Kyi‟s life is much more

„complex and interesting‟ than being just „a story of a courageous woman who challenged a military junta and lost‟. In his effort to do justice to this cause, the author has spent a number of pages on historical accounts of people and events relevant to the subject in question which would not have been possible without in-depth research. I personally think the author understands the need to build a historical foundation to be able to appreciate this wonderful piece of work. One thing that I found repetitive was where the author had included information like what dress Suu Kyi wore or what she ate at breakfast or dinner in the portion describing the campaign trips. That apart, the author has done an excellent job. In fact the book has been written in such a manner that even those who are new to the field would be able to appreciate this work and can even act as a catalyst to move deeper into the area the book has so addressed. With discussions and analysis of the complex political issues in the country by scholars that occupy a large part of the book, the experts would surely find the book highly engaging and interesting. The Lady and the Peacock, the biographical work on Aung San Suu Kyi by Peter Popham is a book in which every reader can hope to find something valuable within its pages.

By: Nongmaithem Sulochana Devi

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 27 of 57

INDO MYANMAR BORDER TRADE BULLETIN

BOOK REVIEW GREAT GAME EAST India, China and the struggle for Asia’s most volatile frontier Author: Bertil Lintner Category: Non-fiction/Politics Publisher: HarperCollins Year: 2012 Page: xxxii + 442 Price: 699 INR

Post-industrialization

countries

have

their

world had gone through an

different sets of agenda

incremental phase of turmoil and turbulences with different

and interest in the region,

power centres mainly European colonizers, Japan, US and

economic interest being

Soviet exercising their hegemony and dominancy on the

the frontrunner. India‟s

grounds of ideology, geopolitics, resources etc. Conflict

grand design of SEA the

and rivalry among the nation states have been shaping the

LEP being initiated which

world order and power relations. The world had seen two

is

World wars and followed by a long span of cold war

reaping economic benefits

between two ideologically built blocks – US & Soviet

from SEA and North East

Union. The post-cold war era after the collapse of USSR

India is seen as gateway

has witnessed an emerging new world order with new sets

to SEA.

of players apart from the old war horses of US, Russia and

Bertil Lintner titled Great

Western Europe. The heighten pace of globalization in the

Game East India, China

last two decades has swept the world irrespective of

and the struggle for

political and territorial boundaries making the erstwhile

Asia’s

ideological blocks irrelevant. India and China, two big

frontier come at a time

Asian neighbours with troubled history between them, are

when the North East India

emerging as an important player in the new world order not

is in euphoric mood over

only in Asia but also in the world vying for ambitious

India‟s LEP.

political and economic aspirations in the region and South

book has already attracted

East Asia particularly Burma which shares boundary with

attention and moreover,

these two giants of Asia and also their foremost area of

the book has an additional

interest.

charm

India and China are critically poised in their

aspiration for a larger role in global scenario. Both

primarily focus

on

The book by

most

because

volatile

So, the

of

its

author who has already

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 28 of 57

INDO MYANMAR BORDER TRADE BULLETIN established his niche in the region with his earlier work The

The prelude narrative of

Land of Jade (when he was with Far Eastern Economic

the

Review) which was a masterpiece narrative of insurgency in

implicate the importance

the region and he has also written other books on Burma,

that these events mark the

organised crime in Asia, North Korea and China. The book

beginnings

is a grand and intriguing narrative of rivalry between India

involvement

and China starting from the built up to their war of 1962

rebel

and its aftermath which is in a sense undeclared war or neo-

India‟s

cold war of the region which is being played out in Tibet,

region. After the 1962

Burma, North East India and Indian Ocean with supporting

war, India China relation

but significant roles from Pakistan, Bangladesh and US.

remains soar and Naga‟s

Apart from this, the book deals with the political

connection

development taking place in tri-border and cross border

paved way for other NE

area of China, India and Burma where the border area of

insurgents‟

these three countries is the „contentious‟ and „trouble‟ area

with China. The author

i.e North East for India, Tibet for China and Northern &

also narrate other events

Western Burma for Burma.

taking shape in the region

The book is classified into seven interrelated chapters with an introduction which serves as background of the entire book. Apart from the introduction and seven chapters, there are four appendices which give mouthwatering information about the region ranging from chronology of events, sensational events, brief Prof.ile of non-state actors etc. In the introduction of the book, the author builds up the multiple historical events of the region to support why he has given the title Great Game East. The introduction starts with the story of Thuingaleng Muivah of NSCN (IM) the then general secretary of Naga National Council and Thinoselie Medom Keyho, a high ranking Naga rebel army who had been fighting for independence from India, taking a long journey to Yunnan province of China through the hostile terrain of upper Burma to seek the assistance of China for their movement against India.

author

tries

of

to

China‟s

in

ethnic

involvement

of

volatile

NE

with

China

connection

such as the root cause of Indo-China war of 962, the sprouting insurgency in north east India and northern

Burma

and

influence of China upto 80s, India and China over Dalai

Lama,

political

development in Burma, China‟s policy towards Burma in recent times and followed up strategy of India

towards

Citing

the

Burma. historical

rivalry between Russian Empires and British in 19th century which is

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 29 of 57

INDO MYANMAR BORDER TRADE BULLETIN christened as the Great game, or The new Great Game the

Indian Ocean the main

conflict between the US and other Western Provinces over

conflict of interest will be

central Asia‟s oil and other natural resources, the author

played out not in 1962 of

call Great Game East the rivalry, conflict between India and

Himalayas

China. In the author‟s word:

acknowledging

India‟s

ever

increasing

power

that

have

started

“But there is also another Great Game being played out in Asia: on the eastern fringes of the Indian subcontinent. The rivalry between India and China, and the resistance and uprising in Tibet and North East India, go back to the 1950‟s. Spies and Agents from both sides have been active in each other‟s volatile frontier areas for decades. Spies from various other countries have also wanted to keep an eye on developments inside „the forbidden area‟ in India‟s north-east, long out of bounds for foreigners and strategically located at the crossroads of the Indian subcontinent, China and South-East Asia”. (page xxviii)

challenging China‟s near supremacy in the region. The ending part of the introduction gives a pinch of his association with the region dating back from 1977 to the present time and his epic 1985 visit to north

east

India

north-western Burma for covering

The author also underlines the importance of

insurgency

movement which had not

including - India‟s challenge of tackling NE within the

been

ambit of Indian federal ethos and also China‟s claim over

foreign

Tibet - in his notion of Great Game East. To cite his

previously.

The

articulation again:

established

him,

“And the Great Game East is also about India‟s struggle to keep its ethnically diverse north-eastern states within the Union. Many Nagas, Mizos and Manipuris, and even Assamese, do not consider themselves Indians, and it is necessary to understand why they feel that way. For China, it is a determined effort to maintain its supremacy over Tibet, whose people definitely do not think they are Chinese.” (page xxviii)

and

lighter

visited

by

any

journalist

note,

visit in as

a a

successful parent as his daughter was born in Kohima during this visit and also a fearless and committed journalist as his epic trek led to the publication of his much acclaim book The Land of

The author also maintains that Tibet and NE India

Jade. The author also

will remain important in a strategic sense but it is in the

acknowledges some of

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 30 of 57

INDO MYANMAR BORDER TRADE BULLETIN the selected persons from the region reflecting a long and

tribal

cordial rapport among the prominent figures of the region

converted to Christianity

Chapter 1 titled as War and Spookery in The Himalayas sets the tone of the book as it elaborates the historical events that led to the hostility of India and China

were

never

which is contributing to the

absence

of

tribal

unrest in the state.

dating back British colonialism on the region stretching

The

second

along the Himalayas (Tibet) and to the present time feud

chapter titled The Nagas:

over Arunachal Pradesh where China is not easily letting it

Challenging the idea of

go. This chapter, as it focus on the pre-1962 war and fall

India is about the origins

out on the geopolitics of India and China over the

and anatomy of Naga

Himalayas, is almost entirely a product of author‟s

movement and its larger

extensive research based on the writings of ex-serviceman,

implication in the region

Chinese propagandist, ex-CIA, western Tibet sympathizer

which the author regards

etc. rather than his typical on field investigative journalism.

as the most complicated

The author neatly scripts the accounts, incident and covert

among

operations taking place in the multi starrer theatre on

author‟s word

Himalayas like the Shimla Convention of 1914 involving British India, representative of Tibet and China, China‟s flexing arm over Tibet in post-1949, Dalai Lama visit to India and his meeting with Nehru in 1956, India‟s humiliating defeat of 1962 war and its aftermath anti-China attitude, CIA‟s operative in Tibet, opportunistic role of Nepal and much more. In the ending part of the chapter, the author tries to convey that the boundary questions (a colonial leftover) especially over Arunachal Pradesh (erstwhile North Eastern Frontier Agency) between China

others.

In

“The

the

Naga

struggle has been longer, more complicated – and bloodier – than any of the other rebellions and as such

deserves

special

attention. It is an issue that is not likely go away easily”. (page xxix) This

and India as one of top issue between their rivalry and

chapter

is

tension citing the recent strong comment over Arunachal

heavily drawn from his

Pradesh over India‟s PM visit . The author is of the view

personal

that Arunachal Pradesh is a product of the Great Game and

experience

is a different state from the rest of the NE states because of

rebels

heavy militarisation due to its proximity to China and its

interview and interaction

and

practical

with

Naga

especially

from Naga leader Th.

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 31 of 57

INDO MYANMAR BORDER TRADE BULLETIN Muivah during his stay in 1985. Apart from this, the author,

Overall,

like in the previous chapter, also has done extensive

chapter

research with secondary information on the genesis of Naga

episode of ups and downs

movement dating back to British colonialism. The author

of Naga movement and

leaves no stone unturned about Naga movement, he details

also more of desperate

– British policy towards Naga hills, formation of NNC, role

attempts from both the

of Phizo (his western campaign), internal feud among the

sides – Indian state and

Naga leaders, role of European missionaries in Naga

Naga

movement, China‟s role, Pakistan role, India‟s strategy in

pursuing their agenda.

dealing with Naga movement from the eve of independence to present time, birth of Nagaland state, NNC to NSCN (IM), role of Muivah, role of Burmese Karens, role of church etc. The author also gives critical observation on certain important issues of Naga movement. For instance, his observation to his recent interview with Muivah, which goes like this, “According to a recent interview with Muivah, the

is

a

this

leaders

The Naga

is

Chapter Mizos,

concise



for

chapter

on

followed

by

three titled

on as

the The

Mizos: from Famine to Statehood

where

the

author narrates how the erstwhile

Lushai

hill

Nagas were once a nation that was „first divided by the

during the British period

British, then by India... were the Naga people asked when

evolve to Mizo hills, the

they divided our land between Manipur, Assam and

1958-59

Arunachal Pradesh? Therefore, all those Naga-inhabited

mould

areas have been united with the present state of Nagaland –

consciousness,

and the Naga Hills of Burma – to form a united,

formation of Mizoram,

independent nation called „Nagalim‟.” (page 43)

the modus operandi of

This is followed by the author‟s observation as:

famine

that Mizo the

Indian state in tackling Mizo insurgency, the role

“Historical realities, however, are not that simple.

of church, China and

The people who are collectively known as Nagas speak

Pakistan role in Mizo

numerous mutually unintengible languages, and the origin

movement, the issue of

of the various tribes in as obscure as the name of their

Chin refugees, the signing

nation. There are no written records of the Nagas‟ early

of Mizo accord in 1986.

history, and even their own folklore and oral traditions are

The author particularly

erratic and often contradictory.” (page 43)

focuses the initiative of its

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 32 of 57

INDO MYANMAR BORDER TRADE BULLETIN prominent leader Landenga‟s role in getting help from

also gives a brief history

China and Pakistan. The author also goes into details about

of the state, the evolution

the absorption of most of Mizo leaders in Indian

of insurgency and its

mainstream after the signing of Mizo accord and formation

connection with China,

of Mizoram state. Though the author regards Mizoram as

Kachin

the oasis of peace, the Mizos of India and other Mizo-

Bangladesh. The author

related tribes from Chin Hills of Burma the old dreams of

gives threadbare account

integrating all Mizo-inhabited areas is still alive. As the

on

author cautiously observed with comparision to that of

associated with especially

Naga,

the “But many Nagas have the same dream: to unite

Nagaland with the Naga-inhabited areas of Arunachal Pradesh, Assam, Manipur and Burma. The Naga as well as the Mizo argument is that the British „divided‟ their „homeland‟ by creating „artificial boundaries‟. But the truth, of course, is that there were never any Naga or MizoChin „homelands‟ in the past, just areas where the people were ethnically related but constantly at war with each other, sometimes from village to village. But say that to a Naga or a Mizo, and he or she will be infuriated. These are sensitive issues that have become part and parcel of local politics”. (page 124)

rebels

important

and

incident

two

prominent

insurgent groups UNLF and

PLA

from

its

inception to the present time. The author also highlights rivalry among the ethnic insurgents like KNO and NSCN (IM). The

chapter

details

especially the happenings of

recent

time

which

prompts him to titled this chapter as The Eternal Imbroglio

which

are

One interesting line the author come across from a

ethnic conflicts, the issue

Mizo veteran leader, “What is the key to the success of the

of territorial integrity, Th.

Mizos?”, the answer of the veteran leader Sapzova was, “If

Muivah attempt to visit

you can‟t beat them join them”. The answer speaks all. The

his hometown and its fall

author also talks about the hype and enthusiasm

out,

surrounding Mizo‟s connection with the lost tribe legend of

insurgents,

drug

Israel.

trafficking

involving

The Mizo chapter is followed by the Manipuri account which the author titled Manipur: The Eternal Imbroglio. Like in the previous two chapters, the author

unofficial

tax

of

undergrounds, underground nexus with MLAs, moral policing of Meira Paibis, the Kangla

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 33 of 57

INDO MYANMAR BORDER TRADE BULLETIN incident, and even the growing craziness of youth over

Arunachal – and Burma –

Korean culture etc. The main attraction of the chapter has

to give up large portions

been his recent visit to the state and the author shares his

of their territories. They

experience of meeting with Irom Sharmila, the anti-AFSPA

also did not want to be

crusader, and his Ukhrul visit after the Moa episode. The

reminded of the fact that,

author describes his meeting with Sharmila in JN hospital

in the 1990‟s, bloody turf

in September 2011 as:

wars were fought between

“As I was allowed past the female security guards outside the ward where she is kept I was expecting to meet a highly spiritual, saint-like person, not unlike the Mahatma himself. But I found a very ordinary young woman, likeable and full of human warmth and even humour despite her long, lonely struggle against what she perceives a gross injustice against the people of Manipur.

NSCN (IM) and various rebel

outfits

from

Manipur‟s

Kuki

population resulting hundreds

of

in

mainly

civilian deaths.” (page 175)

She smiled and joked about how the tube in her nose had

The

people

„become part of her body‟, and even talked about her plans

perception on insurgent-

for the future. She also showed me stacks of religious

MLAs nexus is captured

literature, poetry and novels she kept in a cupboard in her

by the author in very

room, and read out loud some of her own poems, which she

crafty manner saying as

had written neatly with a pen in school-type notebooks. And

„Manipuri Sources‟. The

she was duly humble and modest about the awards and

author writes:

recognition she has received from India and abroad. It was impossible not to take a strong liking to Sharmila, a truly courageous woman”. (page 136) Apart from meeting Sharmila, the author gives his

“According Manipuri

sources,

„underground‟ often

to

hide

cadres in

houses

account of his recent visit to Ukhrul about a year earlier in

belonging to members of

May 2010 where he come across strong voices for the

Manipur‟s

creation of Nagalim. But the author seems to be not

Assembly and are driven

impressed, in author‟s word:

around

“I left Ukhrul thoroughly depressed at the lack of realism among the community leaders I met there. It was not only their dream of persuading Manipur, Assam,

in

Legislative

their

cars.

Some are even protected by state ministers. This would hold true for rebels from

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

all

three

major

Page 34 of 57

INDO MYANMAR BORDER TRADE BULLETIN ethnic groups in Manipur: the Meiteis, the Nagas and the

Bangladesh (Dhaka once

Kukis. State politicians depend on critical support from –

a safe haven) whenever

and intimidation by – underground‟ activists during local

Bangladesh

elections, while the latter need the former to move around

Party was in power due to

the state, hide and collect „taxes‟. There is in Manipur a

their anti-Indian stand and

solid, symbiotic relationship between state politicians and

also even security from

authorities on one side, and the state‟s various rebel groups

Directorate

General

on the other. Nothing is clear cut in Manipur, where guns

Forces

Intelligence,

and money rule, and where no one knows whose is on

DGFI. In this regard the

whose side.” (page 177)

author quips, “It

On the contentious issue of insurgent groups

National

is

also

of

an

involved in drug trafficking, the author also capture people

ironic twist of history, to

perception and also citing an incident KCP top commander

say the least, that nearly

apprehended with 200 kg of ephedrine in New Delhi and

all ULFA leaders came to

comments in a cautious manner. The author writes:

use Bangladesh as a base

“While the UNLF as well as the PLA and other rebel groups claim that they are not engaged in the drug trade – they routinely punish drug traffickers, even kill them – not everyone is convinced. Several people I have met during my visits to Imphal (and I am not talking about government officials) asserts that these groups collect money from drug traffickers as well.” (page 171) In a nutshell, the contradictions, confusions and

for their activities. Their movement grew out of vicious

agitation

Assam in the 1970‟s and 1980‟s against the influx of „foreigners‟- mainly Muslim illegal migrants from

Bangladesh.

Bangladesh,

captured in this chapter.

on

Assam and Bangladesh titled Assam and Bangladesh: Foreigners? What Foreigners?. The title itself coveys the irony over ULFA‟s policy - ULFA which has built up on the anti-foreigners movement in 1970s and 80s especially Muslim illegal migrants from Bangladesh and on the other hand ULFA was getting maximum logistic support from

And

then they ended up in

conundrum in the present Manipuri society is minutely

The Manipur story is followed by the chapter on

in

the

protection

dependent DGFI and

for using

Muslim names in their actual identities. I posed that question to ULFA Secretary General Anup Chetia when we discussed his group‟s policies in a

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 35 of 57

INDO MYANMAR BORDER TRADE BULLETIN Dhaka coffee shop in 1996. He just smiled and shrugged his

etc. The main focus of the

shoulders: „That‟s the way it turned out. Nothing we can do

chapter has been on revolt

it‟.” (page 196)

against the military junta

Like in the previous chapters, the author gives a brief history of Assam, rise of insurgency, ULFA and its connection with China and other NE insurgent groups, role of Pak operative ISI, role of Indian intelligence RAW, political turmoil in Bangladesh, rise jihadi movement in Bangladesh and its influence in north east, AASU movement, Bodoland movement and much more. The main focus of the chapter has been on ULFA connection with Bangladesh and its divers activities like arm smuggling especially in Chittagong tract and recent fall out of the arrest of ULFA leaders in Bangladesh. The most sensational has been the open claim of ULFA leaders about Pakistan direct link with ULFA which the author extracts from the commander-in-chief himself and it goes like this, “When I met Barua in a Bangkok coffee shop in

by CPB, Karen, Kachin, Mons, Shans, and other smaller ethnic groups and especially

attention

on

CPB as it was the most strongest. also

The

looks

chapter

into

the

influence of China and India

in

this

biggest

theatre of Great Game East in order to serve their interest. The chapter highlights changing

China‟s interest

in

Burma which is driven by more

of

trade

and

March 1992, he made no secret of the fact that Pakistan

commercial interest rather

supported ULFA and encouraged him and his comrades to

than ideology.

step up their activities in Assam”. (page 191-192)

author remarks,

As the

“China,

This chapter is all about how the marriage of convenience is played out over the ideology, pride, and core

obviously,

issues.

several games in Burma, The next chapter is about Burma, titled as Burma: A

State of Revolt. The chapter deliberates the colonial history of Burma, their independence from British, the military coup, ethnic movement in Burma with particular focus on Communist Party of Burma (CPB), KIA, the penetration of China in Burmese turmoil, the role of India‟s RAW in Burma, the partnership of Muivah and Khaplang for Naga cause, cross border insurgency, history of CPB movement

is

playing

and although it no longer seeks to export communist revolution, it wants to expand

its

economic

influence down the Southeast Asian peninsula. And given the uncertain future of

Burma‟s

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

military

Page 36 of 57

INDO MYANMAR BORDER TRADE BULLETIN regime, relations with a group like UWSA (United Wa State

especially

Army, fighting force of CPB) secure a foothold for China

Pradesh

and

India‟s

inside the country”. (page 225)

ambition

of

utilising

The chapter also give an account of the bonhomie between Muivah and Khaplang and their break up. In the concluding part the author talks about both the parties going for truce with GOI. The last chapter titled The Indian Ocean: A tale of

Arunachal

Burma as a land bridge for her grand design LEP. The author is of the view that India‟s is following Kautliyas

statecraft

successfully. The author

two islands where the author tries to emphasize that the

also

observes

India‟s

goal post for the Great Game is slowly but surely shifting to

ability to crackdown on

the two penal colonies in the Indian Ocean – Andaman and

insurgents and to bring

Burmese Coco Islands. The author gives a track record of

some of them in the

the historical instances of these two islands along with

negotiating table. There is

documenting the emerging strategic importance of both the

some area, in which the

countries in these two islands. The author captures the

author

different strategies and game plans initiated by both the

observation

countries in Indian Ocean for pursuing their diverse interest

ongoing NSCN peace talk

and agenda. The author puts:

with GOI,

has

critical on

the

“At the same time, it is clear that the new focus of

“I did not visit the

attention – the Indian Ocean – is much more than a tale of

NSCN (IM)‟s equivalent

military developments on two former penal colonies: the

at Camp Habron outside

Andamans and the Cocos. It could be argued that a wider

Dimapur.

new cold war is brewing in the Indian Ocean and,

convinced that ten years

indirectly, China‟s links to the sea through Burma. Apart

from now, it will resemble

from India and its new partner in the Indian Ocean, the

the

United States, some other major powers also have

Mission

possessions in that maritime region”. (page 297)

peace talks have been

The author documents India‟s increasing success story in tackling insurgents problem in north east like the arrest Sanayaima of UNLF, Shimray a arm procurer of NSCN (IM) in foreign countries, successful engagement with Burmese government, military build up in NE

But

NNC‟s

held

ceasefire

camp

Hill.

since

I

am

on

Endless

the

1997

with

no

concessions in sight from the government‟s side. In 2012 Muivah will turn

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 37 of 57

INDO MYANMAR BORDER TRADE BULLETIN seventy-six and Isak eighty-three. India is playing a waiting

pleasure to the book. It

game, wearing them down and hoping that there will be no

has full of information on

next generation of insurgent leaders among the Nagas.

– date, persons, and place

And, after more than a decade of ceasefire and fairly

which has been a part of

comfortable camp life at Hebron, the NSCN (IM)‟s younger

the Great Game East.

generation may not be overly eager to take on the Indian Army”. (page 291-291)

This book is an outcome

of

author‟s

On the issue of economic front, the author with his

journalistic bravado and

vast experience in the region is doubtful of the success of

research. In other words,

India‟s aspiration from economic dividend from ASEAN

it‟s an outcome of his

until a lasting solution to the ethnic problems and

keen interest in the region

insurgencies are not found apart from equipping the

which

lacklustre infrastructure on both side of the border. The last

through

chapter shifting of tension zone to the Indian ocean the

threatening journey in the

author does not rule or complete wipe out of tension in the

last 20 years in the hostile

traditional flashpoint in the near future which is all reflected

terrain of the region also

in the concluding remark of the book,

supplemented

“There may be no end to the perennial turmoil in Burma and India and China will continue to compete for influence over that buffer state between Asia‟s two giants. But it is in the seas where the rise of China, and its need to defend its economic interests, will be felt the strongest in South Asia. And India will be faced with a situation where the Indian Ocean may be stormier than the heights of the Himalayas and the turbulent north east”. (page 304) There are additional parts in the form of appendix.

he

carried many

by

out life

his

exhaustive library works. The book is an outsider‟s insider‟s view and the author writes with an authority of the region. He captures the issues of the region in a very balance,

unbiased

and

sincere

manner

and

probably these qualities

There are four appendices: first, chronology of event

help

starting from 1946 to 2012, second appendix is Major

sensitive

armed Non-state actors in North-eastern India, the

from both the state and

Chittagong Hill tracts and Northern Burma and third

non-state actors of the

appendix is Rebel Mission to China and the last appendix is

region. He writes with

Chittagong Arms Haul. These appendices give a spicy

lucidity and also with a

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

him

to

access

information

Page 38 of 57

INDO MYANMAR BORDER TRADE BULLETIN Prof.ound insight. The glaring quality of his book, no doubt

border

trade,

conflict

the book has got all the information of the region, has been

resolution,

drug

his style of writing - the narrative does not unfold in

trafficking,

geopolitics

chronological order but contains numerous flash-forward

etc. The book is highly

and flashback which makes it thrilling and engrossing to

recommendable

read. The book though lacks, intellectual vigour and

research scholar whose

academic depth in certain area which the author admits in

study area is South Asia,

the introduction by saying, “in a journalistic manner

SEA, China, and North

because I am not an academic”, will be useful to the

East India, and the rich

researcher, scholar, activist, and journalist who take keen

bibliography of the book

interest in multifaceted issues of the region – insurgency,

is an add-on for them.

for

Hanjabam Isworchandra Sharma PhD Assistant Professor, Department of Economics, MU

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 39 of 57

INDO MYANMAR BORDER TRADE BULLETIN

My Experience in Multilateral Trade negotiations Prof. Biswajit Dhar Director General, RIS, Delhi

(Text of the speech delivered on 23/3/12 at the national seminar on “Current Status of Border Trading between Manipur and Myanmar: Infrastructure and Border Trade” at Economics department, Manipur University) I have been working on the multilateral trading system under WTO for a long time. In fact, in my earlier capacity I was heading the centre for WTO studies that Department of Commerce, Govt. of India had set up in the Indian Institute of Foreign trade. I have been part of the negotiating team in WTO on various issues in particular; issues in Agriculture and intellectual Property Rights. So, I share some of my views on WTO and what is happening there. Let me give a larger perspective on what the Global Trading System is looking like and also try to contextualise the importance of Regional Trading and what is coming closer to the topic we are discussing today because the WTO Multilateral Trading System is almost in a state of paralysis at this point. What is happening as a result is that, the bi-lateral trading agreements and the regional trading agreements are proliferating and India is one of the most active countries in bi-

lateral and regional trading rules. When we are looking at trade liberalisation, the first case scenario is really available from multilateral process of liberalisation, because then this is not discriminatory, and there is no possibility of preferential trade and tariff arrangement, and in preferential trading there is a lot of discussion on what are the positives and negatives of preferential trading which is happening now in India under regional and bilateral trade agreements. These can often result in two countries, creating artificial barriers for others to enter, When European Union was formed or North America formed NAFTA one was talking about these fortresses that were coming up in these regions that would have common external tariff and customs union but that would severely discriminate against countries outside their territory. Therefore everyone was then voting for multilateral trading liberalisation. This multilateral trade liberalisation was started long time back. The first attempt at forming multilateral trading system came in through General Agreement on tariff and trade, established in 1948, The agreement was signed in 1947 by 23 countries, India was one of the original signatories, we became independent in August and in October the General Agreement was signed. The General Agreement on Tariff and Trade was essentially a part of the Global Economic governance structure that was conceived of in a conference that was organised in 1944 by JMKeynes at Bretton wood. Three institutions were conceived of at that point to really manage and govern the world economy which had just come out

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 40 of 57

INDO MYANMAR BORDER TRADE BULLETIN of the. depression in the 30s. The most prominent problem to remember from that era is that there was trade war between the countries, there was policy of beggar thy neighbour which was being followed by different countries and each country creating tariff walls and the intension of Keynes and his fellow travellers in Bretton woods conference was to get a post war economic governance structure that would in the first instance get rid of all this discriminatory trade policies and also provide a structure for reconstruction of the post war economy. The World Bank and the IMF were part of the trial that were conceived of in the Bretton woods conference. GATT was formed in 1947 and started functioning on 1st January, 1948but it never became an international trade organisation and Keynes would like to call it International Trade organisation -the main problem was that the United States did not want an international body, multilateral body coming into existence which would set rules that the US as the dominant power would have to follow as we all know and we have seen lots of all the debate in our country also when WTO came in. There was lots of criticism about how

much of our own policy space the WTO was serving. We are talking about tariffs coming down in certain sectors. More in agriculture, there were certain issues that WTO has not been able to settle such as intellectual property rights, patents, the huge debate on access to medicine, prices of medicine going up because of particular patent regime. When a country joins an international organisation, there is a certain amount of curbs in the autonomous policy space that the country has. So there is a little bit of loss of freedom but then in the overall context it is found to be beneficial because everyone is giving up some bit of their own policy space. And the best thing about multilateral trading system was that there was an important recognition that developing countries had to be given special dispensation and we call this WTO special and differential treatment for developing countries and this comes in the form of either lesser reduction of tariffs as compared to the developed countries ,if the developed countries are reducing the tariff by 50% then the developing countries would be reducing by less than 50%, could be half of the 50% or so as that is the part of the negotiation. One is the commitments were lower, second is the time periods for fulfilling the commitments are also quite long and in some cases like we had some freedom in the GATT system, if we had the balance of payments problem we could use non tariff barriers. we called it quantitative restriction, import licensing etc. We put restriction on commodities which we think are nonessential for our country, so what did we do at that time ?Those people who were young will remember that, for a long time we did not get legal access to imported products, they were not available off the shelves imports were banned so we could not get imported white goods. So these restrictions were imposed on imports, so the multilateral trading system had these advantages that it allows countries at different stages of development to adjust their opening up of their economies depending on how much capacity they

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 41 of 57

INDO MYANMAR BORDER TRADE BULLETIN have. So today what we are discussing is that the least developed countries, the 48 countries which have been recognised by the United Nations to be least developed, they are not required to take any reductions in their tariff. They don’t have to reduce any amount of subsidies in agriculture and so on. They have enough space to still continue with their own policy making. Fast developing countries like us have some commitments but not the whole lot of commitments but some commitments but where are we today in terms of WTO structure? When the WTO was formed in 1995 prior to that we had negotiation between countries which went on from 1986, seven years long negotiations and what were we discussing is that we are talking about liberalisation right across the board, and when GATT was formed in 1947 the liberalisation that was to be undertaken was only the broom sake because in 1947 services trade was not anything to write home about, even trade in technology which is governed by intellectual property laws and all, they were not important. There was only merchandise trade which was important and that GATT then started putting rules,

certain rules for liberalising trade between lowering of tariffs and other non- tariff barriers .of course non tariff barriers are something that we are not able to understand very well. There is no clear understanding, as to whether or not these safety standard share reallynon tariff barriers as opposed to something that the countries are justified for putting in place. But there are other standards which are becoming quite anaemic because they are really non tariff barriers and let me give some of these examples. One of these is happening in the area of environment and we all know that debate in climate change that countries are expected to reduce the emissions of green house gases, today we are talking about carbon dioxide not the other green house gases, and now if you look at the total amount of green house gases which are locked up in the atmosphere, most of you would like to know that all the green house gases stay there in the atmosphere for hundreds of years and the scientists have told us that almost the 80% of the available carbon space which is there at the atmosphere has already been captured by the developed countries because they were early industrialises, they emitted the green house gases and these green house gases have remained in the atmosphere so now the developing countries are saying that developed countries must reduce the emissions of green house gases so that when we develop further ,we will also start emitting more of carbon dioxide which India is doing and our emission of carbon dioxide is going up. So there has to be equity, because we cannot give up development in the name of climate change. So, in the name of equity, developed country should reduce their unsustainable lifestyles, they should reduce the green house gases and provide some space for developing countries to grow. But of course there comes politics, the developed countries refuse to comply and now what they are doing is that they have European Union, most of the countries have done this, they are imposing certain emission norms

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 42 of 57

INDO MYANMAR BORDER TRADE BULLETIN for their industries which are very high and very difficult for us to manage that in a very short period of time, and they are now saying that if our industries do not conform to their emission levels that they have set there will be a carbon tax. Our products will be taxed at the border. European Union now requires all the airlines flying into any of the European cities to pay a certain amount of carbon tax for the emission of carbon dioxide above the ceiling fixed by the European Commission. So, this is something that is non tariff barrier. These are actually market access values which are very clear. But other forms of non tariff barriers are really not clear. Now, apart from these trade market access issues (state market access issues) the number of areas in which WTO has laws There are laws relating to subsidies, you can’t give subsidies of industrial products and if all the subsidies in industrial products are totally banned, so we have to adjust our policy regime to ensure that you won’t give this kind of subsidies of course all indirect subsidies are still be given, but direct subsidies cannot be given, then there are rules relating to anti dumping because when the market open up there are

tendencies on the part of exporters and traders to dump products in some countries. So there are antidumping laws which says you cannot export products at prices which are lower than the cost of production or the price at which you are selling the products in your own country. One of the countries which is being accused in dumping is China. China still doesn’t have the market economy status, their own prices are not really market determined, and therefore there is a lot of suspicion that they actually are dumping their products in our country. So India has a lot of anti-dumping actions initiated against China. So this is the rule for industry. In agriculture, there are again very comprehensive set of rules on subsidies. And on agricultural subsidies the fight is really between the two developed entities, the European Union (the 27 members of the European Union) and the United States, both of these countries have very inefficient agriculture, highly resource intensive system and extremely expensive agriculture to maintain but then these countries have decided that they are going to maintain their food security and maintain a certain level of agricultural production at any cost. So they don’t want to open up their agricultural sector and how do they prevent competition from entering into their domain : by using subsidies. So what do they do, they use their subsidies to depress their domestic prices to such an extent that these domestic prices are even lower than the international prices. Some of you must have gone abroad and bought some cereal from the supermarkets and if it converted in Indian rupee it is cheaper there in United States than when we buy here and that is because these are heavily subsidised. Now how do these countries manage this kind of subsidies? I just said, in WTO industrial product subsidies have been banned. But since these countries want to retain their agricultural sector and these are all corporate giants who operating in agriculture because the share of work force in agricultural sector in US for instance is just about 2%.

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 43 of 57

INDO MYANMAR BORDER TRADE BULLETIN In Europe, it’s slightly more and agriculture contributes about 2 or 3%of the GDP. But yet, these countries give these kinds of subsidies. Now, how do they give these subsidies? what they did was that they made a distinction between industry and agriculture and then said that agricultural subsidies can be given as long as these subsidies do not distort markets, so it’s very interesting for some of you in economics, if you go through the discipline that arbiters have brought in, you can do a lot of exercises to find out some of the basic theories , our teachers have taught us on market distortions and how prices are determined through the kind of structure that WTO has put in place so, subsidies are of various kinds. There are subsidies which affect market prices, they create incentives, and there are others which do not create incentives. We also agree with that. There are subsidies which give incentives like minimum prices support which we give in our agriculture, then we have input subsidies which also distort market prices. But what the USA and EU have started doing is - they have started giving direct income support to farmers. Like a kind of dole to the farmers. The interesting part of the subsidies

programme is that the farmers are assured of certain amount of transfers from the government year after year as a part of the agriculture policies that Europe and US have in place. And these are policies which run for 4-5 years so there is a certain amount of predictability as to what kind of fund flow is going to take place, what kind of transfers are going to take place from the government. So in the farmer/producer’s decision making horizon, he or she can easily factor in what I am going to get this much of transfers for the government, so what happens is that these transfers take care of the fixed cost and therefore, the producers only operate on their working capital and therefore they can bring down the prices at which they are selling their products. Now, strangely enough even US have been able to convince everyone and push us into that situation to agree to these subsidies being non market distorting. And of course when the agreement was signed in 1994, when WTO came out in 1995,we had very little understanding-even today we are still understanding bit by bit as to what it means. In 1995 we hardly understood what was happening. So, we went and signed on the dotted line And now when things are appearing before us, we .realise that we had been short changed. Both US and EU both do not maintain high tariffs, US tariffs on most agricultural products is down to zero, so when they sit with us it started negotiating on tariff liberalisation-it is the main job of the WTO they would say that “look our tariff is zero, and you maintain high tariffs on your cereals”- for instance in India our duties on wheat and rice are 80%. So, they say our tariffs are zero and you should come down, why are you keeping your tariff at 80%? So now since we have understood what is the game they are playing and they are offsetting their zero tariffs with the subsidies, so now we are saying that unless you bring down your subsidies we are not going to touch our tariffs. So the negotiations can only move if you reach your subsidies and we will reach our tariffs. But

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 44 of 57

INDO MYANMAR BORDER TRADE BULLETIN that cannot happen, because agriculture is politically sensitive sector. US doesn’t want to import agricultural products from anywhere in the world. They want to be self sufficient. Interesting part of the story is that while they would actually Prof.ess liberalisation in every other sector, even telling us that we should also be liberalising our agriculture when it comes to their agriculture they will try to maintain this inefficient agricultural sector by hook or by crook. So in the current negotiations, we started negotiations about ten years back and the negotiating mandate was given to us in a Ministerial conference that was held in Doha so we called it Doha round, all of you would have heard that term. So the Doha round negotiations got stuck essentially because of agriculture, we just can’t get US to agree to any kind of change. And now things are becoming more problematic because one sector we were thinking of getting some market access in the developed countries was services, now in several service sector we have comparative advantage and we are the first movers from the developing world and since we have our cheap labour which can actually find better job or

at least jobs can be outsourced to us. So we have our opportunity in the service sector. So we are expecting that services sectors would be opened up in lieu of the liberalisation we have undertaken in the goods sector. our industrial product tariffs have really come down, there was a time when tariffs on industrial products used to be hundreds of percentage, today the average industrial tariffis down to 10%or so, we have amply liberalised, so we thought that we will get trade off between our industrial products and services, of course no one wants to home on agriculture. But the problem now is that after this economic down turn the unemployment situation worsening in United States, their labour Unions will not move on any suggestion that the government can put even remotely on services. Of course, another big problem in US as far as straight policy making is concerned is that the democrats have traditionally been somewhat more protectionist thanthe republicans and sincein2008 democrats had lots of backing from labour unions again it was stuck. It was a lame duck governmentthat’s been a problem because democrats had a lot of backing from the Unions and again it got stuck. So, now our problem is .a country like India we have nothing to show in terms of gains, so if the governments will come back and show that we have some gains in several sectors you can’t show any gains in any sector because markets are not really opening up and many of you would know that the aftermath of the downturn that we hiring since it was the name. The big concern the world over whether or not we are going back to the 30’s whether countries are adopt such protectionist measures which is going to bring back the problems of the 30’s. And in services of course some amount of market became less open many of you know that US imports /services. We almost went and opened, became fully converted, but then came the economic downturn and everyone became very cautious and all these plans of capital account convertibility have

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 45 of 57

INDO MYANMAR BORDER TRADE BULLETIN been shelved for the moment. So, all in all it becomes a situation where multilateral trade liberalisation process under the WTO, is just out of the woods. And many, there was an expectation last year that there would be some member didn’t turn out, this year of course there can’t be any movement because the US government doesn’t have the authority to take decisions on such important issues. In China, there is going to be a change in leadership down the year. As these two major powers are facing kind of changes in leadership or potential change in leadership, has most of these decision-making around key issues at the multilateral level have been on the hold, this is not going too far the WTO process and as a result what is happening is the regional trade agreements. India now has a number of trade agreements which has already been signed with a large number of countries. More recent ones have been with the ASEAN it came into effect in 2010, then we signed agreements with Japan, South Korea which are already being implemented, we have an agreement with Malaysia, we have negotiation with Indonesia, Australia, New Zealand and a very important

negotiation is now taking place with the European Union. Of course European Union brings a lot of problems that I mentioned to you on environment and other issues in agriculture but yet we are trying to negotiate with European Union to see how the process of liberalisation can be taken forward and that the process doesn’t get stuck up because there is no movement in multilateral process. So in that context it is important to look at some of the regional trade agreements which have already been signed and what steps can be taken further to deepen these trading groups. The ASEAN is extremely important and we have to see how best we can move on to make some of the decisions that we have taken as a part of these agreements a reality. There are certain timelines for removing/reducing tariffs; if possible I would say that we should bring those timelines forward because it is only in our interest. Also we need to see what we are actually doing to implement these agreements. We also must to get answers -where all we can actually take advantage of market opening that is taking place in our partners to see how best we can utilise the lowering of tariffs and other barriers and use our comparative advantage or the certain strength that we once had but we have actually lost out for various reasons and to bring that back and North East is really the region we should be looking at these issues. The other important agreement which has not gone very far is South Asian Free Trade Agreement, (SAFTA), of course we all know the major problem of SAFTA is that India and Pakistan are not talking to each other. Because Pakistan does not give most favoured nation treatment to India, and as a result trade between India and Pakistan is severely restriction. Pakistan imports only certain products from India which it chooses but things are changing now.We have seen some of the development that the political parties are in agreement there in Pakistanbut military doesn’t agree that India should be given MFN treatment and we should be moving

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 46 of 57

INDO MYANMAR BORDER TRADE BULLETIN on. My own assessment based on what we have been doing is that both countries are losing because India and Pakistan are trading through third countries and we are using Dubai and Singapore as third country through which we are trading, Those of you who were looking at trade statistics would know that during the last few years UAE has become our largest export destination now how did it become the largest export destination when it doesn’t have that kind of market, there is trade deflection taking place ,products are coming in to Pakistan through Dubai and that is inflating the numbers that Dubai is showing today. Now everyone realises today that both business and consumers are losing as a result. So, my expectation is if these positive developments go to their logical conclusions, then SAFTA is going to be moving very fast. And of course in our next tour with Bangladesh, we have taken a number of initiatives to improve our trade relations and here comes the issue of strengthening of these land customs stations and making the check points as mentioned by Bijoy. We want to work further in partnership with this programme to look at what

work can be done in terms of improving India Bangladesh trade and improving the infrastructure and other supply side bottlenecks that we faced in moving the trade forward. One major issue that I can share with you is that in the SAFTA process, all the countries have negative list where they have put certain commodities in the list of commodities they did not want to offer preferential tariffs, they don’t want to encourage imports. In India’s list of preferential negative list, large number of commodities or products is in the apparel sector which was against the interest of Bangladesh. More than 80% of Bangladeshi exports is apparel and if these products have been included in negative list then of course no trading will take place. So we did some work and provided some inputs to the government and before Prime Minister visited Bangladesh last year for whatever reason, we have made some movements- some of these products have been taken out of the negative list and things would be moving, now the point is Bangladesh will be able to export to us more, it need not seek markets in, maybe in the west or wherever, but they have a next door neighbour which is a huge market which is going to be useful for them. What do we export to them from here and this is something that we need to look at. The trade then should be used as an engine of development. We should look at the inherent strengths of this region and to see how this strength can be harnessed through these trade channels and you get the incentives that you need in order to move forward. So, I think that the way the global trading system is working out, it may have big push of liberalisation, WTO few years from now but by then we need to be fully prepared to take advantage of the market opening that are open to us because from whatever analysis we have and some others have also done. India has not been able to take advantage of market opening when WTO came in to the same extent that China is doing. Just to give you some numbers, when the WTO came into

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 47 of 57

INDO MYANMAR BORDER TRADE BULLETIN existence India’s share in World Trade was 0.5%, and China’s share in World Trade was about 2%, today China’s share in exports is almost 11% and India’s share is 1.5%, so we have come from 0.5 to 1.5 and China has gone from 2 to 11 .This comparison has become relevant for us to think about what we can do and how we can take advantage of conditions better may be not as much as China has organised. But surely we can do much better than 1.5% share that we have at the point by this time. So, these are

some of the thoughts that I wanted to share with you, how the trading system works out, what is there for us in particular in our context of bilateral regional trade. So, as I think about all these issues, I think there is plenty for us as researchers for our better understanding of our India’s engagement and how India can really be an economic power house in the real sense, can really show that it means serious business. So, these was some of the scattered thoughts that I really had, didn’t want any to be very structured, my presentation, but I thought in a manner of conversation, I would share some of my thoughts. I am really looking forward to a greater collaboration with you and take this opportunity of having met you today in the near term for a more fruitful interaction and collaborate with you.

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 48 of 57

INDO MYANMAR BORDER TRADE BULLETIN Tales from Myanmar 2

MOREH BUSINESS By Moreh business we mean business in goods brought from Myanmar. It is not an old practice, at the most thirty years. Myanmar: Burma became known as Myanmar in 1989. Its capital Rangoon became Yangon. It was once one of the richest countries in the world, but since 1987 UN has been describing it as one of the most backward countries. Manipur has a 352km long border with Myanmar. Beginning with its contact with Britain circa 1647 it became a part of British India. After its separation from British India in 1937 it was ruled by the Queen of Britain. After the Japanese occupation in 1942 it declared independence on August 1, 1943. The British retook it in 1945. On Jan. 4, 1948 it became independent. However due to unruly events it has been under the military since 28 October, 1958. Myanmar and Manipur : The Burmese are known as Awas by the Meiteis. According to history, wars and clashes dominated the relationship between these countries upto the expulsion of the Burmese from Manipur in 1825 by King Gambhirsingh. There was a country called Pong across the Chindween river (Ningthiturel) on

the eastern side of Kabaw valley. The country beyond was Khumbat in Myanmar. In 1478 the king of Pong exchanged court ambassadors with King Kyamba (1467 - 1508) and asked for the hand of the princess. One princess with a retinue of servants was sent to Pong. However she was captured by the king of Khumbat. In retaliation the Meitei and Pong army destroyed Khumbat. They distributed Khumbat 50-50. The Meiteis got Kabaw valley. Since the reign of king GaribNawaj upto the reign of king Gambhirsingh the Awas fought the Meiteis several times. After the period 1819-1825 known as seven year devastation in Manipur ,when Gambhirsingh with the help of the British drove the Awas across the Ningthiriver, the Meiteis and the Awas stopped fighting. The treaty of Yandaboo signed on 24 Feb, 1826 handed over Kabaw valley to Burma in 1834. The British political agency was set up in Imphal in 1835. Since then the relation between Manipur and Burma became a purely British affair. After the British took over Manipur in 1891 till it joined India in 1949 these two countries used to trade without restriction. Many restrictions came after Manipur’s merger into India. Meiteis from Burma were allowed to enter Manipur without any goods. The trade contact almost disappeared other than secretive barter trade after the military came to power. Meiteis in Myanmar: The Meitei settlers in Myanmar were mainly the prisoners of the several wars the Meiteis fought with the Burmese. The others were servants of Meitei princesses marrying into Myanmar, people in search of better alternatives and in the later stage some followers of Janneta Irawat. They settled down in the Kabaw valley and the land across the Ningthi river in small groups. Most of the settlers in Kabaw valley returned to Manipur after it was given to Burma. The remaining also returned due to border disputes and political pressures. Some of them

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 49 of 57

INDO MYANMAR BORDER TRADE BULLETIN settled down in Moreh in Manipur adjacent to Kabaw valley to carry on trade and commerce. There were Tamil, Marwari, Sikh and Nepali refugees also. Trade with Manipur : Trade between Burma and Manipur developed after the establishment of Manipur state Durbar (1907-47).Manipur exported silk to Burma and imported tea seeds from Burma to be sent to Assam. Other than this there was no open trade . Beginning route:

of Imphal Moreh

The forests in Kabaw valley and adjoining hills of Manipur were rich in natural resources. After the world war II Manipur valley had two approach roads to Burma- one is the Moreh route and the other is the Tiddim route which was developed during the war. Motor vehicles also appeared in Manipur , an important theatre of the war. A few Meitei and outsiders engaged in export of the valuable timber from the forests in Burma using these vehicles appeared. During 1950-60 secretive trade in agar and sandalwood also appeared. It used to be an important source of income for the government. Now this revenue no longer accrues to the government due to the multiplicity of channels. There are many people who have made their fortune in this type of trade. The trade in forest produces used to be the along the routes

connecting Imphal to Moreh, Ukhrul and Tiddim. Now only Imphal-Moreh route is left. Moreh Business: Administration in Burma changed after the military took over the administration .it became increasingly dependent on others for agricultural and manufactured produces. On the one hand following the lead of China and Japan Thailand, Taiwan, Hongkong etc began to sell manufactured products in the markets of Burma. A large amount of used garments reached Burma as aid from for the poor people from western countries. These new and used clothes did not appeal to the Burmese males used to a lungi and banyan and Burmese women used to intricate local designs. They found their way into neighbouring Manipur, Mizoram, Nagaland, Arunachal Pradesh and Bangladesh through clandestine routes. The most convenient markets were Moreh in Manipur and Champhai in Mizoram. These centres grew into important yet clandestine trade centres . By the end of 1960-70 Imphal market began to be flooded with goods smuggled through the Moreh route. The poor people of Manipur liked these goods as these were substantially cheaper than Indian products. Many Moreh traders appeared. Now there are at least 20,000 people earning their livelihood from Moreh trade. Another 1lakh source their goods from them. In short there are at least 5 lakhs people dependent on Moreh trade comprising of 1.2 lakhs who are actively involved in trade and their dependents. It means about ¼ of Manipur’s population are dependent on Moreh trade. It should not be taken lightly both by the government and the public. The changing Moreh trade: Upto 1995 Moreh trade used to be illegal and a clandestine market. Yet common people of Manipur used to go upto Tamu market of Burma and Burmese people upto Moreh in the daytime and conduct their business. Except for serious law and order problem there was no restriction. The Burmese government apparently chose not to stop this as it was of immense help to the poor people in Burma. Traders on both sides had their network to deliver any good irrespective of volume and cost. It also

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 50 of 57

INDO MYANMAR BORDER TRADE BULLETIN included drugs, valuable gold and gem stones. We are going to discuss the illegal yet open trade in buses etc. The Moreh market attracted people. It grew by leaps and bounds. We also developed the habit of going to Moreh at least once to buy some foreign goods. That led to the emergence of morning market at Premnagar controlled by Tamils, Marwaris and Sikhs. Many foreign goods were available in this market. The cheap products of Asian countries produced following the Japanese philosophy of “ use and throw” became readily available. By 198090 there was hardly any family in Manipur not using anything from Moreh. As it was illegal ,several government check posts starting from Pallel began to flourish. As it was very lucrative, there was a rush for postings at Moreh. Now a posting on any gate between Pallel and Moreh even for 5/6 months has become a highly coveted posting. After the initiation of free border trade between India and Myanmar on 12 April 1995 there was some change in this process. The change encouraged bribery in some government offices and inconvenienced the private traders. This became a sore in the psyche of traders dependent on Moreh. Opening of free border trade :

trade

On 12 Aug.1995 border between India and

Myanmar became legal. The function at 2pm was attended by P. Chidambaram, Union minister of commerce, India and His Excellency Lt. Gen. Tunkai , minister of trade ,Myanmar. The ground work was prepared through a series of talks culminating into signing of an agreement at Imphal in January 1995 by Shri Ashok Jha, Ministry of Commerce, India and Mr U Kin Mausu , Managing director, Ministry of trade, inspection and agency services, Myanmar. According to the agreement Myanmares traders should register themselves in the eport import offices under Ministry of trade. To get the permission for export and import they have to be members of Border Trade Association. Indian traders need to get an identification number from Director general of Foreign Trade. License is needed for trade in restricted items, it was free for others. It was even assured that to facilitate transaction , Indian traders would be given simple travel pass for 7 days . The opening of border trade cannot be attributed to agreement between the two countries. India was a party to the ratification of GATT at Marakesh on 25 April 1994 which sought to bring changes in international trade and commerce. The importance of Moreh market grew several fold. Whether people benefit from free border trade will remain a big question. What we have to see is whether traders and concerned government offices are following the clauses in the agreement. Entry into Myanmar from Moreh There are two gates. Gate no 1 is at the end of NH 39 and gate no 2 is about 600 metres on the eastern side. According to international rules one has to enter through gate no 1 if one wants to take a personal vehicle. Gate no 2 is used for crossing on foot. Before the initiation of free border trade in peaceful times one could enter Myanmar through gate no 2 by paying an entry fee of Rs 5 at the Myanmarese checkpost and go upto Tamu. An official receipt was issued as a pass.( now Manipur police is also charging a fee of Rs 5 per person without any receipt for going to Tamu). Now as Namphalong is just across the border, one does not need any pass for buying goods from Myanmar. One still has to get a pass for reaching Tamu. Namphalong is just across the border at gate no 2. Tamu market is 4 km from here. One can go either by horse

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 51 of 57

INDO MYANMAR BORDER TRADE BULLETIN carriage or taxi. One can stay at Tamu upto 5pm with the entry pass. But one should be back in India before 5 pm. Otherwise there are dangers of being arrested. These have not changed much over time. The change is that no longer people are shopping at Tamu or Premnagar morning market. Everyone is buying at Namphalong across gate no 2. There seems to be no restriction at all. This had led to the death of the once flourishing Premnagar morning market. Tamu market in Myanmar has been reduced to a local market .No one goes to Tamu for shopping. The birth of Namphalong market: Premnagar morning market was quite active even after the initiation of free border trade in 1995. Tamil, Marwari, Sikh and Gurkha refugees from Myanmar had established this. They formed one committee for the market. Small shops ( 30 to 40 sqft) were leased out with the consent of this committee. Traders from Myanmar would take these shops on lease and sell their merchandise. The market committee would charge around Rs 380 per month. But Myanmarese traders were not allowed to sell after 11am. This was very advantageous to Indian traders who would have the opportunity of doing business throughout the day with merchandise brought by Myanmarese traders at their own risk ( this was post free border trade ).

Myanmares traders were not satisfied with this arrangement. They realised that Namphalong market would be more advantageous to them as people would freely enter Myanmar to buy goods after the opening of border trade. Namphalong market emerged within a few days during June/July, 1997. Every visitor to Moreh started going to Namphalong by passing Premnagar morning market. Without realising Premnagar morning market died. Politics of Moreh market: Namphalong market flourished, Premnagar died. Businessmen at Moreh had a tough time. George Fernandez, defence minister of India, arrived at Moreh on 2 October, 1997. He talked about a human wall to close the border. The argument ran like this- with the initiation of free border trade dangerous drugs like no.4 would easily enter India and destroy our youth. It was a funny behaviour of a leader. People even thought he might have been brought to Moreh by the businessmen at Moreh. The end of free trade would be beneficial to the big businessmen who had started as smugglers. However they could not succeed. The mission of Fernandez failed, he was not welcome at Moreh by the common men. The businessmen did not succeed. Yet they tried to regain their importance. In the night of November 11,1997 the Namphalong market was completely gutted by fire. Sabotage was not ruled out. But even the fire could not destroy Namphalong. Though the border was sealed for some time, it was reopened after talks at government level. Namphalong market was rebuilt in the same area. No one can suppress it, it would only grow. Moreh Gate No. 2 It is a wooden structure with a tin roof. There is a place for entry at the middle with seating space for 4/5 persons on both sides. Manipur police would sit on one side and customs would sit on the other. Both sides have women personnels. They are posted there from dawn to dusk ( the opening and closing of Myanmar). The tricoloured flag shows that it belongs to India. After the closing of adjacent Namphalong market and close of the Myanmarese gate their duty is over. In other times it is watched 24 hours by BSF.

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 52 of 57

INDO MYANMAR BORDER TRADE BULLETIN After crossing gate no 2 after crossing an unoccupied land of width 10 ft there is a gate manned by Myanmares officials. This strip of ten feet is no man’s land. In the middle of no man’s land there is a very dangerous looking person. His job is to extort money from Indian traders coming back from Namphalong. The rate depends on the merchandise brought and can be anything –Rs 10-20-30-50-100. Everyone has to pay. Otherwise there will be physical assault. Police personnels on our side would turn a blind eye to this. Who is he? Though people suspect that he is engaged by our customs, police and BSF I cannot verify it. People who visit Moreh once or twice are not subjected to this treatment, this treatment is for regular traders, each of whom this rowdy seems to know. Following his example another extortionist also has appeared on the Myanmarese side. They are targeting our traders .this is the story of shopping in Namphalong. There is no report of any arrest of carrying illegal items like number 4 at this gate. Neither have the customs arrested any such person. Check gates at Moreh The story of Moreh business does not end after crossing gate no 2. As soon as the goods from Namphalong are loaded in valley bound vehicles customs people would appear and check the illegal items. A list of illegal items and corresponding

fines would be calculated on the spot. Rs 50 per blanket, Rs 2 per carton of cigarettes, Rs 10 per box containing 60 packet of Oso washing powder Rs 20 per dozen of large sized chappals, Rs 10 per dozen of small sized chappals, there is no proper receipt. If you don’t pay, you cannot take your merchandise it will be seized. Once seized you cannot get them despite paying any amount. The experience at the customs gate will be repeated at the police check post 600 metres towards Imphal. As soon as stop the vehicle, ¾ police personnel jump on the body of the vehicle. They will make a list of the items and ask for the owners. After calculating the amount to be paid the slip would be given to the driver. It is the responsibility of the driver to collect the amount from the passengers and deposit it at the entry post. If he does not pay the vehicle will not be allowed to leave. The amount can be negotiated and it is upto the person who calculates it. Acquaintences can be released without paying anything. The same thing will happen at Tengnoupal and Pallel gate. There is no receipt. This is for manufactured products. If you are bringing forest produces you have to pay at more than twenty gates between Moreh and Pallel. Otherwise you cannot go. Here also there is no receipt. To show such activities a special team of Sanathong journal followed 150 cft of timber from Moreh to Imphal on November 20 . The list of gates where money had to be paid is Moreh 1.Forest gate, 2.Meitei council Moreh gate 3. Kuki gate 4. Moreh town committee gate 5. Wild life reserve forest gate 6.Moreh police gate 7.excise gate 8.Hill tribal council gate Tengnoupal 9.police gate10. Forest gate 11.one gate about 2.5 km before Pallel 12 police gate 13.first forest gate 14.second forest gate 15. Kakchinglamkhai forest gate 16.Thoubal Haokha gate ( on some unlucky days there are as many as 23 gates where one has to buy one’s way.) At the above mentioned gates paying Rs 500 for a demand of Rs 800, Rs 200 for Rs 500 and Rs 50 to 100 for a demand of Rs 300 the total added to Rs 3250. Most of them issued no receipt. Only the gate at Moreh manned by Kukis issued a receipt. This type of nuisance has driven away genuine traders conducting timber trade at Moreh. Those who remain are

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 53 of 57

INDO MYANMAR BORDER TRADE BULLETIN either moneyed powerful groups or groups patronised by them. Revenue to the exchequer turned into a trickle.

prevailing circumstances at least goods worth Rs 2 crores are purchased by these traders from the Namphalong market. It is not a simple matter. But what is happening in such an important market Moreh?

Why such malpractice ?

Politics of Moreh:

According to the free border trade agreement the traded goods should be produced either in India or Myanmar. But the goods coming from Myanmar are all third country products. There are restrictions on such trade. Why not make the traders pay the appropriate duties ?What is the rationale for extorting money from traders in forest products ? Why don’t we make them pay duties which will go to our exchequer? Is not it a big mistake to maintain MorehTengnoupal and Pallel as fiefs of government officials? The government could have earned crores of Rupees every year from Moreh which would have been of immense help to a state as poor as Manipur.

Though Moreh is small, it is inhabited by various communities from India and Myanmar (most of them are refugees from Moreh.) it is a strategic border market. Yet despite being classified as small town its infrastructure is very inadequate. There is no public toilet. Drinking water is as good as non available. It is dirty. There are no well furnished hotels. Most of the existing hotels are bars. Even if government officials visit Moreh on official duty, they seem to be happier going for shopping in Myanmar rather than attending their official duties. It is obvious from the vehicles bearing government number plates parking daily near gate no.2. Among them there are private vehicles coming for different projects.

Transactions in Moreh market: Everyday about 2000 visitors come to and leave Moreh. Out of them about 1500 men and women have Rs 5000 to 30,000 for Moreh business. (those engaged in multi crore business have not been dealt with. What is being discussed is the case of those whose livelihood depends on Moreh business.) some come just for a visit. Yet no one returns without buying at least Rs 1000/2000 worth of goods from Moreh. In short under the

Among them there is a shameful part. In some houses situated on the southern side of Namphalong some unkempt tribal girls indulge in flesh trade. They are patronised by government officials, as is obvious from their dress and Meitei youth. In this connection the Gurkha owner of a hotel on this street told the author “ my son, forget about Aids , let them die , it is alright as long as we are not in it, what hurts me is how the Burmese soldiers look down on us after seeing our officials patronising these numerous joints upto Tamu” . This used to be in Moreh also. But at present after the establishment of Meitei council, a branch of All Manipur Students Union and other civil society organisations (including women’s) and due to their sincere efforts such activities have disappeared from Moreh. What can we do for the Myanmarese side?

Conclusion: There are certain issues about Moreh which the public should know. Every issue carries big questions. May it be taken up by writers in the future. As the importance of Moreh market grows, the government has set up check

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 54 of 57

INDO MYANMAR BORDER TRADE BULLETIN gates between Pallel and Moreh with specific responsibilities. Among them the important ones are police station at Moreh (with more than 70 personnels), police station at Tengnoupal( above 50 personnels) and the police outpost at Pallel ( above 45 personnels). They are a force which can play a significant role in maintaining law and order along Imphal Moreh road and at Moreh. It is very sad to see them extorting money from vehicles engaged in Moreh trade for private purpose. A big blot on the credibility of Manipur police is their habit of checking bags of passers by – a habit developed while in posting at Moreh or a habit in preparation of a Moreh posting. This applies equally to personnels of forest, customs,

excise departments etc. they are no longer respected by Moreh businessmen. That such offices exist only for money and no one bothers about human existence is evident from the fact that there is no proper toilet in Pallel police outpost where there are more than 40 personnels. It is very shameful. Why don’t the government construct any public toilet in Moreh and Pallel market considered to be so important as is evident from the presence of so many offices of police and other departments? It seems to be deliberate. Even if not much benefits to the ordinary people are guaranteed in the bye laws of free border trade, our government should think about the welfare of the people. The government should realise the benefits of cheaper goods from abroad compared to those from India. The government should introduce rules to ensure unrestricted flow of such benefits to the people. It would be wrong to misinterpret free border trade by patronising a few traders surreptiously. It needs to be shown that there is a rule of law in this land or the government is tacitly or openly concerned for welfare of the people of this state.

Written by Shri Manindra Konsam, Editor, Sanathong Published in Manipuri in Sanathong 1998 vol.no.5 no.10, pp-7-14 Translated into English by E. Bijoykumar Singh

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 55 of 57

INDO MYANMAR BORDER TRADE BULLETIN

NEWS Smuggling of rice along Indo Myanmar border It is strange that rice which used to come from Myanmar to India is being taken to Myanmar through Moreh, in Manipur. On 24 August 2013 the police at Pallel outpost intercepted four trucks of rice on their way to Moreh, all with forged documents .This incident involving rice is not the first instance of clandestine trade of essential items of Manipur through Moreh. Earlier there were

many instances of the arrest of people trying to smuggle kerosene and urea to Myanmar. The smuggling of Manipur’s quota of urea and kerosene to Myanmar had several times created scarcity in Manipur. The state has a quota of Kerosene and urea based on its population. These goods are not taken to Moreh for the use of the people of Moreh. It would be smuggled into Myanmar. It is possible that the rice is rice

HNS/Imphal, Aug 24: Altogether 1420 bags of rice, which were being transported in four trucks from CAF&PD godown located at Sangaiprou using fake documents for export to Myanmar, were seized by a team of Pallel Police Station at Pallel at around 11 am today. According to police, the four trucks loaded with rice were detained at Pallel based on specific information that some traders were trying to transport huge quantity of rice to Moreh using fake documents. The police also seized the documents for transportation of rice. The truck drivers stated that the rice bags were being transported to Moreh for distribution to the public through one RK Sanayaima. They possessed the advice notes issued by the Directorate of Food and Civil Supplies, Manipur which showed that three truck loads of rice were lifted on August 19 and another one truck load on August

1420 rice bags heading to Myanmar seized 20 from the Government handyman as godown located at KshetrimayumNanao of Sangaiprou. KonthaKhunou. The truck (MN 01To verify the documents 7979) is also owned by Ashok possessed by the truck Kumar Kandu and it was driven by drivers, a police team led by Yumnam Prafullo (53) of Tera SDPO of Kakching Akham Leikai. A.Ghanashyam went to the The truck (MN 01-8545) is owned Sangaiprou godown. The by RK Murthi of Moreh Ward No. CAF&PD officials there told 3 and it was driven by Md Sultan the police team that there was no (29) of Kwakta Ward No. 1. record of rice being lifted by the A case would be registered four trucks on the dates tomorrow morning after having mentioned on the advice notes. consultations with high ranking As of now, no case has been officials. The trucks have been registered by the police. However, kept sealed at Pallel Commando the drivers and handymen of the Complex, the police said. trucks bearing registration A high ranking official of CAF&PD numbers MN 03-1786, MN 01- told Hueiyen Lanpao that the 8139, MN 01-7979 and MN 01- documents shown to the police 8545 have been detained at Pallel were fake and a proper Police Station. investigation would be conducted The truck (MN 03-1786) is to unearth the black-marketing of registered in the name of Md PDS rice. Abdul Salam of Another source said that rice was LilongHaoreibiTurelAhanbi. The once imported to the State from police have detained its driver Myanmar, but now the price of identified as MdWahidur (27) of rice in Myanmar has soared up. SoraChingjin along with Myanmarese people near the handymen Md Wahid (19) and Md border procure several bags of Sadam Hussain, both of Lilong rice from Moreheveryday. A big Haoreibi. gang is operating this black The truck (MN 01-8139) is owned market of rice at Moreh town and by one Ashok Kumar Kandu of more than 400 truckloads of rice Thangal Bazar. The driver of the have been transported to Moreh truck is identified as within a short period, it added. SoibamRupachand (20) of Wangjing Awang Leikai, while the Courtesy: HuiyenLanpao

siphoned from Manipur’s quota of rice under PDS for the poor people and mid day meal scheme for school children. Now price of rice in Manipur is low because of adequate stock in our godowns. If rice stocked in godowns is thus taken to Myanmar, the dwindling rice stock will raise the price of rice in Manipur and create scarcity of rice. We therefore need to be watchful. Featured

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 56 of 57

INDO MYANMAR BORDER TRADE BULLETIN

PHOTOS

Watermelon vendors at Tamu

Street vendors near Auto rickshaw parking at Moreh

Street Food Vendors near gate no.2 at Moreh

Parkia Specios (Yongchak) Vendor at Tamu

Handicrafts & Woodwork stall at Namphalong

Young Buddhist monks at Namphalong

If you want to see more photo relating to Indo Myanmar Border Trade please log on SAP Photo Gallery.

UGC-SAP-DRS 1 (Bulletin) Economics Department, Manipur University.

Page 57 of 57