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Connecting South Asia: the Stilwell Road & Sub-Regional Networks

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Connecting South Asia: the Stilwell Road & Sub-Regional Networks IPCS Issue BriefIPCS Issue Brief No. 188, April 2012 Connecting South Asia The Stilwell Road & Sub-Regional Networks Ruhee Neog Research Officer, IPCS The ‘reopening’ of the Stilwell Road, as it were, has alternatives if the agenda for Stilwell cannot be come to occupy news space with renewed vigour met? in the past few of years. The road finds its inception at Ledo Road in Assam, through Nampong and I Pangsau Pass in Arunachal Pradesh (the latter is WHY STILLWELL ROAD? the international border point) through Bhamo and Myitkina in Kachin State of Myanmar, to The primary reason for the renewal of interest in Kunming in China’s Yunnan Province. The largest the route’s reopening is due to the passage it section of this currently dysfunctional route lies in provides to China. Apparently, it would help Myanmar (1,033 km), a 61 km stretch traverses reduce transportation costs between India and India and the remaining 632 km passes through China by 30 per cent, thereby giving a fillip to Sino- China. It must be noted that this road was Indian bilateral trade. It would also provide a operational only during the period of World War II, platform for synergy between India’s Look East during which time it was used as a military supply Policy (LEP, 1991) and the Vision 2020 document line. It lay redundant after this, as it does to this for the development of the Northeastern region day. However, of late, the momentum for its (NER) released by Prime Minister Manmohan Singh operationalization has been gathering speed for a in 2008. Engaging in trade through Myanmar, variety of reasons, which shall be explored in the which is considered to be India’s gateway to paper. The calls for its ‘reopening’ are invariably Southeast Asian markets, would allow for regional used in the context of overland, cross-border growth and development in the Northeast. It could trade. This however is a fallacy, since the route also help develop niche production efficiency in was never used as a trade conduit. This paper the Northeastern states by attracting more shall therefore refer to the reopening of the investors to the region. In addition, this is thought to ‘route’, or the opening of the road. be a propitious time for the operationalization of Stilwell Road because of the present drive in Indo- In the mobilization of sentiment in favour of its Myanmarese relations, which are at an all-time opening, the five Ws have been recurrently posed high. Myanmar has also declared its intention to and often answered: what, where, who, why, implement market reform within the country, which when. However, the debate has been would ease bilateral trade negotiations and unsuccessful in going beyond rhetoric to what is agreements. practical and achievable because of an inability to acknowledge three other omniscient questions: Myanmar has in the past expressed serious How would the task be undertaken? Would any reservations about opening the road, but recent challenges arise in its implementation? Are there reports suggest that the junta may have adjusted Institute of Peace and Conflict Studies B‐7/3, Safdarjung Enclave, 1 New Delhi, 110029 91‐11‐4100 1900 www.ipcs.org CONNECTING SOUTH ASIA 2 its view. Previously, the expressions of doubt were currently one of two operational border points in a direct corollary of the control exercised in existence. It could provide a blueprint of what not Kachin by the Kachin Independence Organization to do if Stilwell Road were to come online at some (KIO). However, the change in perspective point in the future, and stress the importance of an suggests that although repeated peace talks all-round conducive environment for the conduct have proved to be unsuccessful thus far, as of bilateral relations instead narrowly focusing on evidenced by the latest round which took place in mere trade requirements. March 2012, the junta is more confident this time around of reaching a position of compromise that It would do well to keep in mind that one of the would be acceptable to both parties. Finally, India final goals of this project is enhanced sub-regional may also want to raise its profile in trade relations connectivity. Trade is only one of many factors with and through Myanmar to counter China’s that may lead to this. For the holistic development entry into Southeast Asian markets. Currently, of a system for the sustenance of Stilwell Road if China is one of Myanmar’s top two trading and when it becomes operational, structural partners; India comes in at seventh place. Also, changes on the Indo-Myanmarese border will China’s side of the Stilwell Road has been have to be undertaken. developed into a six-lane mountain highway, whereas the Indian side has regressed from a two- Moreh in Manipur has both Land Customs and lane all-weather road to a partially paved, one- Currency Exchange Centres, but those who have lane track. Interestingly, the construction of the visited the field reveal that they are under-staffed stretch between Myitkina up to Pansau Pass in and dysfunctional. Therefore, while the Arunachal Pradesh has been handed to China’s government may stress that the institutions Yunnan Construction Engineering Group which necessary for the smooth flow of trade are in may be a clever Myanmarese ploy to encourage place, their existence is no measure of their a more active Indian engagement, or it can functionality. For instance, despite the signing of simply be attributed to Chinese efficiency which the Double Taxation Avoidance Agreement gives it an edge over India. between Myanmar and India, which is meant to ensure that taxation occurs only in a company’s II country of permanent residence, tax irregularities HOW? abound. Traders therefore prefer to conduct their businesses through seaports in Kolkata, Mumbai The discussion on the opening of Stilwell Road is and Singapore, even though a land access point unlikely to move from rhetoric to reality until micro- with hugely reduced transport costs is available to detailing is undertaken by policy and decision- them. Backward connectivity is also significant. makers. For this, a few specific observations may National Highway 102 which runs between Imphal be flagged, most of which derive from lessons and Moreh in Manipur is dotted with check-posts learnt from the border trade conducted at Moreh to ‘monitor’ illegal activities, and ‘taxes’ have to in Manipur and Tamu in Myanmar, which is paid for due passage at each of them. Another border point lies at Zowkathar in Mizoram, which connects with Rhi in Myanmar. Recently, the Ministry of Development for the Northeastern Region (DoNER) claimed that regular trade was One of the final goals of Stillwell road project is being conducted through this route. However, enhanced sub-regional connectivity. Trade is only despite claims of the existence of a Detailed one of many factors that may lead to this. For Project Report (DPR) on the matter, there is little to the holistic development of a system for the no information available in the public domain that would enable interested parties to track its sustenance of Stilwell Road if and when it progress. A comprehensive public information becomes operational, structural changes on the campaign is therefore conspicuous by its Indo-Myanmarese border will have to be absence. This was noted by both domestic and undertaken. international investors and traders at the 7th DoNER-ICC Business Summit in 2011, 2 who 2 IPCS ISSUE BRIEF 188, APRIL 2012 acknowledged that the Northeast held great untapped potential for investment, but this proved difficult to pursue because of the lack of India could also take a leaf out of China’s book information. and seek to emulate some of the work being done To achieve forward, cross-border connectivity, in Yunnan Province for sub-regional connectivity, internal, backward connectivity will first have to be established. Connectivity between the such as opening an Indian consulate in the Northeastern states leaves a lot to be desired. In Northeast for visitors from neighbouring particular, the stretch of road between Nampong countries. and Pangsau Pass, which incidentally translates as ‘Hell’ Pass, is almost completely unnavigable. An infrequent public bus service plies until Nampong where weekly markets are held, and there is no vehicular transport from Nampong to Pangsau. Under the Special Accelerated Road Development Programme-Northeast (SARDP-NE), National Highway 153 between Ledo and business between whom was conducted much Pangsau Pass is currently under construction. Work before formal cross-border trade started taking is in progress in Assam within Phase-‘A’ of the place. A system could therefore be created for programme, and it is recommended that the community-oriented cross-border business portion in Arunachal Pradesh also be worked on exchanges which would work on an already concomitantly. established cultural footing. In October 2011, India Indo-Myanmarese relations are touted to be and Myanmar in reciprocal gestures made going from strength to strength. However, provisions for passport-free, one-week visits by the atmospheres of goodwill are time-bound and relevant communities on either side to 16 km have a sense of immediacy. It is important for within both Myanmar and India (in the states of India to tangibly signal to Myanmar its interest in Arunachal Pradesh, Mizoram, Manipur and opening Stilwell Road before the momentum slows Nagaland, where the Singphos are largely down. Myanmar's deputy foreign minister, Myo concentrated), which suggests that moves are Myint, in a meeting in New Delhi in February 2012 being made in the right direction. indicated that Myanmar was expecting India to ‘come forward with assistance’. He went on Tourism, in this context, could go a long way in record to say, ‘"Myanmar is India's only bridge to strengthening linkages especially because there is Southeast Asia," suggesting that if India wished to already a demand in remote areas of Kachin have a slice of the lucrative Southeast Asian pie, it State for medical visits to Nampong (Arunachal would have to pay its entrance fee, as it were, in Pradesh) and Jairampur (Assam) in India, as well the form of investments in Myanmar.
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