The Role of International Finance in North East India: Fuelling a New Colonization⁽¹⁾
By RAMANANDA WANGKHEIRAKPAM

India’s neo-liberal push since the 1990s has seen little penetration of liberalization, privatization and globalization (LPG) in the North East Region of India (NER). This has been primarily due to, inter alia, lack of clear perspective of the region and its peoples that can help private parties to enter the region, political uncertainty and instability due to peoples’ movements and the long standing India’s geostrategic “fear.” However, beginning around 2000 there has been meticulous planning and strategizing by international financial institutions (IFI), in particular the Asian Development Bank (ADB) and the World Bank (WB) in facilitating LPG in the region. This article aims to outline the entry of the ADB and the WB, sketch the different sectors of interventions and also show how the IFIs are laying the foundation for a new phase of colonization and struggles. Using a case study, the article will also look at some of the larger implications for the region.

While discussing the entry of IFIs in the region, it will be critical to note the role of the Indian state in facilitating their entry. With India’s transformation since the 1990s, it is witnessed that the ‘new’ India has largely been left to be defined by several external and internal forces comprising large corporations and their funders – these being led by the ideology of the market. Among these funders, that direct and shape India’s future, are the Asian Development Bank and the World Bank. Right from the structural adjustment program that mini-mizes public expenditure to privileging the private corporations, these financial institutions have played a significant role however small their portfolios in India are.

Efforts in extending these processes in the North East Region (NER) has also been visible but with little impact. India’s changing policies on different sectors have implications for the NER, due to several reasons endemic to North East. Security concerns in NER as well as India’s geopolitics is one critical factor. Among others, the diversity of cultures with their indigenous institutions that protect the land, forest and water has been able to largely defend itself from external forces (including the state institutions) that try to usurp resources. As witnessed in several news reports and struggles across the region, one finds that the contest for resources between indigenous peoples and/or their representative organizations and the external forces has increased over the years.⁽²⁾

RE-ENGINEERING NORTH EAST

The NER, which became a reluctant party to India (it was controversially merged) have seen several peoples’ movements, including armed ones. For many years even after mergers with India several discussions/debates even in Parliament have shown clear ignorance of the region and its people. While this is true in many senses, effort to expand the neo-liberalization process in the NER has also in one sense been blocked by this ignorance itself. Systematic understanding and mapping of peoples, their institutions, resources etc that can facilitate investments began only recently. Recent effort by the ADB and WB through the Ministry of Development of North Eastern Region (MDoNER) began sometime in 2004 with several studies and technical assistances. There are also studies on each state being funded by other agencies such as the Japanese government and related institutions. It will not be mere coincidence that ADB’s plans, which is predominantly a bank that serves Japanese interest, and the studies conducted by government of Japan goes hand in hand.

Studies by ADB, known as technical assistances (TA), cover almost all sectors. Till date ADB has completed or is conducting its TAs on Tourism, North Eastern Roads, Urban Development, hazardous waste, waterways, power reform, agribusiness, trade and investment creation, power development, governance etc. Included in this are also ones with sub-regional focus such as the roads, hazardous waste management, tourism, etc.
Coupled with this is India’s Look East Policy, launched in early 90s, which has been brought to the NER recently as a way to use the region as a bridge for India as well as to exploit its natural resources. This policy has been criticized for several reasons such as, non-existent of a clear-cut policy document, lack of participation by local people in both policy and program initiatives and ignorance of local situations and aspirations.⁽³⁾

What clearly marks out in these documents or rather a new perception of the region is the effort to redefine north east. From what used to be a frontier and a place marked as a restricted area has now been portrayed as a region with colourful people, a region with plentiful resources and a gateway/bridge to South East Asia⁽⁴⁾. And for the region to “develop” is to transform from its myriad outdated laws and institutions to one that streamlines the region for easy access for private corporations to penetrate.

Mechanism for reengineering has taken various routes of policy changes and even installation of new institutions to facilitate new players. Back in 2001, the Department of North East Region (DoNER) was constituted which later became Ministry of Development of North Eastern Region (MDoNER) in 2004. This Ministry has been considered by groups in the NER⁽⁵⁾ as a special utility vehicle set up to smoothen the progress of entry of IFIs and economic globalization in NER. Indeed as clearly visible, it is after the setting up of MDoNER that we are witnessed to the influx of IFIs in the region.

PRIVATIZATIONS AS OPPOSED TO COMMUNITY CONTROL

Both ADB and WB, institutions known for their aggressive push for economic globalization, has been preparing the NER to create an “enabling environment” for private sector investments and greater exposure to market forces. In all studies or project documents these institutions do not hide their intentions with the claim that the region has lacked development and is “poor” due to lack of private investments and market access.

The sub regional TA on promotion of trade and investment in NE states that the initiative taken up by these institutions will encourage private sector investments across the entire spectrum of large, medium and small businesses. The rationale for ADB and the WB’s aggressive private sector promotion is based on the assumption that private sector relieves the financial pressure from inefficient public sector and that well designed private sector projects serve the poor and generate economic growth. However, experience across Asia-Pacific region on privatization has resulted in increased cost, un-affordable prices which have led to further marginalization of poor people. For example, the ADB funded power sector reform in Assam has resulted in increased tariff and inefficient functioning of the sector components resulting primarily in keeping out the poor from accessing electricity. Power privatization/unbundling effort in Meghalaya also has been under severe criticism both from electricity workers union and from other civil society groups.

Studies by the ADB and the WB, which aims to bring in large private companies in the sectors of forest, agriculture, mining also have seen criticism from some quarters. Privatizing sectors such as agriculture, forest, land and water will particularly result in community dislocation and uprootment that can lead to further chaos and conflict in the region as community ownership has been the traditional norm that governs these resources.

INCREASED DISEMPOWERMENT

What epitomize the entry of IFIs is increased disempowerment and helplessness of the people in the region. From what used to be a village council or a collective of village councils deciding matters that concern a village or villages, (this is still the case in many parts of NE) state governments or rather the central authorities in New Delhi have been key players in deciding development and other socio-economic affairs of the region. IFIs’ operation in NER, despite their multiple loci of powers, is largely controlled by few “developed” countries such as US, Japan and they have further distanced the affected from the decision makers. Getting access to key policy and project documents now requires writing to Manila and/or Washington DC and to complain against a project one might need to even spend meagre resources to go to these Headquarters to meet project officials. This is not to indicate that New Delhi’s operation is better. In almost all of government’s operations in the NER there has been complete top-down approach without even providing a democratic space for people to provide opinion. IFI’s disempowering of peoples is well described when a person affected by Lafarge mining operation in Meghalaya said “Oh! I did not know that our future is decided here.” This statement was made after coming out from meeting ADB project officials in Manila, Philippines. While the overarching goal of peoples’ movements in NER is “self-determination,” the IFI’s involvement has served the opposite.


INCREASING ACCESS TO RESOURCES

India and China’s resource guzzling development model has not spared “untouched” areas. IFIs have assisted this resource intensive model and the everexpanding economic globalization process. In particular ADB and the WB has been preparing numerous Technical Assistances and project documents that aim to open up the region to the world. These banks have made funds for roads, railways, waterways that can facilitate resource extraction and movement of goods and people across countries and region. Mention may be made of the north east roads, Bengal corridor, rural roads, Barak and Brahmaputra water-ways which aim to both connect the region with neighbouring countries and lay access to ‘interior’ areas for resources. Projects like the Trans Asian Railway and the Trans Asian Highway, in which both the Banks have a role to play, aim to connect Europe and Asia making it even easier for global capital to access the region.

Resource extraction with little or no benefit to the local people who originally own them has been one of the emotive issues for the peoples of the NER. It is generally understood that one of the reasons for United Liberation Front of Asom’s (ULFA), an armed group operating in Assam, began with the issue of oil extraction from Assam. This issue, which finds large public support, has also been reflected once again when ONGC [full for] wanted to drill the Brahmaputra for oil. Nagaland is not far behind where Canadian oil company CANORO has found resistance from groups fighting for a Naga Nation. Lafarge’s limestone mining has also brought up the issue of resource and land ownership in Meghalaya. With such background of resource extraction conflict and undermining of ‘self-determination’ struggles, efforts to further intrude into the region for resource extraction can create wide resistances and conflicts. Militarization, which accompanies such large projects, will further lead to human rights violations and subjugation of people in the region.

FUTURING

This article is not a complete treatment of the subject but to highlight some of the key trends and future implications. The existing trend has shown that people’s right to development, to their culture and to their own security, justice and democracy are getting short shrift. This is an unsustainable and dangerous path that will increase inequality and conflict and make the peoples in the region subservient to the dictates of national and international interest groups. This trend must be carefully analyzed and if necessary must be stopped. The people must come together for a North-East-wide debate on their own path of development that integrally demands a restoration of democracy and political autonomy.