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New
route could nurture new Asian trade bloc
By Shehla Raza Hasan
KOLKATA - The recent inking of the agreement for expanding cross-border trade
between India and China through the Nathu La pass in Sikkim - which is
sandwiched between Nepal and Bhutan - as a fallout of the six-day visit of
Indian Prime Minister Atal Bihari Vajpayee, is seen as a landmark for ushering
in regional development in eastern South Asia.
 Economic
development so far has remained elusive to the sub-region, and flourishing
trade along this route could well create a new trade bloc in Asia outside the
Association of Southeast Asian Nations (ASEAN) region, experts say.
The Indian Chamber of Commerce secretary general, Nazeeb Arif, who is an expert
in the economic development of this sub-region, comments, "The easing of
political tensions along this route and the consequent opening of this
strategic path has paved the way for unprecedented economic development in the
region, which includes the Greater Mekong region of Laos, Cambodia, Vietnam,
Thailand, the eastern and northeastern states of India, Bangladesh, Bhutan and
theYunnan province of China. The Nathu La pass will provide the key
connectivity to develop that trade bloc."
He suggests that creation of such a trade bloc will pave the way for further
economic cooperation between the two Asian economic giants, who could work on
their synergies for effective partnership that could pose a formidable economic
rival to the European Union and the North American Free Trade Agreement
(NAFTA).
The economic effects of opening the new trade route are five-fold:
Flourishing two-way trade: The northeastern states and indeed the eastern
states of India could tap the Chinese market for their products and look at it
as a more effective land route. This must be done instead of being overtly
concerned by the import of cheap Chinese goods. In this the states must
leverage their own strengths.
India becomes a new sourcing point for intermediary products which could feed
Chinese factories for production of manufactured goods. For example, Haldia
Petrochemicals Ltd, which produces the raw material for polymers and the
plastics industry, could emerge as a ready sourcing point for manufacturers of
plastic goods in China.
A fillip to agro exports: This is a region rich in agricultural produce.
Eastern India has five agro-export zones, and one in the northeast in Tripura
would have a whole new market to access for agro and agri-processed food.
Accessing third markets: Partnerships and joint-venture collaborations could
help in accessing third country markets such as Taiwan, Indochina, Japan and
Korea by utilizing the Chinese export marketing network.
Tourism could thrive in this region with land routes readily available. This
could be developed into an integrated international tourist circuit. The region
is no doubt picturesque.
The region, when viewed from this perspective by investors, offers some very
profitable propositions, said Arif.
However, with the political will in place, the next step is to carefully tap
the economic opportunities that have emerged. For starters, the state
governments must be urged to commission studies as to how this region can
develop in an integrated manner. According to the agreement, India and China
have decided on two trading hubs - Tsomgo in Sikkim and Rinchingang in Tibet.
Sikkim, which would be the direct beneficiary of this cross-border trade
agreement, has lobbied for some time with New Delhi for the resumption of
border trade. With the agreement in place, the Sikkim government is keen on a
rapid implementation of the agreement and not to allow it to be trapped in the
usual delays.
While Sikkim is anxiously waiting for the agreement to be worked out, West
Bengal is looking forward to the growing importance of Bagdogra airport in
Darjeeling, and hopes that it may be upgraded to an international one. This
would lead to the emergence of North Bengal as an additional trading point with
China.
While all these visions for integrated development are yet to be worked out,
and the euphoria for a better economic future is being felt, there is a degree
of sobriety in government quarters. The government will have to be more alert
and proactive because the opening of the new route means the movement of people
across borders, bestowing on the state government the responsibility of
monitoring the flow of people. Enormous trading activities with transportation
might affect the fragile and pristine environment in an adverse manner.
The new scenario will have to be a modern one, with heavy vehicles moving about
- a far cry from the tinkling bells of mule trains carrying exotic products of
commerce through the thin mountain air. Trade through this region has a
checkered history. With the occupation of Tibet by China in the early 1950s,
trade received a major boost as the Chinese, who were in construction
overdrive, asked the Tibetans to bring in more construction material. However,
with the souring of Sino-Indian relations and the subsequent war in 1962, all
trade along this route abruptly stopped.
Forty-one years ago the trail of the mule trains was picturesque and
interesting. Tibetan traders would lead their mules laden with two maund
(80 kg) sacks of musk pods, raw Tibetan sheep wool, silk, brocade, zee (precious
Tibetan stones) and dayangs (Chinese silver coins) to Gangtok, the
capital of Sikkim, from Lhasa, the Tibetan capital which is 425 kilometers
northeast of Gangtok. They would descend from the icy Nathu La pass, which is
14,000 feet above sea level.
The merchandise would be unloaded, and the mules rested and fed. Trading would
begin soon after, with intense haggling. All goods were sold by weight. In
exchange they would buy manufactured consumer goods, ranging from biscuits to
motor vehicles in knocked-down form, from Indian businessmen who had gathered
at Chandmari in the upper reaches of Gangtok.
Trading over the return journey would commence. Indian traders were issued
permits only as far as Yathung, about 15 kilometers into Tibet - or the major
trading post of Gyantse. The first stop is either Chhangu Lake or Sherathang.
The next would be down the mountain at Chubithang, about 4 kilometers from
Nathu La. Yathung is the first major Tibetan trading post. The rest of the
trail passes through the undulating Tibetan plains with no sign of any
vegetation. The descent into Chumbi Valley on the route down from Nathu La to
Yathung is breathtaking.
It is now up to the individual governments to script a new success story for
the future. The governments must realize that the road to economic success is
self-driven. A whole new world of opportunities awaits businessmen, but the
spade work needs to be done in an expeditious manner.
(Copyright 2003 Asia Times Online Co, Ltd. All rights reserved. Please contact
content@atimes.com for information on our sales and syndication
policies.)
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