On April 5, 2021, the country director of Asian Development Bank, Takeo Konishi, wrote a letter to Dr Guruprasad Mohapatra, Secretary, Department for Promotion of Industry & Industrial Trade (DPIIT), Ministry of Commerce and Industry. The subject line was “ North East Economic Corridor Study — Workshop with Government stakeholders”.
Konishi’s letter, a copy of which is with EastMojo, referred to the DEA’s letter dated 2 March 2021 conveying no-objection to organise workshops in consultation with relevant line ministries on the findings of the ADB study on the development of North East Economic Corridor (NEEC).
The letter also, at least in brief, gives a valuable background to the NEEC study. Its findings mention the need for a multi-modal transport network at three levels: within the Northeast Region (NER); between NER and the rest of India with an additional way of connectivity through Bangladesh; and with the neighbouring countries (Bangladesh, Bhutan and Myanmar) to enhance South Asia-Southeast Asia connectivity.
“The findings for the study pay attention to economic upliftment and equitable development of the individual NER states and the region. The study has identified 24 growth centres and 20 border centres that will drive the development of the states based on their potential. The study delves deep into three key infrastructure – transport, urban and power – as enablers for equitable economic development across the states and the region,” the letter adds.
Perhaps the most important findings of the study were that the agriculture and the food processing sectors have a comparative advantage of production in all the states of NER.
“The identified agricultural commodities are spices, fruits and allied activities (silk, pork and fish cultivation), and the food processing industries are dairy products, beverages, dried fruits and vegetables, among others. For the manufacturing, while oil and gas sector has significant upside potential in Assam, wood-based products (bamboo) are found to have the appropriate production ecosystem in all states in the region. Rubber processing can be a key manufacturing activity in Tripura, and cement industry can be developed further in Assam, Manipur, Meghalaya, and Nagaland. For the services sector, while the study recommends NER-wide tourism sector as a key priority, it also identifies the potential of medical tourism to be developed in Assam and Manipur,” the letter points out.
But why are we talking about this?
Because it seems that throughout the letter, the discussions and the findings, the tiny matter of Arunachal Pradesh seems to have skipped everyone’s attention. There is absolutely no mention of India’s frontier state, as if it remains the territorial dispute that China has always claimed it to be. In fact, it is well known that China refuses to acknowledge Arunachal Pradesh as Indian territory and the state-sponsored media refers to it as South Tibet. And while the ADB is doing great work across India and the Northeast region (read about all their projects here), it seems too happy to toe the China line and act as if Arunachal Pradesh does not exist, not at least as a part of India.
A 12-year-old twist to a decades-old problem
I will not bore you with another lecture on the troubled political history of India and China. The two countries have been at war, and have never featured on the top of the Best Neighbour List (if such a list exists at all).
Simply put, we trade in billions of dollars, we travel to each other’s countries, we eat each other’s cuisines (even though we think Gobi Manchurian qualifies as Chinese cuisine) and every once in a while, we reiterate our commitment to solving our problems. But just utter the words ‘Arunachal Pradesh’ and agencies like the Asian Development Bank start squirming and shifting in their chair like they are uncomfortable but too polite to stand up.
To put it in perspective, the issue of ADB backing out of Arunachal Pradesh goes back to 2009, when China “reportedly blocked a consensus at the ADB board meeting this month, which approved an India plan that included $60 million watershed projects for the northeastern state.”
Subsequently, in July that year, the then Foreign Minister of India SM Krishna had said, “China did not endorse the Country Partnership Strategy [CPS] 2009-12 for India in the Board of the Asian Development Bank [ADB] on the ground that the proposed India CPS involved technical assistance funding for the Flood and River Erosion Management Project in Arunachal Pradesh, which China claims is its territory. Government has clearly conveyed to the Chinese side that Arunachal Pradesh is an integral part of India. Government has also told the ADB and all member countries of the ADB which have Executive Directors on its Board, including the US, Japan, Australia, Canada, Indonesia, Republic of Korea, Malaysia, Philippines, Germany and Italy that (i) the CPS is not a political document and it does not make any judgment as to the legal or other status of any territories; and (ii) China’s objection on political grounds is a clear violation of the ADB’s Charter which prohibits the Bank from evaluating any proposal on grounds other than economic.”
In short, China objected, India tried to convince the ADB, the ADB backed out, and Arunachal Pradesh paid the price. And it continues to do so.
Such was ADB’s fear of China that a 2011 report in The Hindu showed that the ADB “acknowledge(d) it was “a mistake,” according to newly released cables from the United States Embassy in Beijing by WikiLeaks. ADB China’s country director Robert Wihtol told U.S. officials in September 2009 that the project in Arunachal which China had objected to, had “caused problems for the ADB in China.” And, even as Indian diplomats in Beijing told U.S. officials the same month they believed the project was “still alive” with “modalities” being worked out by the ADB, bank officials in Manila had assured Beijing the project “would not materialise,” Mr. Wihtol was quoted as saying,” the Hindu report says.
It is 2021 and even now, ADB’s stance has not changed. We mailed a questionnaire to the ADB asking a range of questions, nearly two days ago. The Bank has not bothered to respond.
Why? One can only speculate here, but chances are the phrase “don’t really have much to say” would be a fair guess.
How Arunachal Pays
Arunachal Pradesh is a state full of amazing people, breathtaking beauty and stunning landscape. It is a world in its own right, one would argue. But what it is not, is developed.
According to a 2017 SBI report, Arunachal is 15th among all states on the state-wise Human Development Index list. The state’s average literacy rate is around 65% as per Census 2011. The roads in Arunachal Pradesh are so bad, that as early as March 2021, state chief minister Pema Khandu became the first CM to ever reach Vijaynagar, the last administrative headquarters near the Myanmar border in Changlang district, by road.
Khandu covered 157 km in two days, in an off-road vehicle. The most endearing image was that of the CM himself trying to somehow navigate through what looks like a road, but could very well be a stream. Arunachal Pradesh, just like every other northeastern state, could do with international aid. Remember the 2009 objection? It was not because ADB was sponsoring state-of-the-art radar systems for India’s military. It was over a watershed project.
In fact, as recently as November 2018, Khandu had pointed out China was objecting to foreign funding from international financial institutions, which in turn is taking a toll on its economy.
“Arunachal is the lone state facing such a fund blockade which is taking a toll on its economy, but it can be overcome by taking advantage of the huge presence of Indian Armed Forces and central paramilitary forces in the state. The state has the presence of over two lakh military personnel and paramilitary forces, which can be thought of as a huge market for selling local produce and goods,” Khandu had said.
The fact that no other northeastern state has to face this problem shows how tough it can be for administrators in Arunachal.
Now, let’s compare what China is building on the other side of the Arunachal border.
Earlier this year, reports surfaced that China was settling villages not across the Arunachal border but inside Arunachal. Media reports emerged that “China has allegedly built a village on the banks of River Tsari Chu in Upper Subansiri district of Arunachal Pradesh. The village reportedly consists of 101 homes and encroaches approximately 4.5 kilometres into Indian territory.” The Ministry of External Affairs said they were keeping an eye on the events. When such reports emerged, China responded by saying that “its construction of a village across the Line of Actual Control (LAC) in Arunachal Pradesh was “beyond reproach” because it had “never recognised” Arunachal.”
This is neither an isolated event nor the last of its kinds. In fact, one could argue that a village is the least of its worries since just a few months later, reports emerged that China had, in fact, approved the controversial hydropower project on the Brahmaputra river in Tibet, close to the Arunachal Pradesh border over which India has raised concerns.
While India and Arunachal Pradesh struggle to build roads, China’s investment on the ‘other’ side of the border knows no end. I am no military expert, of course, but at this moment, the Indian side of the border seems vastly underprepared for any hostility compared to the Chinese side.
But why to blame the ADB, one might say. Well, for one, they have clearly sided with the Chinese government despite agreeing on principle with the Indian government. By not investing in Arunachal all these years, they have denied India, and residents of Arunachal, a chance at a better life. While the rest of the Northeast receives the advantages of investments, the people of Arunachal can only sit back and wonder what could have been.