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COVID-19 Has Ravaged The Economy, Can North-East Defy Odds And Turn It Into An Opportunity?

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In the north east as in the rest of the country, the actual impact of Covid 19 Pandemic on the economy and what shape it would take after its incidence is brought under control is a subject of intense speculations . One thing however is certain: the global and national economies will not get back to ” the business as usual” just as the means of communication all over the world changed after the mobile phones reached out to everyone. The reality that as of now there is no early possibility of a significant fall in spread of COVID 19.

There’s thus strength in the point made in the Economist in its September 26, 2020 issue that ” even if a vaccine emerges no body expects it to be 100% effective” and that” the Pandemic. will remain a part of daily life well into 2021″. We have to learn to adjust our economy, life styles and use of natural resources to meet this challenge. Climate scientists who have been looking into the circumstances which led to release of Coronavirus from the Wuhan Lab in China hold that unabated global warming is certain to release new virus due to rampant deforestation and destruction of wild life going on across the globe.

In this background, the widespread public concern and protests in the North East after the recent fire in oil fields at Baghjan and reckless open cast” rat hole mining” in Dehing Patkai Reserve Forest which caused irreversible damage to forests, wild life and wetlands must be seen as a positive development as conservation of environment and ecological security are now agitating the common people as never before in the North East. The fact that negligence on part of the the concerned Central and the state authorities caused these damages is a matter of even greater concern. It would thus be unwise to look at the ongoing agitation in Assam against some of the provisions of the Draft Environment Impact Assessment ( EIA) notification issued by the Union Forest, Environment and Climate change Ministry and Implementation of Lower Subansiri hydel project in isolation, because the issues raised such as giving virtually a free hand to the project proponents under the draft EIA to go ahead with the project without prior environment clearance or ignoring the concerns of those living in the downstream of Lower Subansiri hydel project strike at the very root of environmental rule of law as pointed out by environment law experts and activists. These steps are deemed unwise in the larger context of environmental, livelihood and health security of the people of the north east in the midst of the Pandamic. Also, north east holds a strategic position in ecological security of Bangladesh, Myanmar and Bhutan which has to be suitability factored in formulation and implementation of all infrastructure projects in the true spirit of the SAARC.

Where do we go from here? This is a question now being raised in the North East media with a note of despair and for good reasons: First, there is no north east centric analysis of the impact of Pandemic on the regional economy even when the North Eastern Council is mandated to formulate and implement a Regional Plan; and second, economic issues in general are accorded a lower priority in the agenda of most political parties of the region than ” identity” issues as if identity assertion is a panacea of all problems. Thus there has been no serious assessment of either” job or growth loss” that the north east economy might have suffered already due to the Pandemic and its Sector wise present profile. However it is realistic to assume that the Gross State Domestic Product of all NE states is certain to decline by a higher percentage point , that is 10% plus in 20-21 as against 9% plus decline projected for the national GDP. This is because the service sector which drives growth in all NE States has been badly hit especially tourism and hospitality and floods have damaged standing crops on about 1.20 lakh hactares in Assam in this year apart from huge loss of livestock and damages to surface communication systems. The signs of slow down are stronger than elsewhere.

In this environment a hard look at the regional economy is the first step to develop a common strategy within the Prime Minister Modi’s “Self reliance” framework appears to be the only way out of this crisis. NEC could initiate this process by analysing and consolidating the data of movement of labor within the region and especially from Assam to other NE states and NE state wise movement of labor outside NE. Abhijit Banerjee and Esther Dufllo have shown in their fascinating study of global economic issues in ” Good Economics for Hard times” that contrary to the usual perception that immigrants ” steal jobs and bring down the wages” their presence actually contributes to growth and incomes of all. Thus the people of the NE need not be paranoid about movement of labor. However when job opportunities in service and manufacturing outside the region have shrunk due to Pandamic, job creation within the region must be accorded the highest priority.

Prime Minister Modi’s recent steps to restructuring the agriculture and rural economy – the proposals to amend the Essential Commodities Act and enactment of laws to facilitate Trading of agricultural produce, price assurance and farm services, that is, ” Three farm reform bills” which have received the Presidential assent provide an opportunity for the NE states to consolidate the rural economy on a strong and dynamic basis for reasons explained below:

Setting aside the larger debate on Farm reform bills if one looks at these reform measures from a north east perspective, it would appear as answers to many unresolved issues of agriculture and rural development of the region especially Assam. The region’s agrarian economy is rice based grown almost entirely by small farmers owning at the most 5 acres and mostly below 2.5 acres who sell their little surpluses of food grains, pulses and vegetables directly to the private traders and not at the markets set up under the APMC Act ( Agricultural produce Marketing Committee Act). Though Assam holds 9 th position in Rice production ( 5.22 Million MT), annual procurement of Rice in Assam has been meagre -1.63 lakh MT as per FCI figures for 2019-20. Other NE rice growing states especially Tripura and Manipur are in a similar situation. Thus APMC system is not relevant to the region. Manipur hasn’t adopted APMC system for marketing of agricultural produce. There’s thus a huge scope for both Producers companies and Farmers producers organization ( FPOs) and contract farming by organising small farmers into Groups or cooperatives for building mutually beneficial arrangements with private traders for upgrading the production function of crops like rice , sugarcane, vegetables horticultural crops and marketing of the same. This could be the basis for “start up”s in rural areas as envisaged in the Farm reform measures. The infusion of capital, technology, management and marketing backed by improved storage and process facilities under ” Agricultural Infrastructure Fund” could really be a game changer for rural economy of the north east for two reasons: First, this could be adopted in e farm holdings are small in every state and second, by consolidating farming in a broad sense it might facilitate growth of agri business, organic farming, food and fruit processing, commercial dairy development and floriculture creating jobs for the local people and significantly, surplus for export to Bangladesh and Myanmar. It is unfortunate that there is inadequate awareness in the NE of the progress Bangladesh has achieved in the last decade. Recognized by the IMF as an” emerging economy” , the present US$ 348 billion Bangladesh economy had been on a high growth path as it was growing@7.9% till the Pandamic and her per capita GNI of $ 1470 in 2017 as compared to India’s US$ 1800 suggest that, trade with Bangladesh offers enormous opportunities for the NE even when the size of the NE economy is just US$ 79 billion. This is because Bangladesh is not only the most easily accessible market but also a gateway to the ASEAN. Expansion and upgradation of network of Bangladesh Border markets for facilitating trade in a wider range of products have to be carried out on urgent basis.

However, the PM’s “Atma nirbhar” meaning a strategy with the object of attaining self reliant development will work only when the states – especially Meghalaya, Assam and Arunachal succeed in generating the necessary political will to discard features of the ” extractive state”- defined as states which thrive on unsustainable extraction of natural resources regardless of its adverse effects on environment and ecological security such as rathole mining of coal in Meghalaya that they have acquired over the years by stopping such harmful practices. The practice of carrying out oil and gas exploration in forests and eco sensitive areas, destruction of wetlands are such activities which are certain to destroy wild life and release unknown virus posing new threats to human kind.

This strategy backed up by an expanded regional health care system pooling the resources of Sikkim and north Bengal and a diversified skill teaching program might enable the extended North East to convert the Coronavirus crisis into an opportunity to move forward by a paradigm shift from GDP growth as the main indicator of progress to sustainable development. It’s time to act.

About RANGAN DUTTA

( The writer is a retired IAS officer of the Assam – Meghalaya cadre and has served as Scientific Consultant in the office of the Principal Scientific Advisor to the Government of India)

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