Till now, the bilateral trade has remained marginal compared to Indiaâ??s trade with other Southeast Asian countries. Since India does not have a precedent of engaging Burma economically in a big way, Indiaâ??s economic gains in Burma may not be very high. Therefore, it is quite likely that Burma will not figure prominently in Indiaâ??s larger scheme of economic opportunities and benefits. Given this scenario, Burmaâ??s utility for Indiaâ??s economic interests is more in the form of providing a conduit for greater trade between Indiaâ??s Northeast and China and Thailand.

A Stable Burma as a Conduit in Indiaâ??s Trade with China and Thailand

Burma as a viable conduit in Indiaâ??s trade with China and Thailand will be possible only when the ruling authority receive support from various ethnic groups which control vast territory in the periphery of Burma. A stable Burma supported by the Ethnic Nationalities Council would guarantee uninterrupted movement of traffic, thereby facilitating greater flow of goods between India and China and between India and Thailand. Greater economic integration between Indiaâ??s Northeast and Southeast Asia will not materialize if the authority over the land routes remains contested. The increase in the quantum of Sino-Indian trade has the potential to expand Indiaâ??s trade with Burma. If India and China have to trade on a much higher scale and if this is done through land routes, then it would have to go through Burma. This would happen under a trilateral framework with a strong bilateral underpinning to it. All weather land routes may be opened up. This would involve especially Northeast India and Chinaâ??s Yunnan province. However, it is noteworthy that even in the case of advanced land-based connectivity between China and India, there is no immediate prospect for enhanced economic relations through Burma since the bulk of the trade is undertaken using sea-routes.

Several Thai companies are investing in Indiaâ??s Northeastern states in various spheres, such as hydel power, agro-based and food processing industries, timber, rubber, horticulture, floriculture, tourism, and so on. Burma can be integrated into such activities very easily by Thai companies since Thailand has proven expertise in these industries. This would mean huge benefits to the entire region. This would be facilitated in the context of a politically and economically stable Burma.

Another question would be the widely held view that Burma is the black hole which acts as a major impediment in the proper implementation of sub-regional initiatives such as the MGCI, BIMSTEC, BCIM, etc. One can assume that a stable and prosperous Burma would facilitate the progress of such initiatives. In the face of Chinaâ??s road connections through Kunming to Bangkok and beyond to Singapore, Indiaâ??s LEP wont go much forward if it does not manage to overcome the Burmese obstacle. Therein lies Burmaâ??s importance for India.

A Stable Burma is Important for Indiaâ??s Northeast Policy

The improvement in the situation in Burma could have both positive and negative aspects on the insurgency in Indiaâ??s Northeastern states. The level of security threats could go down, the internal security spending could go down and the informal trafficking in arms and narcotics could be monitored more effectively. On the flipside, the reduction of troops in the Burmese army would release a lot of arms and ammunition and these could well end up in the hands of insurgents in Northeast India. In addition, one should keep in mind the security implications of a potential settlement between Rangoon and the Naga insurgent group NSCN(K) based in Burma.

A stable Burma would also have an impact on the refugee issue, in particular in Mizoram, which hosts a large Chin population that can potentially turn into a major politico-security issue.  The Chin presence in Mizoram is extremely mobile and floating. Chins have not come in large movements but rather in a regular influx. The unofficial estimate is pegged at 70,000 to 100,000 people. There is considerable interest about the political situation in Burma among Mizos and if the political and economic situation in Burma improves, some of them say they would themselves move there.

The Kaladan multimodal infrastructure corridor project has the potential to transform the dynamics of trade in the region by providing an access to the sea through Mizoram. As a result, the Kaladan project could be a boon to the entire Northeastern region. It would cut costs of transportation and would support many other trade initiatives in the region. But again, the utilization of this region as a mere passageway without commensurate local development is not sustainable and not equitable for the overall growth of trade and commerce. There have been plans afoot to utilize the Kaladan project in to a more inclusive infrastructural project for the Northeastern states of India.

Therefore, India must consider whether it wants to play a more active role in developing the Northeast, or whether it wants to copy Chinaâ??s strategy on Burma, which consists of maintaining and protecting its current stakes while contending itself with a status quo. Does India want to take its LEP through its Northeast? If not, then Northeast India may never benefit from a stable and economically prosperous Burma. Burma has proved to be a hurdle in the economic integration of Indiaâ??s Northeast with Southeast Asia, but development in the Northeast mainly depends on Indiaâ??s commitment. Indeed, Northeast India could be a mere passageway from â??mainlandâ?? India to stable and prosperous Southeast Asia, including Burma.

Pre-requisite for a Stable Burma: Centralized or Federal Regime?

On internal organization of Burma, one should not forget the presence of ethnic groups as stakeholders, apart from the ruling junta and the majority Burmans. These groups would certainly want to come in and be a part of the negotiations. Therefore it is necessary for them to have a vision for economic development and economic integration with neighbouring states. The Economic Nationalities Council (ENC) is indeed carrying out a lot of research and study but it is at a very preliminary stage. The exiled government of Burma also brings out an economic vision report.

But if the centralized politico-administrative setup does not change, then whatever economic potential the country may have, things will probably not change for the better. Can a stable economic situation emerge without political change? Can economic issues be resolved with an unchanged military regime? What kind of regime is needed for a stable Burma, democracy, federalism, or a politico-economic model imported from China?

Status quo may not be effective for the overall regional economic welfare. One aspect remains certain, the lack of rule of law needs to be addressed for commercial and financial interests to be secured and businesses to invest in Burma. Indiaâ??s concerns with its Northeast are more or less replicated in Southwest China. Beijing fears that a federal Burma would have a bad influence on its Yunnan province, as there is a significant number of Kachins in Yunnan, coupled with the presence of almost twenty non-Han groups.

The resumption of international aid would certainly be a precondition to such economic stability which would ensure infrastructure development, capacity building and a possible transition from a military economy to a civilian economy. In order to involve international financial institutions, a strong request from the pro-democracy factions in Burma will have to be formulated. Two key playersâ?? roles, the European Union (EU) and the Association of Southeast Asian Nations (ASEAN), also need to be looked at as well as how they could drive the situation on an interim basis. The Asian Development Bank and Japan could also be the likely players in the region.