Japan's Engagement in India's North East: Reviving the economy in the post COVID-19 world with focus on Agro-Forestry and allied sectors

 Japan’s engagement in India’s North East:

Reviving the economy in the post COVID-19 world with focus on Agro-Forestry and allied sectors[1]  

Introduction:

India and Japan have emerged as close partners in the recent times. There is substantial strategic match between the Act East Policy of India and the ‘Free and Open Indo-Pacific Strategy’ of Japan, and both countries have been progressing steadily in concretising their cooperation efforts by utilising this enabling political and strategic vision. The partnership and cooperation extends over various aspects of development, with particular emphasis on physical connectivity and infrastructure projects including roads, railways and bridges. The partnership between the countries puts special focus on the North Eastern states of India with India government’s Act East policy providing a conduit for the flow of Japanese assistance in the region.  The major chunk of the Official Development Assistance (ODA) from Japan has been on physical connectivity and infrastructure and several of these projects have been focused on the NER.  The figure above shows a snapshot of various projects being supported by Japanese International Cooperation Agency (JICA) in the NER[2].

Among others, the Northeast Network Connectivity Improvement Project is one of the main projects under which Japan ODA has been flowing into the NER. The project with Phases 1 to 4 is assistance from JICA to the Government of India to help build robust road connectivity in the north east states. In a recently conducted Webinar on “Indo-Japan Collaboration for Developing Agri Forestry and Allied Sectors in Northeast India in COVID-19 Era”, hosted by Asian Confluence on May 21, 2020, Mr. Shingo Miyamoto, Minister (Economic and Development), Embassy of Japan, India, reiterated Japan’s assured commitment to the development of the region. He noted that while it was unfortunate that the Prime Ministerial Summit in Guwahati was cancelled due to some law and order problems, the Japanese embassy along with JICA had been continually brainstorming on a lot of ideas of collaboration in the region.

While infrastructure and physical connectivity remains the major highlight of Japan’s engagement in the North East, there is partnership and assistance on several and wider set of areas. JICA has been very active in this region, including in the agri-forestry sector[3]. A high point in this is the Act East Forum, which was jointly launched by the Prime Ministers in September 2017, as a “driving force to advance India-Japan cooperation in the North-East”[4]. The forum prioritises enhancing connectivity, developmental infrastructure, industrial linkages, skill development and people-to-people contacts through tourism and culture as areas where the two nations are focused on for development partnership in the NER. 

The New Normal and reviving the North East:

The COVID-19 pandemic in the very recent times has had devastating impacts on countries and geographies across the world. In addition disrupting and adversely impacting the economy, the global pandemic has ushered in a new normal with shifting strategies, relationships and approaches. With restrictions on travel, transport, mobility of labour and all kinds of resources, supply chains, consumption and future demand trends arguably predict a unprecedented shift. In this context, it is an imperative to revive the economy while keeping the safety and security of life in mind. This in turn, necessitates a re-thinking and realigning on how to strengthen cooperation and collaboration among strategic development partners. Reviving and enhancing livelihoods through strengthening India-Japan cooperation on agro-forestry:

With the backdrop of the global pandemic and in light of the India-Japan cooperation with focus on the North East, one of the key ways for the NER to work around the adverse impact of the pandemic is to revive and strengthen the agr-horti-forestry-aqua and allied sectors. Developing agriculture, horticulture, aquaculture and forestry sectors can be seen as the first rungs of the ladder to economic revival and livelihood generation and ensuring food security in the NER post the COVID19 disruptions. This will not only help revive the economy but also effectively tap into the rich natural resources that the NER has. The NER states have many natural assets conducive to developing a vibrant agro forestry sector with sustainable eco-friendly practices.  The region also shares borders with Bangladesh, Myanmar, Nepal and Bhutan. Collectively, the region boasts rich bio diversity, varying climatic patterns and is home to a very wide variety of agri-horti-aqua-forestry produce. Additionally this will be instrumental in absorbing the returning migrant labour and encourage entrepreneurship in the region.

Given the intra and inter-state physical connectivity projects underway, along with a push on transnational connectivity, regional value chain creation in these sectors can provide a much needed boost to economic recovery.  Several of the state governments from the NER have already publicly expressed their keen desire to develop the agri-horti-aqua-forestry sectors. The Government of Meghalaya, for example, has set up a special task force to look into these aspects. It will perhaps be equally important to be cognizant of cross cutting aspects like climate change, ecological sustainability, gender inclusion and ensure that national planning aligns with regional planning and realities. In other words, it be imperative to adopt a holistic approach and ensure sustainability,

Key challenges and possible way outs:

While there is ample scope for developing the agro-forestry and allied sectors in the NER and a real opportunity to jumpstart the region in the post COVID19 world, there are several challenges that face the region. Some of the key challenges that need to be worked on are discussed in this section along with possible solutions with focus on Japan’s involvement.

Last-mile connectivity: While the region has seen development of physical connectivity in recent years, it still remains inadequate; particularly on last mile connectivity remains an issue. Due to the mountainous terrain, developing good agri-link roads is a major gap that needs to be addressed. As a way out, small local roads needs to be emphasised along with looking at multi-modal linkages, including through waterways, to ensure last-mile connectivity that can strengthen agri-links to help connectivity reach the remote and small producers. In this regard, since Japanese funds are routed through the Central government, gap in coordination between state and centre is the biggest obstacle to implementing last mile connectivity projects. It is easier to address nationally administered roads. The procedural hurdles often lead to the last mile smaller roads being left out. As a possible way out, there is a need to find ways and mechanisms to effectively channel Japanese ODA to rural connectivity projects. In this regard, Ministry of External Affairs (MEA) and Department of Economic Affairs (DEA), Government of India may be urged to look into these issues while discussing Externally Aided Projects (EAP) with donor countries.

Skill and human capital: Entrepreneurship development is a major challenge in the region with significant investment that is needed in capacity building of entrepreneurs. In this context, the Technical Intern Training Program (TITP) initiative by the Government of Japan can be of much help.  The initiative aims at promoting transfer of skills, technology and knowledge, thereby contributing towards Human Resource Development. It provides training to the workers in 72 fields in Agricultural and Industrial sector for a specific period of 3-5 years in Japan’s Industrial Society, administered by the Japan International Training Cooperation Organization.[5] Compared to East Asia, participation of TITs from South Asia is significantly low, including from India. Encouraging participation in the TITP can be an effect way of bridging skill gaps for India. As part of the TITP Program, Japan invites skilled workforce to work and gain experience in Japanese firms including agriculture and horticulture sectors. The success of this program lies in the fact that many who has undergone the program return to start their own businesses or become country head of a Japanese company thereby becoming means to attract Japanese investment in their respective countries. Indonesia attracts a notably large number of participants (tens of thousands) every year. The count in India is however, still insignificant. Japan welcomes people from North eastern region to take advantage of this program[6]. Recognising this opportunity, the Government of India signed an Agreement with the Japanese Government on 17^th October 2017. Although participation was low earlier, recent moves undertaken by the GoI aim to take the TITP on a more serious note. Recently, there was a discussion regarding the fact that Japan may extend special recruitment program to Northeast residents for offering Nursing jobs, wherein residents of the region would be provided specialised training and jobs in Japan.[7]

Post-harvest processing, branding, packaging and linking to allied sectors: Post harvest management of crops, such as aggregation, grading, value addition, post processing and branding is a big challenge. A paradigm shift is needed in marketing and branding, emphasizing on designing products and sourcing raw materials from the region, keeping the end consumer in the international and national markets in mind. Capitalising on the opportunities provided by the TIPP initiative and enabling Japanese FDI could help in this direction. Also, beyond the core agri-horti-forestry-aqua activities, these sectors have immense potential to attract tourism as an allied sector. In particular reference to the NER, which has very diverse natural, cultural and forestry resources, it is an imperative to capitalise on the tourism linkages of agri-horti-forestry-aqua sectors. To this end, eco-tourism needs to be promoted as an allied sector which can help create a ready market for produce as well as encourage innovation and diversification of products and their packaging.

Private Sector Involvement: Private sector participation is lacking from both within and beyond borders. This is owing to several factors including doing business indicators, challenges to FDI, safety and security perceptions, terrain, etc. To cite an example from the Japanese experience, in the COVID 19 crisis, there are reports that about 80% of Japanese businessmen have left India. This is very high compared to other countries such as China (10%) and South East Asian countries (10 to 20 %).  Winning the confidence of Japanese expatriates to India in the health care system needs to be addressed. Additionally, there is a lack of venues and vehicles to introduce Japanese business and products to consumers in India and particularly in the NER. Some of the South East Asian countries have introduced dedicated mall operators to this end and have gained substantially from the move. India can consider similar ideas.[8]

Convergence on planning and inter-departmental links:  Convergence of various departments and programmes is a challenge. In particular when exploring ways to improve agri-horti-forestry and allied sectors, it is extremely important to look at how that links to sectors such as water resources. As part of this an integrated view of water management is also needed to ensure optimal, efficient and sustainable use of water resources for agriculture and allied areas. Similarly, states at times plan in silos while the sector of agri-horti-forestry-aqua are very connected in the natural ecosystems of rivers, aquifers, soil, climate, etc. Additionally, bringing together agro-climatic zones beyond political borders helps in scale, feasibility and practical management of projects and also in engaging foreign investment for the same. To this end, regional projects with regional planning, which facilitate coming together of states and also entities beyond national borders, are crucial.

Ecological sustainability: The environmental effects of large scale projects and plantations (for agri-horti-forestry) need to be studied and taken into account in planning and implementation of projects. For e.g. North East has lot of potential in terms of its bamboo, however,  impact of repetitive bamboo cultivation on soil fertility needs to be ascertained and managed. So, projects need to be both ecologically sustainable and economically feasible.

Gender Inclusion: Gender inclusion is not very weaved into the social, political and to a lesser extent, the administrative structures in India. Though the NER fares better in this regard given the matrilineal societies that are there in many parts of the region, gender as a definite and conspicuous factor to be considered during project designing is still emerging as an idea. Hence, women’s participation, inclusiveness and other affirmative action need to be definite components of regional project designing.

Key Recommendations that emerge:

·         Ensuring last-mile connectivity so as to create and strengthen multi-modal agri-links including those using waterways to help connectivity reach the remote and small producers. In specific reference to India-Japan cooperation, there is an urgent need to find ways and mechanisms to effectively channel Japanese ODA to rural connectivity projects.

·         Institutionalising an integrated view of water management to ensure optimal, efficient and sustainability of water resources for agri-horti-forestry-aqua and allied sectors, as well as for connectivity.

·         Including best practices of forestry in the upper reaches of hill areas, with special focus on vertiver plantation for creating green walls to contain soil erosion.  

·         Promoting Eco-tourism as an allied sector

·         Planning regional projects that can capitalize on climatic and economic feasibility and scaling-up possibilities.

·         Enhancing private sector participation with emphasis on enabling investment by Japanese private sector by providing vehicles (e.g. Japanese mall operators) and venues to introduce Indian consumers to Japanese products.

·         Increase in Ease of doing business: Ease of Doing Business in India is relatively low and Japan is willing to work with India to contribute in changing the situation for the better.

·         Investment in design and developing marketing  linkages

·         Human Capacity Building  and leveraging skill building programmes like TITP from Japan

·         Ensuring that projects and initiatives are climate sensitive and has emphasis on gender inclusion.

Ideating a Pan-Regional East West NER corridor with support from JICA on the backbone of the broad gauge railway network on both banks of Brahmaputra. Silchar can be promoted as a regional hub for multimodal connectivity, with spokes to Tripura, Mizoram, Manipur, Meghalaya and other parts of Assam like Barak Valley and the hill districts, focusing on the entire value chain of environment friendly products of agri-forestry; particularly exotic fruits and vegetables, bamboo and medicinal plants.