The economic potential of the Northeast can be unleashed by focusing on reforms that will boost the region’s participation in regional and global value chains, said a World Bank report.
Highlighting the Northeast’s comparative strengths in agriculture and services, the report, Playing to Strengths: A Policy Framework for Mainstreaming Northeast India, emphasises that the region, despite its low manufacturing base, can leverage those strengths for growth.
Taking that argument forward, a companion report, Strengthening Cross-border Value Chains: Opportunities for India and Bangladesh, has identified four sectors, among many other promising ones, where new value chains can help boost the region’s export potential, and create better jobs for the people. These include fruits and vegetables, spices, bamboo and its related products, and medical tourism.
“Over the past decade, connectivity agreements with Bangladesh and a spurt in infrastructure investments are increasing the region’s economic integration. Together, these developments can help the region showcase its strengths,” said Junaid Ahmad, the World Bank’s country director in India.
The report calls for reorienting the Northeast’s supply base to serve the changing global demand.
India is a leading global producer of fruits and vegetables, accounting for 11 per cent of global production. Yet, its fruit exports form only 0.5 per cent of global fruit exports. The Northeast, with its strengths in organic and near-organic production, can play a significant role in India’s quest to become a global player in fresh fruits and vegetables, especially in the context of changing consumer preferences, it added.
“The region can capitalise on the rising demand for fresh fruits and vegetables, and for fresh, high-quality spices, especially those produced in an environment friendly and socially-responsible manner. It can promote bamboo, an environment-friendly resource. It can encourage nature-based tourism, as well as trade in medical and education services,” said Sanjay Kathuria, the lead economist, World Bank and co-author of the reports.
Bangladesh, which shares a border with four of the eight northeastern states, is very well placed to play a critical role in developing high-impact value chains for the region that will also bring gains to consumers and firms in Bangladesh, the report said.
The region has 53 per cent marketable surplus in fruit production that can provide inputs for Bangladesh’s vibrant food-processing industry, while processed foods can be exported to the Northeast and beyond.
Bangladeshi firms can secure a steady supply of inputs to meet the food requirements of its growing population by investing in the region’s farm sector.
The Northeast has an insignificant share in Bangladesh’s formal imports of fruits, vegetables and spices, worth over $1 billion. “What’s more, access to Bangladeshi ports can improve the region’s access to markets, reducing transportation costs and time, making Northeast products more competitive. At the same time, Northeast value chains can create business opportunities for Bangladeshi transporters and providers of port services,” it said.
Priya Mathur, co-author of the report, said, “The region could consider launching a Brand Northeast that plays to its strengths, emphasising elements such as healthy living, environmental sustainability, social responsibility, and service-orientation.”