A route of hope

The agreement with China to reopen border trade through Nathu La has raised hopes of an economic boom in Sikkim, but is the State ready to seize the opportunity?

in Gangtok and Nathu La

THE barbed wire fence at Nathu La that indicates India's border with China stands at the end of a narrow road. Controlled by the Army, the road does not allow at a time anything larger than a jeep. Army personnel restrict the inflow of tourist taxis, of which not more than 200 get permits to go up to Nathu La. For four decades after the Sino-Indian war of 1962, Nathu La has remained a no-no pass. It was thrown open to tourists a couple of years ago, but did not have much to offer them. There are no ceremonial rituals such as the one seen at the Wagah border post between India and Pakistan.

Now things have changed. Since Prime Minister Atal Bihari Vajpayee announced the opening of the historic Silk Route trade links through Nathu La, things have not been the same in Sikkim. In the official residence of Chief Minister Pawan Kumar Chamling, in the Legislative Assembly and even in restaurants in Gangtok, there is much expectation over how the State, which has been dependent on federal dole, will benefit from the decision.

Insiders claim that the State government never really expected its long-standing demand of opening of the Silk Route through Nathu La to materialise. However, reacting to the declaration, Chamling said: "Things are in place. Within two months we shall present a feasibility report to the Central government on what infrastructural development needs to be taken up in Sikkim for it to utilise effectively the benefits of the opening of the trade route through Nathu La." A high-level committee has been formed to prepare this report. At the top of the agenda is the development of a new township between 15 Mile and Tsomgo in order to create warehousing facilities. Another township will be developed between Ranka and Ranipool. Tsomgo, which is 17 km from Nathu La, at present is mostly constituted by small, makeshift shops, which cater to tourists. The State government plans to develop Tsomgo into a trading township. The first stop for traders who travel along the Silk Route will be Tsomgo. The joint declaration signed between India and China in June says that the Indian side agrees to "designate Tsomgo of Sikkim State" as the venue for the border market and that China will designate Renqinggang of the Tibet Autonomous Region as the border market on its side.

Chamling sees opportunities for Sikkim in the opening of the trade route. "It will generate employment in tourism- and transport-related businesses. Investors from industry and development organisations such as the World Bank will no doubt be attracted towards Sikkim. In order to maximise the benefits, the people of Sikkim will have to upgrade their capacity-building skills," he said.

The Sikkim government hopes to launch a bus service from Gangtok to Lhasa. It is also looking forward to infrastructural support from the Central government to upgrade the road to Nathu La into a motorable one. It has sinking zones and parts of it fall in landslide-prone areas. The fact that one climbs 9,000 feet (2,700 metres) within a distance of about 10 km gives an idea of the gradient of the road. However, the widening of roads might prove to be one of the easiest tasks before the government.

Optimistic Sikkimese business fora predict that regional exports to Sikkim would touch $203 million, with the cross-border sale of vegetables, oils and household items. Economic development of the region will now get an impetus, with a flourishing border trade. The Indian Chamber of Commerce (ICC) has predicted unprecedented economic development of the region, which includes the Greater Mekong region of Laos, Cambodia, Vietnam, Thailand, Bangladesh, Bhutan and the Yunnan province of China. It predicts that Nathu La will provide the key connectivity to develop the trade bloc.

However, the ICC has based its predictions on some conditions. The northeastern States would have to tap the Chinese markets for their products and look at the Nathu La route as a more effective land route. These States would have to pull themselves up and effectively take on the challenge posed by the import of cheap Chinese goods. Secondly, India has to become a new source point for intermediary products, which could feed Chinese factories that produce manufactured goods. Thirdly, the northeastern region would have to push itself and become an agro export zone. Fourthly, partnerships and joint ventures would help in accessing markets of third countries such as Taiwan, Indochina, Japan and Korea by utilising the Chinese export marketing network. Lastly, tourism could thrive in the region with land routes readily available.

For all this to happen Sikkim will have to find the political will to change things. It would not only have to study how the region can develop in an integrated manner but also have to judge how serious the Central government is in bringing about some of the promised changes. A degree of sobriety is lent by the situation on the ground. More than 25 years after Sikkim's merger with the Indian Union, industry is still at a nascent stage in the State. In 1992, the existing industrial units provided employment to over 4,000 persons, hardly 1 per cent of the State's population. The reasons attributed to this poor performance are industrial sickness and governance-related distortions in the private sector. Entrepreneurs from outside the State find it difficult to furnish documents such as domicile residential certificates. Land laws in Sikkim do not allow the alienation of land. Poor social and industrial infrastructure, coupled with a lack of natural resources, has generated a cloud of gloom among the trading and entrepreneurial community. As of now, the State government is optimistic about exporting items such as organic cardamom and ginger, mango, local chilli and construction items to Tibet.

Much hope is pinned on tourism, which is expected to generate employment. Lukendra Rasaily, the secretary, Travel Agents' Association of Sikkim, said: "Working out the modalities of the trade would take a long time. Sikkim would benefit tremendously if the government opens a Buddhist circuit at the border, a combined tour of monasteries in Tibet and in India. The passage through Nathu La can be used for the Manasarovar Yatra." The mountain treks, picturesque lakes such as Tsomgo, and the rhododendrons of north Sikkim attract more than 12,000 foreign tourists and two lakh domestic tourists annually to the State. The tourism industry has led to the creation of jobs and boosted the economy over the past few years. "Most foreign tourists who want to go to Tibet go through Kathmandu. If we open the passage through Nathu La for tourism, at least 25 per cent of those tourists will pass through India. This will boost the local economy," Rasaily said.

The government will have to be proactive in monitoring and checking the movement of people across the border. The State government plans to set up a counter-intelligence service in the State Police Department.

A section of the Indian Army remains strongly opposed to the opening of the border, on strategic grounds. This section of the Army has expressed its concern over the construction of road, rail and air heads in the Tibet Autonomous Region. It fears that the ongoing 1,118-km railway project to link Gormo in China's Qinghai province with Lhasa in Tibet will enhance the induction and sustenance capability of Chinese troops in Tibet. This railway line, which costs a whopping $27.2 billion, will connect Lhasa with four major Chinese centres. This highly reliable and versatile network of defence feeder railway lines from mainland China up to the international border with India has put India's defence establishment on high alert. Two former Prime Ministers, P.V. Narasimha Rao and H.D. Deve Gowda, had rejected proposals to open the trade route.

The issue gets complicated further given the presence of Tibetans in Sikkim. If the opening of the trade route is being seen as de jure acceptance by China that Sikkim is a part of India, then Tibet has also been accepted by India as being a part of China. Tibetan organisations and the Tibetan government-in-exile in Dharamshala in Himachal Pradesh have protested against the move. In Sikkim, the reaction from the 6,000-strong Tibetan community has been much more subdued. There have been no demonstrations or written petitions.

The majority of Tibetans in Sikkim are second-generation migrants. Although they live in Sikkim as refugees, they are fairly integrated into Sikkimese society as a result of inter-marriages and trade links in the local Sikkimese community. T.Y.C. Jimba Phuntosk, president of the Tibetan Youth Club, a civic group which has been demanding the complete independence of Tibet, said: "We are aware of the laws and will not go against them. At the same time we would like to sound a word of caution against China."

To what extent does the acceptance of trade through Nathu La mean that China has accepted Sikkim to be a part of India? Has the opening of the trade route resulted in China's de jure acceptance of Sikkim's 1975 accession to India? Said Chamling: "China can say what it wants to. As the Chief Minister of Sikkim and as its representative, I have always maintained that Sikkim is an integral part of India. We are the only State to join India through a referendum." Chamling lays stress on Sikkim's "reverse integration" with India. It is also not uncommon to come across graffiti like "Kanchenjunga to Kanyakumari: One India" in Sikkim. All these are subtle though effective indicators of Sikkim's integration with India.

At the diplomatic level, however, the dominant opinion is that the meeting between the Indian Prime Minister and his Chinese counterpart has not resolved the issue of Sikkim's integration with India. Differences over semantics have ensured that nothing concrete has come out on paper. Although the talks have not resulted in any solution, there is a reduction in the level of the dispute between China and India on the recognition of Sikkim as being a part of India. The Sikkim government has urged the Central government to include representatives from Sikkim in the committee that has been set up by India and China to resolve the border disputes.