Japan’s loans should focus on Northeast

Japan’s loans should focus on Northeast

By Monika Chansoria | 10 December, 2016
ODA loan assistance includes 67.1 billion yen for North East Road Network Connectivity.

India’s relationship with Japan has steadily clasped on to the changing dynamics and realities in Asia and assumed growing vitality vis-à-vis the future Asian security scene. The Special Strategic and Global Partnership as outlined in the “India and Japan Vision 2025” set forth on 12 December 2015, displays a high degree of convergence in the political, economic, and strategic realm. The strategic realities have become far more pertinent, given the rising centrality of the Indo-Pacific region to regional security and stability.

The renewed focus of India’s active engagement in the region within the ambit of its “Act East” policy initiative compliments Japan’s “Free and Open Indo-Pacific Strategy”, which pushes Prime Minister Shinzo Abe’s vision for an Indo-Pacific strategic framework launched during his second tenure in office, in December 2012. For that matter, Abe’s bid to forge this vision began in his first term as Prime Minister, when he addressed the Indian Parliament in August 2007. Inspired by the most famous authored work of Mughal prince Dara Shikoh, the book Majma-ul-Bahrain (The Confluence of the Two Seas; published 1655) became the foundation and title of Abe’s speech and vision for Indo-Japanese relations—that of nurturing an open and transparent Indo-Pacific maritime zone as part of a broader Asia. In fact, the “Confluence of the Two Seas” speech also underscored the pivotal advisory role of current Deputy Chief Cabinet Secretary, Kanehara Nobukatsu, and special Cabinet Advisor, Taniguchi Tomohiko. The concept of a “broader Asia” is fast transcending geographical boundaries, with the Pacific and Indian Oceans’ mergence becoming far more pronounced and evident than ever.

In order to catch up to the reality of this “broader Asia”, Abe referred to Japan undergoing “The Discovery of India”—implying rediscovering India as a partner and a friend. Even during the most recently concluded visit of Prime Minister Narendra Modi to Japan, the synergy between India’s Act East Policy and Japan’s “Expanded Partnership for Quality Infrastructure” for better regional integration and improved connectivity was highlighted. This policy pronouncement remains significant from India’s standpoint, especially in reference to the dire need for infrastructure build-up in India’s Northeastern states—the bridgehead of India’s connectivity to the East.

The importance of securing appropriate implementation of Official Development Loan Assistance (ODA) projects cannot be more emphasised, with the already received 3.5 trillion yen of public and private financing to India in five years under the “Japan-India Investment Promotion Partnership”. Japanese contributions to the development and modernisation of infrastructure in India via ODA are fast becoming a vital reference point—with a majority of ODA-related projects lying in the infrastructure sector. The current financial year sees commitment of a total of 390 billion yen by the government of Japan—the highest amount committed in a single fiscal year.

Incidentally, Prime Minister Shinzo Abe’s grandfather, former Prime Minister Nobusuke Kishi became the first ever Japanese Prime Minister to visit New Delhi in 1957 and launched Japan’s first post-war ODA to India. The journey since that time has been a long, winding one. Today, Japan’s Official Development Loan Assistance to India is committed for an amount of 242.2 billion yen (Rs 14,251 crore approximately). Among other Indian states, the ODA loan assistance includes 67.1 billion yen for the North East Road Network Connectivity Improvement Project (Phase 1). The ODA projects to enhance road connectivity in Northeastern India by identifying technologies, infrastructure, and strategies to facilitate development will be a critical benchmark that would test the strategic basis of India’s relationship with Japan. In this reference, Japan has agreed, in principle, to back and fund many critical Greenfield highway projects in Northeast India. The Japan International Cooperation Agency, which coordinates official development assistance (ODA) for the government of Japan, will be involved in the earmarked 400 km highway stretch in Mizoram between Aizawl and Tuipang; a 150 km highway in Meghalaya; two projects in Manipur; and one each in, Tripura, Nagaland and Assam. Incidentally, no major project with Japanese assistance has been announced for the Indian northeastern state of Arunachal Pradesh.

For India and Japan to develop a concrete roadmap for the phased transfer of technology that are in sync with the “Make in India” initiative, human resource and financial development and collaboration in highways, high speed rail technology, operations, maintenance, modernisation and expansion of the conventional railway system in India will be the key areas. While contribution of Japanese ODA has no doubt bridged India’s infrastructure deficit to a large extent, Tokyo’s role in developing infrastructure in India’s Northeast will be the defining turn of the real “confluence” of India’s Act East initiative with Japan’s Indo-Pacific strategy.

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