The 1382 offshore-identified islands of India hold immense unexploited potential for fostering growth and achieving cohesive socio-economic development of the region in particular and also, the nation as a whole. They can significantly contribute to the GDP by leveraging the gains from promoting infrastructure and tourism on a large scale.
However, care must be taken to safeguard and maintain the position of these islands as vital strategic assets for national security while keeping their nature and composition as biodiversity hotspots intact.
Given the strategic location of Andaman & Nicobar (A&N Islands) and the Lakshadweep Islands and China’s belligerent expansionist policy in the Indian Ocean Region (IOR), not only is there a need to develop critical infrastructure and upgrade the military base in these regions, but also to harness the multiplier effect generated as infrastructure connectivity strengthens. This in turn, is expected to boost tourism and spruce up economic activity in the region.
Why are they important?
Of late, the Islands have garnered special attention in the wake of the rising maritime territorial tensions at the international front. India’s only tri-service command is established at the A&N Islands at the entrance of the Malacca Strait, the 2.8 km long -world’s most congested choke point, and the primary route for Chinese oil supply. However, with the recent Indo-Japanese initiative to expand civilian infrastructure in its vicinity, China has started exploring alternative land routes to the Middle East for oil, most notably, through the China Pakistan Economic Corridor (CPEC).
Emerging Sino-Indian competition in the region can be seen through the routine deployment of submarines by China, development of underwater surveillance networks, expansion of Chinese naval bases with the establishment of a military base in Djibouti and extending the reach of the One Belt One Road (OBOR) mega-initiative as India joins hands with Japan, Australia and the US in the Malabar Naval Exercises. This sentiment is mirrored in the recent formation of the ‘Quad’ coalition group by the same nations. The Doklam standoff and the recent Chinese policy of forming strategic/ critical commercial alliances with India’s neighbouring countries as the United States displays a clear proclivity towards India, makes fast-paced Island development all the more imperative.
The Immense Latent Potential
The Islands host an unexplored Exclusive Economic Zone (EEZ) with clearly demarcated boundaries that can be capitalized on in numerous ways; the varied ecosystem can be exploited for its medicinal plants and exotic plant species, sustainable agriculture and horticulture practices conducive to the agro-climatic conditions of the regions can be propagated, large-scale hydrocarbon explorations can be undertaken, and alternate renewable energy resources can be exploited so as to meet the energy needs of the nation.
Additionally, rainwater harvesting can be popularized so as to both conserve water and also narrow the critical water infrastructure deficit in the region due to scarcity of resources and inefficient management. Fisheries, the mainstay of the larger populace of these regions, can be given a thrust so as to develop modernized and sustainable inland fisheries and aquaculture ecosystem integrated with the ‘Blue Economy’ vision. Most importantly, the Islands can be developed as prime Tourist Hotspots for not just the country, but also internationally. The pristine beaches, coupled with rich tropical vegetation, can be turned into a more economical and attractive alternative to conventional destinations such as Bali and Maldives, thereby creating many forward and backward linkages and help boost the economy of the regions to a large extent.
Enter the Government:
The A&N Islands alone account for 30% of India’s EEZ-revenue. Given their unrealized potential, bridging the infrastructure gap becomes the next crucial step. Historically, Ship Building and Ship Repairing have been the high priority areas for infrastructure initiatives in the islands. However, acknowledging the urgency and potency of the pending development in these regions, the government in 2016, identified 26 Islands for promoting and implementing development based on sustainable approach to building a thriving economy of the project islands. The government has also announced laying of Rs, 1,102 Crore worth of submarine optical fiber cable between Chennai and A&N Islands so as to increase telephone and internet connectivity in the region by December 2018. Moreover, considering the unique maritime and territorial bio-diversity of the islands, the government has identified enhanced connectivity as one of the key priorities.
In 2017, the Island Development Agency (IDA) was established for the holistic development of the islands, focusing on community-based tourism. Key Infrastructure projects such as creation of jetties/berthing facilities, Roll-on/Roll-off ships; Bridges on Andaman Trunk Road; Upgradation of Diglipur Airport; Construction of Minicoy Airport; Modernization of existing Jetty at Kavarati; Augmentation of Satellite Bandwidth from 1.118 Gbps to 2.118 Gbps in Andaman & Nicobar; augmentation of helicopter services for Islanders and tourists etc. are being accorded priority accordingly.
With better communication services, Information Technology based and other Micro, Small and Medium Enterprises (MSME) would be promoted in the Islands. Further, after carrying out systematic study, 18 Projects, both in Andaman & Nicobar and Lakshadweep, have been identified for implementation, out of which 7 Projects are ready for launch through Public-Private Partnership.
Moreover, international collaborations can also be banked on for the same. The 2016 Indo-Japan Joint Statement on Bilateral Cooperation envisioned to develop “Smart Islands” on the line of the ‘Smart Cities’ project. Japanese capital and expertise can be both pioneering as well as beneficial to this endeavor. The development of the Reunion Islands by France can be a guiding example and also opens up the opportunity for prospective collaboration with Paris in implementation of such projects. The positive response by OECD countries in taking on ‘Smart Cities’ projects further demands similar international cooperation.
The Way Forward: Private Sector Participation
Collaboration is indeed, the need of the hour in this regard as provision of a robust regulatory environment by the government is needed so as to not encroach upon the natural and socio-economic rights of the Particularly Vulnerable Tribal Groups (PTVG) and also preserve the ecological balance of the region, while facilitating better connectivity and maritime security infrastructure. Moreover, the high financial costs entailed in such investments create a need for private sector involvement, where their operational and managerial expertise is required so as to optimally deliver on these projects. Similarly, International best practices can be modified suitably and replicated so as to maximize returns further.
Although, the need for civil infrastructure development in Island regions is unquestionable, in the wake of existing geo-strategic position of these islands, upgradation of defense facilities is equally important. This will constructively channelize the positive externalities of such assets to enhance the living conditions of entire populace.
However, due attention needs to be paid so as to not disturb the ecological balance, disrupt local livelihood-activities, and engage all stakeholders in the decision making process while ensuring that sufficient institutions and mechanisms exist for grievance redressal, compensation and rehabilitation. The road to development must sail through the islands.
Receive Daily Updates
Recent Posts
Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.