SOCIO-ECONOMIC IMPACTS OF CROSS BORDER TRADE ON INDIA: A FIELD STUDY ON ARUNACHAL PRADESH

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1 A Journal of Radix International Educational and Research Consortium RIJEBM RADIX INTERNATIONAL JOURNAL OF ECONOMICS & BUSINESS MANAGEMENT SOCIO-ECONOMIC IMPACTS OF CROSS BORDER TRADE ON INDIA: A FIELD STUDY ON ARUNACHAL PRADESH DR. PHILIP MODY Sr Assistant Professor Department of Commerce Rajiv Gandhi University Itanagar, Arunachal Pradesh TAO ABO Assistant Professor Department of Commerce Dera Natung Govt. College Itanagar, Arunachal Pradesh SRI. TENZING NORBU Research Scholar Department of Commerce Rajiv Gandhi University Arunachal Pradesh ABSTRACT Cross Border Trade- the catalyst of socio-economic development especially along border areas has tremendous impacts on overriding economic and social variables. Beside economic development, it also an active agent of social changes. The present study revealed that there is less change in demography, cultural changes, education and public health due to cross-border trade in Arunachal Pradesh, India. However, cross border trade has significant impact on income, employment generation, acquisition of consumer durables and standard of living. On comparison, it is found that impact of cross border trade has more significant impact on economic variables than social variables in the study area. With this background, the present study makes an attempt to analyse impact of cross border trade on major socio-economic variables in Arunachal Pradesh, India. Keywords: Arunachal Pradesh; Cross Border Trade; Pangsau and; Socio-economic Variable. 9

2 INTRODUCTION Cross Border Trade is seen as a flow of goods and services across international borders within an easy reach of up to 30 kilometers. Perhaps, the centrality of the Arunachal Pradesh and its strategic location supports its growing economic activities in terms of border trade with neighboring countries like- Bhutan, China and Myanmar. Also, this locational advantage hold lot of promises to upscale India trade ties with even ASEAN and SAARC nations. Infact, price differentiation of products along either sides of the border is the raisond être of cross border trade in Arunachal Pradesh. Even, it offers lot of employment and income opportunities to women traders, plays a vital role in alleviating poverty, and promotes women economic empowerment as well. Cross-Border Trade has been the tool of socio-economic development in Arunachal Pradesh. Infact, socio-economic development through cross border trade is a direct product of development in various sectors like infrastructure, banking, transport & communication, agriculture, industry, manpower, etc in and around trading a point. Moreover, pace of cross border trading activities is also influenced by attitude of people, administrative & political stability and other socio-cultural factors of a trading centre. Therefore, developments of these factors are an essential pre-condition for escalating the activities of Cross- Border Trade in Arunachal Pradesh in particular and India in general. Thus, a socio-economic impact results from a cross-border trading activity or an associated movement whether positive or negative, wholly or partially is of paramount areas which open up vast opportunities for research woks. Relevant social variables like demographic change, cultural change, changes in education, and improvement in health and economic variables like income, employment, acquisition of consumer durables, and standard of living are some of the significant parameters which fall within the study of socio-economic impact assessment triggered by cross-border trade in Arunachal Pradesh. OBJECTIVES OF THE STUDY The paper endeavour to: 1. Analyze major social impacts of cross border trade on Arunachal Pradesh by China, Bhutan and Myanmar. 2. Analyze major economic impacts of cross border trade on Arunachal Pradesh by China, Bhutan and Myanmar. RESEARCH METHODOLOGY A. Research Method and Tools: In this study an effort have been made to make study empirical and exploratory. Also field survey and observation method have been used by the present study. Again, personal interview, social networking, telephonic contacts and observation are used during the collection of data. Structured schedules, digital camera, telephone and other stationeries have been widely used to collect field data. B. Sources of Data: The present study in its entirety is mostly based on primary data. However, the same has used secondary data for better analysis of the current topic. For primary data, scholar has used both 10

3 interview and observation method of over one hundred respondents. As regard to secondary data, reports and publication of Govt. of Arunachal Pradesh have been used extensively for the present study. In addition to this, various published books, research papers and articles on cross border trade have been referred to for better understanding of the research problem. However, internet has been one of the most used sources of secondary data for the present study. C. Sampling Techniques & Size: For the present study, scholar has used convenience sampling under nonprobability sampling technique. Altogether, one hundred respondents from the study area have been selected for the present study to represent the population parameter. The respondent includes only traders. D. Universe of Study: The present study is carried on two functional cross-border trading points of Arunachal Pradesh namely- Pangsau and Bleething and which is hereafter, called as the Study Area. In addition, the reference period of the present study extend over two years from to Field data over these two years are used for analysis for the present study. E. Tools of Data Analysis: For analysis of data, bar chart, pie chart, MS-Excel, frequency distributions have been used to draw inferences on the universe. Moreover, statistical packages like SPSS and Minitab have been used to analyze field data. ANALYSIS AND INTERPRETATION OF DATA A. SOCIAL IMPACT Social impact assessment is also of increasing importance within the sphere of Social Entrepreneurship and Impact Investment as a means to measure and monitor the social returns or social outputs of a business. Definitions for social impact assessment vary by different sectors and applications. According to the International Association for Impact Assessment, "Social impact assessment includes the processes of analyzing, monitoring and managing the intended and unintended social consequences, both positive and negative, of planned interventions (policies, programs, plans, projects) and any social change processes invoked by those interventions. Its primary purpose is to bring about a more sustainable and equitable biophysical and human environment." 1. Demographic Changes Literary, Demo means The people and Graphy means Measurement. The concept of demographic change describes a population s age structure adjusting to changes in living conditions. Consequently, changes in the composition of a society s age structure are the result of social shifts. Demography is the statistical study of human populations. It can be a very general science that can be applied to any kind of dynamic living population, i.e., one that changes overtime or space. It encompasses the study of the size, structure, and distribution of these populations, and spatial and/or temporal changes in them in response to birth, migration, aging and death. 11

4 TABLE 1: CHANGES OF DEMOGRAPHIC FEATURES DUE TO CROSS BORDER TRADE IN THE STUDY AREA Frequency Percent Valid Percent Cumulative Percent Strongly Disagree Disagree Neutral Agree Strongly Agree Diagram 1 It can be reveal from table 1 and diagram 1 that out of 100 sample collected for the present study, 12 per cent Strongly Disagree about the changes made on demography by cross-border trade. 45 per cent of the sample Disagree and hold the view that there is no change in demography due to cross-border trade in the study area. 28 per cent of the sample has shown neutrality about the changes. On the other hand, 14 per cent of the samples so collected are of the opinion that there is change in demographic features in the trading region due to cross-border trade including 1 per cent strongly agreeing to it. 2. Cultural Changes Culture change is a term used in public policy making that emphasises the influence of cultural capital on individual and community behaviour. It places stress on the social and cultural capital determinants of decision making and the manner in which these interact with other factors like the availability of information or the financial incentives facing individuals to drive behaviour. The belief that culture is symbolically coded and can thus is taught from one person to another means that cultures, although bounded, can change. Cultures are both predisposed to change and resistant to it. Resistance can come from habit, religion, and the integration and interdependence of cultural traits. Cultural changes along the side of border trading is quite 12

5 possible because the movement of goods and services accompany the movement of people from both the sides for exchange of goods and services which can only happen if the buyer understands the sellers cultures. It is also quite possible that through the practise of cross-border trade, westernisation of culture may increase in due course of time. TABLE 1: CULTURAL CHANGES DUE TO CROSS BORDER TRADE IN THE STUDY AREA Frequency Percent Valid Percent Cumulative Percent Strongly Disagree Disagree Neutral Agree Strongly Agree Diagram 2 It is evident from the above table 2 and diagram 2 that out of the 100 samples collected 57 per cent disagree with the statement out of which 29 per cent strongly disagree and 28 per cent disagree with it. 12 per cent is neither agreed nor disagree it. However, 31 respondents (27 per cent agree and 4 per cent strongly agree ). It is examined that there is no drastic cultural changes that are taking place in the trading region because of cross-border trading. However, it can also be not agreed that there is no cultural changes taking place in the region. It would be appropriate to conclude that the cultural changes are taking place in the region in low scale. 3. Changes in Education Cross-border education refers to the movement of people, programmes, providers, curricula, projects, research and services across national or regional jurisdictional borders. Cross-border education is a subset of 13

6 internationalisation and can be part of development cooperation projects, academic exchange programmes and commercial initiatives. The focus of this study is on the movement of students, programmes and providers/institutions. Cross-border is a term that is often used interchangeably with other terms such as transnational, offshore, and borderless education. There are some conceptual differences among these terms but usually they refer to similar types of activities. The preferred term is cross-border education given the importance of jurisdictional boundaries when it comes to policy frameworks and regulations. While carrying out the field survey, the researcher observed that there were few instance of cross-border education taking place. It is also observed that the potential for cross-border education is very high provided good numbers of schools, colleges, technical institutions along with adequate facilities are provided nearby the trading regions of Arunachal Pradesh. TABLE 2: CHANGES IN EDUCATION DUE TO CROSS BORDER TRADE IN THE STUDY AREA Frequency Percent Valid Percent Cumulative Percent Strongly Disagree Disagree Neutral Agree Strongly Agree As observed from Table 3 and its corresponding Diagram 3, it is evident that the overall majority of the respondents have expressed disagreement on changes in education due to cross border trade in the study area. Diagram 3 Altogether, 36 per cent disagree with the statement that cross-border trade has developed education in the trading region and added to it 14 per cent strongly disagree the query. On the contrary, 15 per cent out of the total respondents agree and included to it 4 per cent strongly agree to the query. The remaining huge number of respondents (31 per cent) has shown neutrality on it. It may well be concluded that most of the people are unaware of the exposure that provides the education to the children. It is also pertinent to mention here that along the study area; hardly any educational institution is running. 14

7 4. Improvement in Health The English word Health comes from the Old English word Hale, which means wholeness, being whole, sound or well. According to the WHO, "Health is a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity and a resource for everyday life, not the objective of living. Health is a positive concept emphasizing social and personal resources, as well as physical capacities." Accordingly, improvement of health care facility in the trading region encourages the traders of feeling being sound mentally and morally. TABLE 3: IMPROVEMENT IN PUBLIC HEALTH DUE TO CROSS BORDER TRADE Frequency Percent Valid Percent Cumulative Percent Strongly Disagree Disagree Neutral Agree Strongly Agree Diagram 4 An analysis can be drawn from the above Table 4 & also from diagram 4 that the maximum number of respondents (39%) don t know whether cross border trade has brought about improvement in health care facilities and public health in the study area. However, 28 percent out of 100 samples nodded that cross border trade has improved public health in the trading region. Appended to it, 2 percent of the respondents strongly agreed that cross border trade has improved public health in the study area. In contrary, 24 percent 15

8 and 7 percent expressed simple and strong disagreement on improvement in public health triggered by cross border trade. B. ECONOMIC IMPACT Economic impacts are effects on the level of economic activity in a given area. They may be viewed in terms of business output (or sales volume), value added (or gross regional product), wealth (including property values), personal income (including wages), or employment etc. Any of these measures can be an indicator or improvement in the economic well-being of area residents, which is usually the major goal of economic development efforts. 1. Income Income is the consumption and savings opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms. For the present study, income means money earned through buying and selling of goods and services due to occurrence of border trade. It is evident from the above table 5 and diagram 5 that cross border trading activity has increased the income among traders who are involved in cross-border trade in the study area. It is observed that 28 per cent agreed that cross border trade has increased their income. TABLE 4: INCREASES IN INCOME DUE TO CROSS BORDER TRADE IN THE STUDY AREA Frequency Percent Valid Percent Cumulative Percent Strongly Disagree Disagree Neutral Agree Strongly Agree

9 Diagram 5 Supplementing it, another 22 per cent declared that they strongly agree to it. On the contrary to above statement, 5 per cent Strongly disagree and 22 per cent disagree and are of the opinion that cross-border trade has not increased their income. The remaining 23 per cent of the sample neither agreed nor disagreed. 2. Employment Employment may be described as all economic activity as work, as long as it is performed at least one hour per week. It encompasses both paid employment and self-employment, regardless of whether a person is engaged in the production of goods or services for the market or of goods for own final consumption. However, for the present study purpose, the term employment may be seen with respect to the cross-border trading activities. All economic activity related in the process of buying and selling of goods and services encompassing paid employment and self-employment along the border sides of Arunachal Pradesh may be termed as employment. According to the field survey, maximum samples in the trading regions are in total agreement that cross border trade has generated employment in the study area of Arunachal Pradesh. TABLE 6: EMPLOYMENT GENERATION DUE TO CROSS BORDER TRADE IN THE STUDY AREA Frequency Percent Valid Percent Cumulative Percent Strongly Disagree Disagree Neutral Agree Strongly Agree

10 Diagram 6 It is evident from table 6 and diagram 6 that most of the respondents agreed to the statement that cross border trade has created employment in the trading region. It is revealed that 4 per cent out of 100 samples strongly disagreed, 24 percent of the sample disagreed over employment generation due to cross border trade. 24 percent of the samples are found not have aware that cross border trade has increased employment. Out of remaining 43 percent of the sample, 37 percent agreed and 6 percent strongly agreed that cross border trade has enhanced employment in the study area. 3. Acquisition Of Consumer Durables Consumer durables involve any type of product purchased by consumers that is manufactured for long-term use. As opposed to many goods that are intended for consumption in short term, consumer durables are intended to endure regular usage for several years or longer before their replacement is required. Just about every household contains at least a few items that may be considered to be of consumer durable nature. The present study makes an attempt to explore whether cross border-trading activity has increased acquisition of consumer durables in the study area or not. It is observed from the above Table 7 and its corresponding Diagram 7 that out of the total samples, 12 percent strongly disagreed, 29 percent disagreed, 19 percent neutral 33 percent agreed and 7 percent strongly agreed that cross border trade has helped them to acquire consumer durables. TABLE 7: INCREASES IN ACQUISITION OF CONSUMER DURABLES DUE TO CROSS BORDER TRADE IN THE STUDY AREA Frequency Percent Valid Percent Cumulative Percent Strongly Disagree Disagree Neutral Agree Strongly Agree

11 Diagram 7 It can be concluded that cross-border trading has helped the traders to acquire consumer durables because 33 percent of the sample respondents which is highest in the scale group hold opinion that cross border trade has increased acquisition of consumer durables like fridge, TV, scooty, bike etc in the study area. 4. Standard of Living Access to material resources can enable an individual to pursue their ambitions, to invest in their future, and to live in security and comfort. Consequently, the standard of living is closely associated with the earnings and the quality of a home or life. A lack of material resources can make it harder to plan for the future, to exercise meaningful control over one s destiny, and to enjoy life. The indicators of standard of living are wealth, low pay and low income, housing and neighbourhood quality and financial inclusion. TABLE 8: IMPROVEMENT IN STANDARD OF LIVING DUE TO CROSS BORDER TRADE IN THE STUDY AREA Frequency Percent Valid Percent Cumulative Percent Strongly Disagree Disagree Neutral Agree Strongly Agree

12 Diagram 8 It is revealed from the above Table 8 and Diagram 8 that the cross border trade has positive impact on the standard of living in the study area. Altogether, 45 percent of the total respondents opined that cross border trading activities have brought about improvement in standard of living. Categorically, 36 percent and 9 percent have agreed and strongly agreed upon this. Analysis also shows that 10 percent and 24 percent of the samples have strongly disagreed and simply disagreed on the same. However, 21 percent of the sample exhibit neutrality on the fact. CONCLUSION Cross Border Trade- the catalyst of socio-economic development especially along border areas has tremendous impacts on overriding economic and social variables. Beside economic development, it also an active agent of social changes. Analysis on the present study shows that there is less change in demography due to cross-border trade in the study area. Also, it is revealed that cultural changes are taking place at low scale owing to cross border trade. As regards to education, it is found that from the present study that cross border trade has insignificant impact on the growth and development of education in the study region as 50 percent of the sample respondents hold view that cross border trade has no relevancy with education sector in the study area. Further, it is unveiled that impact of cross border trade on public health and facilities in the study area is insignificant. On the contrary, it is divulged from the present study that 50 percent of the sample respondents opined that cross border trade has increased their income and earning capacities in the study area. On the positive note, 43 percent of the respondents hold opinion that cross border trade has increased employment in the study area. Further, 33 percent of the sample respondents are of the view that cross border trade has increased acquisition of consumer durables like fridge, TV, scooty, bike etc in the study area. Finally, it is uncovered that 45 percent of the total respondents opined that cross border trading activities have brought about improvement in standard of living. Thus, it is revealed that impact of cross border trade is found to be more significant on economic variables than social variables in the study area. 20

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