The main feature of Manipur is its social heterogeneity. Multi-culture, multi-lingual and multi-religion flows in the region. We can broadly classify the state into the hill areas dominated by the tribals and the plain areas dominated by the Meiteis (Manipuris). Because of the presence of multi-identity, any attempt to homogenize the social structure of the region would only invite chaos.

The disadvantageous geographical location of the state is one of the main stumbling blocks to its economic development. According to study, the North East region (State of Arunachal Pradesh, Assam, Manipur, Mizoram, Nagaland, Meghalaya and Tripura) as a whole shares less than one percent of its borders with the rest of the country, and the rest with Bhutan, Bangladesh, Myanmar and the Tibetan region of China. This international border has been artificially created.

The outcome has been the elimination of the region’s trade, commerce and other linkages which existed in the pre-partition days.

There has been talk of converting this locational disadvantage into a boon because of an increasingly integrated world economy. This is particularly so when all the seven states of the region are on international borders. In addition these states are very close to the dynamic South-East Asian economies. Most policy makers in the region are excited and optimistic, about the idea of linking their economics with dynamic Asia. There are suggestions that if for security reasons, the Government of India is reluctant to open up the natural trade routes, the North East states should ask the central govt. to compensate them for the loss of trade. Thus, a coherent policy thinking in this area should be developed.

Secondly, the weakness of India’s foreign policy; beside failure of the economic policy framework in the region, the government of India had ignored South East Asia for a long time. Consequently, the North East region was not only cut off from its national economic partners but also excluded by unfriendly countries.

Though trade relation with Myanmar exists, it is an unauthorized trade. The state authority of Manipur is fully aware of these activities which function smoothly through unofficial channels. China is an important player in the border trade even though its trading activities are mainly through Myanmar.

Thus, emphasis should be given on synchronizing these realities into Indian trade policies. A coordinated effort by different central minister-- mainly External Affairs, Home and Commerce -- as well as a strong commitment from the region is the need of the house to transform the low economic activity area into a dynamic region in the next 10-15 years.

The central government on its part should help in converting the unauthorized trade into an authorised trade. The unauthorized trade works on the basis of strong network which involves traders, police, forest departments and of course, many underground groups and each has its own share in the pie. Apart from infrastructural problems at Moreh (Manipur), the larger number of check-posts on National High Way 39 and 53 would create problem in switching over from illegal to legal trade. In most cases, the State Government turn a blind eye to the border trade in illegal items because commodities are not declared legal officially.

There is corruption at every turn. It would be a good idea to declare certain area in the region as free trade areas officially since for all practical purposes, they are free trade areas anyway

Thirdly, the exposure of law and order vacuum in the state. Manipur is one of the oldest insurgency states in independent India. The last few decades have seen the emergence of a number of insurgent groups. Many of which have faded out but some are still active and continue to spill blood. Frequent bandhs and economic blockades by various groups are another annoying factor in Manipur. Bandhs are called not only by insurgent organizations, but also by political parties.

A related aspect is the fear of extortion, kidnapping and killings of businessmen. In order to survive, almost every industry or business, big or small, in most part of the state, makes regular contributions to different underground outfits. Even the public sector units as well as government employees in many parts of the state are reportedly paying money. In such a situation, it is hard to expect any enterprise for investment in the state of its risk.

Therefore, the central and State Government should give serious efforts to end insurgency in the state besides announcing of numerous schemes foe economic development. Peace effort in the last few years between the government of India and National Socialist Council of Nagaland (NSCN-IM) are steps in the right direction.

The major insurgent groups operating in Manipur are: 1. National Socialist Council of Nagaland (NSCN-IM) 2. Peoples’ Liberation Army 3. United National Liberation Front 4. Kangleipak Communist Party 5. Kuki National Front 6. Kanglei Yarol Kanba Lup 7. Peoples’ United Liberation Front

In Manipur, 15th August and 26th January celebrations are virtually paralyzed every year by a joint bandh called by all the outfits for 36 hours (12 hours preceding the day). According to the North East Development Finance Institution (NEDFI), lost in state domestic product per day due to bandh have been Rs. 4,479 Lakhs. In 2000, Manipur witnessed a total of 100 days bandh.

Such bandhs called by different underground outfits, student organizations, political panties, etc have tremendous effect on the state’s educational set up. This hampers the growth of education, led to the students of the state being left behind as for as academic excellence is concerned.

In a state like Manipur, where unemployment has raised its neck, it is natural that the unemployed youth take to arms. For, there has been a report that most of the insurgent groups operating in the state pays good salary to its cadres.