The Multi-faceted Economic Ramifications of Manipur’s Ethnic Conflict

The costs of the violence on the economic front include the decline in investment and the loss of human capital.

Any state conflict, whether surfacing from an internal ethnic strife or is state-engineered, has serious economic costs attached that are often less quantifiable at the time a given conflict is unfolding. One can study the probable costs attached with respect to the loss caused to human and physical capital, but a lot becomes clear after the fog of violence has disappeared.

As part of an effort to study and understand the current conflict in Manipur, the research team at the Centre for New Economics Studies has been involved in bringing forth a series of field-based reports spotlighting lesser-known cross-cutting humanitarian issues that are emanating from the ongoing conflict in Manipur.

In addition to understanding the socio-economic impact of the conflict, the series also seeks to map out instances of resilience, local innovations in humanitarian action, and examples of community peacebuilding in the context.

Interpreting the Economic Impact of Conflict

The repercussions of conflicts are multi-faceted. While the immediate and visible consequences of most conflicts, especially violent ones, include the loss of life, the destruction of property, and the displacement of people, the indirect implications are seen on the economic front. These costs of conflict include the disruption of economic activity, the decline in investment, and the loss of human capital.

Manipur’s sectoral composition is depicted in the above graph and as is evident, agriculture continues to be the predominant profession in the state. Agriculture plays a significant role in the economy of Manipur with nearly 52 percent of the total workers engaging in cultivation. The types of cultivation prevalent in Manipur are broadly of two types i.e., permanent cultivation and terrace cultivation.

Permanent cultivation is mainly practiced in the valley districts, whereas the hill districts practice terrace cultivation, with jumping and shifting cultivation being the widely adopted practices. The allied activities of agriculture include livestock/poultry, horticulture, forestry, and fishery, among others. Livestock/poultry plays an important role in the state’s rural economy.

The Meitis who largely reside in the valley region have been able to practice some form of stable cultivation or permanent cultivation due to their geographic landscape vis-a-vis the Kuki and Naga tribes that have historically practiced shifting cultivation in the hilly regions of the state.

As a result, the cultivation in the hilly regions is significantly lesser than in the valley since they produce enough to sustain themselves. However, the valley allows for surplus production, which makes it the hub of economic activities and trade, indirectly sidelining the hilly regions and the people residing therein.

The Cultivation Question

The ongoing conflict has severely affected agricultural practices in the state, preventing them from not only initiating cultivation but also having to face the direct impact of the conflict in terms of infrastructural damage to the irrigation and storage facilities. In peace times, farming activities usually commence in the first week of June but in some instances may be delayed up until the last week of the month.

However, this time around, cultivation began only after the arrival of the security personnel around 8 July. The onset of the monsoon compelled the Manipur government to deploy troops to facilitate cultivation in the state. Around 2,000 security personnel, including the Manipur Rifles and the India Reserve Battalion, are serving in farming areas adjoining the hills. However, with instances of violence still being reported in parts of the state, farmers are now undertaking cultivation fraught with anxiety.

Pukhao region of East Imphal seems to be suffering more than others because despite the deployment of security personnel in the area, the occurrence of sporadic armed violence, resulting in some casualties, is making the farmers increasingly apprehensive.

A direct implication of the delayed cultivation is the extremely low yield of the produce as well as the general spike in prices due to the shortage of food considering the ongoing conflict. The graph below depicts the agricultural yield for Manipur since 2008. The decline in agricultural yield is correlated with periods of conflict in the state. In 2011, there was a major uprising by the United National Council (UNC) in Manipur.

This conflict led to the deaths of hundreds of people and the displacement of thousands more. The conflict also disrupted agricultural production, leading to a decline in yield. The conflict in Manipur has continued in the years since 2011. In 2016, there was another major uprising, this time by the Kuki Students Organization (KSO). This conflict led to further deaths and displacement, and it also disrupted agricultural production. The decline in agricultural yield in Manipur hurts the state's economy.

Prices of rice have risen significantly considering the conflict and the inability of farmers to sow paddy; the sharp rise from Rs 10 to Rs 30 is just the beginning as suspected. Not only has cultivation been hampered but so has the harvest of produce.

The Irabot Foundation Manipur has estimated that nearly 10,000 hectares of cultivable land will not see rice plantation this season leading to a rice deficit of 40,000 metric tonnes next year, and widespread starvation in the coming years.

While these estimates highlight the issues in the Valley, there is an absence of data from the hill districts, which is necessary to ascertain the impact on agriculture and livelihoods in the hills.

Unemployment and Migration

While the impact of the ongoing conflict on the agricultural economy of Manipur is alarming, it is also important to assess some of the causal factors that contribute to the insurgency in the state aside from the cultural underpinnings of the conflict.

The state of Manipur has been suffering from unemployment woes. Each year the number of employable-educated youth increases but the available job opportunities are minimal since most of them are in the governmental sector due to the state’s lack or near absence of industries. The chart below reflects the declining labor force participation rate in Manipur over the years, which highlights the rising unemployment in the state.

Resultantly, the youth are either forced to migrate from the state in search of better employment opportunities or are forced to settle for poor job prospects that the state has to offer. There is a sparsity of big industries in the state due to the state’s geographical location being in the hills with relatively inaccessible landscapes, varying climatic conditions, and inadequate infrastructural facilities.

Therefore, the industry sector in Manipur consists largely of Micro-Small and Medium Industries which have a traditional orientation towards khadi, handloom, handicrafts, sericulture, and pottery etc. Sericulture and Pottery are among the oldest industries in Manipur. They are important labor-intensive and agro-based industries generating employment opportunities for the rural people with the lowest investment cost.

Thus, they help in the improvement of the economic conditions of the people of the state. However, the present industrial setup in Manipur fails to meet the employment demand in the state since there is a significant gap in the demand and supply chains.

Unemployment and Insurgency

It has been observed over the years that the lack of job prospects in the state makes the youth fall prey to the insurgents in the state. Insurgency in Manipur is widespread since many militant outfits belong to various communities and sects.

It has been observed that small-scale startups are also hard to start in Manipur due to a host of accompanying problems which include access to basic amenities such as good electric and water supply, and transport infrastructure. These are basic requirements for any industry to survive. Should the governments seek to address these issues, the youth will be able to start small industries catering to the problem of unemployment to some extent.

Due to the predominance of security forces in the state and the need to maintain peace and harmony, economic activities have taken a back seat historically because of this we see the lack of industrial development in the state and the poor quality of necessities in the state.

The economy of Manipur can be characterised by a high rate of unemployment and poverty, low capital formation, inadequate infrastructural facilities, geographical isolation, communication bottlenecks, and minimal industrialisation. It is time that the nation collectively works towards the upliftment of the state in addressing its economic conditions, which will also help alleviate the historic conflict the state has witnessed.

(Deepanshu Mohan is Professor of Economics and Director, Centre for New Economics Studies (CNES), Jindal School of Liberal Arts and Humanities, O.P. Jindal Global University. Amisha Singh, Shalaka Adhikari, Samragnee Chakraborty and Aditi Desai are Research Analysts with CNES and members of the Mapping Humanitarian Initiative. Previous write-ups from the team can be accessed from here, here, and here. This is an opinion piece and the views expressed are the author’s own. The Quint neither endorses nor is responsible for them.)