Trade Induced Employment Function and Employment Multiplier: A Case Study in Indo-Myanmar Border Trade

Abstract

The wave of globalization had started winding since the late 1980’s in many countries of the world. This led to a structural change in different sectors of economy in different parts of the world. One of such sectors is external sector which remained closed in many countries specially socialist countries for many decades. Many countries have started adopting export as engine of economic growth, and, import as means to acquire technological know-how and capital goods for promoting export sector. India’s economy which had been under the License Raj for almost four decades, however, by the turn of 1990s, India had been in the new wave of globalization. As a part of project globalization, India adopted “Look East Policy” for opening up its economy to those neighbouring South East Asian countries. Under this policy, India signed the Indo-Myanmar Border Trade agreement on 21st January, 1994 with Myanmar in view of the needs and demand of the people of the North East India. However, border trade along the Indo-Myanmar border has been being witnessed trading of both formal and informal goods simultaneously. Therefore, this paper examines exclusively the items under informal trade; the institutional factors behind this informal trade; methodologies; employment function and employment multiplier.