June 26 (Bloomberg) -- Earlier this month, Naypyidaw, the capital of Myanmar, hosted the World Economic Forum. The event confirmed the unexpectedly swift reassimiliation into the global community of a country that, until five years ago, had remained walled off by the military junta in power since 1962. Now that the regime is at long last liberalizing, and inviting foreign investment to change the landscape of one the poorest regions in Southeast Asia, Myanmar could make enormous strides by taking advantage of its geographical location, with India to the east and China to the west.

Crucially for India, Myanmar's new openness to the world would mean a release not just of that country's dormant energies -- and a spike in India-Myanmar trade -- but also a new lease of life for India's desperately poor northeastern flank. The caprices of postcolonial geography mean that this vast, hilly, landlocked region is linked to the rest of India only by a tiny corridor creeping between Nepal to the north and Bangladesh to the south. The difficulty of the free movement of people and trade across this channel has made the northeast much more economically backward than the Indian mainland. And the intransigence of the Myanmar junta has meant that for half a century its Indian neighbors have been unable to exploit the advantages of the border of more than 1,500 kilometers (900 miles).

Squeezed on both sides, the region has long depended on New Delhi for handouts even as its numerous insurgencies further disabled its economic life. It's not hard to see how, in opening itself to the world, Myanmar could do for India's northeast in a decade or two what India's central government has never been able to accomplish. Meanwhile, the "Look East" turn of Indian foreign policy over the last two decades, designed to improve trade relations with Southeast Asia, would acquire an internal dimension: greater investment from both government and Indian businesses in the northeastern flank as it becomes, like Myanmar, a bridge to a new regional trade corridor.

This isn't just wishful thinking. As recently as the beginning of the 20th century (when Myanmar was called Burma) the cities of Mandalay and Rangoon (now Yangon) occupied a privileged place in the imagination of the poor in India's densely populated eastern regions. To such people, Burma was the place that offered the best prospects of moving up in the world. But after 1962 (this report from that year is worth reading), Indian businesses in Myanmar were taken over and Indians expelled, creating a breach that has not yet been healed. The Indian writer and translator Jatindra Nayak, who has edited a volume of 19th-century Indian accounts of Burma, writes in an essay called "Burmese Days":

"Not so long ago, Burma did not seem such a remote, unfamiliar place to people in [the east Indian state of] Orissa. In fact, historians have pointed out that the Orissa-Burma relation is an ancient one and that Oriya merchants took the maritime route to reach Burma and many of them settled there. It was in the 19th century that Orissa-Burma relations entered a very significant phase. For about a hundred years, Burma was a favourite destination of thousands of Oriyas.

"In the villages of Orissa, Burma fascinated people as a land of incredible opportunities. The saying, ‘You earn one rupee in Burma by just cutting down a banana tree,’ seems to have gained currency in Orissa. Burma returnees often flaunted their gold tooth and were sometimes accompanied by Burmese wives."

In a recent essay in the Telegraph called "Road to Myanmar and beyond," Arup Kumar Dutta supplied a short history of Indo-Burmese links in the time of the British Empire, including an abortive India-Burma rail project that was proposed at the beginning of the 20th century:

"The importance of a road to Myanmar and beyond for the Northeast can hardly be underestimated. In the past, this region, being strategically positioned between China and Southeast Asia and India, enjoyed a geo-political centricity....

"A viable outlet to Southeast Asia will go a long way to ensure that the psychological feel of being boxed in from all sides except the west evaporate and the Northeast regain its historical centricity."

Journalists attending the World Economic Forum this month brought back a wealth of perspectives on Myanmar. Thant Myint-U, author of "Where China Meets India: Burma and the New Crossroads of Asia," suggested in an interview that the onus was on India, as the bigger power, to push for economic activity in the region:

"In the short term, the importance of Myanmar for India and for Indian policymakers depends on the importance of North-East India for Indians. If North-East India is important, then Myanmar is very important. If it is not, then Myanmar is not a gateway to anywhere else. In the future, if Myanmar has to be a gateway for anywhere, an imaginative focus on North-East India is going to be critical."

For now, India's main Myanmar-related undertaking is the development of an ambitious new trade route between the two countries. The Kaladan multimodal transport project would extend by sea from the city of Kolkata in India to the coastal town of Sittwe in Myanmar, proceeding further by river and land back up into India's northeast. The Indian conglomerate Essar Group is currently building the port at Sittwe, where India would like to see a special economic zone set up. There's also an India-Myanmar-Thailand highway in the offing, with a projected completion date of 2016. These developments carry the potential to vastly expand the volume of bilateral trade between India and Myanmar from the current $1.4 billion annually -- and to allow Indian businesses to play a prominent part in Myanmar's growth story.

As Robert Kaplan writes in a perceptive essay on Myanmar's new geopolitical significance on the website Stratfor.com, "A liberalized Myanmar draws India deeper into Asia, so that India can more effectively balance against China." It would seem that Myanmar's return to the world stage comes not a moment too soon for its 60 million citizens, while also promising to supply the missing link in India's efforts to develop the economies of its northeast.

(Chandrahas Choudhury, a novelist, is the New Delhi correspondent for World View. Follow him on Twitter. The opinions expressed are his own.)

To contact the author of this blog post: Chandrahas Choudhury at Chandrahas.choudhury@gmail.com

To contact the editor responsible for this post: Max Berley at mberley@bloomberg.net