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Posted at: Jun 15, 2017, 12:19 AM; last updated: Jun 15, 2017, 12:21 AM (IST)

Myanmar looks to China

G Parthasarathy
New Delhi losing out, needs to review economic cooperation
Myanmar looks to China
About turn: There is a clear shift away from the West as Suu Kyi aligns with China.
WHEN Aung San Suu Kyi emerged victorious in national elections in Myanmar, there were widespread expectations that given her iconic image in the West, her government would receive substantial economic assistance from the US and the EU. Suu Kyi had two priorities on assuming office. The first was to establish ethnic peace in Myanmar, where minority groups have resorted to armed insurrection. President Thein Sein, who headed the government earlier, had negotiated cease-fire agreements with a number of these groups. But some powerful groups continued with their armed insurrections. Suu Kyi’s second priority was to create conditions for accelerated economic growth. Illusions that she may have entertained about receiving substantial Western aid were not fulfilled. Myanmar has, however, done well on her second priority, by diversification of agricultural production, while achieving a growth rate of around 8 per cent. 

Rather than appreciating Suu Kyi’s efforts for seeking ethnic peace, Western powers and Islamic busybodies like Turkey and Malaysia chose to pressure Myanmar for alleged violation of human rights of its ‘Rohingya’ Muslim population. Japan and India have shown understanding of Myanmar’s internal problems. China embarrassed its southern neighbour by offering to ‘mediate’ in the ‘Rohingya’ issue. It is, however, China’s approach to Myanmar’s ethnic problems which is forcing Myanmar into a tight Chinese bear hug. Suu Kyi has visited China twice and met President Xi Jinping and Premier Li Keqiang.

The long-running ethnic insurgencies in Myanmar now involve the dominant majority, Bamars, facing 22 armed groups comprising ethnic minorities. Among the strongest of these groups are the United WA State Army (UWSA), with 25,000 well-armed cadres, and the 5,000-strong Kachin Independence Army (KIA), which operates across the India-China-Myanmar tri-junction. Both these groups receive weapons and logistical support from China. The KIA has backed India’s northeastern separatist groups like ULFA and the NSCN (Khaplang), in consultation with government officials in China’s neighbouring Yunnan province. The Chinese have equipped the UWSA with sophisticated weapons that are used in Myanmar’s insurgency ridden Shan state. Cross-border attacks by the UWSA are a major instrument of China to pressure Myanmar.

China also regards Myanmar as a land-bridge to the Indian Ocean. It was initially concerned about the reportedly pro-Western Suu Kyi’s election victory. Beijing, however, skillfully used its security and economic leverages to ‘persuade’ Suu Kyi to give it a significant say in her quest for peace agreements with armed separatist groups. China shielded Myanmar from Western criticism in the UN on the issue of Rohingya Muslims. It also used shortsighted Western aid policies to acquire considerable leverage within Myanmar, to influence domestic decision-making on crucial political and economic issues. It reportedly persuaded the UWSA recently to accept a ceasefire. It is acting similarly with the Kachin Independence Organisation (KIO). China’s envoy to Myanmar has ‘facilitated’ talks with the KIO — a development India should closely monitor. China now has an ability to significantly influence Myanmar insurgent groups.

Large Chinese infrastructure and mining projects in Myanmar came up since the early 1990s, with scant regard for considerations of environmental degradation and massive displacement of people.  Myanmar’s first constitutional President, Thein Sein, was compelled to suspend a $3.6 billion hydroelectric project called the Myitsone Dam because of public protests.  Apart from the displacement of thousands, the project involved the transmission of 90 per cent of the power generated to China. Suu Kyi, however, personally and controversially approved, amid widespread local protests, a Chinese-backed copper mine project, giving the Chinese partner a 30 per cent share of profits. 

Another controversial Chinese project is the development of the Bay of Bengal Port of Kyauk Pyu, involving an estimated Chinese investment of $7.3 billion. Beijing is looking at a 70-85 per cent equity stake in this project. Alongside the port is a proposed 4,289-acre Kyauk Pyu Economic Zone, where China has sought a 51 per cent stake, with an investment of $2.1 billion. China is reportedly agreeing to not press its demands for the Myitsone project, if Myanmar agrees to its terms for projects in Kyauk Phu. China could, thereafter, assume control of the port and use it for berthing its naval vessels, as it has done in Gwadar. Its navy recently held joint exercises along Myanmar’s shores.

India has continued its engagement with Myanmar, with both Army Chief General Rawat and Foreign Secretary Jaishankar visiting Myanmar recently. The Indian armed forces have traditionally had very friendly relations with their Myanmar counterparts. There are regular meetings of local commanders on the borders. Both countries face problems of armed separatist groups using each other’s soil.  Problems for India have now increased because of covert Chinese support for India’s northeastern separatist groups.

India has to recognise the reality that it cannot match China in weapons supply or in a range of infrastructure and industrial projects. India, for example, cannot match Chinese supply of JF-17 fighters manufactured in Pakistan, as our much-touted Light Combat Aircraft has not yet been operationalised. Likewise, our public sector infrastructure projects like the Sittwe Port, the Kaladan Corridor linking our landlocked northeastern states to the Bay of Bengal at Sittwe, or the proposed 1,800 MW Hydro-Electric Project, have either been delayed or abandoned, after years of procrastination.

While diplomatic efforts enabled us to get a stake in successful offshore gas exploration, we lost access to the gas because of our inability, and indeed inefficiency, in devising measures to transport/transfer and utilise the gas, which is now transshipped to China by a pipeline. Private sector projects for the utilisation of Myanmar’s vast bamboo resources for the paper industry or investment in the agricultural sector have similarly been delayed or failed. The main area, which has won us gratitude, is vocational training and education facilities for Myanmar personnel.

We need to review and restructure our economic cooperation with Myanmar, with increasing focus on assisting populations living close to our borders, through imaginative schemes for education, health, communications and small/village industries. The Indian rupee could be made legal tender for such cross-border projects. This could be undertaken in close cooperation with Japan and the Asian Development Bank and duly integrated with new measures now being considered for giving momentum to regional cooperation through BIMSTEC. Larger industrial and agricultural projects in Myanmar are best left to market competition and not undertaken through monopolistic public sector involvement.


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