The Chinese have aggressively involved themselves in Myanmar yet they are unsure of their future relationship and their investments due to the oncoming democratically elected government. Chinese involvement in Myanmar has been viewed with a great deal of hostility by the locals, as they perceive that the Chinese have exploited their country through corrupt deals and benefitted themselves more than anyone in Myanmar. Consequently, Chinese investment fell from $12 billion in 2008- 2011 to just $407 million in 2012-2013. This resentment has forced the current government to renegotiate most of their major projects to get better terms for themselves. China is also wary of the NLD leader’s proximity to the West (US) and its allies like Japan and South Korea. Thus China would have to fight tooth and nail to retain her influence in Myanmar and safeguard her national interests.
On April 01, 2016, a new dawn heralded in Myanmar as a new democratically elected government was sworn in to rule the country. In the recently concluded elections held in November 2015, the National League for Democracy (NLD) party led by Aung San Suu Kyi swept the elections and won more than 75 per cent of the contested seats1. As per the Myanmar constitution only 75 per cent of the seats are contested for in the elections as the balance 25 per cent are reserved for the army to nominate its own candidates directly to the Parliament.
Also, as per the constitution’s Chapter III, Number 59(f), Aung San Suu Kyi is banned from becoming the President of Myanmar as two of her sons are foreign nationals holding British passports2. In spite of this setback, there is a sense of optimism amongst the people of Myanmar, for it is almost after 54 years that the country has realised the dream of a democratically elected government. The poverty stricken nation is now hoping to move forward on the road to prosperity.
India has been maintaining good relations with Myanmar through the transition period and before. Former Prime Minister Rajiv Gandhi made the first breakthrough and visited Myanmar in 1987. Relations once again deteriorated thereafter for a brief period due to the mishandling of the pro-democracy movement by the military junta in 1988. Subsequently, the impetus to the bilateral relationship was given by P.V Narasimha Rao and Atal Bihari Vajpayee. This changed the course and started the period of warmer relations between the two countries. This was a part of a wider foreign policy initiative of increasing India’s participation and influence in Southeast Asia, in light of the growing influence of the People’s Republic of China3.
Myanmar has a long border with China in its North and India has concerns about that too…
Dr Manmohan Singh went a step further and made Myanmar as the stepping stone to his “Look East Policy”. Narendra Modi, the current PM has continued with the same initiative and also visited Myanmar within the first six months of his becoming Prime Minister, highlighting the importance of sustaining good relationship with our immediate neighbour. Wisely, both, the current and the previous PMs during their visits made sure that they called on the current NLD leader Aung San Suu Kyi, keeping her future status in mind, a move which is likely to pay rich dividends now.
India’s Interests in Myanmar
India and Myanmar share a long boundary of almost 1,624 km4. This border runs along the Indian states of Arunachal Pradesh, Nagaland, Mizoram and Manipur – an insurgency-prone area in India’s Northeast (NE). India has deep interest in tackling the sanctuaries which exists in jungles of Myanmar which border India. Myanmar has a long border with China in its North and India has concerns about that too. The Chinese get an easy access into NE India through surreptitious routes running from North of Myanmar. Myanmar connects the Indian landmass with the rest of Southeast Asia and thus becomes a gateway for India’s ‘Look East’ policy. Myanmar also is the only ASEAN nation which shares land borders with India making it a stepping stone for India for anything that happens in its East.
Myanmar has a long coastline which has strategic interests for India due to China’s ‘String of Pearls’ strategy. The proximity of the Myanmar-owned Coco Islands in the Bay of Bengal, just 18 km North of India’s Andaman and Nicobar Islands is a matter of grave strategic concern for India.
Due to British colonisation of Burma there are still a significant number of Indians living in Myanmar. Thus India has demographic interests there too. Myanmar is rich in natural resources such as arable land, forestry, minerals, natural gas as well as freshwater, marine resources, gems and jade. It also has a young workforce. It is primarily an agricultural economy. With the most productive segments of the economy currently being the extractive industries, in particular oil and gas, mining and timber,5 India has deep commercial interests in Myanmar.
India and Myanmar are involved in many new initiatives which would give impetus to the development of the region and improve people-to-people contact. Chief amongst them is the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), an organisation of South and Southeast Asian countries to make a sub-regional group to enhance trade, commerce and tourism amongst each other.6 Both India and Myanmar are members of this group.
The onset of democracy in Myanmar must augur well for India…
Also there is another similar initiative called the Mekong-Ganges cooperation (MGC) involving both India and Myanmar, primarily for the promotion of tourism, cultural exchange and education amongst member nations.7 The Bangladesh–China–India–Myanmar Forum for Regional Cooperation (BCIM) is a sub-regional organisation of Asian nations aimed at greater integration of trade and investment between the four countries. The Bangladesh, China, India and Myanmar Economic Corridor is an initiative conceptualised for significant gains through sub-regional economic cooperation within the BCIM. The multi-modal corridor will be the first expressway between India and China and will pass through Myanmar and Bangladesh.8
Drug menace is an important issue which cuts across the hearts of authorities on both sides of the Indo-Myanmar border. Myanmar has thick jungles and this shelters numerous drug processing plants/facilities. India is keen to eradicate these with the help of the Myanmar’s authorities. India is very sensitive to the golden crescent of poppy and opium edged by Afghanistan, Pakistan on its North-west and the golden triangle defined by Myanmar, Thailand and Laos lying on its East, which is making India the illicit transit route of narcotics and increasing the already growing security concerns in the country.
Finally, for defence cooperation, Myanmar has traditionally been relying on China for its defence needs. For long, India considered Myanmar to be a satellite of the Chinese. But with Myanmar extending an open invitation to Indian experts to visit the Coco Islands, things are on the mend. India has decided to change the status quo and is now aggressively promoting defence trade and cooperation with Myanmar. Towards this, India has taken significant steps such as increased military to military contact of both countries, training of military personnel of Myanmar armed forces in India, supplying military hardware such as Armoured Personnel Carriers (APC), artillery guns, few aircraft and now, the likelihood of giving the indigenously built Advanced Light Helicopter (ALH).
Why Should Myanmar Look Towards India?
The onset of democracy in Myanmar must augur well for India. The spread of democratic traditions in the region has many positives for its development. With the election of first democratically elected government in half a century, the common people’s hopes and expectations have soared. But to grow as a vibrant nation and to make the people prosperous, Myanmar has to develop fundamental structures to support its economy. To fulfill this, the new government has two options in the immediate future. First, it can look upon China to develop its structures or second, it can depend upon nations in the West including India to do the same. The possibility that Myanmar would lean towards a Western nation for advice is more likely. The NLD leader’s proximity to the US is well known, and in India, she could find a friend which is not only closer to her borders but also a country which is less likely to annoy China and keep the US in good books. The problems that the new government is likely to face in the immediate future are explained below.
One of the biggest challenges the new government is going to face is the issue of federalism in Myanmar…
The core structures for any economy are the banking and financial institutions. India, led by its central bank RBI has very sound banking systems. It has strict banking norms and adherence and compliances are of the highest order. The control of the RBI, over all the banking and non-banking financial institutions is admirable and it enforces the monetary policy through them very effectively. Similarly, the stock markets and its regulators, the Security & Exchange Board of India (SEBI), are highly evolved and effective systems. Myanmar can get the best insight on these issues through advisors from these two institutions. In many respects, they have better standing internationally than the Chinese. The Indian economy has come of its own and has progressed towards a free market economy. The Chinese economy, on the other hand, has been state controlled till recently and their recent attempts to deregulate it and move towards a market driven economy has not met with adequate success.
The next big challenge that the Myanmar government would face is that of restructuring the constitutional structures. The recent experiment with democracy could remain a one off attempt if the Myanmar constitution is not amended. Putting in place a vibrant multi-party democracy where all the sections of society find adequate representations is what Myanmar should desire and strive for.
One of the biggest challenges the new government is going to face is the issue of federalism in Myanmar. Currently, there are at least four major insurgencies or civil wars that the army in Myanmar is battling with. There are at least 17 groups with which the government had reached a ceasefire agreement in 2004. Since the military government came to power in late 1988, at least 17 anti-government major ethnic armed groups and over 20 small groups were claimed to have returned to the legal fold by signing respective ceasefire agreements with the government.9 Yet the civil war rages on and the civil war in the North with the Kachin state is the deadliest of all, followed by the Karen insurgencies in the East of the nation. The new NLD government would have to struggle to keep these insurgencies in check and keep the federal structure of Myanmar intact. India has successfully dealt with similar predicaments.
Myanmar- China vis a vis Myanmar-India Relations
Myanmar’s new government has options but it has to weigh them carefully before it embarks upon a different foreign policy initiative than that followed by the last regime. As Aung San Suu Kyi has clarified in her initial statements after winning the elections, she will keep the national interests of Myanmar supreme in deciding upon the fate of all economic decisions taken by the previous government10. For India to find favour with the new government, it would have to better Chinese efforts in terms of economic and trade initiatives.
China and Myanmar have had a long yin–yang relationship. Yet today China is Myanmar’s most important trading partner and has also invested in great measure in creating strategic assets inside Myanmar. The Chinese are keeping their fingers crossed ever since the NLD has come to power. Chinese woes started with several strategic treaties that China signed with the military-led government of President Thien Sein in 2011, when China reached an agreement with Myanmar called ‘Comprehensive Strategic Cooperative Partnership’. It was viewed by China as ‘Pay Back’ by Myanmar – compensation for the support the Chinese had lent to Myanmar in its years of isolation and sanctions.
Under this agreement, China signed major strategic projects with Myanmar and three most important of them were – Myitsone Dam, the Letpadaung Copper Mine project and the Sino-Myanmar Oil and Gas Pipelines. All of these ran into trouble and the first two are in the process of being renegotiated with the new NLD government and the third is facing problems both in Myanmar and China due to objections by the locals. The third, i.e. the gas project is moving slowly as it is a combined venture involving four nations including India. The coming to power of the new NLD government led by Aung San Suu Kyi has made the Chinese government a little nervous on the future of its investments. Yet compared to India, China is far ahead in its investments in Myanmar.
According to official statistics, bilateral trade between Myanmar and China amounted to over $10 billion in 2014-2015. Of the total, Myanmar’s export to China hit $4.6 billion and its import from China reached $5.6 billion. Meanwhile, according to Myanmar official statistics, China’s investment in Myanmar amounted to $15.42 billion in 115 projects, accounting for 26.07 per cent of the total as of December 2015.11 Compared to this, the Indian bilateral trade with Myanmar was to the tune of $2.18 billion in 2013-2014. But Myanmar has an export surplus vis-a-vis India, making it Myanmar’s third largest export destination in the world. Indian investments in Myanmar are of the order of $508.46 million.12 The gap between India and China in terms of its investments is huge but the government of India is trying to narrow the gap by taking up projects which would help the common man in Myanmar as well as help improve the speed of trade and commerce between the two nations. The projects are supported by India through training, provision of expert knowledge, line of credits and grant-in-aid. Some of important projects are Kaladan Multimodal Transit Transport Project, Trilateral Highway, Rhi – Tiddim road, Renovation of Thanbayakan Refinery; Setting up of an IT University in Myanmar, Tamanthi and Shwezaye Hydropower.13
The Chinese have aggressively involved themselves in Myanmar yet they are unsure of their future relationship and their investments due to the oncoming democratically elected government. Chinese involvement in Myanmar has been viewed with a great deal of hostility by the locals, as they perceive that the Chinese have exploited their country through corrupt deals and benefitted themselves more than anyone in Myanmar. Consequently, Chinese investment fell from $12 billion in 2008- 2011 to just $407 million in 2012-2013.14 This resentment has forced the current government to renegotiate most of their major projects to get better terms for themselves. China is also wary of the NLD leader’s proximity to the West (US) and its allies like Japan and South Korea. Thus China would have to fight tooth and nail to retain its influence in Myanmar and safeguard her national interests.
India is competing with China for strategic and commercial space in the new Myanmar. China has the advantage of its past dealings with the previous Burmese and Myanmar governments, yet the same may have come to haunt the Chinese due to the new democratic set up in Myanmar. India, on the other hand, has started small and experiences very little antagonism in the country unlike China and Chinese companies. India also enjoys a relationship with Myanmar which starts with the British colonisation. Aung San Suu Kyi’s father, General Aung San, who led the Burmese nationalist movement, was the architect of Burmese independence from the British, had good ties with Indian leaders such as Jawaharlal Nehru.
Aung Sang Suu Kyi herself has early educational ties with India. Coupled with this is the fact that India is the biggest democracy and nation with a growing economy and rising stature in the world. This gives India a good standing to be the dominant partner in Myanmar’s future aspirations. Geo-politically, India could bridge the existing leadership void in the South and Southeast Asia by involving herself more in the growth and development of modern Myanmar. There is no better time than now for India to assume the mantle of this responsibility.
1. Myanmar: From Elections to Formation of the New Government – 25 mar16, accessed on 07Apr 16, http://www.southasiaanalysis.org/node/1961ig
2. Myanmar election: Why can’t Aung San Suu Kyi be president and why is the country in leadership limbo?,posted on 10 nov 2015,accesed on 22 apr 2016, http://www.abc.net.au/news/2015-11-10/myanmar-election-explained
3. India–Myanmar relations, 2 April 2016 accessed on 07 apr16,https://en.wikipedia.org/wiki/India-Myanmar_relations
4. Indo–Myanmar barrier, o8 Dec2015,accessed on 19 apr16, https://en.wikipedia.org/wiki/Indo%E2%80%93Myanmar_barrier
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6. Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, 11 mar 16,accessed on 22 apr16, https://en.wikipedia.org/wiki/Bay_of_Bengal_Initiative_for_Multi-Sectoral_Technical_and_Economic_Cooperation
7. Mekong–Ganga Cooperation, 21 apr 16. accessed on 22 apr 16, https://en.wikipedia.org/wiki/Mekong-Ganga_Cooperation
8. Dasgupta, Saibal (Dec 20, 2013). “Plan for economic corridor linking India to China approved”. Times of India (The Times Group). Retrieved 9 June 2014
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10. Asian Times:China’s relations with Myanmar: Does an NLD government mark a new era? 08 Dec 2015,accessed on 19 Apr. 2016, http://atimes.com/2015/12/chinas-relations-with-myanmar-does-an-nld-government-mark-a-new-era/
11. China daily:Myanmar-China bilateral trade hits over $9b in 10, Updated: 2016-02-16 09:50,accessed on 19 apr16, http://www.chinadaily.com.cn/business/2016-02/16/content_
12. Bilateral & Economic Relations, Embassy of India In Yangon Myanmar,2014,accessed on 19 Apr16, http://www.indiaembassyyangon.net/index.php?
14. Stimson:Chinese Investment in Myanmar: What Lies Ahead? By Yun Sun,ISSUE BRIEF NO. 1 September 2013, accessed on 19 Apr 16, http://www.stimson.org/images/uploads/Yun_Issue_Brief1.pdf