18 February 2019, NIICE Commentary 2392
Shrabana Barua
With Myanmar having transitioned to democracy in 2011, the country has come quite a few miles from making amends within its political system to revisiting its foreign policy vis-à-vis external players in its territory. For one, China’s overpowering presence is unavoidable in Myanmar, but it is not the only given anymore.
Some might argue as to how it never was the “given”, that China’s presence has been questioned previously, particularly during the Ne Win era. But there is a reason and history behind how and why China found itself to be the largest investor as well as the largest trading partner of Myanmar. Its given or obvious role in Myanmar’s economy and polity was big enough to normalize the overwhelming Chinese presence in Myanmar. China’s trade with Myanmar stood at USD4.44 billion in 2011, only second to Thailand, while FDI measured to USD20.2 billion the same year. As of 2015, China is estimated to have invested in more than 70 projects across Myanmar. Yet, today China’s FDI investment has risen only marginally in the last seven years to USD20.35billion in 2018, closely followed by Singapore at USD20.33 billion. Though bilateral trade showed some upside standing at approximately USD8 billion in 2017, it at best reflects the economic sobriety of China-Myanmar relations that no doubt still exists. Yet, back in 2007, it did not come in as a puzzle when the gas produced in the A-1 block by a consortium of India-South Korea companies was signed off for supply to Petrochina. China pocketed this deal as a payment for veto-ing US sponsored sanctions in the United Nations Security Council against Myanmar was evident. But does China have the same influence today in Myanmar as it did before 2011?Is Myanmar moving away from China in the sense of diversifying its external relations? The answers to these questions are important to delve into.
Trace through Historical Moorings
It is not simply because Burma became the first non-communist state to officially recognize the People’s Republic of China in 1949 that a relationship was formed between the two. There was also the Tiananmen Square incident and the 8.8.88 massacre that provided them with an analogous connection to bond over. This deepened with Beijing’s support for the tatmadaw throughout the 1990s. China’s aims pertaining to Myanmar was put out in an article published by Pan Qi in the Beijing Review on 2 September 1985. It expressed the Chinese desire to find an outlet for its southern provinces such as Yunnan and Sichuan up to the India Ocean through Burma. This put Chinese quest for influence in Myanmar into a geopolitical and a geo-economic perspective. But with the announcement of the Belt and Road Initiative (BRI) in 2013, and the surge of Chinese aggressive foreign policies in Asia and beyond, Myanmar indeed has become wary of Chinese presence in its territory.
Myanmar has joined China’s BRI with the hope of gaining more than better connectivity. But, as a common sentiment in Myanmar, the quality of Chinese goods flowing into the market has been repeatedly questioned. This aside, the lack of transparency and growing exploitative nature of Chinese influence that follows infrastructure investments have been cited as reasons for suspension of the Myitsone dam project in 2011 by President Thein Sein. Similarly, in February 2014, when mild protest broke out following the arrest of activist Thaw Zin involved in objecting the Letpadaung Copper mine project where the Chinese company, NORINCO had stakes in a Joint Venture, Thein Sein set up a committee to investigate the matter. Further, in July 2014, Myanmar’s Ministry of Railway dropped a proposed railway connection project that was to link Yunnan with Rakhine, with an estimated cost of USD20 billion stating popular opposition as a reason for the step. These examples reflect a growing sense of caution by Naypyitaw vis-à-vis China’s presence in Myanmar. May be it is not too early to say that Myanmar as an independent and democratic state has a greater agency today than it is given credit for.
Myanmar in 2019
Myanmar has faced slow growth and falling rates of investments in recent years. The FDI inflow last year fell short of the official estimate by 50 percent between April-October, while growth forecast came down from 6.3 percent to 6.6 percent in 2019. As an attempt to improve this, 2019 began with Aung San Syu Kyi making a call to foreign business at the Invest Myanmar Summit 2019 held from 28-29 January in Naypyitaw about the feasibility of investing in Myanmar and the many opportunities that it brings. While an article in the Myanmar Times wrote about her attempt to “woo foreign foreign investors” by praising the Thilawa Special Economic Zone project and talking about Dawei SEZ where Thailand has major stakes, it noted that the Kyaukpyu SEZ backed by China was not mentioned.
In the financial capital, Yangon, the vibrancy with which the Chinese lunar New Year is celebrated in February, is difficult to ignore. But this has more to do with the common traditions shared by the Chinese populace than with downright political influence. Yet, interestingly, the celebrations for the Myanmar Union Day that is observed on 12th February each year falls rather flat even at the heart of the city. If not for the many signs of glitches that have begun to appear in China-Myanmar “paukphyu” relationship, the Sinicization of Myanmar is quite entrenched in Burmese affairs.
In 2019, the very obviousness about China’s dominance in Myanmar has found more counter. The announcement of the 1st Rakhine State Investment Fair held in Nagpali Beach from 21-22 February is a point in case about Myanmar’s readiness in engaging with varied external partners. But the publicity and vigor in promoting Rakhine as an investment destination can be read as an attempt to alter the tarnished image of the province mired by the humanitarian crises pertaining to the Rohingya issue.
While the state in Myanmar has taken up initiatives to attract external players to the region, private investments and small scale collaborations have already been put to place that carries with it the seeds of enduring developments. The people have opened up more willing to outside players, albeit cautiously. The political establishment in Myanmar is also shaking away the webs of an all embracing Chinese grip with each passing year. The announcement of Myanmar Project Bank in 2018 is an example of willingness to make development in Myanmar people oriented and transparent. There are multiple players ready to play the so called great game at the cross-section of South and Southeast Asia with renewed vigor.
