China or India: Difficult choice for new Myanmar government

Even as the Aung San Suu Kyi-led National League for Democracy (NLD) is expected to form a new government in Myanmar, China has lost no time in diagnosing the import of the party’s victory and is all set to recalibrate its policy towards the country to steal a march over India towards gaining a deeper strategic depth in this ASEAN nation.

China’s standpoint became clear when Chinese Foreign Minister Wang Yi said in the middle of November that his country expects Myanmar to continue its friendly relations with Beijing although a new dispensation is set to emerge in Naypyidaw.

China has reasons to feel uncomfortable as Suu Kyi has close personal bonds with India. General Aung San, her father and the legendary Burmese liberation hero, enjoyed close personal relationship with the Indian political leadership. Suu Kyi herself spent a good amount of her life in Delhi. She studied first in the Jesus and Mary Convent and then in Lady Shri Ram college.

Because of this fact, China had extended her a warm reception in Beijing in June when President Xi Jinping had met her, breaking protocol.

The ground reality is that China is way ahead of India in matters of strategic depth in Myanmar. In a classic example of establishing relationships with the Indian Ocean littoral states, China has recently constructed two pipelines originating at Kyaukpyu in Myanmar and terminating in Kunming for transporting oil and gas. The purpose is to lessen reliance on the route passing through the Malacca Strait.

Given Myanmar’s strategic importance in South Asia, China has been constantly increasing its economic footprint in the country. Last year China’s cumulative foreign direct investment in Myanmar stood at $14 billion. Bilateral trade reached $6 billion in 2013 while the corresponding figure for India-Myanmar trade was around $2 billion.

Most probably, any government led by Suu Kyi will try to maintain a balance in its relations with the two Asian giants. But the task for her will be difficult because while China acts, India deliberates and dithers. A tell-tale example of this is the Kaladan Multi-modal Transport Project which envisages connectivity between the Indian ports in the east and Myanmar’s Sittwe port – along with river and road connectivity with Mizoram. The project was scheduled to be completed in 2013, but is delayed due to slow river engineering works.

In spite of delays in some India-sponsored projects the race for leverage over Myanmar is going to be intense and interesting. New Delhi has worked out high speed data links in 32 cities of Myanmar and several Indian companies like ESSAR, GAIL and ONGC Videsh Ltd. have invested in the country’s energy sector. Most importantly, India has extended duty-free tariff preference to Myanmar.

It is true that compared to China, India’s trade with Myanmar has been showing a tardy trend. But from a paltry $12.4 million in 1981 to a little more than $2 billion in 2013 is certainly not bad progress.

Moreover, the balance of trade is in favour of Myanmar by 4:1. It mostly exports to India primary agricultural products like beans, pulses and forest products while India sends pharmaceutical products, steel and iron goods, electrical machinery, mineral oil, and rubber products, among others.

But India’s concern should lie in the development and utilization of the huge energy reserves that Myanmar possesses. The country has the world’s biggest gas reserves – estimated to be more than 90 trillion cubic feet. Myanmar has apportioned the job of exploration and development of oil and gas fields to companies of various countries like the China National Petroleum Corporation (CNPC), Daewoo (South Korea), Itera(Russia), ONGC Videsh and GAIL (India), among others. In the same vein, Myanmar chose China, instead of India, for supplying 6.5 trillion cubic feet of natural gas for 30 years beginning from 2005.

India is desperately trying to catch up. The UPA-2 government (2009-14) extended a new $500 million credit line in addition to an existing $300 million line. The same government had targetted bilateral trade of $3.5 billion in 2015. Whether the target has been met remains an open question.

The two sides are now also showing interest in military cooperation. During his visit to India in June, Senior General Min Aung Hlaing, the commander-in-chief of the Myanmar army, had shown keen interest in purchasing offshore patrol vessels.

There are 400,000 people of Indian origin living in Myanmar. There are also Chinese-origin people, particularly in the northern parts. Both China and India have very high security interests and a tug-of-war is inevitable. It is to be seen how the new government in Myanmar tackles this – because it is a hard choice to make.

Source: Business Standard

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