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Pandemic adds to Chinese infrastructure delays in Myanmar: ICG

The Covid-19 pandemic and resulting shock to the economy are likely to ease pressure on Myanmar to speed up China’s ambitious but slow-moving infrastructure programme, according to a new report by the International Crisis Group (ICG).

The ICG noted that President Xi Jinping’s visit to Myanmar in January, when the outbreak was in its early stages, had already failed to secure the major acceleration Beijing was hoping for in the multi-billion dollar China-Myanmar Economic Corridor (CMEC), which forms a core part of its global logistics Belt and Road Initiative.

“Uneasiness and lack of capacity within the Myanmar government, as well as political sensitivities around Chinese investment, mean that this trend is likely to continue through at least November 2020, when Myanmar is scheduled to hold a general election,” the ICG says in its 45-page report, Commerce and Conflict: Navigating Myanmar’s China Relationship, released by the Brussels-based think tank on March 30.

Richard Horsey, ICG Myanmar adviser and one of the report’s authors, told The Myanmar Times: “Even once the pandemic eases, China and Myanmar will likely be focused for some time on addressing the fallout of the crisis, rather than pressing quickly ahead with previous plans.”

“Certainly there is a perception in Myanmar that this is a ‘foreign virus’, but public attention is focusing much less right now on its origin in China and much more on the risk of returning Myanmar nationals bringing Covid-19 into the country,” he added.

Mr Horsey noted that the first few cases identified in the country were people returning from Europe and the United States, while large numbers of Myanmar migrant workers are now coming back from Thailand.

Key manufacturing, agriculture and tourism industries in Myanmar have been severely hit by the pandemic. Factories have been forced to halt operations while farmers and fruit producers relying on the China market have suffered huge losses.

Beyond the immediate economic disruption, the pandemic has derailed efforts by Daw Aung San Suu Kyi’s government to boost investments and growth ahead of parliamentary elections in November.

Mr Xi’s visit marked the 70th anniversary of Sino-Myanmar diplomatic relations in Nay Pyi Taw in January, the first Chinese leader to visit Myanmar in two decades. The two sides signed 33 agreements to accelerate progress on railways linking southwestern China to the Indian Ocean, a deep-sea port in Kyaukphyu, a cross-border economic zone, and a new city scheme in Yangon.

But no major new agreements were inked and no mention was made of the controversial Myitsone dam, a Chinese-backed flagship project suspended by then president U Thein Sein in 2011.

ICG said Myanmar’s economic and geopolitical dependence on Beijing was growing despite past mistrust and suspicion, and that China’s investments, notably through CMEC, were “poised to shift into higher gear”. Myanmar has moved to shore up its relationship with China, driven in part by its rift with western countries over its military crackdown against the Muslim minority in northern Rakhine State.

But, ICG notes, there is a risk of exacerbating Myanmar’s armed conflicts. Each end of the economic corridor – in the states of Shan and Rakhine – is mired in conflict and the report warns it is unclear whether major investments will help quell the fighting or lessen the underlying grievances rooted in control of the economy.

For now Beijing appears ready to move at Myanmar’s pace, but it is uncertain how long its patience will last, the ICG says. However, increased coercion from Beijing could trigger a backlash similar to protests in 2011 that led the government to cancel the Myitsone dam.

The Brussels think tank noted in its report that it had to suspend research work in China, including all interviews with officials, following the detention of its northeast Asia adviser Michael Kovrig in Beijing in December 2018 without charge or access to his family.

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Source: Myanmar Times

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