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India, China battle for hold over Myanmar

POSTED ON 29 APRIL 2016

Nizika Sorokhaibam
research intern, Cdps

Once a shunned state, shelled with economic sanctions and almost on the verge of becoming a pariah state, Myanmar, today is being tugged by India and China to join their respective camps. Both countries’ interests intersect in Myanmar and in this race to woo Naypitaw, New Delhi needs to take pro-active measures to implement its revamped and renewed Act East policy, given a boost by the Government of Prime Minister Narendra Modi.

China has an advantageous head-start over India as it signed trade agreements with Myanmar as early as 1988 and started to supply military hardware to the military junta. The Tatmadaw, Myanmar’s Army, became heavily dependent on the Chinese politically and militarily. China also wants to safeguard its trading routes and this has led to further arming Myanmar with Chinese made military equipments at a discounted rate or through interest-free loans.

China is focussing on Infrastructural diplomacy when it comes to Myanmar—constructing roads, rail and river links between China’s landlocked Yunan Province and the Irrawaddy—Irrawaddy corridor. This serves as a spring board, an outlet for exports from Yunan Province to the South Asian region. One of China’s aims is to safeguard its energy security. Due to its booming economy, China requires lots of energy resources and about 80% of China’s oil imports come through the straits of Malacca, which is a very insecure route for China. An oil and gas pipeline was successfully completed in 2013, connecting the South–Western China to the Indian Ocean where China can get direct access to energy resources from the Middle East and Africa and Myanmar as well. Another investment proposed by the Chinese is the Bangladesh-China-India-Myanmar (BCIM) Economic Corridor which will cover 1.65 million square kilometres and include 440 million people in the said countries. Myanmar is highly important to China and it plans to use the region as a land-bridge to exert its influence and make its presence in the South–Asian region. Besides, China wants access to Myanmar’s minerals, timber and semi precious stones like jade.

China is also suspected and accused by India of trying to encircle India with its ‘String of Pearls’ strategy and thwart India’s influence in the Indian Ocean region. India is wary of Chinese support to upgrade Myanmar’s naval facilities especially in the strategically important Coco Islands of Myanmar which is only a few kilometres away from the Andaman and Nicobar Islands.
When the military came to power in Myanmar after a coup in 1962, India perhaps thought it would be at the helm of affairs for a limited tenure. New Delhi continued its support for the pro-democracy forces. But, around the 1990s, when India realised that the Military was there to stay, it changed its course and established relations with the military regime. Thus, India was able to maintain a good relation through her ‘Two Track Policy’ with the approval of the then Prime Minister P.V. Narasimha Rao – with the military as well as the pro-democracy forces.

India has not been able to give the assistance that it intends to provide Myanmar in terms of trade and investment and this is because of the lack of energy and infrastructure, especially in the North-Eastern region which is the doorway to Myanmar. Although, India signed a border trade agreement with Myanmar in 1994, outlining 22 items for exchange among the residents in the border areas, trade has not made notable progress. Most of the goods traded in Moreh-Tamu border are not accounted for. Attempt needs to be made to mainstream the border trade and regularise it. There is also a project being proposed to open another trade outlet in Champhai-Hri border. Since 2012, Indian government and some private companies such as ONGC Videsh, Jubilant Oil and Gas and the Century Ply-Star Cement group commenced operations in Myanmar. India is also assisting a port-cum-waterway project worth Rs 350 crore which involves building the Sittwe Port and a jetty at a town in west Myanmar, very near to Bangladesh. This will act as a water link to ship goods from the Kolkata port to Mizoram, by getting around Bangladesh and through Sittwe port. New Delhi should consider providing more autonomy to the states neighbouring Myanmar– such as Arunachal Pradesh, Nagaland, Myanmar and Mizoram– to establish trade relation on their own, so that there is a boost in economy of the North-Eastern states. The Central government has been considering to grant a 100-crores budget proposal that was requested by Manipur state government to set up an "Export Promotion Industrial Park" in Manipur State.

China has made great contributions to Myanmar economically and India follows right after Thailand and Singapore. Foreign Direct Investment in 2014 by China in Myanmar was $14 billion which was one-third of the total foreign investment. This was in contrast to India-Myanmar trade which was under $2 billion, much below the actual potential.

India is investing on the India–Myanmar–Thailand trilateral highway and hopes that it will open new economic doors. India has built India-Myanmar friendship bridges in Myanmar and although this does not amount to the infrastructures built by China in Myanmar, it is still an effort to make its presence felt in Myanmar.

India also requires Myanmar’s assistance and co-operation in Anti-terrorist and counter-insurgency activities to suppress insurgents in the India–Myanmar border areas. An example would be that of the Operation Golden Bird in April-May 1995 which was a successful India and Myanmar joint Counter-Insurgency operation in the Border areas, until, India conferred the Jawaharlal Nehru Peace award to Aung San Suu Kyi. This angered the military junta, resulting in Myanmar withdrawing its forces and leaving a flank open for the rebels to retreat and escape the dragnet.

Myanmar, in the 21st century, is undergoing drastic changes in governance as well as public mood that is seen to be turning against China over many issues. This has the potential to provide India a good opportunity to strengthen her bond or hold over Myanmar. Myanmar’s democratically elected government NLD has come to power led by Aung San Suu Kyi, which may bring Myanmar closer to India because of the ideological affiities. As the pioneer for democracy in Asia, India has a responsibility to help and cater to the apt transition of Myanmar from a military rule to a democracy. Even though India cannot keep up with China’s infrastructural aid to Myanmar, it should focus on the historical, cultural and economic linkages.

The upsurge of anti-China feeling among the Myanmar public is largely because they felt that China’s influence in the internal affairs of Myanmar threatens their national security. Projects such as the Myitsone Dam project was suspended because 90% of the electricity that was produced was to be transferred to China’s Yunan province which the Myanmar locals did not appreciate. The people of Myanmar felt the Chinese population in Myanmar, about 10% of the total population who are0 wealthy, are taking advantage of the economy and leaving the locals to themselves. Deriving inspiration from the Arab Spring, the people have publicly protested China’s advances.

Again, India can also assist Myanmar in taking concrete stand on the Rohingya issue and thus help in advancing a step towards a secular and tolerant Myanmar.

However, Myanmar may not endorse its bilateral relationship with India at the price of their relationship with China because Myanmar is still heavily dependent on China for various things. Suu Kyi realises the role Myanmar can play for India–China relations and sees Myanmar “emerge as bridge between India and China” and noted that Myanmar “should not be seen as a battleground.”

India should avoid considering China as a competition but rather focus all efforts on charting out ways and means to facilitate Myanmar to the best of her ability. Myanmar cannot be expected to lean completely towards India. Naypitaw needs to find a balance between the neighbours and maintain equilibrium, so that Myanmar can get the support of both her neighbours- India and China—while maintaining its autonomy and sovereignty.