India is losing to China in the fight to woo Myanmar, the latest geo-economic battleground, says Rupesh Dutta
In the last five years, India has achieved notable success in strengthening relations with its immediate neighbours, Sri Lanka and Nepal. However, the other major economy in the region, China, is determined to emerge as the winner in the ongoing geo-economic clash with India and Myanmar has become the latest battleground. China has overtaken India in terms of pumping in money and finalising massive infrastructure projects in the tiny country’s economy.
This comes despite India’s all-out efforts to boost its Act East Policy. Myanmar, whose political transition to a free democratic system is less than four years old, is in dire need of foreign investment to shun the tag of an “underdeveloped economy.” While India has been sluggish in its approach to invest in Myanmar, China has grabbed the opportunity by wooing Aung San Suu Kyi, the Buddhist nation’s State Counsellor, a position akin to a prime minister, with lucrative trade offers. Myanmar, has swallowed the Chinese investment bait hook, line and sinker.
According to Myanmar’s Directorate of Investment and Company Administration, between 1988 and 2011, India invested a paltry $763.567 million as compared to China’s whopping $20,566 million. In 2014-15, Indian investment was $208.886 million against China’s $511.415 million and in 2015-16 it was $224.223 million against Beijing’s $3,324 million. In 2016-2017, New Delhi invested nothing and China pumped in $482.591 million.
Similarly, India invested $10.993 million against China’s $1,396.219 million in 2017-18, followed by New Delhi’s $19.925 million against Beijing’s $304.732 million in 2018-19. Year after year, Chinese investments were more than 200 per cent of that by India which even restricted its funding during the power transition from the ‘Tatmadaw’ (armed forces) to a democratic set up in 2015.
Significantly, the Beijing-led Asia Infrastructure Investment Bank (AIIB) is considering providing $20 million to Myanmar for the development, construction and operation of a Greenfield 225 MW Combined Cycle Gas Turbine (CCGT) power plant in Mandalay. It will be the largest gas-fired Independent Power Producer (IPP) in Myanmar, producing much-needed clean energy to meet the power deficit.
Furthermore, a master plan for a Chinese-backed, model economic zone along the China-Myanmar Economic Corridor (CMEC) has been prepared and the Suu Kyi Government is engaged in discussions for its implementation. The Myitkyina Economic Development Zone (MEDZ) is also in the pipeline and a pact was signed between Myanmar and the Chinese Yunnan Tengchong Heng Yong Investment Company for its implementation. The MEDZ is likely to come up in approximately 4,700 acres of land along the historic Ledo Road, built during the World War II and used by the Allies to deliver supplies to China which was fighting the Japanese forces. It was an overland connection between Ledo, in Assam and Kunming in China’s Yunnan Province. The MEDZ expected to cost over $400 million, will include nearly 500 factories and 5,000 buildings.
On the other hand, India has fallen short in its plans for Myanmar’s infrastructural development. New Delhi must realise that its inability to engage with Naypyitaw will spell doom for its Act East Policy as Myanmar is the bridge linking India with South-East Asia. Sadly, most projects have remained on paper and others are likely to miss deadlines. For instance, New Delhi had funded and implemented a project to develop the deepwater Sittwe Port in Rakhine State to handle 20,000-tonne vessels by dredging the River Kaladan from Sittwe to Paletwa (a 158-km long stretch) to improve its navigability. It also involved building an inland terminal at Paletwa and constructing a129-km-long highway linking Paletwa to the Indian border. However, the project is running behind schedule and has faced various hurdles.
Similarly, the Narendra Modi Government had cleared a Rs 6,167 crore upgrade of a 352-km National Highway in Mizoram to improve connectivity to Myanmar. However, the project has been in a limbo for the last couple of years despite the contracts being awarded.
Moreover, Beijing supported the Myanmar Government during the ethnic crisis in its Rakhine province, saying it understands the country’s “security concern” even when the rest of the world termed the clashes as ethnic cleansing and has since called for the repatriation of Rohingyas.
This was the opposite of what the Modi Government did, as it not only remained neutral but also constructed 250 pre-fabricated houses in Myanmar, indicating its tacit support for the repatriation of the Rohingyas to Myanmar. India’s relations with Myanmar in the last couple of years have improved significantly and the cooperation between the two governments has increased, especially when it comes to sharing Intelligence.
This in particular, is a boon for India, given the fact that the majority of armed extremist groups from its northeastern states have their camps on the Myanmar side of the border. India should be fully aware that to crush such forces, it will need the support of the Myanmar Government.
The Modi Government must consolidate its image as a caring neighbour who does not believe in economic adventurism like China. It must also make larger investments in Myanmar not only to check Beijing’s rising regional dominance but also not to lose an immediate neighbour which has a buffer status vis-à-vis China.
(The writer is a senior journalist)