Monday, 30th October 2017

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THE ABSENT NEIGHBOUR - China looms large in every aspect of India's Myanmar policy

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By Krishnan Srinivasan The author is former foreign secretary of India
  • Published 5.11.08

In the vast number of publications on India’s foreign relations, Myanmar is a neighbour that has remained mainly absent. In part, this is is because of the reclusive nature of that regime, and partly because Myanmar is not regarded as an important international player; but mainly because relations between the two countries were virtually non-existent in the three decades between the military coup that deposed U Nu in 1962 and the mid-Nineties.

Burma was the largest province in British India, and only in 1937 was it acknowledged as an independent entity within the British Empire. Indians were drafted in large numbers into the colonial army during the three Anglo-Burma wars of the 19th century, and about 4 lakh Indians were sent there to run several public services. Added to these were the immigrant, Tamil-speaking Chettiars and agricultural workers. The persons of Indian origin on the eve of the Japanese invasion numbered 1.1 million, mainly in urban centres. These people became a bone of contention, being treated as resident aliens and discriminated against, though they had lived in Burma for generations. Despite these privations, the Indian government estimates — mainly guesswork — that there are nearly three million persons of Indian origin in Myanmar today, and in contrast with most such communities living abroad, this one is neither well-off nor well regarded.

In the late Eighties, India supported the pro-democracy uprising and offered sanctuary to Burmese dissidents. But a few years later, New Delhi switched to constructive engagement with the military regime in Yangon as part of its ‘look east’ policy, to counter growing Chinese influence, and the desire for closer ties with the Association of Southeast Asian Nations. The need for new sources of energy played its part, and a powerful ingredient in India’s thinking was the imperative to develop the Northeast without the disruption of insurgencies.

The first border trade agreement was signed with Myanmar in 1994, involving points in Manipur and Mizoram and, the next year, a joint military operation against insurgents took place. High-level military-to-military contacts began in 2000. Heads of state visited each other, and accords were concluded on security, culture, hydro-electricity, petroleum, remote-sensing, and Buddhist studies. Indian loans of $40 million were offered to Yangon.

The rationale for India’s policy to befriend Myanmar despite that regime’s ill-treatment of people of Indian origin and repression of its own citizens is understandable, but the lack of beneficial results from the new orientation is harder to comprehend. The new strategy has failed even partially to open a closed polity, and insurgency in the Indian Northeast has not diminished because India and Myanmar have varying types of problems with different sets of insurgents and do not share the same priorities in addressing them. Cooperation against the cross-border militants has tailed off. It was hoped that greater border trade with Myanmar would introduce regeneration in our Northeast and help to quell narcotic and arms trafficking and AIDS. But only one of the two proposed border posts is open, for which India blames Myanmar, the road on the Indian side to Moreh is sub-standard, two-way trade is constrained by the small list of tradable goods, excessive regulation and restrictions, and is negligible compared to trade across the Myanmar borders with China and Thailand. Our Northeast is swamped by goods of Chinese origin, but there is hardly any movement of Indian exports in the opposite direction. The benefits of economic prosperity seen in other parts of India have not yet touched the region.

India interacts with Myanmar in several economic fora — the Bay of Bengal Initiative, the Kunming Initiative, and the Mekong-Ganga Cooperation Initiative. Apart from China, Myanmar is the only one of India’s neighbours that exports more to India than it imports, and India does not even rank among Myanmar’s top five import sources. Trade is hampered by both countries not accepting direct payment methods such as telegraphic transfers or letters of credit, forcing the involvement of third parties, such as Singapore. Transaction costs are high and the disparity between the real and official rates of exchange is another disincentive, as is the difficulty in obtaining export credit and insurance. Many Indian companies are even disinclined to reveal they are operating in Myanmar.

India has given $100 million credit for Myanmar infrastructure, while $ 57 million has been offered to upgrade Burmese railways. A further $27 million in grants has been pledged for road and rail projects, but there is little yet to show for this approach in terms of concrete benefit. The Tamu-Kalemayo 160 kilometre road in Myanmar has been built by India, and India and China are planning to rebuild the Stillwell Road, on which the Chinese work has already started. The Kaladan river project to link a newly constructed Sittwe port to the Indian Northeast involves dredging the river to create a trans-shipment terminal and will take several years. A proposed railway from Hanoi to Imphal and a 1,500 km Trans-Asian highway from India to Bangkok are still being talked about. The Oil and Natural Gas Corporation is working three offshore blocks off the Rakhine coast, but the debate continues on whether the energy extracted would be transported to India by pipeline or as liquefied natural gas, while Bangladesh blows hot and cold on the use of its territory for transit. Meanwhile, China has predictably moved faster. It is building pipelines to Yunnan, a deep-sea port at Kyaw Phuy, and a road linking that port with Kunming.

China looms large in every aspect of India’s Myanmar policy, but after the barren years since the Sixties, India has to play catch-up with a weak hand. India’s desire to regenerate the Northeast is matched by China’s wish to develop Yunnan and Sichuan and to integrate the economies of autonomous Burmese border regions with southern China’s economy. Large numbers of Chinese investors and traders and the large Chinese diaspora in Myanmar, estimated at 2 million, are assisting actively in this process.

New Delhi takes some comfort from the view that Myanmar wishes to balance the preponderance of China with relations with India and the Asean, but in the jostling for influence in the spaces along India’s frontiers, India is faltering in Myanmar with adverse consequences for the ‘look east’ and Northeast strategies. Departments in our capital blame one another for the loss of momentum, and no one is prepared to drive forward the agenda without a clearer directive of priority from the political leadership,

India’s maritime strategy focuses on threats in the Indian Ocean. New Delhi is not reassured by Burmese promises that its territory would not be used for military purposes against any third party, and the Indian military is concerned about China modernizing naval bases at Hanggyi, Cocos, Akyab, Mergui and the port at Kyauk Phuy. This has become an unequal triangular relationship where one party seems to be reaping all the benefits. New Delhi was reluctant to condemn Myanmar during the monk-led fuel-and-food protests of 2007 and quick to send relief after the recent cyclone. But while this was noted positively in the new capital of Naypyitaw, a realistic assessment is that if India had not responded in the way it did, there would have been a negative fall-out. The outcomes of the energies expended by India over the past two decades have been negligible. The situation calls for a re-appraisal designed to turn the tide more in our favour.