Engaging Myanmar as it moves to democracy

Economic and strategic imperatives both demand building close ties

Last year, Burmese political icon and Nobel laureate Aung San Suu Kyi told an Indian television network: “If the National League for Democracy (NLD) wins the elections and we form the government, I am going to be the leader of that government, whether or not I am president.” On Monday, she stood on the cusp of fulfilling that promise with the historic inauguration of Myanmar’s first civilian-dominated parliament in half-a-century. The process of Myanmar’s political transformation that started—hesitantly—with 2010’s allegedly managed elections and gathered steam with more convincing elections in November last year is now well underway.

Reportedly, Suu Kyi has avoided triumphalism in the wake of the NLD’s convincing victory. She has good reason. Multiple challenges await her. Pushing towards a resolution of ethnic conflicts is one. For another, she may soon hold power through a proxy president, but the military junta that ruled Myanmar from 1962 to 2010—and continued to dominate the political landscape during the subsequent nominally civilian dispensation headed by former general Thein Sein—will not be returning to the barracks anytime soon. The NLD’s overwhelming majority of about 80% of the elected seats in the legislature will be offset in part by the 25% block of both parliaments reserved for the military and the military’s continued hold on ministries like defence, home affairs and border affairs.

The NLD consequently finds itself in the unenviable position of needing to deliver strongly on the promise of democratic rule in order to maintain public support and buttress itself against military interference—while being constrained by the military’s continued political role. That means sustaining the promising 8.5% economic growth of 2014-15 when Myanmar’s July floods have led the World Bank to forecast a moderation to 6.5% for 2015-16.

That makes the potential of India-Myanmar economic links all the more important. Unsurprisingly, despite easing ties with the military junta in 1993—an admirable display of pragmatism—New Delhi has failed to invest the required political will and energy in the relationship. ONGC Videsh Ltd and GAIL (India) Ltd both have stakes in Myanmar’s Shwe offshore gas field and India has invested in English-language training, agriculture and the IT sector. But China, accounting for 42% of the over $33 billion of foreign investment in Myanmar between 1988 and 2013, is leagues ahead. It has bankrolled a host of infrastructure projects from oil and gas pipelines—strategically important for Beijing, allowing it to ship oil straight from the Indian Ocean, bypassing the Strait of Malacca choke point—to ports and dams.

But with that investment has come a popular backlash within Myanmar. The Chinese model of economic engagement is seen as exploitative; land confiscation, forced relocation and cross-border influx of cheap goods and labour have all made China unpopular. The opening up of Myanmar as sanctions were eased and border incidents have also led to a cooling of relations between Beijing and Myanmar’s generals—its strongest backers—over the past few years.

That and the new administration now in place in Naypyidaw mean this is New Delhi’s best chance yet to begin rectifying its past lack of initiative. Its Look/Act East policies, carried across administrations since the 1990s, all but demand it—Myanmar is the gateway to South-east Asia. The capacity and institution building it has done so far, along with cultural links, mean it enjoys a positive perception across the border. That advantage must be exploited with infrastructure initiatives that benefit the Burmese people—such as the India-Myanmar-Thailand highway, bus and rail links, the Bangladesh-China-India-Myanmar Economic Corridor and power transmission lines—alongside energy sector investment.

The economic and strategic benefits of such investment—the two are intertwined—extend to boosting development in India’s North-east and cooperation with Myanmar in combating insurgent groups operating in the region. The cross-border raid in June last year targeting the Khaplang faction of the Nationalist Socialist Council of Nagaland and the Kanglei Yawol Kanna Lup is a case in point.

Naypyidaw will seek to extract all it can from the relationship and play Beijing against New Delhi for best advantage, of course. Suu Kyi’s visit to the former last year and her public statements about Myanmar serving as a bridge between China and India indicate as much. It’s time New Delhi upped its game.

Can India overcome China’s advantage in Myanmar?