Great potential in Myanmar - for
some By Emanuela Sardellitti
Rich in natural resources and minerals,
Myanmar is a land of immense economic potential.
Under international pressure, the country has
undertaken some economic-liberalization programs,
although the reforms have had little impact on
most Myanmar nationals.
Yangon now bustles
with construction, consumer goods and even foreign
exchange; however, this superficial development
touches few people. For the majority, who are
small farmers in rural areas, there is no benefit.
Military spending soaks up about 40% of
Myanmar's budget, and
the
military junta that runs the country continues to
expand its army. State enterprises, especially
those controlled by the military, dominate local
and joint-venture investments. The Union of
Myanmar Economic Holdings Co is run by the Defense
Ministry's Directorate of Procurement and is
engaged in almost every foreign joint venture.
Recently, the government has developed
some economic projects, especially in the
petroleum sector, by cooperating with other
countries. Economic development, however, is
proceeding without public input, reliable economic
data and official accountability. Moreover,
thousands of people have been expelled from their
homes to make way for infrastructure projects, and
others have been conscripted as laborers for road
and railway construction in the gas-pipeline
region.
Despite decades of mismanagement
and missed opportunities, the potential of
Myanmar's economy is still significant. In recent
years, Myanmar has been aggressively pursuing
economic cooperation with neighboring China, India
and Thailand.
Economic cooperation between
Myanmar and China has flourished since 1988 when
their governments signed an agreement on border
trade. China is financing a large number of
engineering projects in Myanmar designed in part
to increase bilateral trade. To curb China's
economic influence in Myanmar, India shifted its
policy toward its eastern neighbor in the early
1990s from isolation to constructive engagement.
Currently, India's policy promotes close economic
ties with Myanmar.
Within the regional
framework, Myanmar has been an active member of
Association of Southeast Asian Nations since 1997.
ASEAN was set up in 1967 in Bangkok by Indonesia,
Malaysia, the Philippines, Singapore and Thailand.
It now counts 10 members, including Myanmar, with
a total population of about 500 million, a total
area of 4.5 million square kilometers and a
combined gross domestic product of almost US$700
billion. The association aims at accelerating
economic and financial growth and promoting
regional stability.
In opposition to the
sanctions regime imposed by the US and other
Western nations, ASEAN states have pursued a
policy of productive economic engagement with
Myanmar. On the grounds of political and economic
integration, this regional body provides financial
and economic assistance, with particular regard to
infrastructure development, human-resources
development and communications technology.
Divisions between ASEAN and the United States on
the proper policy to encourage democracy in
Myanmar leave the current US administration
without a clear direction for its reconciliation
efforts.
Energy interests in Myanmar
Although Myanmar is endowed with oil and
gas reserves, it is impoverished and
underdeveloped in great part because of
regime-imposed isolation and cronyism. Myanmar is
protected on the international stage by its
Southeast Asian neighbors, Japan, India and, most
important, China.
Each of these actors has
economic interests in Myanmar, with particular
regard to energy issues. Myanmar, for example, has
the world's 10th-largest gas reserves. Given
Myanmar's oil resources and its strategic
location, its most important economic partner
remains China, which has also been a primary arms
supplier to the government.
Nevertheless,
in recent years, India has become a crucial player
in the energy game. The sense of urgency that
India holds over its energy needs, due to its
rapid economic growth, explains the emergence of
Indian economic interests in Myanmar.
Indian policymakers have initiated
numerous policies to address India's growing
energy needs, to secure its provisions and to
diversify energy supplies by developing other
energy resources such as nuclear power, coal,
natural gas and renewable energy as well as
stepping up exploration activities within Myanmar.
Moreover, India is using both diplomatic and
economic means to strengthen ties with the South
Asian states as well as Myanmar.
With the
aim of securing its energy provisions and
balancing Chinese influence in Myanmar, India has
made significant progress in tapping into the
country's energy resources. Among the most
important projects are the Sagar Samriddhi project
(a deepsea project to explore for oil and gas
reserves in the Bay of Bengal) and the Shwe Gas
Pipeline project in western Myanmar. Thailand has
also expressed interest in developing the
pipeline.
As far as the Shwe Gas Pipeline
is concerned, experts point out that, if built, it
would be Myanmar's largest gas-development project
ever realized. Conflict over increasing energy
needs is foreseeable. Consequently, although
demand for energy resources at the global level
may be a catalyst for short-term cooperation, it
may also lead to conflicts.
Moreover, the
increasing economic interdependence among China,
India and Myanmar conceals an important aspect of
international strategy. Indian and Chinese
policies are mainly focused on attempts to engage
"rogue states" such as Myanmar, Iran and Sudan to
achieve different objectives.
From an
economic point of view, they want to access their
energy resources, while at a political level they
aim at countering Western attempts to isolate
autocratic regimes - which would likely weaken New
Delhi's and Beijing's geopolitical influence in
these regions.
Look for the wide region
encompassing the Indian Ocean coastline from
Bangladesh to Myanmar to be increasingly central
in this year's geopolitical competition over
strategic resources. In the event of a
breakthrough in Myanmar's political situation,
China, India and the US can be expected to step
in, trying to implant a government whose basic
foreign-policy orientation best suits their
respective interests.
Published with
permission of thePower and Interest News
Report, an analysis-based
publication that seeks to provide insight into
various conflicts, regions and points of interest
around the globe. All comments should be directed
tocontent@pinr.com.
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