Since gaining its independence from British colonial rule in 1948, Myanmar (also known as Burma) has faced ethnic division and conflict. For decades, an array of ethnic political movements and their armed wings have sought political, economic, cultural, and social rights as protection against domination by (majority) Burman authorities, even as the Myanmar military (the Tatmadaw) has asserted that its mission is to ensure the country’s sovereign independence, territorial integrity, and unity.
Majority-minority ethnic relations and the distribution of power and resources have been the most serious problems since independence. Achieving mutual trust and a system of governance agreeable to all of Myanmar’s diverse peoples are the country’s defining challenges.
Mixing Peoples Liberation Army Businesses With Strategic Interest
China and Myanmar signed 33 agreements that will further strengthen economic ties between the countries, including a port project that will give Beijing a crucial pathway to the Indian Ocean.
Chinese President Xi Jinping and Myanmar’s State Counselor Aung San Suu Kyi agreed to the projects in a meeting in Myanmar’s capital. The meeting presented Xi an opportunity to accelerate the China-Myanmar Economic Corridor (CMEC) as part of Beijing’s Belt and Road Initiative at a time when Western nations are pulling back from Myanmar over its treatment of ethnic minority Rohingya.
In 2014, China made up 63 percent of Myanmar’s USD 8.96 billion exports. The second closest country was Thailand with 15.8 percent, according to CIA Factbook figures. China also accounted for 42.4 percent of Myanmar’s USD 12.17 billion in imports in the same year.
One Belt One Road
According to Myanmar government officials, the two sides signed agreements related to a deep-sea port project at Kyaukphyu Special Economic Zone, accelerating China’s $1.3 billion project to gain strategic access to the Indian Ocean.
One subject of public backlash is the $3.6 billion Myitsone Dam project, which was halted by then-Myanmar President Thein Sein in 2011. There was no mention of reviving the project during Xi’s visit, signaling China’s compromise on the issue. This was apparently out of consideration for Naypyidaw, which is facing protests against the project over its potential impact on the Irrawaddy River, the country’s main waterway.
Control Bay of Bengal To Counter India
The infrastructure projects have all been the subject of discussion and disagreement for a number of years.
The railway will run for 1,215km Kyaukpyu, a harbour on the Bay of Bengal, and Kunming, the capital of Yunnan province, via Mandalay. This was agreed in three-year memorandum of understanding as long ago as 2011, when its reported cost was $20bn. That agreement expired in 2014, and neither side wished to take it forward.
The special economic zone around the port was awarded to a consortium of six companies led by the China International Trust and Investment Corporation (CITIC) back in 2015. Negotiations dragged on for three years, leading to a framework agreement, and more talks, in 2018.
At that time the cost of the deepwater port was put at $7.3bn and the zone and accompanying industrial park was put at $2.7bn, later cut to $1.3bn after concerns that Myanmar would not be able to repay the debt.
The plan is to build a roughly 1,000ha industrial park and a port able to handle 7 million 20-foot-equivalent-units (TEU) a year – roughly the size of the Port of New York – leading to the creation of as many as 100,000 jobs.
Other Chinese companies in the port and zone consortium include China Harbour Engineering, China Merchants Holdings, TEDA Investment Holding, and Yunnan Construction Engineering Group (YNJG). There is also a Thai conglomerate called the Charoen Pokphand Group. The consortium is to operate the port for 50 years.
Port development will be divided into four phases, with the first stage taken up with the construction of two berths with a total investment of $1.3bn. Work is due to begin after the completion of economic and social impact assessments.
The two sides also made a reference to New Yangon City, a planned industrial quarter for Myanmar’s biggest city that the China Communications Construction Company has proposed.
The Financial Times notes that the agreements did not include the Myitsone hydropower dam, a $3.6bn Chinese project in Myanmar’s northern Kachin state that was frozen in 2011 by the country’s previous government after widespread opposition.
Rakhine State and Chinese Interest
Beijing offers an alternative economic development “order” with the BRI and Asian Infrastructure Investment Bank (AIIB) where investment is meant to alleviate poverty and conflict in areas with ethnic insurgencies. The China-Myanmar Economic Corridor (CMEC) is a major joint effort by the two governments under the BRI. The MOU on the CMEC Cooperation Plan (2019-2030) was signed by the governments at the Second Belt and Road Forum in April 2019 and reaffirmed Beijing’s commitment to alleviating ethnic tensions. China and Myanmar are setting up three core zones along their border to increase trade and logistics cooperation in areas that have experienced instability. The China-backed Muse-Mandalay railway is a bet on connectivity through regions of ongoing ethnic violence, and the Kyaukphyu port is to anchor a new special economic zone in Rakhine State.
The United States continued to support the complete and timely implementation of the recommendations of the Advisory Commission on Rakhine State (the “Annan Commission”) report in 2017. Among other things, the report’s recommendations called for citizenship verification, freedom of movement, and access to livelihoods for the Rohingya, and socioeconomic border security and socioeconomic development more broadly in Rakhine State.
In the process, the US government should consider ways to both apply pressure and appropriately engage the Myanmar military in a way that empowers democratic institutions in Myanmar, moves toward resolution of the Rakhine crisis, and continues the progress of reform inside the country.
China is also demonstrating strategic muscle in adapting its policies toward Myanmar. Deep sea port and offshore container terminal are key priorities for China. A democratic Myanmar would disrupt China’s ambition to dominate Bay of Bengal and Indian Ocean nation and counter India.
Democratic Myanmar Will Disrupt Chinese Interests
The relationship between China and Myanmar is best characterized as a marriage of convenience rather than a love match. The dependence is asymmetric – Myanmar has more to lose should the relationship sour: a protector in the Security Council, support from a large neighbour amid international isolation, a key economic partner and a source of investment.
While China sees major problems with the status quo, particularly with regards to Myanmar’s economic policy and ethnic relations, its preferred solution is a gradual adjustment of policy by a strong central government, not federalism or liberal democracy and certainly not regime change. In this way, it can continue to protect its economic and strategic interests in the country. In addition to energy and other investments, Myanmar’s strategic location allows China access to the Indian Ocean and Southeast Asia.
But Beijing’s policy might ultimately have an adverse effect on Myanmar’s stability and on China’s ability to leverage the advantages it holds. Political instability and uncertainty have resulted in a lack of confidence in Myanmar’s investment environment, and weak governance and widespread corruption have made it difficult for even strong Chinese companies to operate there.
At the same time, resentment towards China, rooted in past invasions and prior Chinese support to the Communist Party of Burma, is growing. Myanmar’s leaders fear domination by their larger neighbour, and have traditionally pursued policies of non-alignment and multilateralism to balance Chinese influence. Increasing competition among regional actors for access to resources and economic relationships has allowed Myanmar to counterbalance China by strengthening cooperation with other countries such as India, Russia, Thailand, Singapore, North Korea and Malaysia. The military government is intensely nationalistic, unpredictable and resistant to external criticism, making it often impervious to outside influence.
While China shares the aspiration for a stable and prosperous Myanmar, it differs from the West on how to achieve such goals. China engaged with Myanmar on terms dictated by the Communist Party in Beijing. China’s leaders prioritize economic development and strategic interest before human rights or international law. They seek to increase political leverage via trade and investment and by becoming indispensable to multiple domestic stakeholders in a partner country.
Fear of Prosecution
The 64-year-old General Min Aung Hlaing has spent his entire career in the influential military. Min Aung Hlaing rose steadily through the ranks of the Tatmadaw, Myanmar’s powerful military, but as commander-in-chief for the past decade he also wielded significant political influence before the 1 February coup. General Min Aung Hlaing is just one year away from his retirement.
He successfully maintained the Tatmadaw’s power even as Myanmar transitioned to democracy, but received international condemnation and sanctions for his alleged role in the military’s attacks of ethnic minorities.
The 64-year-old general has spent his entire career in the influential military, which he joined as a cadet.
A former law student at Yangon University, he entered the Defence Services Academy on his third attempt in 1974.
The relatively unassuming infantryman kept getting regular promotions and moved up the ladder, eventually becoming commander of the Bureau of Special Operations-2 in 2009.
In this role, he oversaw operations in north-eastern Myanmar, which led to tens of thousands of ethnic minority refugees fleeing the eastern Shan province and the Kokang region, along the Chinese border.
In 2016 and 2017, the military intensified a crackdown on the Rohingya ethnic minority in the northern Rakhine state, leading to many Rohingya Muslims fleeing Myanmar.
The military chief was condemned internationally for the alleged “genocide”, and in August 2018 the UN Human Rights Council said: “Myanmar’s top military generals, including Commander-in-Chief Senior-General Min Aung Hlaing, must be investigated and prosecuted for genocide in the north of Rakhine State, as well as for crimes against humanity and war crimes in Rakhine, Kachin and Shan States.”
Following the council’s statement, Facebook deleted his account, along with those of other individuals and organisations who it said had “committed or enabled serious human rights abuses in the country”.
The US sanctioned him twice – in 2019 for his alleged role in “ethnic cleansing” and human rights violations, and in July 2020 the UK also imposed sanctions on him.
Min Aung Hlaing was originally due to step down as commander-in-chief after reaching the retirement age of 65 in July this year, but has now given himself at least another year in power – and potentially longer – with Myanmar’s apparent return to military rule. The military coup will give him last chance to avoid prosecution and extradition to international criminal court in Hague.
Beijing’s economic capability, debt diplomacy, military might and will to shift the centre of power and influence in Asia is changing institutional architecture with implications for the processes and products of policymaking in the region.
The Western government should also encourage Beijing to be more transparent about its peace strategy and engagement with various players, including ethnic armed organizations along its border. In the process, China should avoid any actions or policies that obstruct or inhibit furtherance of peace inside Myanmar due to narrow consideration of its own national interests.
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