Elephant, dragon & the Burmese castle

Prime Minister Manmohan Singh’s recent three-day visit to Burma, from May 27 to 29, was historic not just because it took place 25 years after the last prime ministerial visit to that country, but also because it marks a shift in the way India is beginning to look at its role in the region.

This visit was a concrete step towards cementing India-Burma ties at the highest level.
While over the past few years India has received several high-level delegations from Burma, this is the first time since the visit of Prime Minister Rajiv Gandhi in 1987 to Burma that an Indian Prime Minister has visited the country. Dr Singh’s visit has pushed the two countries closer, both in the economic and security spheres.
Following close on the heels of several changes that have shaped the political space in Burma, Dr Singh’s visit is an endorsement of Burma’s reform process. The byelections in which Aung San Suu Kyi and her National League for Democracy won in April and her recent integration in the political process is leading to rapid changes in Burma’s political system. The release of several political prisoners and the space given to the freedom of the press and political parties is part of significant reforms underway in Burma.
As both the EU and the US have lifted sanctions to a credible level, endorsement by regional players like India is significant. For India, Burma is the land that connects it with its Asean neighbours. Both bilaterally and at the multilateral level, ties with Burma will serve India’s long-term interests in the region.
Moreover, with the growing interest that the international community is showing towards Burma, there is a view that the India-China stand-off will be very visible in terms of how each seeks to enhance its ties with Burma. Throughout the years of Burma’s isolation China has been a supporter of its junta and has made huge inroads into the Burmese economy by extending assistance.
India too, with the adoption of the “Look East Policy” in the Nineties, made Burma an important part of its foreign policy, in spite of international criticism over the weak influence India had on Burmese democratic progress.
At the economic level one of the highlights of Dr Singh’s visit was India’s readiness to give Burma a $500 million line of credit. An agreement to this effect was inked between the Export-Import Bank and the Myanmar Foreign Trade Bank. Initiated in October 2011, when Burmese President Thein Sein visited India, the credit line was finalised during this visit. Other agreements, covering increased air connectivity and the setting up of joint trade and investment forums which seek to increase bilateral trade to the tune of $3 billion by 2015, have also been signed.
The credit line agreement follows a range of assistance measures India has been providing to Burma in infrastructure and other projects. India’s financial assistance with regard to infrastructure projects is more recent and is considered to be a major thrust area in promoting both road and port connectivity between the two countries. The development of the Moreh-Tamu-Kalewa road, the multi-modal Kaladan project and the Sittwe Port are a few examples of such assistance.
Another area where India’s assistance has been appreciated is capacity building and training. Two initiatives have been very well received — the Myanmar-India Entrepreneurship Development Centre (MIEDC) and the India-Myanmar Centre for Enhancement of IT Skills (IMCEITS). The MIEDC, being run under the Indian Initiative for Asean Integration, is a programme meant for newer members of the Asean — Cambodia, Laos, Vietnam and Burma — whereby India trains personnel in entrepreneurship in key industries so as to enable them to achieve global levels of competence. The Burma chapter of the MIEDC, which began in 2009, has got very good response. The IMCEITS has been successfully imparting training in IT related areas, India’s key selling pitch in the region for a long time. India’s offer to assist in the training of personnel in cutting-edge technology has been appreciated, given its world-class expertise in the services sector.
Compared to India’s support, the Chinese presence in Burma has been much more tangible — nearly two-thirds of all foreign investment in Burma comes from China, Burma being also its second largest trading partner. In terms of both economic and technical assistance, China has been the most significant player in Burma since its isolation in the early 1960s.
Among the areas India is exploring to enhance its ties with Burma, energy security is high on the agenda. The quest for new sources of energy in the region and India’s ability to access them is one of the factors driving the India-Burma relationship forward at a rapid pace. Burma’s energy resources are also being eyed by China, and a few Chinese companies have already made some inroads. But there are several offshore and onshore blocks of natural gas which will be auctioned in the future. Indian companies are keen to bid for these.
In October last year China objected to the presence of Indian oil-exploration companies assisting Vietnam in the South China Sea claiming that the Chinese rights have to be taken into consideration in that region. Given that India and Burma have long historical and cultural links, India needs to make its presence felt in Burma to check China’s growing clout in our neighbourhood.
India, concerned over the rise of China in Southeast Asia region, is seeking to enhance its presence in the region beyond economic interests and in this context Burma’s importance, especially when it comes to security and strategic interests, cannot be overstated.
It is interesting to note that the manner in which India is consolidating its position in Burma may be slow, but India’s position within the region is likely to have a more sustained impact given that India is not seen as a hegemonic power.
While India may be seen as reacting to China in the region, its economic growth is slated to be far more stable in the long run compared to China’s. From Burma’s standpoint, its growing ties with India will eventually make it less dependent on China, thereby balancing its own interests as a regional player.