Many international players are seeking to ride the wave of Burma’s emergence. Its position between the giants of China and India add an extra dimension to the geopolitical story, says Paul French
There’s a new phenomenon in Rangoon – private jets. In the past few months a steady convoy of the high and mighty of the rarefied worlds of international finance, fund management and leveraged buyouts have been hopping onto their Learjets and heading down to Burma.
Remember, these are guys who’ve already margin-called China, hedged Mongolia and mezzanine-levelled India. They’re on a constant search for new “emerging” markets to get a piece of the action in and right now Burma is the hot topic. You can expect one thing this year – a lot of purportedly deep thinking on Burma and things Burmese from people who’ve done a fly-in/fly-out trip.
It seems the president, Thein Sein, has been successful at wooing western countries and the international bankers with his reforms. It’s also true that much of Burma, even from the little round window of a Learjet or the blacked out window of an S-Class Mercedes, is achingly beautiful. It’s as hard not to fall in love with Burma and the Burmese as it has been difficult to stomach the generals that have run the place for decades.
Of course there’s a balance sheet to all this change – some political prisoners have been released, there have been elections (and more are promised) and economic reforms appear to be under way. Yet is it time to lift the sanctions? More is needed and time will tell if the reforms are real and deep or merely an elaborate smoke-and-mirrors exercise.
Economics Nobel laureate Joseph Stiglitz, who recently touched down briefly at Yangon airport, says it’s time to lift the restrictions. Returning from Burma he wrote: “It is time for the world to move the agenda for Myanmar forward, not just by offering assistance, but by removing the sanctions that have now become an impediment to the country’s transformation.”
Others are not so sure. Eva Kusuma Sundari, an Indonesian member of parliament for the Democratic Party for Struggle, and a long time Burma observer, believes there’s a lot of work to be done to bring the fractious ethnic minorities of Burma together. Many ethnic groups still do not recognise the government. Their treatment during the junta-dominated decades has been awful and tragic.
The symbolism of Burma’s emergence is obvious and comes out in every op-ed, think piece and column on the subject – “on the cusp”, “poised at a crucial juncture”, “standing at the crossroads of real change”… and they’re all as right as they are trite.
But sometimes the trite and obvious are how things actually are – this is an amazing moment for Burma and its 60 million people.
Neighbourhood watch
Burma has been a contentious subject between those two great rising economies of India and China for some time. The Chinese have invested heavily in Burma – the Kunming highway is western China’s link to the restored Burma Road (restored with Beijing money, largely) and, so China hopes, provides a route to the Indian Ocean bypassing the infamous Malacca straits and so saving time and avoiding troublesome pirates.
New Delhi of course looks at this as China dipping its toes in the warm waters of the Indian Ocean. China has used Burma almost like a colony, employing the cheap labour there to manufacture goods and taking advantage of its geography to further Beijing’s energy security. A huge gas pipeline from Burma’s Shwe field makes its way from the coast on the Andaman Sea through the humid jungle and the mountains on the border between Burma and China and pipes straight into Sichuan province.
In 2008 Beijing and Burma’s military junta agreed to build a $1.5bn oil pipeline, and, in 2009, a further agreement was reached to build an additional pipeline. What of this relationship now? China and Burma negotiated as two one-party undemocratic states; now one may be fundamentally changing, and it ain’t China. So far Beijing has not had a lot to say, at least publicly, about the reform process in Rangoon.
By contrast, democratic India seems to be welcoming the reforms, actively engaging with the new government and poking the old Chinese enemy in the eye at the same time. More meetings, and more road and air links.
India had been on the back foot with Rangoon for a while as Chinese investment dominated. That’s changing now and so, along with analysing how real and deep the reforms will be we’ll all have to keep an eye on the resurgent India-Burma relationship and just how Beijing might feel about being demoted by Rangoon.
One thing’s for sure – it really is all to play for in Burma this year.
Paul French has been based in China for more than 20 years and is a partner in the research publisher Access Asia-Mintel.