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Ashok Kumar asked: What is the politico-strategic impact of China's SEZ in Kyaukphyu and the China-Myanmar Economic Corridor on India? Why India has not been able to achieve such advantages in Myanmar?

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  • Udai Bhanu Singh replies: China-Myanmar Economic Corridor (CMEC) has been touted as a flagship project of Beijing’s Belt and Road Initiative (BRI) in Myanmar. A memorandum of understanding (MoU) to establish CMEC was signed between the two countries in September 2018. Started on the lines of the more controversial China-Pakistan Economic Corridor (CPEC), Beijing wants CMEC to be fast tracked sensing possible delay in the implementation of the BCIM-Economic Corridor (running through Bangladesh, China, India and Myanmar). CMEC holds great significance for China whose landlocked Yunnan Province needs access to the Indian Ocean (and resolve its ‘Malacca dilemma’) and also to permanently secure the dual pipeline between Kyaukphyu and Kunming (already functional) passing through the conflict prone Rakhine State of Myanmar.

    While India desires rapid economic and infrastructural development of Myanmar, it has some legitimate concerns about growing Chinese economic and strategic penetration of Myanmar. This is particularly aggravated by the following factors:

    • Prospects of increased dumping of Chinese goods in the Indian markets.
    • Fear of accentuating Myanmar’s existing societal faultlines, especially in Rakhine where armed groups are still active. Fears have continually been voiced about inadequate environmental as well as social impact assessments before undertaking projects such as the Kyaukphyu Special Economic Zone (SEZ). Farmers have expressed concerns vis-à-vis inadequate compensation, environmental degradation and also, based on past experience with Chinese investments in extractive industry (copper), lack of job opportunities for local people including those displaced, and finally, being ensnared by the debt trap (Sri Lanka’s experience). On the other hand, neighbouring countries like India have legitimate concerns about increased flow of refugees consequent to economic and social displacement.
    • There are also more direct strategic concerns such as possible use of Myanmar’s deep sea port by China for exercising direct influence in the Indian Ocean.
    • Exacerbation of non-traditional security threats emanating from the Golden Triangle, basically threat of increased proliferation of drugs and small arms in the region including India’s Northeast.

    India’s connectivity projects (although lagging behind) including the Trilateral Highway and the Kaladan Multi Modal Transit Transport Project are edging towards completion. India lacks China’s deep pockets and India’s Northeast is unable to provide (as yet) sufficient indigenously manufactured goods in the absence of requisite infrastructure. Internally, India’s Northeast is inadequately connected and hampered by lack of industrial base.

    However, an opportunity does exist in a changing Myanmar as its strategic community and also its civil society appears unwilling to be over-dependent on China for its growth and development. India could leverage its presence in international and regional lending institutions to secure funding for infrastructure projects as well as the expertise of friendly countries like Japan, Australia and Singapore for collaborative projects (especially in health and education sector) in both Myanmar and bordering areas of India’s Northeast.

    Posted on April 12, 2019