Sushma Swaraj's Visit

India in Myanmar: Strengthening the Economic Commons

26 Aug, 2014    ·   4624

Aparupa Bhattacherjee writes about India's increasing thrust towards engaging with Myanmar on the economic front

Aparupa Bhattacherjee
Aparupa Bhattacherjee
Research Officer
Indian External Affairs Minister Sushma Swaraj’s four-day visit to Myanmar highlights India’s intentions towards expanding the New Delhi-Naypyidaw bilateral. Swaraj, during her visit emphasised on the border cooperation and trade and investment between India and Myanmar. What were the focuses of this visit? What are the potential outcomes of these focuses vis-à-vis the future trajectory of the India-Myanmar relationship? 

Sushma Swaraj in Myanmar: A Short Note
Swaraj attended three multilateral forum meetings: the ASEAN-India Foreign Ministers meeting, the East Asia Summit (EAS) and the ASEAN Regional Forum (ARF). She also held bilateral meetings with her counterparts from Indonesia, the Philippines, Brunei, Australia, New Zealand, Japan, China, and other ASEAN and East Asian countries. Her meetings with foreign ministers of ASEAN and other East Asian countries demonstrates India's growing thrust towards pushing its Look East Policy (LEP) to a new phase, one that called the ‘Enhanced LEP’ or ‘Look East:3.0’.

Swaraj also had the opportunity to meet the President of Myanmar, Thein Sein, and her Myanmarese counterpart, Wunna Maung Lwin. The primary discussions in these meetings were on border cooperation, economic investment and connectivity. Swaraj also met with the Speaker of the Myanmarese Upper House of the Parliament, Thura U Shwe. Interestingly, she did not meet Aung San Suu Kyi, the leader of the main opposition party, the National League of Democracy (NLD). Official statements explained this by reasoning that since Swaraj was only visiting Naipyidaw, it was not possible for her to meet the leader who lives in Yangon. However, Swaraj was expected to meet Suu Kyi, especially since the country is in preparation for the 2015 general election. It could hint India’s support is towards the Union Solidarity Development Party (USDP), as opposed to the NLD.

Economic Bonhomie?
The Indian external affairs minister in her speeches at the multilateral forums cited a new term called ‘economic commons’. The term has a larger meaning, and encompasses trade, investment, connectivity and similar factors. According to Swaraj, “The economic commons in East Asia would benefit from the connectivity and infrastructure sufficiency in the region.” The need for connectivity and developed infrastructure was also emphasises upon in her meetings with Myanmarese leaders. However, other important issues such as the Rohingya issue, ongoing ethnic conflicts – especially in the Shan and Kachin states – appear to have been intentionally kept aside in her meeting with her Myanmarese counterpart. The strategy could have been that of focusing purely on economy as it is a safer subject to be discussed without affecting bilateral relations.

Two issues play a significant role in the growth of New Delhi-Naypyidaw trade relations:

a. the trilateral highway project intended to connect India, Myanmar, and Thailand that is expected to be completed by 2016, and

b. the Kaladan Multimodal Transit Transport Project (KMTTP) initiated by India in Myanmar’s Rakhine state.

In 2012-13, the India-Myanmar bilateral trade stood at $1.8 billion. India’s exported $532 million worth materials to Myanmar imported $1.33 billion worth materials from the country.

India imports a substantial amount of pulses from Myanmar. Despite being immediate neighbours and sharing a 1600-kilometer border, the import depends on the sea routes instead of land routes – owing to the lack of infrastructural development, especially in Northeast India. Additionally, Northeast India is connected to the mainland by a narrow stretch called the Silliguri corridor; the other alternative is via Bangladesh’s Chittagong port. However, Bangladesh has always used transit facility through this port as a political leverage. Therefore, India’s emphasis on the KMTTP is justified. The Project will not only improve India's connectivity with Myanmar and other Southeast Asian countries but also provide the former with an alternative sea route via the Kaladan River into India’s northeastern state of Mizoram.

Along with the development of connectivity along the border, India should also focus on the development of infrastructural facilities within the country. Improved connectivity with Myanmar through India’s north-eastern states will further encourage Indian businesses to invest in Myanmar’s growing economy. Indian companies such as ONGC Videsh Ltd, Jubliant Oil and Gas Pvt. Ltd, Gas (India) Ltd., etc are mostly public ventures. Improved infrastructure will lure Indian private enterprises into the Myanmarese market. Furthermore, several Indian banks such as the State Bank of India (SBI), the Bank of India and the United Bank of India have declared their plans to establish their representative offices in Myanmar. This will help boost bilateral India-Myanmar trade and investments.

Strengthening Ties: An Agenda for the Government
The recent visit amplified the expectations of increased trade between both countries as well as of greater involvement of Indian private enterprises in Myanmar. However, it is important that India undertakes certain measures in order to live up to these expectations. Time-bound completion of governmental projects is necessary. New Delhi should also provide incentives and trade concessions to private businesses’ that have – and that might – ventured into the Myanmarese market. It is also essential to build the people-to-people relationship that is currently lacking – as made evident via the lack of enthusiasm in the Myanmarese media vis-à-vis Swaraj’s visit. Therefore, it is imperative that India focuses on these aspects in order to build its relations with Myanmar.