PLAYING CATCH-UP

In a changing Myanmar, Ashis Ray finds that past history and present caution have held India back in exploiting new opportunities

The Myanmar government is a 10-month cohabitation between the military and Aung San Suu Kyi’s National League for Democracy in a country ‘where China Meets India’, the title of the seminal work of the Myanmar historian, Thant Myint-U. By comparison to China, however, India is almost invisible.

Indian foreign direct investment (FDI) in Myanmar is a little over $2 billion, Chinese FDI is $18 billion. Trade between Myanmar and India stands at a bit more than $2 billion; between Myanmar and China it is $29 billion.

After the British annexed Burma, as it was known, to the Raj in 1824, an increasing number of Indians settled there. But after independence in 1948 the indigenous majority in Myanmar began to resent the Indian presence. A policy of discrimination began, which climaxed after the 1962 military coup. Homes owned by Indian families settled in Myanmar for a century were forcibly seized; businesses – even small shops – were nationalised without compensation. Ties between India and Myanmar went into a tailspin.

When Suu Kyi, now State Counsellor or de facto prime minister, launched a campaign for democracy in 1988, the then Indian Prime Minister, Rajiv Gandhi, decided to support her. This caused a further deterioration in relations. Myanmar – in collusion with China – retaliated by providing sanctuary and staging posts to separatists in India’s north-eastern states.

In the 1990s, with PV Narasimha Rao now premier, India switched to a strategy of re-engagement with the armed forces, without abandoning Suu Kyi. Simultaneously, New Delhi melted the 30-year state of freeze with China by sealing a landmark peace and tranquillity treaty.

In the 1970s, China even fought alongside Burmese communists against the Myanmar state, with direct clashes between Chinese and Myanmar armed forces. Thousands died in the hostilities. China, Nyint-U writes, ‘claimed its “state-to-state friendship” was separate from its “party-to-party support” for the Burmese rebels’ – a truly remarkable ideological contortion.

The Burma Communist Party collapsed in 1989. But by this stage, thanks to Deng Xiaoping’s reforms, Chinese goods had already swept the Myanmar market. With the West imposing sanctions on Myanmar, and progress quite slow in India’s repair of its relationship, China flourished in a virtually empty playing field, and since the late 1980s has been the biggest investor in the country.

India, however, has unobtrusively invested $1.75 billion in rebuilding or creating highways and bridges, and developing a sea port in Sittwe, capital of Rakhine State, on the Bay of Bengal. The port, conceived by the Manmohan Singh government, will receive shipments from the eastern Indian port of Kolkata. The freight will then be transferred to smaller vessels and transported up the Kaladan river to the north-eastern Indian state of Mizoram – slicing the cost and distance of shipment by half.

Sittwe will also provide an additional facility for the Indian navy, extending Indo-Myanmar defence co-operation at a time when Myanmar’s relations with neighbouring Bangladesh and Thailand are somewhat tense. Dhaka has taken delivery of the first of two Chinese submarines, and Bangkok has ordered three from the same source.

STATE OF ENLIGHTENMENT: Most Myanmar visitors to India are pilgrims to Bodh Gaya in Bihar
STATE OF ENLIGHTENMENT: Most Myanmar visitors to India are pilgrims to Bodh Gaya in Bihar.

Ministers in the present Indian government publicly boasted of a hot pursuit of Indian secessionists by Indian troops into Myanmar in 2015, which caused resentment in Nay Pyi Taw, the capital. But Myanmar did not make an issue of it, for two reasons. Such action is permissible under a memorandum of understanding signed between the two countries when Singh was prime minister. And Myanmar wants to cement relations with India as a counterweight to China.

India and Myanmar also have a mutual interest in road links and enhanced border trade between the Indian states of Manipur, Nagaland and Mizoram and the north-western region of Myanmar. ‘Northeast India and Burma combined make up a market of over 100 million people, poor now, but not necessarily for ever,’ observes Myint-U.

The Tatas are assembling trucks in Myanmar, Oberoi and ITC hotel groups are eyeing the burgeoning tourism market, and Bharti Airtel is exploring the mobile market. But by and large, India’s private sector has failed to capitalise on the trade and investment opportunities secured by Singh, despite the fact that Myanmar, without upsetting China, is seeking to diversify its dependence.

GUARDED: India and Myanmar have many reasons to co-operate, but Delhi is proceeding cautiously
GUARDED: India and Myanmar have many reasons to co-operate, but Delhi is proceeding cautiously

This policy began under the country’s last military president, Thein Sein, who handed over to Suu Kyi last year. In 2011, Sein symbolically suspended Chinese construction of the Myitsone dam, on the Irrawaddy river, following countrywide protests in Myanmar. Suu Kyi has referred the matter to a commission, but Chinese involvement with ethnic rebels in Myanmar continues to be an impediment to the peace she seeks.

While Western and Indian companies wait for greater clarity on FDI, not to mention trade, others have stepped forward. Japan has already become the biggest donor, committing $7.7 billion over the next five years to infrastructure development, while Singapore has moved into real estate, shopping plazas and tourism.

Diplomatically, too, India has held back. The Chinese foreign minister, Wang Yi, was in Nay Pyi Taw within a week of Suu Kyi’s swearing in last March, and became the first overseas dignitary to call on her. In contrast, no Indian cabinet minister visited Myanmar until August. And Suu Kyi’s state visit to Delhi in October – where she went to school when her mother was her country’s ambassador to India – was more ceremony than consolidation.

But Buddhists in Myanmar – 80 per cent of the population – identify India as the land of Gautama Buddha. Indeed, the bulk of Myanmar visitors to India are pilgrims to Bodh Gaya, in the Indian state of Bihar, where Buddha is said to have attained enlightenment.

There are many reasons for India and Myanmar to co-operate, but Delhi is proceeding cautiously. Despite great expectations of Suu Kyi, the men in uniform not only control the key ministries of home, defence and border areas (where various rebel groups pose a challenge), but also the civil service. And the ambitions of the head of the armed forces, Senior General Min Aung Hlaing, are unknown. Suu Kyi may be in office, but is not fully in power.

India’s carefully calibrated policy may ultimately succeed. But most people in Myanmar are unaware of Delhi’s under-the-radar contribution. In a country where dissemination of information is restricted, you only get noticed if you are prominent in public places. India is inconspicuous in this respect. Tomorrow, though, could be another day.


Ashis Ray has worked for the BBC, the Ananda Bazar Group and the Times of India. He was CNN’s founding South Asia bureau chief in Delhi and is the longest serving Indian foreign correspondent.

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