The China-Myanmar/Burma 2011 ‘Memorandum of Understanding’ (MOU) on the trans-Burma railway has expired, without the materialisation of the project. Burma is still open to the project if a new agreement is signed, but calls for regional devolution and anti-Chinese public sentiment mean it is not a priority. Meanwhile, an expectant Beijing has already started preparations within its own territory.
Background
Prior to the democratic and economic reforms launched in 2011, China was the de facto international supplier and diplomatic partner of the military junta that had ruled Burma since 1962. Estimates indicate that, since 1988, Beijing has invested up to US$20 billion in Burma, providing the catalyst for much of its mineral prospecting and extraction. A railway has been planned to run from the Burmese port of Kyaukpyu to the Chinese city of Kunming, parallel to the Chinese oil and gas pipelines that are already in place. Various regional groups are angered that the pipelines were built without their permission or consultation; they now object to the idea of their lands being confiscated again.
A large part of China’s diplomatic manoeuvrings seem to be centred on energy security. Its wariness of the bottleneck represented by the Strait of Malacca in its trade routes from the Middle East and further afield, is often commented on. China’s appetite for building alternative maritime infrastructure is visible everywhere, through Pakistan, Bangladesh, Tanzania, the Maldives, the South China Sea and Burma.
China regards the development of the hydro-power potential of mountainous eastern Burma as of great importance to its western provinces. The same could be said about its appetite for exploiting Burma’s rich mineral deposits: resources that can be acquired by China without the need for seaborne imports. The proposed railway means a new, direct route for China’s exports of ore and energy and its imports from Burma. Burma. For Beijing, this provides one way of avoiding its “Malacca dilemma”. Also relevant is the fact that the proposed railway embodies a possible threat to Burmese manufacturing: a sector currently enticed by the prospect of Western outsourcing, rather than Chinese imports.
Due to the diverse ethnic makeup of Burma, formulating state policy has been problematic. Naypyidaw has previously been nonchalant about demands from the provinces, but since 2011 it has tried to harmonise internal politics in the face of severe regional reactions. China perceives this and has aligned itself officially with the Naypyidaw Administration, noticing that it has few friends in the provinces. At present, anti-Chinese sentiment is high, due to perceptions of unfair trading terms between the two countries. Burmese regionalists argue that infrastructure projects conducted by Chinese State-Owned Enterprises (SOEs) do not hire local workers and distort the terms of agreements. The fact that local farmers were dispossessed of their lands to accommodate the initial Chinese pipelines, without prior consultation, remains the focal-point for anti-development public sentiment.
The western Burmese province of Rakhine recently produced a union of 55 local political party representatives, which presented a petition to the central government. Calling for the cessation of industrial and resource based enterprise in their districts, the document held that such operations were not lawful, due to the lack of local-consultation prior to their implementation. An official press release claimed that while Rakhine was one of the industrial hubs of Burma, it was also the ‘least developed’ and ‘second-poorest region in Myanmar’.
Similar disputes have been apparent for years, with the Nationwide Ceasefire Co-ordination Team (NCCT), a multi-ethnic alliance of key ethnic leaders and businessmen, formed to lobby the government to acquiesce to regional demands. A period of 90 days, commencing on 16 August, has been set as the timeframe for a total ceasefire and for the drafting of a new constitution (sporadic fighting has occurred over the past few decades). China’s reaction is not yet clear and neither is the status of the Wa: a warrior-ethnicity spanning a smattering of small, semi-autonomous group of regions on the eastern borders, near China’s Yunnan province.
The Wa State is currently not recognised by Burma and has never been totally under state-control, even as far back as the British Raj. Burma’s concern over the Wa State, and specifically its United Wa State Army (UWSA), is its suspected widespread criminality and ongoing insurgency. The US Government has officially declared the UWSA a Narcotic Trafficking Organisation. In 2013, an IHS intelligence review[1] claimed that the UWSA was advancing its military capability (it already has a standing army of 30,000) by receiving Chinese equipment, including helicopters and anti-tank weaponry. Beijing denies any double-play between the separatists and the Administration, with a Chinese Embassy report stating that China ‘holds a clear and consistent policy of respecting the sovereignty and territorial integrity’ of Burma.
Burma’s newfound interest in federalism casts a shadow of doubt over China’s railway intentions: the railway harbours more negatives than positives. With China currently building another railway in neighbouring Laos, Beijing is both momentarily distracted, yet adamant that Naypyidaw will proceed with the railway once its internal transformation is complete. China’s construction of the tunnel stages of the railway in the mountains of western Yunnan is an example of its confidence. Sino-Burmese relations are unlikely to deteriorate over this issue, but Japan’s recent decision to write-off the US$3.7 billion debt owed to it by Burma, may provide clues as to Naypyidaw’s ultimate direction.
Ben Pattison
Research Assistant
Indian Ocean Research Programme
- See more at: http://www.futuredirections.org.au/publications/14-strategic-weekly-analysis/1897-strategic-weekly-analysis-3-september-2014.html#sthash.LJuIt0yk.dpuf
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