Myanmar: India intends to play the long game & invest more

, August 4, 2021, 0 Comments

The armed forces of Myanmar, referred to as Tatmadaw, are in the habit of grabbing political power. They did it again in a February 1, 2021 coup.myanmar-india-marketexpress-in

But unlike in the past, India didn’t leave the post. At a time when projects funded by top multilateral or development agencies have come to a grinding halt; New Delhi is aggressively pursuing its development cooperation initiatives in Myanmar. If that’s not all, the Narendra Modi government is encouraging Indian businesses to stay put in the land of the golden pagoda.

The decision was not easy. The banking system is paralyzed in Myanmar, and cash (both local currency as well as the dollar) is in short supply. Health risks are abnormally high, as medical staff joined the civil disobedience. Law and order situation is bad. Clashes between the civil liberty groups and the army are commonplace.

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Global investors are in serious trouble. Uncertainties forced many to write-off investments. Western companies scaled down presence. Those operating are re-routing transactions through the third country to ring fence allegations of army connections.

Such connections, however, are near impossible to avoid, as Tatmadaw held all important ministries and had veto power, even in democratic rule. They operate as a conglomerate, ensuring their pound of flesh in almost all major business and industrial activity.

However, Delhi is standing firm. It denies giving China a free hand again, as it enjoyed during the near five-decade-long army rule (1962-2011) when Tatmadaw handed over a sizable part of the country’s natural resources to Beijing.

According to ITC Trade Map, in 2019, roughly 32 per cent of Myanmar’s exports were directed to China, with natural gas being the top export item. India has zero control over these vast resources and shares less than four per cent of Myanmar’s export and import trade.

Barring some controversies – including the one regarding cost escalation of Kyaukpyu port and the rising indebtedness of Myanmar – the Chinese run didn’t stop even during the 10-year (2011-2021) democratic rule.

The only aberration to this trend is India’s recent efforts to strengthen its position in Myanmar.

Contracts for the impact project of the Trilateral Highway were awarded in 2018. As per the latest reports, the implementing agency, the National Highways Authority of India (NHAI), remains fully mobilized in Myanmar to complete the highway. The coup didn’t affect the construction, but the rains did.

Meanwhile, India decided to start ship movement to India-funded Sittwe port in Rakhine. The central government-controlled Kolkata Port is asked to make preparations.

India re-entered Myanmar roughly a decade ago, along with the return of democracy. Since then, it has captured a dominant position in the country’s pharmaceuticals market. Indian companies started dominating the nascent IT space in Myanmar. And, Adani Group broke through in the logistics sector.

Indian investments are yet to reach significant levels. According to Myanmar’s Directorate of Investment and Company Affairs (DICA), India contributed barely $773 million in Myanmar’s FDI stock of $87.5 billion in 2019-20. In comparison, China invested $21.5 billion, Thailand $11.4 billion and Vietnam $2.2 billion. China and Thailand never left Myanmar.

 

Having said that, India is banking on the tremendous goodwill it has generated in the last couple of years vis-à-vis the recent resentment against China.

Common Myanmarese always held India in high regard for Buddhism, the quality of medicines and English education. The Modi government was successful in leveraging social connections.

The normalisation of border trades in November 2015 and the introduction of land visas through the Manipur border beginning August 2018; helped improve the people-to-people contact. Poor Myanmarese now access quality healthcare in northeast India. Imphal, in Manipur, emerged as a health-tourism hotspot.

Additionally, India’s cooperation in restoration of ancient religious sites in Myanmar, programmes for English education, helping rice farmers achieve better yield, up-gradation of state hospitals, etc touched lives.

Meanwhile, pro-democracy protests rate China as the power behind the Tatmadaw. There were a series of attacks, including arson and destruction, of Chinese factories and properties. In comparison, there has been no untoward incident in Indian establishments.

Myanmar suffered a lot. But the country has an indomitable spirit to fight it back. India is right in keeping its faith in Myanmar.

EastlyExpress handholds & helps MSME’s, Entrepreneurs, government agency to find opportunities in their areas of workings, capitalize on those, solve various challenges and create a sustainable growth story.
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