Indo-Myanmar relations and Northeast India: Peace, Security and Development
- Part 4 -

Subir Bhaumik *

*** A lecture delivered by Subir Bhaumik on the occasion of MOSAIC festival in Tata Institute of Social Sciences, Mumbai, Dated January 22, 2016

India will have to engage China on this whole issue of small arms proliferation in South Asia. But until such time the Chinese are willing to restrain a very profit-making weapons industry for the sake of regional peace and stability, India will have put huge pressure on the Burmese military junta to stop the thriving Yunnan-Upper Burma-Northeast India weapons route.

India is now seeking to use the Northeast as a land bridge to Southeast Asia, which is where Myanmar figures in a big way. Since the early 1990s, India has been seeking to situate the country's troubled Northeast at the heart of what eventually evolved into its so-called 'Look East' policy. This has led to a reorientation of Indian policy and many analysts have revised their attitudes on the country's long troubled Northeast.

Some would say that the Look East policy centred on the Northeast is not strictly true as the decision to reorient India's foreign policy towards its eastern borders came first, and the strategic location of the Northeast, useful for the implementation of this new direction, came as a necessary corollary. The Northeast has historically been considered a means to an end- the successful implementation of the LEP- and herein lies the problem. One analyst says that the many problems identified with the Northeast in the context of the LEP are symptomatic of the unequal focus on forward as well as backward integration and connectivity, which implies that internal developments must be concomitant to external developments.

Viewing the Northeast as a “land bridge” has also led to the fear that development will pass through without doing much good to the region itself. The author takes note of the multiple insurgencies that have held up development in the past and continue to do so (to a lesser degree, although this is not mentioned), that have also eaten into “vital resources” that could have been more gainfully used. However, he does not take note of the problem of funds not reaching their recipients due to the ubiquitous corruption in the seven states. Another issue – that of inter-state politicking – based primarily on the notion of Assam's primacy due to which the other Northeastern states are not granted equal focus, is also not discussed.

I have strongly advocated opening of the defunct Stilwell Route, on which the debate is split. To illustrate the opposition to the Stilwell route, I have talked about in various forums about the “strange security mindset” of Indian military officials who think that this could allow China great advantages in the event of a conventional war with India. Trade officials say the Stilwell road could be used by China to dump its goods on Northeast India and through it to the rest of the country.”

The reality is that Chinese goods have already infiltrated the Indian market through the large volume of informal trade that takes place at the border. In this paper therefore, while concessions are made for a wide range of problems in seeking to situate the Northeast in the LEP, the 'what' has been accorded much more focus than the 'why'.

I am a strong advocate of developing regional cooperation that would link Southto South East Asia through India's Northeast. But I am clear on one point-- if China is not included in the matrix and we only have south-east Asia in mind when talking of using Northeast as a land bridge, this LOOK EAST policy won't work. No Indian or foreign manufacturer would relocate to Northeast if not promised the western and south-western China markets -- promise of a market in Laos or Myanmar is not good enough.

So one would have to treat the Northeast as a land bridge for India to both south-east Asia and China and Myanmar as an area of Asian cooperation rather than competition.

In that case, one would expect rising Indian presence in Myanmar and its economy, especially after all the glib talk of a "Great Game" on Myanmar involving China, Western powers and India. But does India have the minimum economic footprint in Myanmar to play a Great Game? Total foreign investment ( FDI) in Myanmar crossed $43 billion in August 2013, according to the Myanmar Investment Commission.

"Myanmar has foreign investment from 32 countries in four major sectors: energy, oil and gas, mining, and manufacturing," said an official from the Myanmar Investment Commission. China is the biggest investor in Myanmar, followed by Thailand, Hong Kong, South Korea, Britain, Singapore, Malaysia, France, Vietnam and India.

India's investment in Myanmar is now around $273.5 million. It is expected to soar to $2.6 billion over the next few years. Indian companies that have a presence in Myanmar include ONGC Videsh (OVL), Jubilant Oil and Gas and the Century Ply-Star Cement group.

Thailand is the largest importer from Myanmar. As much as 41% of Myanmar's total exports went to Thailand last year, while 15% went to India and 14% to China. Myanmar imported mainly from China, as usual, in 2012. A total of 37% of Myanmar's imports came from China, while 20% came from Thailand, but just 3% from India. Myanmar's total trade volume in 2012 was $25.16 billion.

The trade deficit reached $5.76 billion because total exports stood at $9.69 billion and total imports were $15.46 billion. Myanmar enjoys a favourable trade balance with India, but of its total trade of over $18 billion, India accounted for only about 7.5% in 2011-12. Whenever one asks a foreign trade official for an explanation, one is bombarded with statistics. Like India's bilateral trade with Myanmar has "expanded significantly" from $12.4 million in 1980-81 to $1,070.88 million in 2010-11.

But why should be looking at a progression over 20 years? Where was Sino-Indian trade 20 years ago? Now China is India's biggest trade partner, and it all happened in a few years. India's exports stand at $334.4 million, while it imports goods worth over $1 billion from Myanmar. The main exports to Myanmar are pharmaceutical products, iron and steel, electrical machinery and equipment. India imports large amounts of vegetables, pulses and wood products from Myanmar.

The Indian IT industry and also the entertainment industry has not really looked at Myanmar as a market. From an investment point of view, healthcare and education beckon Indian players for large-scale investment with possibilities of great returns and that will also ensure an Indian presence with "winning hearts-and-minds" capabilities.

Even Indian media has possibilities of investments in an untapped market, where a new democracy has increased an appetite for news. The trouble is that India has generally looked at Myanmar for its hydrocarbons. Seven Indian companies figure among the 59 shortlisted foreign companies for the second round of bidding, among them are the likes of ONGC-OVL, Jubilant and Cairn Energy.

But the real irony unfolds in this sector when OVL and Gail decide to invest $1.33 billion in the China-Myanmar gas pipeline and Punj Lloyd wins a construction contract for two parallel pipelines for oil and gas involving a Chinese investment of $475 million to build the 200-km Kyaukphyu-Kunming oil and gas pipeline.

India lost out on this pipeline because we could not offer Myanmar a route to bring their gas from the Shwe fields. Bangladesh under Khaleda Zia did not oblige by providing its territory for the proposed pipeline and it was considered too expensive and risky to route it through India's northeast.

India has requested Myanmar to start fresh negotiations on the pipeline now that Delhi has a more friendly government in Dhaka. But we can't guarantee that will be the case by the time negotiations start.

To conclude, I would emphasize that
(a) to be able to play a meaningful role in Myanmar that is important to the success of our Look East policy, India must help Myanmar find solutions to its long drawn ethnic insurgencies-- Indian support for Myanmar democracy and federalism is crucial for its success, top Burma watcher and my good friend Bertil Lintner has said.
(b) find solution to its own ethnic imbroglio in Northeast-- one can't expect a major policy initiative like LEP work through an area if its myriad conflicts are not resolved
(c) develop a sizeable economic footprint in Myanmar by encouraging Indian state and private capital a presence in that country-- Indian crony capital have to get over its inhibitions of investing in Myanmar and not expect government hand-holding all the time
(d) allow for much greater sub-regional cooperation between Northeastern states and neighbouring provinces of Myanmar -- this is crucial to develop local stakes in a larger bilateral and multilateral partnership
(e) avoid conflict and competition and cooperate with China on Myanmar -- the way to do it is to get Myanmar to leverage China for what it is good at like infrastructure and leverage India for what it is good like services and skills development.

Concluded...

* Subir Bhaumik is a veteran journalist and author on India's northeast. Both his books " Insurgent Crossfire: Northeast India" and "Troubled Periphery: Crisis of India's Northeast" have been well acclaimed. His next book " Agartala Doctrine: Proactive Northeast in Indian foreign policy" is being published by the Oxford University Press. Bhaumik is a former Queen Elizabeth House fellow of Oxford University, a Senior Fellow at East-West Centre (Washington) and an Eurasian fellow at Frankfurt University. He was BBC's bureau chief for East and Northeast India for 17 years and worked for Reuters, PTI and Ananda Bazar Group of Calcutta before that since 1980. Now he works as senior editor for the Dhaka-based bdnews24.com and doubles up as Consulting Editor for Myanmar's Mizzima Newsgroup. He writes Opinion pieces in leading Indian newspapers like Hindu, Telegraph, Times of India and Hindustan Times and also for Al Jazeera and BBC. He is also involved in full time research as Senior Fellow of the Calcutta-based Centre for Studies in International Relations & Development (CSIRD) and has written detailed policy papers for Observer Research Foundation, Calcutta Research Group and Singapore's ISAS