Sunday, 20 January 2013

The race for influence in Myanmar

With a recent cease-fire between Kachin rebels and the government of Myanmar the country has leapt once again onto the world stage.  

However tenuous the cease-fire may turn out to be, the call highlights an important aspect in the on-going Great Game being played between some of the world’s most powerful nations to secure influence over an important emerging economy

External pressure from the West is mounting on Myanmar to control the internecine fighting so that important investment projects can accelerate. However, Beijing’s interests in the region depend heavily on continued influence in the Southeast Asian country it shares 2000 kilometres of rough jungle border land.

There is little in the way of natural geographical barriers between China and Myanmar. The rainforests have complicated the suppression of Kachin rebels in the past, but pipelines and highways are relatively easily built among the vegetation.

State-of-the-art harbours built by China in the port city of Kyauk Phyu, Myanmar, connected to new road and rail lines, again built by China, are expected to receive delivery of Middle East oil bound for the Yunnan province in Southern China later this year. Chinese investment in Myanmar is no joke, and they are serious about staying in control.

Well before the 2012 political openings in Myanmar, the German academic Journal of Current Southeast Asian Affairs concluded that Beijing’s investments in Myanmar will impact the future direction of the county’s politics and planned reforms.

From Beijing’s perspective this is just as well. With upwards of US$5 billion planned investment in Myanmar, China’s incentive to retain influence in Myanmar is high.

The United States' so-called “pivot” to the Pacific is worrying Beijing. And particularly worrying for China is Washington’s intent to embrace members in the Association of Southeast Asian Nations (ASEAN). Having enjoyed a long-term hegemony in Southeast Asia, a renewed focus especially in Myanmar from the U.S. may undermine China’s energy security.

The fear of losing influence in Southeast Asia is causing much trepidation for Beijing as China sees yet another confirmation of its theory that the U.S. is actually looking to surround and “contain” China.

China is understandably concerned with the prospect of forfeiting hegemony in Myanmar. China’s pipeline infrastructure in Myanmar is extensive. At the same time increasing efficiency and speed of delivery, and bypassing the U.S. Navy-dominated Strait of Malacca, the matrix of oil and gas pipelines snaking through upland forest bankrolled by Beijing benefit both countries immensely.

According to Beijing’s Global Times newspaper a new pipeline capable of pumping a modest 23 million metric tons of oil per year, built by China National Petroleum Corporation (CNPC), is slated for completion sometime midway through 2013.

This pipeline represents the significant political levers Beijing can access in Myanmar. Projects like this increase the grassroots economy in Myanmar, supplying much-needed capital and jobs for the local populace. But whether the investments are maintained or pulled is entirely up to Beijing, allowing for considerable weight over Naypyidaw’s decisions.

Also, Beijing’s ability to direct large investment projects in Myanmar from a state-level is a tool Washington does not have. Private enterprise being what it is, does not allow the U.S. government such luxuries in foreign policy.

Myanmar has been a useful strategic country for Beijing allowing China access to the Indian Ocean and the chance to secure its southern borders. In techniques not dissimilar to old British diplomacy, Beijing balances ties northern Myanmar’s ethnic groups and Naypyidaw.

Maintaining ties with various unaligned ethnic groups in the northern reaches of Myanmar has historically offered Beijing a buffer region from which it has been able to set up oil and gas pipelines and extend influence south into Myanmar.

Beijing’s strategy of maintaining a balance of power between ethnic groups and Naypyidaw ensures China’s significant financial investments remain safe. As the United States, and even New Zealand, continue to advance the fig leaf to an awakening Myanmar, China has to wrestle with the possibility of losing the heavy regional influence it has enjoyed since the 1960s.

China has been Myanmar’s only ally and economic partner for over 50 years. As the serious prospect of Western investment looms, Naypyidaw is excited about a chance to diversify its contracts to nations other than China.

Both Wellington and Washington frown upon violent Myanmar military responses against the Kachin rebels. Understanding this, Beijing’s position as patron and mediator between the two sides, and the two country’s geographical proximity, gives China the option to escalate conflict as it sees fit, although in a limited capacity.
This is important because each time conflicts flare up and Naypyidaw unleashes its troops, Western nations tend step back from further investment as a protest.

If the fighting continues in Myanmar’s northern regions for much longer, questions will be asked about Naypyidaw's seriousness in wishing to attract foreign aid. Without a cessation to the conflict, Naypyidaw's goal of diversifying away from dependence on Chinese economic support will be nipped prematurely.

Integration into ASEAN is an attainable goal for Naypyidaw. In order for Myanmar to carry on the encouraging nascent political reengagements begun in 2012, concrete political and economic reforms will be necessary especially to attract further investment from the West.

A reintroduction of a prodigal country into the world-system is a rare and rarefied event. 2013 will be an important year for Myanmar, if it can juggle the pressures of both Beijing and Western nations for reforms.

There was a time when to count hermetic countries, one would need two hands. Today few isolated regimes remain as globalisation’s cost-benefit incentives encourage such regimes to come in out of the cold. 

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