India Looks East: The Great Game between India and China Over Myanmar Gets Fiercer

Courtesy of The Wall Street Journal, an interesting article on the Great Game between India and China to foster business ties with resource-rich Myanmar.  As the report notes:

“…India has long stood in China’s shadow when it comes to investing in Myanmar, also known as Burma. China, which like India shares a border with Myanmar, accounts for two-thirds of investment in the country and almost half of its bilateral trade.

But there are signs of change as India more aggressively pushes its “Look East” policy to balance China’s influence in Asia.

Myanmar President Thein Sein visited India last week with a large delegation of ministers. The visit, coming only days after Myanmar announced it was suspending a controversial $3.6-billion dam being constructed by a Chinese company, has Indian commentators talking about a window of opportunity for New Delhi in Myanmar.

Srinath Raghavan, a senior fellow at the New Delhi—based Center for Policy Research, a think tank, wrote in The Hindu Business Line newspaper Monday that Myanmar’s generals are worried that China’s focus on resources is not creating employment.

“Myanmar does not wish to be locked in an exclusive embrace with China,” Mr. Raghavan wrote.

India has been slower than China to develop infrastructure in Myanmar and to benefit from its natural resources but appears to want to redress the balance.

Last week, India announced it was lending $500 million to Myanmar to help develop projects, including irrigation works.

In a briefing, India’s Ministry of External Affairs said it finally was serious about plans to develop Myanmar’s Sittwe port in western Rakhine state. India agreed to finance and carry out the $110-million project in 2008 but has so far failed to deliver on its promise.

An Indian company, Essar Group, recently began work on the port and dredging the Kaladan River, and plans to complete the job by 2013, the ministry said last week.

The idea is for India to ship goods from its eastern port of Kolkata to Sittwe, where they can then travel up-river, either back into India’s cut-off northeastern states or on into Myanmar.

India also is pushing ahead with plans to develop a road network from Manipur state through Myanmar and down into Thailand, a policy which in the past has been delayed because of Indian fears that separatists from its northeast who hide out in isolated parts of Myanmar might use these roads to facilitate attacks.

These measures, although yet to be completed, come as India is re-invigorating its “Look East” policy, developed in the 1990s to focus on relations with its Asian neighbors after the demise of the Soviet Union, but never really developed.

Recently, India has been beefing up defense ties with countries like Japan and Vietnam to counter China’s rising assertiveness in the region, especially the resource-rich South China Sea, which is the focus of  territorial disputes between Beijing and a number of countries.

Myanmar’s state visit came on the heels of a trip to India last week by Vietnam’s President Truong Tan Sang. During that visit, both sides firmly stated they would go ahead with joint gas-development projects in the South China Sea, despite China’s warnings this would amount to an infringement of its sovereignty.

Still, India has a long way to go until it can challenge China, with whom it fought a brief border war in 1962, in Myanmar or elsewhere in East Asia.

China, which won that war, knows that its military and economic heft gives it huge negotiating power. China became India’s largest trading partner last year, with two-way trade touching $60 billion, much higher than the $1.28 billion that India does with Myanmar. While China exports communications equipment to India, fueling its economic growth, Myanmar is a source of pulses.

Indian officials were keen last week to stress that there’s room enough for India and China in Myanmar and that development there was not a “zero sum game.”

That attitude also partly reflects that India knows it’ll likely have to rely on Chinese infrastructure to get resources out of Myanmar.

China is building a pipeline from the Rakhine coast to southern China to transport oil and gas extracted offshore in Burmese waters. It’s also building a new deep-water port at Kyauk Phyu, not far from India’s development at Sittwe.

Indian companies that are prospecting for gas in Burmese waters, which include Essar and state-owned ONGC Videsh, will likely have to use this pipeline to sell gas to China because plans to build a similar India-Myanmar pipeline have so far stalled.

Nevertheless, the game to take on China in Myanmar is on.

This entry was posted on Tuesday, October 18th, 2011 at 5:56 am and is filed under China, India, Myanmar.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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