Let’s reap po­ten­tial of China-Myan­mar co­op­er­a­tion

Mizzima Business Weekly - - CONTENTS - Bi Shi­hong

Since Myan­mar em­barked on its po­lit­i­cal tran­si­tion, po­lit­i­cal elites in the coun­try have cham­pi­oned that peace is the premise for eco­nomic and so­cial de­vel­op­ment. In the first two years of the gov­ern­ment led by Na­tional League for Democ­racy (NLD), Nay Pyi Taw de­voted a lot of ef­forts to pro­mot­ing na­tional rec­on­cil­i­a­tion with the hope of mak­ing a ma­jor break­through and con­sol­i­dat­ing pub­lic sup­port. Re­gret­tably, re­sults are not sat­is­fac­tory. The NLD gov­ern­ment is cur­rently locked in a stale­mate over na­tional rec­on­cil­i­a­tion.

It has also per­formed poorly in boost­ing the econ­omy and im­prov­ing peo­ple's lives. Main eco­nomic in­di­ca­tors sug­gest that since the NLD gov­ern­ment as­sumed power, Liv­ing stan­dards haven't sub­stan­tially im­proved, and more eco­nomic prob­lems have sur­faced to plague the coun­try. One of the main rea­sons why the NLD lost seats in the 2018 elec­tions is the gov­ern­ment's lack­lus­ter eco­nomic per­for­mance. If the econ­omy doesn't im­prove, it will inevitably af­fect the NLD's po­ten­tial for vic­tory in the 2020 elec­tion.

There­fore, the NLD gov­ern­ment is now at­tach­ing in­creas­ing im­por­tance to eco­nomic and liveli­hood is­sues. It has is­sued a string of poli­cies to at­tract for­eign in­vest­ment. Take the new Myan­mar Com­pa­nies Act. Un­der the law, for­eign­ers are per­mit­ted to take up to a 35 per­cent stake in lo­cal com­pa­nies and busi­nesses with for­eign stakes of more than 35 per­cent will be clas­si­fied as a for­eign com­pany, which fa­cil­i­tates co­op­er­a­tion be­tween for­eign in­vestors and lo­cal busi­ness­men and will help at­tract more for­eign in­vest­ment.

But Myan­mar still has some ob­sta­cles to deal with in or­der to at­tract for­eign cap­i­tal. The first is in­sta­bil­ity in the job mar­ket and rel­a­tively low la­bor ef­fi­ciency. Par­tic­u­larly, the re­cent years have seen an in­creas­ing num­ber of strikes and the fail­ure of the gov­ern­ment to ease in­dus­trial re­la­tions con­flicts with ef­fec­tive mea­sures has crip­pled in­vestor con­fi­dence in the coun­try. Some for­eign en­ter­prises even with­drew from Myan­mar and shifted to neigh­bor­ing coun­tries, dent­ing the im­age of the na­tion.

Sec­ond, Myan­mar's back­ward in­fra­struc­ture may de­ter po­ten­tial in­vestors. A small num­ber of power gen­er­a­tion fa­cil­i­ties and frag­mented grids can­not en­sure sta­ble and suf­fi­cient power sup­ply. Ac­cess to elec­tric­ity is lim­ited to only 26 per­cent of the pop­u­la­tion, im­ped­ing Myan­mar's eco­nomic de­vel­op­ment.

Third, some Myan­mese are prej­u­diced against for­eign in­vest­ment. Wor­ry­ing that Myan­mar's eco­nomic and so­cial in­ter­ests may be im­paired, they turned their backs on for­eign in­vest­ment. De­mon­stra­tors ral­lied in Kachin State to de­mand the gov­ern­ment per­ma­nently halt the My­it­sone dam project, with­out giv­ing any con­struc­tive sug­ges­tion on the fol­low-up ar­range­ments. It's fair to say some move­ments against for­eign-in­vested projects, driven by na­tion­al­ism and so-called en­vi­ron­men­tal con­cern, are of no help in im­prov­ing the coun­try's in­vest­ment en­vi­ron­ment, and have hi­jacked eco­nomic de­vel­op­ment. Re­spect­ing the spirit of the con­tract is a ba­sic re­quire­ment for mod­ern states and their peo­ple. Myan­mar State Coun­cilor Aung San Suu Kyi re­cently said an ad­min­is­tra­tion shouldn't ter­mi­nate for­eign-in­vested projects ap­proved by its pre­de­ces­sor.

As the West steps up its crit­i­cism of Myan­mar over the Ro­hingya and Rakhine is­sues, the coun­try's re­la­tions with the West have de­te­ri­o­rated. China is one of the few pow­ers Myan­mar can rely on. There is vast co­op­er­a­tion po­ten­tial be­tween the

two coun­tries. China and Myan­mar can ad­vance in­dus­trial co­op­er­a­tion un­der the frame­work of the Belt and Road Ini­tia­tive, the China-ASEAN Free Trade Area, the China-Myan­mar Eco­nomic Cor­ri­dor and the Bangladesh-China-In­dia-Myan­mar Eco­nomic Cor­ri­dor. How to un­leash Myan­mar's huge de­vel­op­ment po­ten­tial with the help of China should be placed on the NLD gov­ern­ment's plan­ning agenda.

As Myan­mar's largest neigh­bor, China will con­tinue to play an ac­tive role in pro­mot­ing Myan­mar's na­tional rec­on­cil­i­a­tion and ad­dress­ing the Rakhine is­sue as well as build mech­a­nism for talks. It will as­sist Myan­mar as much as it can. When in­vest­ing in Myan­mar, Chi­nese en­ter­prises should pay at­ten­tion to their so­cial re­spon­si­bil­ity. They should also ad­dress lo­cal peo­ple's sus­pi­cions and mis­un­der­stand­ings on Chi­nese-in­vested projects. We have rea­sons to be­lieve that the prospect for China-Myan­mar co­op­er­a­tion un­der the Belt and Road frame­work is promis­ing.

The author is a pro­fes­sor at Cen­ter for China's Neigh­bor Diplo­macy Stud­ies and School of In­ter­na­tional Stud­ies, Yun­nan Uni­ver­sity.

Cargo fa­cil­i­ties in Xian, China. Photo: EPA

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