Myan­mar be­com­ing an im­por­tant cat­a­lyst in US-UN, China-Rus­sia ten­sions?

Mizzima Business Weekly - - CONTENTS - An­dre Wheeler

Much has been re­ported on the re­cent re­lease of the two Reuters jour­nal­ists in Myan­mar. Whilst the fo­cus has been on is­sues of press free­dom, many com­men­ta­tors have not eval­u­ated the in­ter­na­tional re­sponse to the re­lease. In my view, the re­sponse by the likes of Europe, USA, China and Rus­sia, is an in­di­ca­tor of the grow­ing geo-po­lit­i­cal ten­sions within the Asian re­gion. More im­por­tantly, it high­lights the po­ten­tial that Myan­mar has to unify China and Rus­sia’s stance against what they view as the USA’s geo-po­lit­i­cal and ide­o­log­i­cal threat.

This Sino-Rus­sia uni­fi­ca­tion is be­ing fa­cil­i­tated by de­vel­op­ments along the China Belt Road Ini­tia­tive (BRI), in which the China Myan­mar Eco­nomic Cor­ri­dor is play­ing an increasing role. As men­tioned in ear­lier ar­ti­cles, Myan­mar and the port of Kyauk Phyu, pro­vides China with a so­lu­tion for en­ergy and trade se­cu­rity by al­low­ing China to by­pass the Malacca Straits. It also shifts the pre­vi­ous re­la­tions be­tween China, Rus­sia and Myan­mar from be­ing mil­i­tary in de­sign to that built around trade.

This is in di­rect con­trast to the US and UN push­ing for more sanc­tions against Myan­mar over what they see as hu­man rights vi­o­la­tions. Ex­ac­er­bat­ing this di­vide, is that the call for in­creased sanc­tions comes at a time when Myan­mar is fur­ther open­ing its econ­omy through reg­u­la­tory change.

It is im­por­tant to pro­vide some con­text to these claims, par­tic­u­larly how Myan­mar’s par­tic­i­pa­tion in the BRI presents an op­por­tu­nity for Rus­sia-China re­la­tions. This claim would ap­pear to be con­trary to re­cent re­port­ing of how Sino-Rus­sian re­la­tions are good and grow­ing closer, many point­ing to the joint mil­i­tary ex­er­cises be­tween the two na­tions. They also re­port that bi­lat­eral trade has grown, reach­ing an all time high of us$100 bil­lion in 2018. How­ever, an anal­y­sis of this trade sug­gests that the qual­ity in this trade is more favourable to China. Whilst China is Rus­sia’s sec­ond largest ex­port mar­ket, Rus­sia is only tenth on China’s list. Fur­ther­more, 75% of Rus­sian ex­ports are raw ma­te­ri­als with no value add. On the other hand, Chi­nese ex­ports have in ex­cess of 80% be­ing in value added consumer goods, elec­tron­ics and machin­ery.

How­ever, it would ap­pear that Rus­sia is un­happy with China’s Belt Road Ini­tia­tive (BRI) march into Europe and Cen­tral Asia. Sup­port­ing this no­tion is the re­cent Rus­sian Rail­way increasing a wide range of tar­iffs. The no­tice in ef­fects cuts off all metal raw ma­te­ri­als and chem­i­cals freight that they per­ceive as China dump­ing onto the Euro­pean mar­ket by ap­ply­ing ad­di­tional charges onto non-gen­eral cargo freight that use Rus­sian rail.

Ex­am­ples of these wide rang­ing prod­uct list­ing in­clude the trans­porta­tion of: house­hold goods, metal goods trans­ported to em­bassies and for­eign per­ma­nent

Ex­ac­er­bat­ing the is­sue is the re­cently es­tab­lished China Myan­mar Eco­nomic Cor­ri­dor (CMEC). This has been done at the ex­pense of in­vest­ment along the New Eurasian Land Bridge Eco­nomic Cor­ri­dor (NELEC).

mis­sions, dan­ger­ous goods (in ad­di­tion, dan­ger­ous goods re­quire cus­tomers to pro­vide cargo safety cer­tifi­cates and Rus­sian ma­te­ri­als to be con­firmed with the Rus­sian Rail­way can dan­ger­ous goods be trans­ported), Goods that need to main­tain a constant tem­per­a­ture (food, etc.), Ethanol, Co­gnac, Raw To­bacco, To­bacco, Wine ma­te­ri­als (al­co­hol and to­bacco prod­ucts through Be­larus must be ac­com­pa­nied by se­cu­rity).

It is be­com­ing ap­par­ent that whilst Rus­sia has looked for friends as it be­comes in­creas­ingly iso­lated, it is still wary of the im­pact that the BRI is hav­ing on its own econ­omy. What the BRI is do­ing, is es­ca­lat­ing the geo-po­lit­i­cal com­pe­ti­tion be­tween the two coun­tries. This is par­tic­u­larly bruis­ing to Rus­sia as its own eco­nomic woes has pre­vented it from com­pet­ing with China. In a sense, Rus­sia’s sta­tus is grad­u­ally be­ing rel­e­gated to a sec­ond tier global player as China en­ters mar­kets pre­vi­ously treated as Rus­sia’s back­yard.

Ex­ac­er­bat­ing the is­sue is the re­cently es­tab­lished China Myan­mar Eco­nomic Cor­ri­dor (CMEC). This has been done at the ex­pense of in­vest­ment along the New Eurasian Land Bridge Eco­nomic Cor­ri­dor (NELEC). Par­tic­u­larly note­wor­thy is Rus­sia par­tic­i­pates in the NELEC. Par­tic­u­larly wor­ry­ing as China looks to se­cure its en­ergy re­quire­ments from the Mid­dle East and East Africa via the Kyauk Phyu – Kun­ming oil and gas pipe­lines. At present China re­lies heav­ily on Rus­sian oil and gas that does not sit com­fort­ably with the Chi­nese bu­reau­cracy, with the re­cent CMEC cor­ri­dor MOU re­duc­ing China’s reliance on Rus­sia.

Fur­ther de­vel­op­ments in­clude the high-speed rail con­struc­tion be­tween Kun­ming and Kyauk Phyu. This 1400 km rail­road link is a fur­ther cru­cial strate­gic eco­nomic link that by­passes the Malacca Straits as well as parts of the con­tested South China Sea.

Fur­ther­more, China has com­mit­ted to as­sist with Myan­mar’s peace process that pro­motes na­tional di­a­logue but is also within Myan­mar’s na­tional con­di­tions that al­lows a sus­tain­able and steady demo­cratic tran­si­tion.

Rus­sia has also been sup­port­ive to Myan­mar, par­tic­u­larly in us­ing its veto pow­ers in the UN. It also sees Myan­mar as a gate­way to ASEAN. Prior to the po­lit­i­cal changes in 2011, there were ex­ten­sive tech­no­log­i­cal, train­ing

and ed­u­ca­tion ex­changes in the 1980s and 1990s, with these recom­menc­ing over the last 12 months.

So how can Myan­mar in­flu­ence geo-po­lit­i­cal align­ments within the re­gion? With China hav­ing pro­posed 24 projects un­der the CMEC cor­ri­dor, and Myan­mar hav­ing agreed to ac­cel­er­ate work on nine of them, it could fa­cil­i­tate Rus­sian in­clu­sion in these projects, par­tic­u­larly the Kyauk Phyu Special Eco­nomic Zone and the new city project ad­ja­cent to Yangon. This multi-lat­eral in­volve­ment would help heal the geo-po­lit­i­cal wounds opened by Rus­sia increasing rates along the BRI.

In the event of this hap­pen­ing, Myan­mar could well act as the cat­a­lyst to fur­ther ce­ment Sino-Rus­sian re­la­tions in their push to fur­ther iso­late the in­flu­ence of the USA and the UN in the Asia re­gion.

This may all change should the USA and the UN change its ap­proach to its eco­nomic re­la­tion­ship in the strate­gi­cally lo­cated Myan­mar.

Photo: EPA

Myan­mar State Coun­sel­lor Aung San Suu Kyi, left, meets Chi­nese Pres­i­dent Xi Jin­ping, right, last month in Bei­jing ahead of a meet­ing on China's Belt and Road Ini­tia­tive.

Photo: EPA

Myan­mar State Coun­sel­lor Aung San Suu Kyi lis­tens in­tently at a meet­ing in Bei­jing.

Photo: EPA

Lead­ers of the coun­tries that make up BIM­STEC, in­clud­ing Myan­mar.

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