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Myanmar’s pushback against China-funded Economic Corridor inspired by debt trap in S Asian states


NEW DELHI: Myanmar’s pushback against China, which is trying to widen its influence through China Myanmar Economic Corridor (CMEC), among other issues has been influenced by Pakistan’s experience in China Pakistan Economic Corridor (CPEC) and Sri Lanka’s Hambantota Port that have pushed these countries to debt trap.

Myanmar’s all-powerful generals have drawn lessons from experiences of Pakistan, Sri Lanka and Maldives where China funded projects have pushed these countries debt trap and increased Beijing’s influence, ET has reliably gathered. The Ministers in the current civilian government have equal reservations against the Chinese inroads.

In an investigative report in 2017, the Pakistani English daily Dawn claimed that China was forging a new structural relationship with Pakistan, which would enable Beijing to exercise an overwhelming influence on Islamabad. “The [CPEC] plan envisages a deep and broad-based penetration of most sectors of Pakistan’s economy as well as its society by Chinese enterprises and culture,” The Dawn had reported in its investigation.

“The CPEC model, which has led to Pakistan’s structural subordination to China, is now rumbling in CMEC,” according to an opinion piece ‘Rescuing Myanmar From the Chinese Debt Trap’ recently published in Myanmar’s leading English media outlet The Irrawaddy.

In terms of geography, the Chinese have proposed that the CMEC (part of BRI) would start from China’s pivotal Yunnan province, which shares borders with Myanmar, Laos and Vietnam. From Ruili city on the China-Myanmar border, the corridor would head towards Mandalay, Myanmar’s former royal capital on the banks of the Irrawaddy River in the northern part of the country. From there, it could extend towards the east and west to Yangon New City and the Kyaukphyu Special Economic Zone, in the western Rakhine province.

During Chinese President Xi Jinping’s state visit to Myanmar in January, two agreements were signed — establishing the Kyaukphyu Deep Sea Port (KDSP) and setting up the Special Economic Zone (SEZ). “By setting up the KDSP, the Chinese are hoping to lower their dependence on the Straits of Malacca, which is China’s main trade artery, linking the Indian and the Pacific oceans. With a new cold war with the United States on the horizon, the Chinese are desperate to reduce their over-reliance on the straits, which are militarily dominated by the US,” according to the opinion piece in The Irrawaddy.

The Kyaukphyu Deep Sea Port is also critical for China’s energy security. The port houses an oil and gas pipeline, supplying energy to Yunnan. It is estimated that under an elaborate plan, China is targeting a massive investment of around $100 billion in Myanmar’s economy—a figure is over and above $62 billion funding for CPEC.

China has proposed 38 projects under CMEC but Myanmar so far has approved only nine. Since last year Myanmar has decided that it will only implement the projects that will be mutually beneficial.

Myanmar continues to suspend the construction of Myitsone Dam. The proposed $3.6-billion dam is one of seven hydropower projects planned for the upper reaches of the Irrawaddy River as well as the Mali and N’Mai rivers, at whose confluence the Irrawaddy begins. Work on the project started in 2009, but then-President U Thein Sein suspended it in 2011 amid widespread public concern over the dam’s social and environmental impacts.

U Set Aung, the deputy minister of planning and finance, who is also chairman of the Kyaukphyu SEZ Management Committee, has openly warned against falling into the Chinese “debt trap”. He has stressed that Chinese projects must have commercial viability and benefit Myanmar. The minister has successfully negotiated reduction in the size and cost of the Kyaukphyu project. The Chinese-funded port is now $1.3 billion in scope from the initial $7.2 billion.

Myanmar’s armed forces still purchase arms and hardware from China, but the military has also diversified its sources. Today, Myanmar buys arms and ammunition from Russia, India, Israel, Ukraine and several other countries in Central Asia and Europe, according to The Irrawaddy report.

Several ethnic insurgent groups in Myanmar have allegedly received weapons from China. These include the United Wa State Army (UWSA), Kachin Independence Army (KIA), Ta’ang National Liberation Army (TNLA), Myanmar National Democratic Alliance Army (MNDAA) and the Arakan Army (AA).

In August last year, during a meeting with Sun Guoxiang, Chinese special envoy on Asian Affairs, Myanmar’s Senior General Min Aung Hlaing showed the Chinese officials photographs of Chinese-made weapons, which had been seized during clashes with the Northern Alliance, a four-member coalition, which includes the Arakan Army and Ta’ang National Liberation Army. The senior general has apparently declined a Chinese request to conduct joint naval exercises and an offer of a submarine from China.

During his visit to Russia in June, the Senior General noted that that defense cooperation between Moscow and Naypyitaw had acquired momentum. During his visit to India, he finalized the deal for the acquisition of the first ever submarine for the Myanmar Navy. The submarine is now in Myanmar and crews are undergoing training.

“The situation is also ripe for India to step up ties with Naypyitaw, to counter China, following a trust-breaking military standoff between New Delhi and Beijing in Ladakh. There has been no let up in Japanese investments in Myanmar, but ties between the two countries could acquire a sharper security dimension as political friction between Tokyo and Beijing is flaring once again over their disputed East China sea islands,” according to The Irrawaddy opinion piece.

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