Sources: The Irrawaddy

By: Aung Naing Oo

November 8, 2011: China has its “Go West” policy while India espouses the “Look East” policy. These policies emphasize the role of trade ties with neighboring countries to facilitate economic growth and stability in India’s and China’s most remote and backward regions. Recently, Burma has stepped up its diplomacy with India to cement better trade and security relations. But unlike China or India, Burma does not have a specific name for its relationship with its neighbors. Hypothetically, it should be called the “Look to the Neighbors” Policy.

Most crucially, with it there should also be clear intent and policy formulation to forge closer trade and economic ties with the neighbors. Internally, also, setting out a clear, explicit policy direction on relations with the neighbors will provide the impetus for better coordination and cooperation among relevant ministries and local administrations and institutions to deal with emerging challenges.

Following a bloody crackdown on pro-democracy protests in 1988, Burma’s relationship with the West was strained. India sided with the West. Broke and without friends, Burma turned to its other neighbors—Thailand and, most notably, China—for political and economic support. Previously, China and Burma had uneasy relations, due to China’s support in the 1980s for the then-socialist government’s internal enemy No.1, the Communist Party of Burma. Yet despite this legacy of mistrust, the relationship blossomed into a mutually beneficial arrangement for both countries, especially for the Burmese generals.

Burma’s military rulers understood that they were abandoning the country’s long-standing policy of neutrality. But they did not want to capitulate to Western demands for an immediate improvement in human rights conditions. Despite their initial reluctance to draw too close to China due to historical tensions, the generals felt they had no choice. Surrounded by enemies both within and along the borders, the military government embarked on an obvious path—continued suppression of dissent. It cost the military government dearly as the West retaliated, and the alienation persisted—as it has until today.

The withdrawal of Western aid and recognition of the ruling junta and continuing condemnation of the abuses, along with India’s support for pro-democracy groups, provided China with a perfect opportunity. Within a few years after the 1988 uprising, China was selling weapons to Burma and had cemented trade ties with the country. As the voices from the West became louder, Beijing’s stature with the Burmese regime grew.  

Then in the early 1990s, India did a 180-degree turnaround. Realizing that China had made enormous advances inside Burma, India enunciated its “Look East” policy and ceased its support for the Burmese opposition movement. However, the balance of power between Burma and regional powers in Burma remained lop-sided, with China gaining more ground, eventually becoming the country’s No.1 trading partner last year.

For its part, Burma's military government realized the need to better balance its relationship with its giant neighbors and so stepped up its diplomatic efforts with India. But a number of factors, including insurgency in India's northeastern states bordering Burma, cumbersome Indian bureaucracy and Burma’s own struggle with ethnic rebels within its borders, have stood in the way of both sides' efforts. Meanwhile, ongoing pressure from the West meant that Burma continued to rely heavily on China, prompting the generals to be cautious about bringing India into the power equation.  

However, this situation may be changing. Since the new government of Thein Sein came into power this year, Burma has sought to re-balance its relationships with its neighbors, not only in terms of trade and business but also in terms of security and a myriad of other issues, including insurgencies on its Indian and Chinese borders.

China’s “Go West” policy was implemented to spur economic growth for its backward northwestern provinces. The strategy is paying dividends now, especially in Yunnan, a province of 45 million people adjoining Burma. China’s once underdeveloped and belligerent province has enjoyed a dramatic economic boom in recent years. According to the Yunnan Statistic Bureau, Yunnan’s GDP was up 12.5 percent in the first three months of this year alone, which is 2.8 percent year higher than the national average. Overall, Burma’s trade with China stands at US $4.7 billion.

Evidently, Burma has contributed, to an extent, to Yunnan’s boom, especially from the uncontrolled sale of natural resources to China.

As the construction of pipelines and railways from Yunnan to the Bay of Bengal in western Burma and an array of other large-scale development projects bankrolled by the Chinese accelerate, the relationship between the two countries will continue to deepen.

India came up with the “Look East Policy” in the early 90s in order to bring about economic development in its seven volatile and conflict-ridden northeastern states. With a population of some 40 million, the area is completely landlocked with limited transport links to the Indian heartland. India now is Burma’s fourth most important trading partner, though its trade with Burma was a mere $1.5 billion last year.

However, the two countries have a goal of doubling trade to $3 billion by 2015. But Burma’s giant western neighbor intends to go further—towards the Association of Southeast Asian Nations (Asean), using Burma as a crucial land bridge to the rest of Southeast Asia.

For India, Burma has become an increasingly important ally in its pursuit of balance of power in the region and expanding trade routes eastward. For Burma, India has become crucial to the strategic balance it hopes to achieve and maintain between two regional giants.

To the east, Thailand has moved westwards into Burma with the gigantic Dawei Deep-sea Port project, believed to be worth a staggering $58 billion. Thailand and Asean are Burma’s second most important investors and trading partners. More significantly, however, Burma’s economy is to be integrated into the Asean Economic Community in 2015.

For the new Burma, however, the most important thing is to improve ties with the West, which is likely to be the main market for Burma in the future. And despite the government’s strained relationship with the West, the Burmese people aspire to democracy and human rights. Above all, Burma’s new rulers understand that improved relations with the US can provide a better regional power balance and stability. For Burma, a better relationship with the West, especially the US, means revocation of economic sanctions and arms embargoes—for economic reconnection with the Western world and perhaps better modernization of its armed forces.

However, while trying to improve relations with the West, and particularly the US—which is a work in progress and likely to be a lengthy process—Burma really needs to deepen its understanding of the political and economic dynamics of its neighbors. Burma's understanding of its neighbors is woefully lacking. It is particularly important to grasp the changing dynamics in India and China, to which Burma is already so exposed.

Burma is surrounded by about half of humanity: China has a population of over 1.3 billion, and India, with more that 1.2 billion people, is quickly catching up with China and will soon surpass it. Meanwhile, Asean minus Burma has around 500 million people, and neighboring Bangladesh 160 million. The region has also seen the fastest economic growth on the planet in the past two decades. Burma's combined trade with its regional neighbors phenomenally dwarfed the volume of its trade with Europe (€244 million, or $336 million) and the US ($10 million) last year. Approximately 90 percent of Burma's exports are to neighboring countries and elsewhere in Asia. Almost 80 percent of its imports are from the same region.

More importantly, though, Burma’s neighbors have been in one way or another involved in insurgency within Burma’s borders, with the Karen, Kachin, Wa and others relying on China, India and Thailand for international access and support. Burma’s borders with these countries are long and porous, smuggling of natural resources across the borders is rampant and the illegal arms trade is still something to be reckoned with.

It is, therefore, imperative that the “Look to the Neighbors” policy focuses not only on trade, investment and the know-how needed to extract and sell natural resources, but also on winning support from these countries—through trade, cooperation and negotiation—for bringing peace and development to Burma’s conflict-stricken frontier areas.

However, beyond government-to-government relations, Burma, China, India and Thailand should seek to increase people-to-people contacts. They should promote understanding and networking to advance mutual respect and work toward the long-term interests of all peoples. This could balance the short-term interests of the authorities in their respective countries. This is particularly crucial for Burma, as it has become central to a new geo-political and economic equation.

In 2004, I wrote that Burma had “good neighbors” propping up the military regime. But in 2011 and beyond, Burma’s strategic partnership with its neighbors should compel peace and prosperity in the region. China’s push westwards, India’s eastwards and Asean’s emphasis on the growing importance of Burma’s relationship with China are all coming to a head. In his recent book, “Where China Meets India,” Dr. Thant Myint U wrote that Burma is fast becoming the new crossroads where China, India and Asean meet.

Burma, which is strategically located in the middle, lags behind others in the region and seems to be least prepared for the unprecedented history unfolding in the coming years.  

Recent changes demonstrate that Burma has a new “Look to the Neighbors Policy” in formulation and action. But it appears that the current effort lacks clarity, transparency and direction. It should be reviewed and strengthened, balancing trade and security and creating new institutions under the current polity to adequately deal with the regional challenges ahead.

*Aung Naing Oo is the deputy-director of the Vahu Development Institute.