Manmohan Catapults India-Myanmar Ties

Posted on | juni 5, 2012 | No Comments

Manmohan Singh’s recently concluded visit to Myanmar, first by an Indian Prime Minister since 1987 was historic in many sense. It outlined the fast pace changing relationship between the two countries that is based on strengthening of the economic ties.

Ahead of Mr Singh’s trip to Myanmar a symbolic announcement was made for starting the first official bus service from Imphal and Mandalay, Myanmar’s second-largest city. It’s on the lines of Lahore and Dhaka bus service.

There are many sub-texts to the visit of the Indian Prime Minister to Myanmar. The first was the quest for energy and other natural resources as Myanmar is rich in it and strengthening eonomic ties would synergize the bilateral relationship.

It may also have a telling impact on India’s Look East policy as Myanmar is the gateway to the South East Asian countries strengthening ties with Myanmar is key to the fulfillment to this policy.

Then Prime Minister Manmohan Singh’s meeting with Aung Swang Suki, the light of Asia was to send the message that India extends unstinted support to the bacon of democracy in Myanmar.

Last but not the least, Prime Minister’s visit to the mausoleum of the last Mughal Emperor Bahadur Shah Zafar was to drive home the point of civilization baggage India carries in its transition from medieval to modern India.

Manmohan Singh visit to Myanmar was to catapult the momentum of investment and trade relations with Myanmar. The outcome of India’s concerted efforts for the India-Myanmar trade agreement was first signed during PV Narshimera Rao’s regime in January, 1994. India is now Myanmar’s third biggest export market, behind China and Thailand.

Indian Prime Minister’s first official visit to Mayanmar came after 25 long years. It follows high level visit to India by Myanmar’s reformist President Thein Sein in October 2011, and visits by the foreign ministers of the two countries.

There were 12 agreements signed between the two countries to strengthen trade and diplomatic ties. India offered $500 million line of credit to Myanmar as a part of new trade and investment package. Airline Services Agreement between India and Myanmar: with more carriers and more destinations (extending to other Southeast Asian cities)

India-Myanmar Border Area Development, establishment of Joint Trade and Investment Forum, establishment of the Advance Centre for Agriculture Research and Education (ACARE) establishment of Rice Bio Park at the Department of Agricultural Research in Naypyitaw. Setting up Myanmar Institute of Information Technology

Cooperation between Dagon University and Calcutta University, cooperation between Myanmar Institute of Strategic and International Studies and Indian Council of World Affairs, agreement on Cooperation between Myanmar Institute of Strategic and International Studies and Institute for Defence Studies and Analyses. Cultural Exchange Programme (2012-2015).

Establishing of Border ‘Haats’ across the border, India agreed to open commercial hubs or border ‘Haats’ along the Myanmar border on the lines of ‘Haats’ opened on Indo-Bangladesh border.

The proposal of United Bank of India to set up five branches and SBI to set up branches at all land customs points materialized during Prime Minister’s visit. This includes the border trade post at Rhi – Zawkhather.

India also gave Myanmar ‘positive country’ status to ensure flow of cost-effective credit and guarantees. The Reserve Bank of India is pursuing the move to use Line of Credit (LC) to push larger trade; the Commerce Ministry is reviewing ‘credit’ worthiness of Myanmar.

In recent years, India has offered around $800 million in credit to Myanmar to help develop infrastructure such as power, railways, roads and inland waterways, road transport services and trade, banking, agriculture.

These measures are being contemplated to arrest the decline in bilateral trade with Myanmar that was 9.7 per cent in 2010-11 at $1.35 billion vis-à-vis $1.49 billion in 2009-10. Bilateral trade between India and Myanmar was around $1.2 billion in 2011. Both sides hope to push trade to $3 billion by 2015.

Exports from India to Myanmar include pharmaceutical products, iron and steel, prepared animal fodder, mechanical appliances and electrical machinery.

Imports from Myanmar include vegetables, certain roots and tubers, wood and its articles as well as wood charcoal that declined by 21 per cent to $1.01 billion in 2010-11 as against $1.28 billion in the preceding year.

Apart from cost-effective credit, India is jointly pursuing large projects in Myanmar. The major projects that were discussed during the Prime Minister’s visit is the progress of the Kaladan multi-modal transit and transportation project for road connectivity between two nations that extends national highway 54 on Indian side to Myanmar border. This mega project after its completion will ensure seamless movement of goods between India and Myanmar.

India is also developing the Dawei project in Myanmar. This strategically important deepwater port is being touted as the biggest infrastructure project ever in Southeast Asia that offers a viable chance to unite the fast-growing South India region with the ASEAN.

Indian government run NHPC is exploring the possibility of going ahead with Shwezaye power project in Myanmar with an installed capacity of 600 mw.

In sum, India-Myanmar relation is moving from strength to strength. The internal changes going in Myanmar has made many countries in the world to forge ties with this southeast country. India is seizing upon the opportunities of these cataclysmic changes.

The importance of India’s Look East Policy is two fold; first an extended security trajectory to project India’s concerns over the perceived Chinese build-up in the region, second India’s strategy of economic cooperation based on globalization in the pursuit of becoming an economic power in the region.

Myanmar is the pivot in India’s Look East policy and the summery of Manmohan Singh’s visit to the neighboring country is a pointer to this fact.

AUTHOR: Mujtaba Syed
URL: http://mujtabas-musings.blogspot.com
E-MAIL: syedalimujtaba [at] yahoo.com