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Western pressure pushes Myanmar towards China, research firm says

John Liu Myanmar Times  Fri,  March 6, 2020

Myanmar State Counselor Aung San Suu Kyi and Chinese President Xi Jinping inked a slew of memoranda of understanding (MOUs) at the Presidential Palace in Naypyitaw in January. Photo – China Daily

A global research agency believed increasing pressure from the west on Myanmar’s alleged rights violations would push the country’s political and economic allegiance towards China, even if Myanmar seeks diversification of trade relations.

Fitch Solutions, a unit of the UK Fitch Group, said China looks likely to be the dominant foreign influence over the coming years with its already entrenched interests over Myanmar coupled with the possibility of news sanctions from the West due to human rights abuses.

“The government’s inaction and repeated equivocation of the alleged abuses risks Myanmar becoming even more isolated on the international stage and also sanctions being expanded to include civilians and the economy,” said Fitch Solutions in its latest Outlook for Myanmar report released last week.

The atrocities committed against the northern Rakhine Muslims has once again caught the international attention recently as the International Court of Justice in January imposed emergency “provisional measures” on Myanmar, ordering the country to preserve evidence of crimes and report to the court on measures taken to prevent genocide. The case derived from the military crackdown that resulted in more than 740,000 northern Rakhine Muslims fleeing to Bangladesh.

The EU Commission’s decision in early February to partially withdraw Cambodia’s trade preference under the Everything But Arms (EBA) trade preferences initiative renewed worries about the EU removing Myanmar’s privileged status.

China, however, remains Myanmar’s safest bet. In terms of security and peace, China has proved to be indispensable with over 60 percent of weapon supply to the Tatmadaw between 2014-18, while playing a key role in the national ceasefire negotiation between ethnic armed groups and the government.

On the economic front, China has been the top investor following the tumbling of western investment after the Rakhine humanitarian crisis that shocked the world in 2017.

Meanwhile, Chinese president Xi Jinping’s landmark visit to Myanmar mid-January demonstrated the latter’s strategic importance that could enable Chinese sphere of influence to be extended to Indian Ocean. The 1,700-kilometre-long China-Myanmar Economic Corridor under the multi-billion dollar Belt and Road Initiative, includes investment in railways, oil and gas pipelines, special economic zones and a deep sea port.

“[Myanmar’s] current entanglement with the West amid alleged human rights abuses would make it difficult to develop its trade relations with countries other than China, amid uncertainty as to the continuation of its EBA privileges and the risks of doing business with a country that could come under tougher economic sanctions from the West,” said Jason Yek, Asia Country Risk Analyst of Fitch Solutions.

In an interview with the Myanmar Times, the EU ambassador said the situation in Myanmar is better than Cambodia, but declined to comment on the timeline in which the EU would make a decision on the country’s trade status. He added a monitoring mission would visit Myanmar before the summer.

The state visit of Chinese president in January was accompanied by the inking of 33 agreements, spanning the New Yangon City mega-development to the US$1.3 billion Kyaukphyu project.

Xi’s visit flagged a new era of bilateral relations that would be brought about by building a “China-Myanmar community with a shared future”, as highlighted in the joint statement issued before the Chinese president’s departure.

The statement served as a great example of demonstrating the attraction of the Myanmar-China relations, said ISEAS-Yusof Ishak Institute’s Daw Moe Thuzar. She is the lead researcher at the ASEAN Studies Centre of the Singapore-based research institution.

As investment in infrastructure became a key component of bilateral cooperation, “Myanmar must embark on a new way of managing this relationship so that the benefits of cooperation are felt by the people,” she added.

Going forward, analysts warned the Myanmar government of the multitudes of issues surrounding infrastructure investment and project cooperation as the two countries inch closer.

“The main priority for the next stage of the relationship seems to be a manageable level of investment for the government to avoid finding the country over-exposed,” said Alastair Cook, senior fellow of S Rajaratnam School of International Studies under Nanyang Technological University.

Stephanie Olinga-Shannon of Amsterdam-based thinktank Transnational institute stressed the importance of inclusion of all levels of stakeholders. Project delays could be positive if they signal deeper concerns from the government, she said.

“Taking the time to assess, consult, review and involve communities in the areas affected is essential to ensure that these projects are in the interests – and for the benefit – of all Myanmar peoples,” she added.

This year marks the 70th anniversary of diplomatic relations between China and Myanmar. In the near future, however, Fitch solutions cautioned against the economic downturn due to the coronavirus outbreak that would hinder the flow of investment over the year.

“Investment appetite is likely to come under pressure as Chinese companies face a grim outlook from weak economic activity in China and the rest of the world as the coronavirus spreads globally,” Jason Yek of Fitch Solutions said.

Fitch Solutions currently ranks Myanmar in its political risk index score at 57.1 out of 100, the lowest among all ASEAN countries. Higher score reflects lower political risks. The research agency noted a potential for downward revision, should the west expand sanctions on Myanmar.

 

 

From: MYANMAR TIMES, MYANMAR March 6, 2020

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