Despite competition, China, India on same page on Rakhine

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SUBIR BHAUMIK  Yangon/Delhi

Their troops are involved in periodic stand-offs on a long disputed Himalayan border, but India and China seem to be on the same page on the Rakhine conundrum in Myanmar, easily the most sensitive of regional issues at the moment.

Both the Asian powers have veered round to back Myanmar strongly in sharp contrast to the West and the Islamic world ripping apart the Aung San Suu Kyi government for failing to check military atrocities on Muslim Rohingyas.

Many have even demanded that Suu Kyi be stripped off her Nobel Peace Prize.

The crackdown on the Rohingyas in northern Rakhine state by the Myanmar army Tatmadaw has led to the exodus of half a million refugees into Bangladesh, straining its meagre resources and raising fears of a military conflict.

Bangladesh Prime Minister Sheikh Hasina, always a strong backer of Burmese democracy and said to be good personal terms with Suu Kyi, last week alleged that Myanmar was trying to provoke a war with her country.

Hasina also worries about a trans-border jihadi nexus and had offered Myanmar military cooperation to curb the ARSA but the Burmese military did not respond.

Workers weld a pipe at a construction site of the Myanmar-China natural gas pipeline. Photo: AFP

The fear of that jihadi nexus worries India as well because its intelligence has detailed reports of close links between the Arakan Rohingya Salvation Army ( ARSA ), Bangladesh’s Jamaat-ul-Mujahideen or JMB and Indian Mujahedeen, all apparently backed by Pakistan’s Lashkar-e-Tayyaba that is held responsible for the 2008 terror strike on Mumbai.

“We stand by Myanmar in the hour of its crisis, we strongly condemn the terrorist attack on Aug 24-25 and condole the death of policemen and soldiers, we will back Myanmar in its fight against terrorism,” said a statement of the Indian ministry of external affairs the day after the ARSA attacks.

But it did not mention the retaliatory extra-judicial killing of Rohingyas by the Tatmadaw.

India has also threatened to expel the nearly 40,000 Rohingya migrants it alleges to have illegally settled in the country, including the 15,000 odd registered with UNHCR as refugees.

That provoked sharp criticism from the UN Human Rights Council, but undeterred, China also extended ‘ strong support ‘ for Myanmar on the Rakhine issue.

“We hope that the international community will create a good external environment so that Myanmar can solve its problems properly,” said Chinese ambassador to Myanmar Hong Liang at a reception to mark the 68th anniversary of the founding of People’s Republic of China ahead of an open discussion on Rakhine at the UN Security Council.

What if ARSA terrorists attack an Indian ship on the Kaladan river or try blowing up parts of the Yunnan-Kyauk Phyu oil-gas pipeline as the ULFA used to do in the Indian state of Assam,” says Maj-Gen Gaganjit Singh, former deputy chief of India’s Defense Intelligence Agency.  “Such scenarios cannot be discounted

Hong Liang promised to continue providing humanitarian aid for people in Rakhine State, noting the Chinese government provided 200 million kyats for Rakhine State through the Ministry of Social Welfare, Relief and Resettlement last week.

China supports cooperation between Myanmar and Bangladesh to solve border problems and sincerely hopes that the Myanmar government will be able to bring harmony, stability and prosperity to societies in Rakhine State, said Hong Liang.

“Myanmar and China have always maintained bilateral cooperation as well as close cooperation in areas of mutual interest in regional and international arenas including the UN,” Myanmar Vice-President U Nyan Tun said at the reception.

When asked about China’s view on Aung San Suu Kyi’s briefing to foreign diplomats recently, China’s foreign ministry spokesperson Lu Kang said that her speech will “help the international community to better know about the situation in Myanmar and understand and support the Myanmar government’s effort to achieve domestic peace and national reconciliation”

Both India and China have huge connectivity driven projects in Rakhine state — the India-funded Kaladan multi-modal project designed to provide a sea-river-land link to its remote northeast from the mainland through Sittwe port and China-funded Kyauk Phyu port being the starting point of an oil-gas pipeline and rail-road link to its Yunnan state on the mainland.

And both India and China engage the Burmese military as much as the civilian government because the country is key to India’s Act East and China’s Southern push for OBOR.” India and China, however, continue to compete for influence in Myanmar and miss no chance to snipe at each other

Though neither of these projects are in the troubled region of northern Rakhine where Muslim Rohingyas are a majority, the threat of spiralling terrorism worries both India and China.

“What if ARSA terrorists attack an Indian ship on the Kaladan river or try blowing up parts of the Yunnan-Kyauk Phyu oil-gas pipeline as the ULFA used to do in the Indian state of Assam,” says Maj-Gen Gaganjit Singh, former deputy chief of India’s Defense Intelligence Agency. “Such scenarios cannot be discounted.”

When Indian Prime Minister Narendra Modi met Chinese President Xi Jinping on the side-lines of the BRICS summit at Xiamen in early September amid a festering border stand-off at Doklam, both leaders decided not just to pull back troops from the Bhutanese territory to avoid a confrontation.

They also agreed to ‘work constructively for regional stability’, hinting to Rakhine, where the ARSA attacks have created a crisis of sorts.

“China supports Myanmar to retain its influence built over three decades of massive development aid and supply of military hardware, India supports Myanmar to play catch up and build influence partly by development financing and partly by playing on civilisational linkages based on the shared Buddhist heritage,” says Binoda Mishra, who heads the Calcutta-based think-tank CSIRD.

“And both India and China engage the Burmese military as much as the civilian government because the country is key to India’s Act East and China’s Southern push for OBOR.”

India and China, however, continue to compete for influence in Myanmar and miss no chance to snipe at each other.

Just ahead of Prime Minister Narendra Modi’s visit to Myanmar in Sept, Indian ambassador Vikram Misri said his country’s approach to Myanmar’s development differs from others (read: China).

“India wants to create public assets in Myanmar and hand over to local authorities, unlike some countries (read: China) who want to create commercial assets for themselves in Myanmar,” Misri told local newsgroup Mizzima in an exclusive interview.

Misri fired this nuanced salvo at a time when Burmese nationalists had to begin to oppose Chinese plans to seek an 85% stake in its prestigious and signature Kyauk Phyu deep sea port project.

India has invested $1.75 billion in Myanmar’s infrastructure, including developing a sea port in Sittwe, capital of Rakhine State

“We finance projects like Kaladan Multi Modal Transport corridor mostly by grants and some concessional financing, but we ensure that never becomes a burden on Myanmar’s economy. We will use the Kaladan sea-river route to access our Northeast but it is Myanmar who will make money from our logistical movements, not us,” Misri said to drive home the difference between the Indian and Chinese style of funding.

But he never mentioned China by name.

Beijing has pushed hard for preferential access to the deep sea port of Kyauk Pyu on the Bay of Bengal, which it helped built as part of its ambitious “One Belt, One Road” infrastructure development investment plan to deepen linkages between China’s economy with other countries in Asia and the rest of the world.

A consortium spearheaded by China’s CITIC Group [CITIC.UL] has pushed for a 70 to 85 percent stake in the $7.3 billion deep sea port, Reuters said in a report quoting ”negotiating documents” and three people familiar with the talks between the Chinese state-owned conglomerate and Myanmar’s civilian government.

The size of the proposed Chinese stake is substantially larger than the 50/50 joint venture proposed by Myanmar late last year, an offer rejected by CITIC, Reuters said, quoting ‘two people’ involved with the negotiations.

Indian ambassador Vikram Misri said his country’s approach to Myanmar’s development differs from others (read: China). India wants to create public assets in Myanmar and hand over to local authorities, unlike some countries (read: China) who want to create commercial assets for themselves in Myanmar

Well-placed sources told Reuters recently that China had signalled it was willing to abandon the controversial $3.6 billion Myitsone dam project in Myanmar, but would be looking in return for concessions on other strategic opportunities in the Southeast Asian nation – including the Bay of Bengal port.

Kyauk Pyu is important for China because the port is the entry point for a Chinese oil and gas pipeline which gives it an alternative route for energy imports from the Middle East that avoids the Malacca Straits, a shipping chokepoint.

The port is part of two projects, which also include an industrial park, to develop a special economic zone in Myanmar’s western Rakhine State. CITIC was awarded the lead role in both initiatives in 2015.

Beijing-based CITIC, China’s biggest and oldest financial conglomerate, did not respond to several requests from Reuters to comment, neither did China’s Foreign Ministry respond to a faxed request for comment.

Indian media, fed by diplomats and economists, have accused China of imposing a ‘debt burden’ on Myanmar through projects like Kyauk Phyu.

“Like Sri Lanka, Myanmar will face a debt burden that it cannot manage due to such projects. It is China’s strategy to then get controlling stake in such projects because the Burmese cannot pay such huge debts,” said economist Prabir De.

The Japanese have also not lost out on the opportunity, with those developing Thilawa and Dawei SEZs pointing out that Myanmar keeps the controlling 51% stake and the Japanese 49%.

Like Sri Lanka, Myanmar will face a debt burden that it cannot manage due to such projects. It is China’s strategy to then get controlling stake in such projects because the Burmese cannot pay such huge debts

“The contrast between Kyauk Phyu and Thilawa is stark and noticeable,” said Simon Tay, who holds a chair at the Singapore Institute of International Affairs.

“The two percent difference is not so big in practical terms but it is an important symbol of trust and friendship,” Tay told ‘Myanmar Times’ on the side-lines of the Myanmar-ASEAN Forum in June.

Burmese politicians fight shy of openly criticising China because the country depends on its northern neighbour for support in UN to counter resolutions critical of its human rights record in Rakhine.

But privately many NLD and Opposition politicians, including ministers and MPs, told SCMP they were ‘uncomfortable with giving away controlling stakes” in key projects like Kyauk Phyu to Chinese companies.

“We should know what happened with Chinese projects in Sri Lanka and how the debt was used by Beijing to gain control,” said a top NLD MP on the side-lines of an India-Myanmar dialogue organised by Parami group. But he was not willing to be named.

Earlier this year, about 600 residents of the deep-water port town of Kyaukphyu in western Myanmar’s Rakhine state protested against Chinese oil tankers moving into the area.

The residents boarded more than 100 motorboats and piloted them from Kyaukphyu to Maday Island, site of the local office of the Chinese state-owned oil company China National Petroleum Corporation (CNPC), or Petro China, which operates the tankers.

The protesters said that local fishermen’s livelihoods are threatened because Myanmar’s Fisheries Department has banned them from fishing in the area, while allowing oil tankers to operate there, and that the government has failed to rectify the situation.

We should know what happened with Chinese projects in Sri Lanka and how the debt was used by Beijing to gain control,” said a top NLD MP on the side-lines of an India-Myanmar dialogue

Protesters demanded that officials do something to ensure the fishermen’s survival and provide adequate health care and education so they can eke out a living.

“We fishermen are in trouble,” protester Ko Lone Lone told RFA’s Myanmar Service. “We protest today because we want to know whether CNPC or the government will assume responsibility for our survival, health care, and education.”

The protesters also demanded the delivery of electricity to their homes 24 hours a day and the construction of communication towers, high schools, and dams that will benefit residents.

Myanmar and China has agreed in April to open the 770-kilometer (480-mile) oil pipeline between Kyaukphyu and Kunming, capital of south-western China’s Yunnan province, after years of project delays and negotiations.

The pipeline will allow China to import oil from the Bay of Bengal, thereby diversifying its oil supply routes and scaling down its dependence on sensitive shipping lanes in the South China Sea.

A twin gas pipeline that is part of the same project has started operating.

India has already completed two of the three phases of the $484-million Kaladan multi-modal transport projects in Myanmar that will offer connectivity to Mizoram in India through sea and then up the  Kaladan river.

It was the first major project taken up by India in Myanmar.

India is moving fast to complete the third phase of the project — a Rupees 1,600-crore contract has been awarded for building 109-km road connecting Paletwa river terminal to Zorinpui in Mizoram border. The construction is expected to start this October (2017).

India completed the construction of Sittwe port, at the estuary of Kaladan River, in trouble-prone Rakhine state last year, one year behind schedule. Construction of the river terminal 158 km upstream is also finished but dredging of the river to ensure navigability is in its final stages.

At the Indian side, extension of the Aizawl-Saiha National Highway by 90 km to the international border at Zorinpui, at the southern tip of Mizoram, is almost over.

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