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Myanmar: Kyaukphyu Port-The Dragon Enters in a Big Way

Paper No. 6467            Dated  6-Dec-2018

By S. Chandrasekharan

In a meeting with Suu Kyi, the Chairman of the China Development and Reforms Commission (NDRC), Ning Jizhe, tried to hustle Myanmar to workout an ‘implementation Plan’ for the China-Myanmar Economic Corridor (CMEC) under the Belt Road Initiative.  Suu Kyi stood her ground and made a very significant response that said – “the CMEC Projects (are) needed to be implemented in line with the Myanmar’s sustainable Development Plan and should support the long-term interest of both peoples. Th message was that it should not be in the interest of China alone but that of Myanmar also.

She also stressed that China needed to negotiate the projects systematically and in accordance with domestic rules and regulations.( thus avoid going to BRI Courts in Xian in China later)

This timely reminder to China is not only for Myanmar itself but for other countries who are negotiating various projects in this region under the BRI. 

This reminds me of a well thought out remarks by an analyst of Sri Lankan origin Gajalakshmi Paramasivam, in connection with the projects in Sri Lanka.  She pointed out that “Borrowing without the ability to repay results in slavery.  One who is a slave does not  have the capacity to work sovereign powers anytime, anywhere!”

It looks that countries in South and South East Asian region have begun to understand the sinister intentions of China in going ahead in a big way with mega projects in countries  that do not have the ability to repay.  The case of Hambantota port being swallowed up by China is a case in point.

The Mega project at Kyaukphyu on Myanmar’s east coast in Myanmar in Rakhine Province is another  case in point. 

After two years of intense behind the scenes negotiation, the CITIC Conglomerate of China and the Myanmar Government signed a deal on 8th November.  It is not a coincidence that China took a major initiative at the same time to get the KIA the second most powerful insurgent unit to talk to the Myanmar Peace Commission to find ways to de-escalate the intense fighting going on between Myanmar Army (Tatmadaw) and the KIA. 

The Chinese efforts to bring the warring parties to talk is not to be seen as a benign effort to bring peace to the region for its own sake, but to help the infra structure projects under the BRI and China Myanmar Economic Corridor that would necessarily need peace and stability in the region.

While signing the agreement, the Chairman of the CITIC Chang Zhenming said that the project is meant to be only the beginning for further steps!  He admitted that the project comes under the BRI meant to connect Myanmar with Western China as well as an ‘economic corridor’ joining other ASEAN economies.

Knowing the resentment of the local people (Myitsone dam), U Set Aung, Chairman of the Kyaukphyu SEZ management Committee  and Deputy Minister of Planning and Finance, bravely said that the project will not amount to a debt burden for Myanmar though it is too early to make such a statement.  The Minister must also be aware that the same CITIC Group is negotiating to develop an industrial park with an investment of 2.7 billion US $ with 51 to 49 percent stake between the Chinese firm and Myanmar respectively. Two weeks earlier on- October 22nd to be precise, the Myanmar railways and the China Railway Group signed an MoU to build a railway line between Mandalay and Muisse on the Chinese border.  This is part of an ambitious road/rail project to connect Yunnan with Mandalay to Yangon and on to the deep-water port at Kyaukphyu.

The project in the first phase involves the construction of two deep water berths ( brought down from 6) and an industrial Special Economic Zone Park. 

The NLD Government knowing fully well the debt trap that would follow, has brought the projected investment from 7.3 Billion to 1.3 billion dollars and also brought down the stakes from 85-15 originally agreed to 70-30 ratio.  Myanmar expects to give half of its stake to private companies.

What is missing in the whole dealing is transparency, a complaint that is being heard from Pakistan too. 

Tall claims are now being made that 90 percent of managerial posts in the SEZ will be filled by  Myanmar workers and a total of 100,000 locals are supposed to be benefitted!

The fact is that the Kyaukphyu port and the infra structure road and rail projects are part of the desperate efforts of the Chinese  to find an alternative route to the Indian Ocean and thus avoiding the Malacca Straits.  By diversifying the sea trade route, China would save about 5000 Kms of sailing distance. 

One cannot but conclude that the chief beneficiary of the Kyaukphyu Port is China.

It is hoped that the smaller countries in South and South Eastern region do not fall a prey to the allurements of “generous offers” of loans by China only to be enslaved eventually. The tactics are familiar.  First get the country to be strategically dependent and then go for economic strangulation. Pakistan knows it!

 The countries that are enthusiastically getting involved in the BRI which is actually Belt and Road Invasion  should again be reminded of the dictum “Borrowing without the ability to repay results in slavery”

 

 

 

 

 

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