China-Myanmar Economic Corridor and the limits of ‘Cheque Book Diplomacy’

On September 9, 2018 Myanmar and China signed a memorandum of understanding (MoU) for establishing the China-Myanmar Economic Corridor (CMEC), as part of China’s ambitious Belt and Road Initiative (BRI). The corridor will traverse a distance of approximately 1700 kilometres and seeks to connect Kunming (in China’s Yunnan Province) with Myanmar’s key economic points – Mandalay, Yangon, and Kyauphkyu.

According to the MOU, both sides have agreed to collaborate in a number of areas. Some of the important areas identified for collaboration by both countries are: infrastructure, construction, manufacturing, agriculture, transport, finance, human resources development, telecommunications, and research and technology.

Chinese Foreign Minister Wang Yi had first announced the proposal to build CMEC during his meeting with Myanmar’s State Counselor Aung San Suu Kyi in November 2017. The MOU had been finalized in February 2018.

The CMEC is an ambitious project from which Myanmar could benefit immensely. Yet, there have been apprehensions with regard to the economic feasibility of the project, and Myanmar does not want to meet the fate of other countries which have fallen into what has been dubbed as a ‘Debt Trap’.

Opposition to Kyauphkyu

There has been skepticism with regard to the BRI project in general, and China’s involvement in the SEZ and Sea Port to be set up in Kyauphkyu (a coastal town in the Rakhine Province) in particular. Large sections of the population have been questioning the economic rationale of the project – and the benefits for Myanmar. CITIC (China’s biggest financial conglomerate) was awarded both projects, but it had to reduce its stake from 85 percent to 70 percent in the Sea Port after vehement opposition from the local population. Locals found the 85-15 arrangement unreasonable. Fearing a debt trap, the NLD government in Myanmar has also reduced the initial value of the Sea Port project – a whopping $7.3 billion USD to $1.3 billion. There has been opposition to the SEZ as well (mainly on environmental grounds), and while the initial Chinese take in the SEZ (originally valued at $2.7 billion) was 51 percent, it is likely to be revised.

U Kan Zaw, a Minister in the erstwhile Than Sein government (and Chairman of the Kyauphkyu SEZ tender committee), confessed that Myanmar was not very keen for Chinese investment (it had sought investments from the UK and Europe), but it was not left with any other option once other countries declined to invest.

China beginning to acknowledge shortcomings of BRI projects

Of late Beijing has expressed a willingness to re-examine some aspects of BRI-related projects (including CMEC and the China Pakistan Economic Corridor – CPEC). On the face of it, at least Beijing seems open to addressing the worries of countries which are part of the BRI.

Chinese media itself is trying to send a message that Beijing is responsive to concerns of countries which are part of the BRI initiative. A recent example is an article in CGTN on CMEC, which acknowledged not just the drawbacks of the project, but also the fact that the response to CMEC has been tepid so far in Myanmar. Said the article:

CMEC is temporarily suffering from a cold reception, we believe that it is an excellent endeavor.

The authors of the article also makes a significant point: that Chinese businessmen are not familiar with Myanmar. While the article could be referring to the lack of familiarity with Myanmar’s policies, many host countries have been critical not just of the ‘one sided’ nature of Chinese economic investments, but their unwillingness to understand local cultures, and the fact that they remain aloof from the local population.

On a number of occasions, Chinese businessmen have even misbehaved with locals. In Pakistan, on two occasions, Chinese businessmen have beaten up policeman, and this did not go down well with the local population.

While alluding to the failure of big ticket infrastructure projects, the article also refers to the need for Chinese investments in ‘light industry’ as opposed to ‘heavy industry’ (in a reference to infrastructural mega projects, such as those which were scrapped by Malaysian Prime Minister Mahathir Mohammad).

One of the interesting aspects of CMEC is that Myanmar was keen to have third party investments, and not restrict itself only to Chinese investments. Investments will come from countries in South East Asia and East Asia — Thailand, South Korea, and Japan. While China’s economic presence in Myanmar is staggering, this has not gone unchallenged and of late countries like South Korea are also increasing their presence in Myanmar. The authors of the CGTN article also try to pitch for Chinese cooperation with other countries, arguing that joint investments will mean not only lesser economic and political burden for China, but that they could also reduce hostilities between Western and Chinese companies.

Finally, the article speaks about the need for greater cooperation between Myanmar and China in the sphere of agriculture (especially aquaculture), and that this cooperation should be economically beneficial for the local population.

Conclusion

It remains to be seen whether China will actually acknowledge the genuine concerns of countries participating in the BRI, and whether or not it will actually take some tangible steps to address the apprehensions. As stated earlier, Beijing seems slightly more flexible in its negotiations, but whether this is a short term trend (which many would argue is a consequence of Malaysian PM Mahathir Mohammad’s straight talking with China) or not remains to be seen.

China may be further compelled to change its approach towards overseas economic investments after the recent electoral rout of Abdulla Yameen (outgoing Maldivian President), considered to be pro-China. One trend which is clearly emerging, as was evident from the electoral verdict of Maldives, was that leaders (many of whom position themselves as strongmen) blindly following Chinese diktats for short term economic goals does not go down well with ordinary citizens, and China may need to address its perception problem by looking beyond Cheque book Diplomacy.

India’s approach towards BRI: Need for pragmatism

(new title)

Recently, China’s consular general in Kolkata, Ma Zhanwu, while speaking at a function, proposed a bullet train connecting Kunming (in China’s Yunnan Province) with Kolkata, the capital of India’s eastern state of West Bengal. Said Ma:

With joint efforts of India and China, a high-speed rail link could be established between the two cities.

It would be pertinent to point out that the proposal for a bullet train connecting Kunming and Kolkata had been discussed earlier at the Greater Mekong Subregion (GMS) meet in 2015. In fact, enhancing connectivity between India and China through the Kolkata-Kunming multi-modal corridor (officially the Bangladesh-China-India-Myanmar Economic Corridor, or BCIMEC), which covers a distance of 2,800 kilometres, has been under discussion for over 2 decades, through the Track II K2K (Kolkata-Kunming) dialogue. During former India Prime Minister Manmohan Singh’s China visit, in October 2013, sister city relations were established between Kunming and Kolkata.

In recent years, China has been pro-actively reaching out to West Bengal Chief Minister Mamata Banerjee, and has invited her to visit on repeated occasions, though she has been unable to visit (she was all set to visit in June 2018, but her trip was cancelled at the last moment). Apart from this, a number of Chinese investors have expressed interest in investing in West Bengal and even attended the Bengal Global Business Summit 2018.

Given the increasing emphasis on connectivity with South East Asia, through India’s North East (one of the key aims of India’s ‘Act East Policy’), it was believed that the BCIMEC would tie in neatly with India’s vision for connectivity.

However, tensions between India and China – due to the Doklam standoff as well as Beijing’s insistence that BCIMEC be included in its official Belt and Road Initiative (BRI) –  have contributed to a wane in New Delhi’s interest in the project, at least for the time being. The Rohingya crisis, and more general tensions between Bangladesh and Myanmar, are also a major impediment to the project.

The China Myanmar Economic Corridor: Why New Delhi should pay close attention

While a high speed train is an ambitious project, New Delhi can not be closed to the BCIMEC and should pay close attention to the China-Myanmar Economic Corridor (the Memorandum of Understanding for this project was signed on September 9, 2018). While the China-Myanmar Economic Corridor (CMEC) has been under discussion for some time, there have been numerous debates with regard to the economic implications for Myanmar (the Kyaukphyu Deep Sea Port project, as well as Special Economic Zones, have been contentious). The increasing debate on the issue of ‘debt trap diplomacy’ has only increased apprehensions within sections of the Myanma government (the stake of Chinese conglomerate CITIC in the deep sea port has been reduced from 85 percent to 70 percent due to domestic pressures). Myanmar has also made it clear that it would not like to depend only on Chinese investments, and the recently-signed MOU categorically states that third party investments from Japan, South Korea, and Thailand in CMEC projects are more than welcome. Interestingly, an article on CMEC in Chinese media acknowledges some of the apprehensions vis-à-vis CMEC, and also bats for closer cooperation between China and other Asian and Western countries.

The proposal for the bullet train connecting Kolkata-Kunming came days after the agreement had been signed between China and Myanmar. China would like to extend this corridor all the way to India (while speaking about rail connectivity between Kunming and Kolkata, the Chinese diplomat also spoke about an industrial cluster along the route).

How should New Delhi play it?

While New Delhi’s objections to the BRI are valid, it does need to shed blinkers. It is free not to participate in those components of the project with which it is not comfortable, but there are projects, like the BCIMEC, where it can easily find common ground with China. This will give a boost to India’s infrastructure in the eastern and northeastern part of the country, and complement it’s Act East Policy. If third countries are allowed to invest in CMEC, Indian companies should explore opportunities, as this will enhance their presence in Myanmar while also bolstering the Act East Policy.

China’s narrative in South Asia

Post the Wuhan Summit, there has been a clear change of narrative from the Chinese side. China has expressed its keenness to work jointly with India in Afghanistan – in capacity-building projects. This was unthinkable a few years ago.

China’s burgeoning economic relationship with Nepal has sent alarm signals in New Delhi. China’s decision to give Nepal access to its ports (Tianjin, Shenzhen, Lianyungang and Zhanjiang) raised the hackles in New Delhi. Pragmatists realize that New Delhi can not dictate Nepal’s ties with China, and the fact is that Kathmandu would like to benefit economically from its ties with both China and India.

Interestingly, China has been urging Nepal to strengthen economic ties with India. During his visit to Beijing, Nepal’s Prime Minister, K.P. Oli, made an unequivocal pitch for strong ties between Kathmandu and New Delhi (as well as Kathmandu and Beijing). He stated that the economic progress of both India and China was an opportunity for Nepal, and stated that Nepal wanted to emerge as a bridge between both countries, and would not like to get embedded in zero sum geopolitical games. Nepal’s former Prime Minister, Prachanda, during his visit to India, also referred to the need for close ties with both India and China.

India should also keep in mind a few other points

While many in New Delhi are pointing to Malaysian Prime Minister Mahathir Mohammad’s stand against Chinese projects, it is important to keep in mind that while the Malaysian PM has scrapped a few projects, he has continued to reiterate the relevance of the China-Malaysia relationship (there is need for nuance). Second, it is one thing to point out the shortcomings of the BRI project, but India needs to prove its own track record in big ticket connectivity projects (New Delhi has been extremely slow when it comes to the implementation of connectivity projects within the neighbourhood). Third, there are areas where India is already working with China, so rigidity and paranoia do not make much sense. If even Japan is willing to participate in certain projects of BRI, there is absolutely no reason why India should not at least be open to elements of the project. It is also important to look at connectivity from an economic dimension and not a narrow security prism as large sections of India’s strategic community do. Finally, New Delhi can not put all its eggs in the American basket. While India’s strategic relationship with the US has witnessed an improvement, and Washington has repeatedly spoken about the need for greater connectivity within the ‘Indo-Pacific’, the US is not likely to invest significantly in economic connectivity projects. India thus can not be totally dismissive of Beijing-led connectivity initiatives.

While New Delhi needs to exhibit pragmatism, Beijing on its part needs to address the concerns of India, and other countries, with regard to the BRI.

Buddhist Lobbyists Push for Legislation Targeting Muslims in Myanmar (UPDATED)

The story is here.

I’ll be straight with you: I hate arguments that try to pinpoint Islam and Muslims as more prone to violence or bigotry than other faiths. Aside from lacking any evidence whatsoever to support such a claim, they contribute to hostility and bad faith when this conversation – about religion and society – could easily be used to contribute to tolerance and a better understanding of why government sucks.

All religions are exactly the same when it comes down to it.

Politically and organizationally, lobbying efforts on behalf of religions are necessarily going to aim for shoving its particular beliefs down the throats of everybody else. This is why separation of church and state is so important (church and state, not church and society; I could care less how people organize themselves in the non-political arena).

So, for example, the censorship we have here in the United States, on television, is the direct result of Christian groups that were able to successfully lobby the government to stifle free speech (see this excellent essay in the Freeman by BK Marcus on how the television markets are now changing thanks to deregulation). Can’t buy beer in your county on Sunday or after 7:00 pm on weekdays? Thank your local Christian lobby (or, if you’re in parts of India, your local Hindu or Sikh lobby, or…).

The extremity of the lobbying groups depends not on religion per se, but on the institutions that a state has in place. Anybody who argues that the Middle East is a more violent place than sub-Saharan Africa – the other region of the world that largely adopted Leninist socialism after independence – is a charlatan or a fool. It is, unfortunately, not a well-known fact that heavily Muslim, predominately Arab states are anti-capitalist, and staunchly so. This anti-capitalistic mentality has led to poverty, of course, and isolation (“cultural stagnation”), but it has also had an adverse effect on these states’ political institutions. Instead of becoming more open, and more inclusive of various factions (“lobbying groups”), political institutions in the Muslim world have been built around the executive branch – the Strong Man –  and as a result the more populist a lobby’s message is, the more it is likely to receive support from the Strong Man (the oil states in the Gulf are considered wealthy, but they are still anti-capitalistic).

In a world that is dominated by a secular hegemon that often supports bad people in the name of savvy geopolitics, the popularity of Muslim populism is not hard to fathom.

Meanwhile, in Myanmar, the Muslims being targeted by legislation are mostly illegal immigrants fleeing Bangladesh. The most prominent lobby pushing for the bill, the Association for the Protection of Race and Religion, is headed by a Buddhist monk (of the Theravada sect if I’m not mistaken).

In other news I still come across Americans, my own age, that support the Castro regime in Cuba (“because free health care and equality”). What kind of sick world do we live in?

EDIT: I had to edit this thing for clarity. Jesus donkey smears.

UPDATE (11/2/2014): Wait a second Brandon, did you just write that the Buddhist zealots are lobbying the state of Myanmar for legislation aimed at Muslims? How can this be? Myanmar is a known authoritarian state. Doesn’t the junta do what it wants, when it wants?

The short answer is “No, it can’t.” Authoritarian regimes are constrained by choices and popular opinion as well. One of the main differences between authoritarian and democratic states is the number of factions involved in the lobbying process. In democratic states, any faction can lobby the government for any reason it wishes to. Everybody has equal access (if not equal influence). This equal access (which, again, does not translate to equal influence) is, in part, what classical liberals and libertarians mean by political and legal equality. In authoritarian states the number of lobbying groups tends to be a lot smaller than in democratic states. I’ll let you figure out why this is.

It’s worth noting that calls to limit lobbying efforts by repealing Citizens United is, in its barest form, an authoritarian urge. For what is this repeal movement, if not an attempt to shut some factions up using the power of the state? The excuses always vary (in this case it’s “money”), but the pattern of authoritarianism through limiting choices remains the same.

The difference in understanding of equality between libertarians and conservatives/liberals strikes at the heart of American politics (I can’t speak for other places). Yet it also illustrates why libertarianism’s conception of equality is superior to that of the conservative/liberal. If there is a successful attempt at leveling out influence so that it’s equal in some measure (though conservatives/liberals are ambiguous on what they mean by ‘influence’, not to mention ‘equality’), then equal access has to be denied or else some factions would tip the balance of influence. Attempting to guarantee equality of influence would also lead to cronyism. Instead of lobbying the government for favors, factions would end up lobbying the committee that picks lobbying groups it deems worthy of lobbying for government favors!

On the other hand, if equal access is protected then everybody has a shot and no influence is guaranteed.

UPDATE (11/03/2014): The more I think about it, the more the Muslims-are-more-prone-to-violence canard sounds an awful lot like the Jews-secretly-run-the-world canard. People point to outbreaks of collective or individual violence perpetrated by Muslims or a Muslim and say to themselves “Well, this isn’t surprising, as their 7th century founder was a war chief.”

Disgusting. And, I suppose, Jews really are running the world because Judas stabbed poor ole Jesus in the back for 30 pieces of silver in the first century. The logic is exactly the same.

The Jews-secretly-run-the-world canard hides a nasty prejudice against Jews by creating a half-baked, pseudo-scientific rationale that can be used in public (this canard does not hide such a prejudice very well, at least to others; it may hide well from himself the intolerance and ignorance a person has in the form of rationalizing his prejudice). The Muslims-are-more-prone-to-violence canard is most often used by proponents of overseas military intervention in Muslim regions of the world.* Like the anti-Jewish voices, the anti-Muslim voices are not interested in Truth but in forcing their own deeply hostile beliefs down the throats of others. Hence the libertarian’s task of delicately balancing religious skepticism with the protection of religious believers from vulgar conspiracy theorists.

* There is a small cadre of religious skeptics and secularists who also use the “violence” thesis, though this faction, which includes myself, is more easily swayed by evidence.

Buddhist Leaders Call on Myanmar to Expel Muslims

From the New York Times:

After a ritual prayer atoning for past sins, Ashin Wirathu, a Buddhist monk with a rock-star following in Myanmar, sat before an overflowing crowd of thousands of devotees and launched into a rant against what he called “the enemy” — the country’s Muslim minority.

“You can be full of kindness and love, but you cannot sleep next to a mad dog,” Ashin Wirathu said, referring to Muslims.

There is much more in the piece, including this:

[…] images of rampaging Burmese Buddhists carrying swords and the vituperative sermons of monks like Ashin Wirathu have underlined the rise of extreme Buddhism in Myanmar — and revealed a darker side of the country’s greater freedoms after decades of military rule. Buddhist lynch mobs have killed more than 200 Muslims and forced more than 150,000 people, mostly Muslims, from their homes.

Ashin Wirathu denies any role in the riots. But his critics say that at the very least his anti-Muslim preaching is helping to inspire the violence.

What began last year on the fringes of Burmese society has grown into a nationwide movement whose agenda now includes boycotts of Muslim-made goods. Its message is spreading through regular sermons across the country that draw thousands of people and through widely distributed DVDs of those talks. Buddhist monasteries associated with the movement are also opening community centers and a Sunday school program for 60,000 Buddhist children nationwide.

This bad news is, of course, contradictory to everything Dr Delacroix and other imperialists have written on the subject of religious extremism. Imperialists in this century like to pretend that Islam has suddenly appeared to take the place of communism as the preeminent threat to peace and prosperity in the world. They point to violence, poverty and state-sponsored oppression as examples of Islam’s inherent incompatibility with the liberal world order.

This is all anecdotal evidence. There is nothing inherently violent about Islam. All religions are equally authoritarian at their core.

I pull two things from this piece: 1) it reaffirms my commitment to secular government and 2) it reconfirms my skepticism of democracy. These two things go hand-in-hand, of course.

A government that decides to adhere to one religion is necessarily going to oppress those it does not sponsor. This is easy enough for our Western readers to understand, but it is an argument that does not have nearly enough clout in the non-Western world (you could perhaps exclude China from this list, and India has essentially been Westernized; New Delhi even has its own condescending policy towards its indigenous minorities).

The democratic aspect, too, should be familiar to Western readers. Democracy needs restraints, and lots of them. The reasons for this are practically infinite, but suffice it to say here going to war in the name of democracy is a foolish, morally horrendous thing to do. The fact that imperialists today often shroud their lust for power in terms of democracy speaks volumes about the immoral nature of their worldview. (h/t Eugene Volokh)