Tuesday, August 19, 2014

Swapping sovereignty for development?

Weekly Eleven  17 August 2014 23:58
Chinese-backed development projects have raised concerns about Myanmar’s ability to assert sovereignty over its territory through democratic means – as it makes an historic shift from military to civilian rule. Questions, for example, were raised about the Shwe project: dual pipelines that transport natural gas from fields offshore Rakhine State and crude oil shipped in from the Mideast to China’s Yunnan province.

The contracts were signed under the dictatorship; the pipelines have been completed.

The status of another project linking Rakhine State to Yunnan – a railway connecting Kyaukphyu to Yunnan’s capital Kunming – is now in question.

It had been presented by its backers as an opportunity to jolt development in the impoverished western state, but it is also part of China’s strategic plan to assert greater influence in region. The question many are asking now is whether Beijing is using the language of development to smooth talk its way into greater territorial control.

The pipelines, for example, are operating at far less than the capacity stated during the planning and construction phases. Only 1.8 billion cubic metres of gas was exported in the year since the gas pipeline began operating, compared to the 12 billion cubic metres envisaged. Revenues from these exports will be far less than the numbers cited. The project has also generated disputes over land, compensation, environmental damage, damage to the fishing industry and human rights abuses – not to mention the treatment of Myanmar employees hired to build the project.

Those living near the pipeline have paid the highest price, while the state has not seen the revenue gains that were touted by the project’s developers. Beijing seems to be in no rush to use these pipelines at their full capacity. What is the purpose of these pipelines?

China’s Ambassador contradicts Nay Pyi Taw

A memorandum of understanding for the railway project linking Rakhine’s Kyaukphyu Township to Kunming was signed in 2011. However, a Ministry of Rail Transportation official recently said it had been cancelled after more than three years of inaction. People living along the proposed route also opposed it and this was taken into consideration in the decision to the cancel the MoU, he said. 
Beijing sees things differently.

Yang Houlan, its ambassador to Myanmar, told reporters on July 24 that the railway project could proceed if the people and government of Myanmar supported it. He said he was unaware of any opposition expressed to it when its original investor, China Railway Engineering Corporation, and government officials met with local people to discuss the project. Most press reports on opposition to the project quoted government officials not people from the state, he said

Yang Houlan said Beijing wants to develop the Kyaukphyu-Kunming rail project as it is important for the "development" of Myanmar and the people living along its route.

He suggested that his embassy was more in tune with the wishes of Myanmar’s people than Nay Pyi Taw is. “According to our study, we’ve heard no voices against the project … Most of the locals support the project,” he told the press conference. He said that the only opponents of the project that Myanmar media quoted were government officials.

He added, that Beijing would “respect the decision of the Myanmar government and people”.

These recent developments have not gone unnoticed outside of Myanmar. The New York Times published the article "China Looks to High-Speed Rail to Expand Reach" on August 8. Online news site Asia Times ran the article "China, Myanmar: stop that train" on August 14 by Yun Sun, who has a reputation for parroting the views of Beijing.

Developing strategic interests

China's quite fervent desire to build the railway undermines its claim that it is acting "for the development of Myanmar". The project serves China’s interests, not Myanmar’s.
This was evident at the meetings between President Thein Sein, the US secretary of state and China’s foreign minister in Nay Pyi Taw during the 47th ASEAN Foreign Ministerial Meetings earlier this month.

US Secretary of State John Kerry talked of providing technological support, enhancing bilateral trade and investment, the human rights situation in Myanmar and assistance for the people.
The Chinese foreign minister also stressed improving bilateral ties. In addition, he discussed border security issues, border trade, the peace process, the China-India-Bangladesh-Myanmar economic corridor, the Kyaukphyu Special Economic Zone in Rakhine State, infrastructure construction and loans.

As discussions included the China-India-Bangladesh-Myanmar economic corridor and Kyaukphyu Special Economic Zone it is likely they discussed the Kyaukphyu-Kunming rail project, which is vital to both projects. Out of five major projects in Myanmar that China has backed, it has lost one: the Myitsone dam project. It will not give up another easily. We can expect plenty of wrangling over the Kyaukphyu-Kunming railway. It has geopolitical significance for China.
Myanmar just one of a ‘String of Pearls’

China’s strategy for global political, economic and security affairs was unveiled in 2000 under the name “String of Pearls' Strategy”. It was seen as the key growing geopolitical influence and securing a sufficient energy supply.

Myanmar is a significant component in this strategy. It is especially important for China to gain access to the Indian Ocean through Myanmar to reinforce its influence in the South China Sea and the Straits of Malacca. Having a route to the Indian Ocean would also help China find a shorter route for exporting its goods to Africa.

The Kyaukphyu deep-sea port and Kyaukphyu-Kunming railway are critical shortcuts for China to the Middle East and Europe.

This suggests that China will not give up the rail project easily. Some analysts say that the abandoning of the Myitsone dam project was a distraction for moving forward on the pipelines and rail project.
Regional links

China is increasing its influence in Asia. It wants to realise the grand trans-Asian rail accord and build thousands of miles of track that will loop through Laos, Cambodia, Thailand and Malaysia and Singapore. the Kyaukphyu-Kunming rail is part of the plan, according to the recent New York Times article. Meanwhile, Thailand's junta head General Prayuth Chan-ocha announced the revival of plans that call for more than 620 miles of rail links from Thailand to Kunming by 2021.
Myanmar, however, is different from Thailand.

The New York Times article questioned whether the Chinese bid to expand its high-speed rail network would be successful. In addition to China's longing for a rail link, it noted opposition from Myanmar. It quoted Eleven Media Group CEO Dr Than Htut Aung as saying the project is a national security issue.

“Through the Sino-Myanmar railway, China can easily access the Indian Ocean, and Myanmar’s security would be threatened. Because of the rail, Myanmar could become a second Crimea,” he told the New York Times.

China remains confident that the rail project will be signed eventually. Chinese plans are proceeding to gouge an 18-mile rail tunnel through the Gaoligong Mountains, which straddle the border with Myanmar and serve as the entry point to Yunnan Province and Kunming, according the New York Times.

In the Asia Times article said that Myanmar could sign another MoU under new terms. He warned that cancellation of the project might strain bilateral relations, while China might need to accept a less optimal arrangement than the one outlined in the now lapsed MoU.

The approaches of the New York Times article and the Asia Times article differ. The New York Times article highlighted various concerns of Myanmar people, Chinese plans to increase its influence and the possibility that Nay Pyi Taw will not easily accept the project. The Asia Times article calculated the loss to China and showed a way to make profit from the loss.

A recent article in the Irrawaddy journal probed the motives behind the pipeline project. It pointed out that there was a political motive behind it: construction of the pipelines proceeded despite objections from Chinese energy strategists.

Its operator, China National Petroleum Corporation, has yet to explain why its exports have fallen so far short of their target. CNPC former chairperson, Jiang Jiemin, and other senior officials have recently been charged with corruption, the Irrawaddy article wrote.

Although it is not known if the case of CNPC's former chairperson is related to the pipelines, there are questions for all those involved in the railway project.

More questions developing

In Myanmar, there are five major projects backed by China: the Letpadaungtaung copper mine, Myitsone hydropower plant, Tarpain hydropower project, Kyaukphyu-Kunming gas pipeline and railway project and Takaung nickel mine.

The Myitsone Dam project has already been suspended by President Thein Sein’s government.  Although the railway project was cancelled, China wants to resume it under a new contract. It is aiming for a 50-year build-operate-transfer contract, which would see it gain the most benefits from the line for the first 50 years.

Again, the question of benefits from this “development” project is apparent. Was the Chinese Ambassador to Myanmar correct when he described it as “for the development of Myanmar and its people”. 

Was he offering a gift? Surely, every Chinese project cannot be for the benefit of Myanmar. A mouse share of the benefits may be all that Myanmar will see.

It is uncertain that a multi-purpose plan including railway station, bus stands, fuel filling stations, housing and supermarkets, alongside the pipelines and an expressway will benefits the development of Myanmar and its people.

For sure, Myanmar workers will be like servants without labour rights – as we have seen before.  There have been no improvements in the lives of Myanmar people working on the gas pipeline project. Moreover, those who live alongside the project are facing greater difficulties than they were before the pipelines arrived.

People living near the Letpadaungtaung copper mine have yet to see much benefits from this “development” project. Continued protests by its workers demonstrate that even they have not benefited from it. 
Illegal migration

The railway project threatens Myanmar’s sovereignty and could cause a disintegration of the union. At the same time illegal Chinese migrants are flowing deeper into Myanmar. Their numbers are estimated at 2-5 million.  They have already penetrated into Upper Myanmar, including Mandalay, and are now proceeding to Yangon.

The number of Chinese people investing in most of businesses in Myanmar and holding both of Myanmar and Chinese identity cards is rising. Chinese citizens with false Myanmar identity cards have been arrested in Mandalay recently. Reporters from Eleven Media have seen Chinese youths on their first visit to the country carrying Myanmar passports.

This issue, illegal migration and false identity cards, is not being investigated. The number of arrests of Chinese nationals who enter Myanmar illegally is paltry. It is so easy for them to get Myanmar ID that it is nearly impossible now to even estimate the number of Chinese people with Myanmar ID who are staying here illegally.

Although nearly 10 million Myanmar workers have left the country to live overseas, the population is not declining.  This is raising questions about how large a proportion of population consists of Chinese immigrants.

There are about 500,000 White Card holders in Rakhine State alone. Chinese migrants with Myanmar ID will be able to vote in the upcoming election.

Support for rebel armies

Another issue is the Wa and Mongla regions along the border with China in Shan State. They are designated as Special Regions by Nay Pyi Taw. Currently, the Wa is the largest armed ethnic group.
Both groups do not speak Myanmar, but speak Chinese dialects and use that country’s currency.

There is strong evidence of China influence over the activities and management of the Wa armed group.

The two groups did not attend the recent discussion on the signing of a nationwide ceasefire deal in Yangon. Rumours circulated that Chinese authorities commanded them to boycott the peace talks.
It has also been reported that the Wa and Mongla armed groups will not sign the nationwide ceasefire agreement.

The Wa region, at any time, may become a disputed area between Myanmar and China, as Crimea is between Russia and the Ukraine.

Reports that China has proposed assigning Wa soldiers as security guards for the pipelines show that they could be used to serve the interests of Beijing. 

Regarding the railway project, it is true that Chinese people can enter Myanmar at any time. This issue is not worrisome for Myanmar. However, there is an important concern that the railway could be closed if bilateral relations sour. Could this be used as a pretext for the Chinese army to invade Myanmar?

The railway can wait

Illegal Chinese workers and related issues, disrespect for local cultures, conflicts with residents who stand in the way of projects, environmental degradation – these are hallmarks of what China often refers to as “development”. 

Despite Beijing’s persistence in pushing the railway, Nay Pyi Taw cannot permit it. The project has too much potential to destabalise Myanmar and undermine sovereignty, while most of the benefits will flow to China and allow it to more easily assert its power.

If Myanmar was more stable and the project was guaranteed to bring genuine development to the country, it should be pursued. However, it is impossible to proceed with it now. Perhaps it will be suitable in 20 years.

If the government pursues this project it is swapping Myanmar’s sovereignty for what Beijing describes as “development”.