Myanmar’s Critical Role in Bolstering India’s Look East Policy

India implemented a Look East Policy (LEP) in the early nineties, aimed at strengthening relations with the Association of Southeast Asian Nations (ASEAN) member states. In keeping with its bid for a leadership role in Asia and beyond, India seeks greater integration with ASEAN and is striving to create an Asian Economic Community. Looking back, it can be said that the Policy has been moderately successful. India’s relations with ASEAN and its member states have developed significantly over the years. The India–ASEAN Free Trade Agreement, signed in 2009 and operationalised in 2010, has been a tangible outcome of India’s LEP.

The key highlights of the LEP include:

• India has summit-level relations with ASEAN, is a full dialogue partner in the ASEAN Regional Forum (ARF), and is a member of the ASEAN Defence Ministers Meeting (ADMM+). The next India–ASEAN Commemorative Summit will be held in New Delhi in 2012.
• India is a founding member of the East Asia Summit (EAS).
• India and ASEAN have an FTA in operation.
• India–ASEAN trade has been increasing in recent years at a fast rate. According to Government of India (GoI) data, India’s trade with ASEAN in 2010–11 was US$ 57.9 billion; of this, exports accounted for US$ 27.3 billion, and imports accounted for US$ 30.6 billion. Trade with ASEAN constitutes about 10 per cent of India’s global trade.
• Indian investments in the ASEAN countries are increasing.
• More and more Indian professionals are working in ASEAN countries.
• ASEAN welcomes cultural engagement with India. As part of this, the international Nalanda University is being set up in Bihar.

While these are positive developments, what are the prospects for India–ASEAN relations over the next 20 years? Undoubtedly, the past two decades of LEP have provided the foundation for rapid growth of India–ASEAN relations in the next 20 years. Yet, a critical and objective analysis of the LEP would show that its full potential has not yet been realised.

• Connectivity between India and the ASEAN region is still poor.
• The trade is below potential, especially if seen in comparison with ASEAN’s trade with China or Japan.
• Investments in each others’ economies remain low.
• People-to-people contacts remain at a low level. Visa restrictions continue to prevail, and tourism is below par.
• BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral and Technical Cooperation) and MGC (Mekong-Ganga Cooperation) are performing much below their potential.
• New areas of cooperation have not been tapped. India should invest in capacity building, strengthening of democratic institutions and engagement with civil society. The potential of cooperation in health, education and tourism also need to be utilised.
• ASEAN counties are not yet comfortable with the idea of enhancing cooperation in defence and security areas due to the China factor.
• Cooperation on counter-terrorism has not reached a critical mass.
• Flagship projects like the Nalanda University have made slow progress.

A major lacuna in India’s LEP has been the absence of deep engagement with Myanmar, which is not only India’s neighbour—sharing a land border with India—but also a gateway for India to ASEAN. Closer engagement with Myanmar will give a boost to India’s LEP.

Another key impediment has been the relative lack of development in India’s North-East region. The North-East must be made an integral part of India’s LEP as both a key driver and a staging post for the Policy.

This will require, first and foremost, the settlement of the continuing insurgencies in the region as it would take care of many of India’s security concerns. It must be noted that considerable progress has been made in this regard in recent years. The recent improvement in India–Bangladesh relations has had a major security benefit for India in terms of winding down of the ULFA insurgency. Similarly, improving ties with Myanmar will help India in dealing with the Naga and Manipur insurgencies. Economic and social development in the region will also pay security dividends for India.

The North-East region has the potential to become a manufacturing hub for engaging with neighbouring Bangladesh, Myanmar, and ASEAN in general. For this, the North-East needs to be connected more densely with Bangladesh, Myanmar, and the ASEAN region beyond. This will require building infrastructure—roads, railway lines, river transport, airports, tourism infrastructure, border check-posts, educational, and health infrastructure, etc.—in the North-East on an urgent basis. The GoI needs to invest big sums in the region in order to make LEP a success. Moreover, linking the North-East to Myanmar and Bangladesh will help in the development of the region and address the issue of poverty.

Myanmar’s Role in India’s Look East Policy

The transition to democracy in Myanmar is a development of great significance for Indo–Myanmar relations. It will also impact the region as a whole. Since March 2011, when a civilian government came to power and political and economic reforms were subsequently initiated by President Thein Sein, Myanmar’s isolation is gradually receding. The US and the European Union are also contemplating engagement with Myanmar. Given its geo-strategic location and natural resources, Myanmar is on the verge of a major take-off.

President Thein Sein visited India in October 2011 and the Myanmar Foreign Minister, Wanna Maung Lwin, paid a visit in January 2012. India’s External Affairs Minister, S.M. Krishna, also visited Myanmar in 2011. Thus, there is mutual interest in taking bilateral ties forward. A key challenge for India is fast-tracking its relations with Myanmar as that will boost its Look East initiative.

The current state of Indo-Myanmar relations appears healthy. Both countries have set a target of doubling bilateral trade to $3 billion by 2015. According to information provided by the GoI to Parliament, India has offered assistance to Myanmar

“for road development projects to build physical connectivity with Myanmar. These include up-gradation of the Tamu-Kalewa-Kalemyoa road (about 160 km) in Myanmar across the border from Manipur; Kaladan Multi-Modal Transit Transport Project, which envisages development of road and inland waterways from Sittwe port in Myanmar to Mizoram; upgradation of Rhi-Tiddim Road (about 60 km) in Myanmar adjoining Mizoram; and some segments of Trilateral Highway Project (about 1,360 km) connecting Moreh (Manipur, India) to Mae Sot (Thailand) through Myanmar.”

The Kaladan Multimodal Transit Transport Project and the Rhi-Tiddim project, once completed, will transform India’ North-East and the bordering Myanmar regions.

President Thein Sein’s visit to India in October 2011, when he was accompanied by a number of cabinet ministers, was a landmark event that sought to transform India-Myanmar relations. A number of agreements were signed during the visit, including a Memorandum of Understanding (MoU) for the up-gradation of the Yangon Children’s Hospital and Sittwe General Hospital, and a programme of Cooperation in Science & Technology for the period 2012–2015. India has already extended lines of credit worth $300 million for the development of railways, transport, power transmission lines, oil refinery, and OFC link, etc., to Myanmar. During the visit, India announced the extension of a new concessional facility of a $500 million line of credit to Myanmar for specific projects, including irrigation projects. The Indian Prime Minister announced that India would extend technical and financial support for the following new projects: setting up of an Advanced Centre for Agricultural Research and Education (ACARE) in Yezin, and a Rice Bio Park at a farm in Nay Pyi Taw. The Prime Minister also announced India’s support to Myanmar for setting up an Information Technology Institute in Mandalay and a second Industrial Training Centre at Myingyan with technical support from HMTI.

Energy security and the power sector are important areas for mutual cooperation. During President Thein Sein’s visit, it was agreed to enhance cooperation in the area of oil and natural gas. In this context, Myanmar welcomed the substantial investments made by Indian companies, including GAIL, ESSAR, ONGC, among others, in off-shore and on-shore blocks, and the construction of natural gas pipelines. Myanmar agreed to encourage further investments by Indian companies, both public and private, in its oil and natural gas sectors.

During the visit, the two sides reiterated their commitment to cooperate in the implementation of the Tamanthi and Shwezaye projects on the Chindwin River Basin in Myanmar. While the Detailed Project Report (DPR) on the Tamanthi project by NHPC has been submitted, the final updated DPR for Shwezaye will be available in March 2012. While designing these projects, India must factor in their impact on the local population and environment. It is essential to take their views into account.

Indo–Myanmar cooperation in the past has been marred by delays and uncertainty. These delays have cost India productive cooperation in the hydrocarbon sector, where China has been the gainer. Undoubtedly, there is far greater potential in Indo–Myanmar relations than the few projects India has undertaken so far. These projects should be competed at the earliest but more needs to be done.

The following steps can be considered by the GoI:

• India should enhance its investments in Myanmar and set up a much larger sum of, say, $5 billion for investment in Myanmar’s economic and social projects in the form of grants and soft loans. This investment should be made in building critical infrastructure in Myanmar, infrastructure enhancing connectivity between India and Myanmar, and also in trilateral projects between India, Myanmar, and Thailand.
• People-to-people contacts between India and Myanmar should be enhanced rapidly through liberalisation of the visa regime, educational and cultural cooperation, border areas development, and the development of tourism infrastructure.
• Security cooperation between the two countries should be upgraded by establishing information sharing, joint patrolling of the borders, and cooperation on border management.
• Indian investments in Myanmar should be increased in the areas identified by the latter, particularly in minerals, energy, and agriculture.
• India and Myanmar should enhance cooperation in maritime security.
• India should share the benefits of its science and technology with Myanmar. A 10-year programme of science and technology cooperation should be established and implemented.
• India should share its experience in strengthening democratic institutions with Myanmar.
• The two counties should coordinate their approaches on the issue of cooperation in BIMSTEC, ARF, EAS, and ADMM+, etc.
• Myanmar has a significant Indian diaspora, which is well integrated in the local society. The diaspora can play an important role in strengthening India–Myanmar relations.
• The existing Joint Committee at the Commerce Ministry level should be elevated to a Joint Economic Commission to take a holistic and comprehensive view of the bilateral economic relationship. A business forum consisting of businessmen on both sides can also be set up. High-level mechanisms of officials should be set up to focus on greater connectivity between India and Myanmar.
• An MoU for defence cooperation between the two sides should be considered.
• The two sides should consider signing a cultural exchange programme.
• Given the affinity between Myanmar and India’s north-eastern states, cooperation agreements to promote closer cultural and trade affinity between the two sides should be considered.

As Myanmar opens up to the outside world, India can aid it immensely in nurturing its nascent democracy. The two neighbours have a historic opportunity to come close to each other once again and transform their bilateral relations as well as the larger region. Myanmar is rich in natural resources, and consistent and long-standing cooperation with India will help it develop its true potential. For India, cooperation with Myanmar will help transform the North-East, bolster its LEP, and help it emerge as a major Asian power.

The author is the Director General, IDSA, New Delhi. This presentation was made at an International Conference on “Myanmar : Bridging South and Southeast Asia” held at Jamia Milia Islamia University, New Delhi on 30-31 January 2012.The views expressed in this article are personal.