Another opportunity lost in the neighbourhood

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Left behind India is not only losing in the financial race, it is also losing its soft power to China and western nations. Photo: Avalok Langer
Left behind India is not only losing in the financial race, it is also losing its soft power to China and western nations. Photo: Avalok Langer

It had been 18 days of overcast skies, daily cloudbursts and wet shoes. Ready to fly out the next day, I sat rehearsing a list of complaints, things I felt India was doing wrong in Myanmar, as an Indian government official introduced himself. Before I could start my barrage of condescending questions, the official, who had so kindly agreed to meet me, said something unexpected, “The biggest loser of Myanmar’s opening up has been India.”

Before the 2010 elections and the subsequent lifting of sanctions and embargoes, Myanmar’s options were limited. While the West was off limits, Myanmar’s neighbour to the east, China made its presence felt. Meanwhile, India alienated itself from the military government of the day by offering support to pro-democracy players. Later, insurgencies in the Northeast and the fear of growing Chinese influence pushed India to rekindle ties with the military government. This policy flip-flop made India unpopular both with the pro-democracy forces as well as the military.

Today, the dynamics have changed. While China remains at the top of the food chain, the US, EU and other Asian countries have found their way into Myanmar. India, on the other hand, has not been able to keep up. “To be honest, no one really cares about India,” explains Dr Marie Lall, a South Asia expert. “India can’t compete with China. Between 2005 and 2010, India could have also laid the groundwork for more engagement. If anything, India was in an even better position then, but ambivalence within many New Delhi ministries did not allow the relationship to develop.”

As the official explained, “From being the third biggest trade partner (after China and Thailand), today we are nowhere. According to reports, in August, Myanmar received $731 million as foreign investment, bringing the total since 1988 to over $43 billion investment. China stood as the largest investor followed by Thailand, China’s Hong Kong Special Administrative Region, South Korea, Britain, Singapore, France, Vietnam and then India, at number 10.

So how did India lose the race? The answer came from the official himself. “We just take too much time to deliver,” he said. “The process is long. First we send the file from here for approval from the finance ministry in New Delhi. They will ask us to approach the government of Myanmar to make a formal request/proposal. That will then be cleared by the embassy. An overseeing body will be set up after which a detailed report will be sent back to India and then the final clearance will be given. This entire process will take about seven to eight months, how do we then finish construction in two months? So the government of Myanmar would rather go to someone who will deliver on time.”

This systemic failure has greatly hampered our projects as well as image in Myanmar. In fact, devoid of a banking system, Myanmar, where the majority transactions continue to be in cash, had reached out to India, to help create their banking system. “We took so long to get back to them that they have now sought help elsewhere,” explained the official.

“We don’t give priority to our neighbouring countries,” explained another Indian official in Myanmar. “They are seen as punishment postings rather than opportunities.” He explained the system followed by the South Koreans: “The individual who is selected as the Ambassador would have previously served in Myanmar for at least six years. After retiring, they come back to Myanmar as the head of a company, so that they can build on their networks. We don’t follow such a system.”

For India, one of the biggest plus points of the opening up of Myanmar is that India can now further its ‘look east’ policy through the Northeast and develop the region’s economy through trade. To further the economic progress, many infrastructure projects have been taken up — a deep sea port on Myanmar’s western coast; a 160-km highway, which will eventually connect Manipur to Thailand; and plans to establish multiple, crossborder railheads.

The potential for the Northeast aside, Myanmar is the last of a dying breed — a country untouched by modernisation — where there is a potential to invest in everything from a safety pin to oil refineries. International players have flooded the country. Vietnam, Japan, South Korea are all there, but India companies are shy to invest; their biggest complaint is that the Indian government does not back Indian companies.

“There are huge risks in doing business here. There is no banking system, everything is through upfront, down payments of cash. If something goes wrong, we don’t know who to appeal to. We can’t get Indian banks to sign off loans and we don’t know how long this situation will last. If the military takes power and throws us out, what will we do?” asks a senior official of one of the Indian companies with offices in Yangon.

“How do the Japanese do it? The Japanese government makes a deal with the government of Myanmar and then outsources the work to Japanese companies. They are backed by their government, which doesn’t happen in India,” he adds.

Surprisingly, India is not only losing in the financial race, it is also losing its soft power. Given our historical ties, and the fact that India granted asylum to many pro-democracy leaders and that a sizeable population of today’s Burmese intellectuals have studied in India, we should be the recipient of some form of good will. Strangely, there is resentment towards Indians and the reasons are even stranger.

The average Burmese, belonging to the ethnic Buddhist majority, believes that all Indians are Muslims, as many of the early Indian settlers were Bengalis and Muslims. And given the recent resurgence of Buddhist nationalism, there is a sense of animosity. “They were shocked when I made my presentation on India. They could not believe that we have women with fair complexion in India,” says an Indian student studying in Myanmar.

For the person on the streets, India is a powerful country — a functioning democracy that could help and train Myanmar — but at the same time, a dirty, racist, unsafe country of dark Muslims.

The educated Burmese are open to India. They realise the potential for a mutually beneficial relationship. However, in the same breath, they accuse India of slyly changing tracks and supporting the military.

“You have to understand, we don’t have the financial power that the US or Japan have. We have our limitations and we have to function within them. We don’t believe in regime change and try to work with the government of the day,” explains a government official in Myanmar. “At the same time, are we doing all that we could do? Not at all.”

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