Myanmar and Regional Connectivity
Author - Dr.Tin Htoo Naing
1. Introduction -
Many of the economies in South and Southeast Asia depend either on the investment flows from the western economies or the market of those economies or both as the principle engines for rapid economic growth. The Southeast Asian countries are aware of the need to further diversify its engines of growth from the traditional growth engines of the US to Japan and more recently, China, to India as well. Connectivity improvement is the key to such growth. Although a small economy with a population of 60 million and a GDP of US$ 58 billion, Myanmar’s possession of natural resources and its strategically important location give it a significance beyond its economic weight class. Myanmar is the only land bridge between India, China and ASEAN and has a unique opportunity to develop as a regional economic hub. With a potentially vibrant agriculture sector, it can become the food basket of Asia.
Myanmar is further endowed with significant energy and other mineral resources which it can use to support rapid industrial development based on its strategic location and latecomer advantage (Verbiest and Tin, 2011). However, underdeveloped infrastructure and an unfavorable institutional and business environment seriously limit Myanmar’s participation in regional and global production networks. Myanmar needs financial and technical assistance from international agencies to design and implement needed policy reforms to transform growth potential into actual growth and to foster peace-building and democratisation process. Recently, the EU and USA eased restrictions on Myanmar, and the World Bank and IMF have pledged to restart the relations with government. Likewise, Myanmar has to perform well in its duties as ASEAN Chair in 2014, and comply fully with AFTA (the ASEAN Free Trade Area) requirements by 2015. Deeper integration within ASEAN and fast expanding trade with China and India would further be the drivers of rapid growth.
Myanmar is a full member of regional cooperation blocs such as ASEAN, SAARC, GMS, BIMP-EAGA, BIMSTEC, ACMECS, ACD and BCIM. The purpose of these regional groupings is to provide economic and technological cooperation among the members in the areas of security, trade and investment, technology, energy, tourism, transport and communication. Myanmar is of geopolitical importance for regional connectivity with its location at the tri-junction of East Asia, Southeast Asia and South Asia, and a potential central hub for exchange of goods, services and technology. The cross-border connectivity plays a very important role in this scenario. Establishing better connectivity will allow Myanmar and then, the other neighbouring countries, to create possibilities for collaboration between them and to expand economic synergies for development in the region.
2. Economic Corridors -
Economic Corridor is an approach to leverage overall development by integrating infrastructure with other economic opportunities including trade, investment and efforts to address social and other impacts arising from increased connectivity of respective region.
3. India-Myanmar-Thailand Trilateral Highway -
India-Myanmar-Thailand Trilateral Highway (TH) Project is an important development process for trade, transport and the economy of three member countries. The inspiration of India-Myanmar-Thailand project is to enhance trade, investment and tourism by linking the three countries. It is planned to be a 1,360 km long Moreh-Bagan-Mae Sot highway at the estimated cost of US$ 700 million. The intrinsic objective of the road was to fulfill the ambition of creating a ‘link’ between Northeast India and Southeast Asia.
4. Stilwell Road -
China and India have suggested to the Myanmar government that the 1726-kilometre-long Stilwell Road, which could serve as an important road link between the world’s two most populous nations, be reopened.
5. Tiddim-Rhi-Falam Road -
Detailed project report for upgrading of Tiddim-Rhi-Falam Road was carried out by the engineers and surveyors of the Border Road Organisation of India and Public Works of Myanmar in 2006.
6. New Delhi-Hanoi Rail Link -
India is planning New Delhi-Hanoi Rail Link with two possible routes. The main tasks of developing New Delhi-Hanoi Rail Link are: (a) to link India’s Manipur with India’s main railway corridor, and (b) to re-establish and renovate railway networks in Myanmar.
7. Dawei Deep Sea Port -
The Dawei project is being implemented by the Italian-Thai Development Company. It would include a 250 sq. km area with three major components: Deep Sea Port, Industrial Estate (Heavy, Medium and Light Industries), and cross-border road, rail and pipeline links. The total project investment cost of infrastructure and supporting facilities is estimated to be US$ 8.6 billion, and the required investment from potential industrial investors in the industrial estate is estimated to exceed US$ 50 billion (MPA, 2010).
8. Kyauk-phyu Deep Sea Port -
China is developing another project for building a deep-sea port at Kyaukphyu in western Rakhine State. Kyaukphyu deep-sea port and connecting highway projects will shorten the overall distance by thousands of kilometers and will save money and time for China by sending their products to the west and Middle East through Myanmar, instead of passing through the Malacca Strait.
9. Kaladan Multi-Modal Transit Transport Project (KMMTTP) -
The purpose of the project is connecting the landlocked area of Northeast India with the sea via western Myanmar and open up trade routes to Southeast Asia. The Framework Agreement was signed by the Minister of Foreign Affairs of the Union of Myanmar and the Minister of External Affairs of the Republic of India during the goodwill visit of Vice Chairman of the State Peace and Development Council (SPDC) in April 2008 (MPA, 2010).