Business

India’s ‘Discovery’ of Burma Still Waiting for the Train to Leave the Station

By William Boot 5 June 2012

Can India finally overcome years of a stuttering “look east” policy and challenge China’s business dominance in Burma?

New Delhi’s belated high-profile official visit after numerous Western leaders had already trail-blazed to Naypyidaw seems to sum up its lack of success in gaining a firm foothold in Burma.

In spite of the political decision in the 1990s to ditch support for Burmese opposition leader Aung San Suu Kyi in favor of the junta generals, India is today still only ranked as Burma’s 13th largest trading partner, with far smaller countries like Thailand and Singapore managing much more business success.

Much trumpeted Indian transport infrastructure projects in Burma’s southwest and northeast are far from nearing completion, and the Chinese are tapping the Burmese gas and other natural resources which India craves.

Most of the business interaction between India and Burma has been government-led or sponsored, like the redevelopment of the west coast port of Sittwe.

However, Prime Minister Manmohan Singh was accompanied on his Burma visit last week by senior executives from some of India’s big-name conglomerates as part of a delegation from the Confederation of Indian Industry.

They delegation featured leaders from Bharti Enterprises, a multi-billion dollar conglomerate which includes food retailing, property and insurance; vehicle manufacturer Tata Motors; and the Essar Group, which is engaged in steel making, electricity power generation, oil and gas production, shipping, property and large infrastructure construction.

Even so, some of them felt obliged to claim that India is not late knocking on Burma’s business door.

“I don’t think we have missed the bus. This country is just starting to happen,” said Sunil Bharti Mittal, chairman of telecommunications firm Bharti Airtel, which is part of Bharti Enterprises. “There is so much to be done. Every piece of infrastructure [in Burma] needs to be rebuilt and the warm, historic relationship that we enjoy will come in handy for Indian businessmen when they are competing with the rest of the world.

“While the world only discovered Myanmar now, I think India has discovered this place for a long time, more than a century. It’s up to us now, how fast we can move into this country.” Mittal told New Delhi’s Asian News International.

The evidence does not support this view.

India may have “discovered” Burma a long time ago but both political and business relations have been uncertain and sluggish for years.

“Singh sought to make up for 15 years of stunted relations,” said The Hindustan Times, one of India’s oldest and biggest newspapers, which was closely linked with Mahatma Gandhi, whose non-violent protest philosophy is much admired by Suu Kyi.

India has tried with little success during its years of embracing the military junta to expand economically in Burma, or to use Burma as a conduit for trade in other Southeast Asian countries.

Indian state oil firms lost out to China in the bidding for the 200 billion cubic meters of gas in the Shwe offshore field in the Bay of Bengal. A Thai firm has won the concession to develop a major port and industrial complex at Dawei, after India had fumbled with the idea for years, and the much-heralded Trilateral Highway meant to link northeast India with Thailand and beyond via northern Burma is still five years away from the best estimate on completion—even though the idea was conceived by India in 2004.

India’s cross-border trade with Burma has been stifled for years by poor road transport links, railway lines that never get off the drawing board, and stifling bureaucracy over import-export tariffs. A current bilateral trade agreement via the only land border crossing, at Moreh, covers just 40 items.

One of the economy-improving ideas the Singh delegation took to Naypyidaw was a new cross-border bus service between Imphal, capital of the northeast Indian state of Manipur, and Mandalay. Nothing was agreed due the lack of an all-weather road, said The Times of India.

India’s most successful infrastructure development in Burma has been the US $135 million project to modernize the old British-era rice port of Sittwe and link it with a navigable Kaladan River flowing from India’s Mizoram State. One of the main construction firms is the Essar Group, which has said the work should be completed sometime in 2013.

However, this project was agreed and begun before the current political reform in Burma and is seen by analysts and political observers as a trade off by the former Burmese junta for New Delhi’s tacit support. Sittwe will merely be an import-export outlet for India’s isolated northeast. It was conceived after Bangladesh had refused to give India similar access to the Bay of Bengal.

“Why did India decide to switch from supporting pro-democracy activist Aung San Suu Kyi and back Myanmar’s brutal military regime? The answer is not oil, or China. The answer is the [Indian] northeast,” said The Hindustan Times last week.

The New Delhi government faced ethnic insurgencies in its northeast which it could not cope with alone and so sought the help of the Burmese military to choke off cross-border refuge for rebels, said the paper. In return, New Delhi switched support from Suu Kyi to the junta.

“New Delhi will need more than one prime ministerial visit to restore its image among pro-democracy activists in Myanmar,” The Hindustan Times commented. “It is no secret that many in the National League for Democracy… see India’s past policy as opportunistic if not amoral.”

Settlement of ethnic tribal disaffection in both northeast India and northwest Burma will be necessary before that region can move forward economically from the backwater it now is, said the paper.

Meantime, it remains to be seen whether the confidence of the new Confederation of Indian Industry (CII) bears fruit elsewhere.

“Bilateral trade relations are growing [and] through the India-Asean free trade agreement, both countries are hoping to double trade by 2015,” the CII said last week.

But even if that is achieved it would only raise India’s two-way trade to an annual value of $2.6 billion. That’s hardly big stuff for the 11th largest economy in the world with a GDP in 2011 of $1.67 trillion.

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