Will the Asean Chair Strain Burma’s Resources?

By William Boot 9 January 2014

Burma’s chairmanship of the Association of Southeast Asian Nations (Asean) begins in earnest next week when it hosts its first major regional meeting—a gathering of foreign ministers from the 10 member countries.

The meeting next Wednesday in Bagan will be the first of hundreds of Asean events, including two leaders’ summits, during Burma’s year-long leadership of the huge trading bloc. And 2014 is a crucial year for the 40-year-old regional grouping, as it moves toward a unified market along the lines of the European Union.

But as Burma itself strives to re-emerge as a viable economy after decades of isolation, how much of a strain will the Asean chairmanship be on a country with limited resources?

“Managing the [Asean] chairmanship will impose extra burdens upon a narrow cohort of able people who are managing the reform process, but who are already grossly overworked. To this extent, the chairmanship could be an unwelcome distraction,” economist and Burma expert Sean Turnell told The Irrawaddy while visiting Rangoon.

“On the other hand, the country is receiving assistance in the role from prior chair countries, which is likely to be helpful both for the matter at hand, and perhaps more broadly in terms of public administration.”

Some in giant neighbor India have welcomed Burma’s prominent role this year in Asean, saying Indian and Burmese businesses will likely benefit from new opportunities.

“Holding of the Asean [leadership] symbolises [Burma’s] re-entry to the global community. At the same time, it gives [Burma] another opportunity to demonstrate that it is committed to democracy and wider integration with the world outside,” Saroj Mohanty, a strategic analyst at the Indo-Asian News Service (IANS), wrote in a commentary last month.

“However, doubts have been raised about the country’s ability to steer a grouping as significant as the Asean in a rapidly changing strategic environment in the region where the US, China, Japan and the EU are intensifying their re-balancing efforts.This has been further compounded by the internal challenges the country faces and its abysmal infrastructure.”

Burma’s failure so far to improve its dilapidated infrastructure continues to affect economic progress, with poor roads and inadequate electricity supply. Hosting major events draws attention to these problems and makes them worse for local people, critics say.

“During the World Economic Forum, [hosted by Burma in 2013] many infrastructure problems were made glaringly obvious,” the Southeast Asia Globe magazine reported.

“For most, travel to the capital, Naypyidaw, involved a long journey by road from [Rangoon] airport. Only a select few were able to land at the capital’s airport and, for those lucky enough to alight there, the 30-minute taxi ride into town often cost more than the flight. Upon arrival, many found a shortage of hotel rooms along with poor internet connections and frequent power cuts.”

Such a negative experience for high-profile business or political visitors clearly does not help Burma’s image, but Turnell, a professor at Macquarie University in Australia and co-editor of the Burma Economic Watch, believes the year-long leadership of Asean will help Burma in more ways than one.

“The chairmanship shines a light on the country in ways that, perhaps, might encourage further reforms and dissuade more negative elements,” he told The Irrawaddy this week.

It will be too late for the Asean year and all the many hundreds of comings and goings between Rangoon and Mandalay and Naypyidaw, but plans at least have been drawn up to greatly improve the railway system.

Ironically, perhaps, it is Japan and not Asean countries stepping forward to help improve Burma’s infrastructure.

The Japan International Cooperation Agency (JICA) is finalizing arrangements with the Ministry of Rail Transportation for a US$200 million loan agreement to finance modernization of the Rangoon-Mandalay line. The refurbishment is aimed at cutting the journey time between the two commercial cities by half.

Burma’s other giant neighbor, China, has so far said little about the 2014 leadership of Asean. This might be a reflection of the allegations that Beijing sought to manipulate the 10-nation bloc’s foreign policies during Cambodia’s 2012 stewardship.

“In recent years, China’s shadow has loomed large over Asean proceedings. In its 2012 stint as chair, Cambodia was heavily criticised for toadying to China over the South China Sea dispute,” reported the Southeast Asia Globe.

“If Beijing tries to overplay its hand and push the [Burma] government too hard on Asean matters, it’s likely that [Burma] will push back,” the Globe quoted Phil Robertson, deputy director of Human Rights Watch’s Asia division, as saying. “[Burma] will likely not repeat Cambodia’s mistake.”

The Asean year will certainly put the international spotlight on Burma, but whether it will bring more business investment into the country will only become clear by the end of 2014.

One foreign company certain to benefit—in prestige terms, at least—from Burma’s stewardship is the upmarket carmaker BMW. The German firm is providing almost 100 luxury limousines to the Naypyidaw government to carry Asean VIPs to and from meetings.