China to Provide 1 Billion Yuan Socioeconomic Grant to Myanmar

By Nan Lwin 30 April 2019

YANGON—China will provide a grant of 1 billion yuan (225.39 billion kyats, or approximately US$148 million) for socioeconomic development projects under an economic and technical cooperation agreement signed in Beijing last week.

Myanmar’s Ministry of Foreign Affairs said in a press release on Monday that the 1 billion yuan would be used to support socio-economic development, particularly projects to improve people’s livelihoods, feasibility studies for major projects and humanitarian assistance for IDPs in northern Myanmar.

State Counselor Daw Aung San Suu Kyi recently completed a six-day visit to China to attend the 2nd Belt and Road Forum for International Cooperation at the invitation of Chinese President Xi Jinping. The Belt and Road Initiative (BRI) is Xi’s signature foreign policy project. Unveiled in 2013, it is also known as the Silk Road Economic Belt and the 21st-Century Maritime Silk Road. The project aims to build a network of roads, railroads and shipping lanes linking at least 70 countries from China to Europe passing through Central Asia, the Middle East and Russia, fostering trade and investment.

Myanmar officially became a BRI partner country after signing a 15-point MoU establishing the China-Myanmar Economic Corridor (CMEC) in September. The estimated 1,700-kilometer-long corridor will connect Kunming, the capital of China’s Yunnan province, to Myanmar’s major economic checkpoints—first to Mandalay in central Myanmar, and then east to Yangon and west to the Kyaukphyu Special Economic Zone (SEZ).

More than 5,000 high-level delegates from over 150 countries attended the 2nd BRI Forum, including 37 heads of state and government, and representatives of international organizations.

On Thursday last week, as part of the forum, Myanmar and China signed three agreements: the Agreement on Economic and Technical Cooperation; a Memorandum of Understanding on the China-Myanmar Economic Corridor (CMEC) Cooperation Plan (2019-2030); and a Memorandum of Understanding on the Formulation of the Five-year Development Program for Economic and Trade Cooperation, which aims to enhance cooperation in investment and productivity.

According to the ministry’s statement, the MoU on CMEC will promote cooperation in the following areas in line with the Myanmar Sustainable Development Plan: industry, transportation, energy, agriculture, “digital silk road”, finance, tourism, environmental protection, people-to-people exchanges, science and technology, personnel training, water resources and flood prevention and control.

China has proposed 30 projects under the CMEC, but Myanmar has only approved nine so far. Under the CMEC agreement, the Myanmar government agrees to build three border economic cooperation zones in Shan and Kachin states.

Amid growing public concern that involvement with BRI projects will incur unsustainable debt to China, Daw Aung San Suu Kyi said at the High-Level Meeting Session 1, which was held under the theme “Belt and Road Cooperation: Shaping a Brighter Shared Future,” that all BRI projects “must win the confidence and support of local people”.

Myanmar serves as a land bridge between South Asia and Southeast Asia, in close proximity to large economies such as China, India and ASEAN. It has always been Myanmar’s policy to maintain close and friendly relations with all nations, especially with its neighbors, she said.

She also expressed her belief that “BRI projects selected in line with Myanmar’s national plan and priorities will contribute to its endeavors for the improvement of much needed infrastructure that will not merely enhance domestic connectivity but also improve cross-border connectivity.”

The State Counselor held separate bilateral talks with Xi and Chinese Prime Minister Li Keqiang during the trip. The Foreign Ministry statement said the two sides emphasized promoting bilateral cooperation under the BRI framework; continued provision of assistance to Myanmar’s efforts for peace and national reconciliation; maintaining peace, stability and rule of law along the border areas, including a successful repatriation process in Rakhine State; and continued support to Myanmar at the UN and in other international forums.

China’s recent effort to revive the controversial Myitsone Dam inflamed negative sentiments among the people in Myanmar. It was widely expected that Daw Aung San Suu Kyi would use the Beijing visit to discuss the most controversial China-backed projects in Myanmar including Myitsone. However, the Myanmar President’s Office said the dam was not on the agenda in Beijing, while promising that all developments related to the dam would be handled transparently and that nothing would be done without the public’s knowledge.

Yangon-based ethnic affairs and China analyst U Maung Maung Soe told The Irrawaddy that the small grant comes at a time when local political tensions over Myitsone are on the rise.

“You could say it is just to soothe the people’s feelings [over the Myitsone issue] and to assist border stability. The absence of larger grants at this time means the Myanmar government may need to negotiate [with China on major issues].”

At the 2nd BRI Forum, China signed more than $64 billion in deals with several countries. It repeatedly reassured existing and potential partners that Beijing does not intend to saddle them with unsustainable debts and aimed to benefit all parties involved in the initiative.