Second BRI Forum Roundup—How Myanmar Fares

By Nan Lwin 6 May 2019

YANGON— Despite global concerns about the Belt and Road Initiative (BRI) causing unsustainable debt for countries involved, China managed to attract no less than 40 heads of state and delegates from 150 countries and 90 international organizations from around the world to Beijing for the Second Belt and Road Forum for International Cooperation held in late April.

During the two-day conference, China produced 283 deliverables. Chinese and Myanmar representatives, led by State Counselor Daw Aung San Suu Kyi, agreed to nine deliverables—including three bilateral agreements—which demonstrate the country’s willingness to be involved in BRI projects in the future.

Chinese President Xi Jinping’s signature foreign policy unveiled in 2013, the BRI is a grand vision to revive the historic Silk Road trade route and create a “21st-Century Maritime Silk Road.” Ultimately planning to encompass nearly 70 countries and two-thirds of the world’s population, it would create a network of trade routes from China to Europe passing through Central Asia, the Middle East and Russia.

Myanmar occupies a unique geographical position in the global BRI plan, lying at the junction of South Asia and Southeast Asia, and between the Indian Ocean and southwestern China’s landlocked Yunnan province.

What about Myanmar?

After the Second Belt and Road Forum, China officially released 283 concrete results in six categories, namely initiatives proposed or launched by the Chinese side; bilateral and multilateral documents signed during or immediately before the forum; multilateral cooperation mechanisms under the forum framework; investment projects and project lists; financing projects; and projects by local authorities and enterprises.

Bilateral agreements

Before the BRI forum officially started, China’s top economic planning agency, the National Development and Reform Commission of China (NDRC) signed a bilateral document, a cooperation plan on China-Myanmar Economic Corridor (CMEC) 2019-2030 with the Ministry of Planning and Finance of Myanmar.

In September, a 15-point memorandum of understanding (MOU) for the CMEC was signed. The economic corridor is set to be part of the BRI and aims to construct basic infrastructure connecting key economic centers in Myanmar. Under the MOU, the governments agree to collaborate on projects in a number of sectors including basic infrastructure, construction, manufacturing, agriculture, transport, finance, human resources development, telecommunications, and research and technology.

The MOU outlined the agreement that the CMEC will promote cooperation on industry, transportation, energy, agriculture, a “digital silk road”, finance, tourism, environmental protection, people-to-people exchanges, science and technology, personnel training, water resources and flood prevention and control, according to Myanmar’s Ministry of Foreign Affairs.

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).

The Ministry of Commerce of China signed the MOU on the Formulation of the Five-Year Development Plan for Economic and Trade Cooperation with Myanmar’s Ministry of Investment and Foreign Economic Relations in late April which aims to enhance cooperation in investment and productivity.

Myanmar and China also signed an agreement that outlines the countries’ collaboration on the economy and technology.

Under an economic and technical cooperation agreement, China will provide a grant of 1 billion yuan (225 billion kyats, or US$148 million) for socioeconomic development projects particularly projects to improve people’s livelihoods, feasibility studies for major projects and humanitarian assistance for internally displaced persons in northern Myanmar.

Multilateral cooperation at BRI forum

At the forum, eight countries including Myanmar jointly released a Statement of Intent for Cooperation on Promoting Specification-setting for Pesticide Quality under the Belt and Road Initiative.

As multilateral cooperation mechanisms under the BRI framework, China’s ecology and environment ministry, along with 25 countries (including Myanmar) and international organizations (including the United Nations Environment Programme, the United Nations Industrial Development Organization and the United Nations Economic Commission for Europe) launched the BRI International Green Development Coalition.

The coalition was proposed by Chinese President Xi Jinping at the first Belt and Road Forum in May 2017. He spoke about the importance of promoting new philosophies of green development and enhancing cooperation in environmental protection and building an ecological civilization to achieve the United Nations’ 2030 Agenda for Sustainable Development.

China and the other member countries agree to support green development philosophies; work towards the 2030Agenda for Sustainable Development; push forward green and low-carbon construction, operation and management in infrastructure buildings; emphasize ecological civilization in investment and trade; and enhance cooperation in ecology, environment, biodiversity and addressing climate change, according to the BRI International Green Development Coalition.

According to China’s state media China Daily, Shanghai Cooperation Organization Environmental Information Sharing Platform and Green Supply Chain Platform and another four sub-platforms will support Belt and Road member countries with environmental data such as information on environmental protection laws, regulations, standards, policies, concept, technical exchange and industry cooperation.

China officially announced the establishment of Belt and Road Energy Partnership (BREP) on the first day of the forum and Myanmar agreed to join along with 27 other Asian countries including Laos, Nepal, Pakistan, Mongolia and Cambodia.

According to the documents, BREP aims to promote mutually beneficial energy cooperation, help countries jointly solve problems with energy development and to achieve shared development and prosperity. The BRI energy ministerial conference will be held every year and will initiate training projects for energy ministers and energy cooperation talent training as needed.

China and member countries also released Cooperation Principles and Concrete Actions of the Belt and Road Energy Partnership at the forum. The document said member countries are to enhance policy exchanges, build bilateral and multilateral project cooperation and technology exchange platforms and to promote pragmatic cooperation in the energy field.

Myanmar’s Union Minister for Electricity and Energy U Win Khaing joined the Belt and Road Energy Ministerial Conference in Suzhou, China in October last year.

At the second BRI forum, over 30 countries and regions including Myanmar agreed to establish the International Commercial Dispute Prevention and Settlement Organization (ICDPASO) offered by the China Council for the Promotion of International Trade and China’s Chamber of International Commerce.

Since August, the vice chairperson of the NDRC, Ning Jizhe told the media that China will strengthen legal risk prevention and control, and initiate the establishment of the BRI’s international commercial dispute settlement mechanism and institutions.

Chinese media reported that cross-border commercial disputes in international trade accepted by China’s people’s courts have dramatically increased. China established International Commercial Courts in Shenzhen, Guangdong, and Xi’an, Shaanxi last year to deal with mainly international commercial disputes between equal commercial entities.

Under ICDPASO, China wants to adopt a “trinity” dispute settlement mechanism to mediate international commercial disputes and play a full role in mediation in resolving disputes with the wishes of the parties, members of the International Commercial Expert Committee and international commercial mediation agencies.

Investment projects and project lists

Except for these bilateral and multilateral agreements, Myanmar and China also signed CMEC project harvest lists and handed over the Feasibility Study Report of the Muse-Mandalay Railway.

According to the list of deliverables in the document, the Ministry of Planning and Finance of Myanmar and the NDRC signed a document on the early harvest projects list of the CMEC.

Myanmar’s government has not officially publicized the list.

In December 2018, Mandalay Region Finance and Planning Minister U Myat Thu told The Irrawaddy that China proposed implementing 40 projects, but finally the two sides tentatively agreed to implement nine projects as part of the economic corridor project, including three economic cooperation zones in Kachin and Shan states.

In October, two state-owned companies—the China Railway Group Ltd. and Myanmar Railways—signed an MOU to conduct a feasibility study on the Mandalay Muse railway project, which itself is part of the CMEC, together.

The Mandalay-Muse railway project will be 431 kilometers (268 miles) long and pass through armed conflict areas in Shan State. China Railway Group Ltd. covered the full cost of the study, which will assess the environmental and social impacts of the proposed railway line.

According to the Ministry of Transport and Communications, the survey was carried out on the Naung Cho (Nawnghkio)-Lashio section of the railway between Jan. 6 and April 13 and the Lashio-Muse section between Jan. 15 and April 2.

Muse, which lies on Myanmar’s border near China’s Yunnan province, is the largest trade portal between the two nations. Mandalay is central Myanmar’s commercial center and the country’s second largest city. The railway is expected to become a lifeline for China-Myanmar trade.

Currently, Myanmar is implementing five priority transportation corridors. The Muse-Mandalay railway would be part of the South Transportation Corridor section of the Trans Asian Railway Network (TAR), a project implemented by the United Nations Economic and Social Commission for Asia and the Pacific.

At the forum, China signed deals worth a total of more than $64 billion with several countries. It repeatedly reassured existing and potential partners that Beijing does not intend to saddle them with unsustainable debts and that it aims to benefit all parties involved in the initiative.

China signed 13 bilateral and 16 multilateral agreements with Asian nations, including Myanmar,

Nepal, Pakistan, Bangladesh and Sri Lanka. However, there were no infrastructure projects included in those agreements. This second forum was completely different to the first BRI Forum held two years ago when most of the deals were related to bridges, railway links and roads.