Myanmar Government cautious about Chinese funds in CMEC - Burning Issues

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Myanmar Cautious against CMEC

In recent months, Myanmar has demonstrated its resistance to China.
China is trying to deepen its influence on Naypyidaw through the China Myanmar Economic Corridor (CMEC).
Myanmar’s Ministers in the civilian government have equal reservations against the Chinese investment in Myanmar.

China-Myanmar Economic Corridor

Proposed CMEC will start from China’s Yunnan province From Kumming near the China-Myanmar border.
The corridor will head towards Mandalay, Myanmar’s former royal capital on the banks of the Irrawaddy River.
From there, it will extend towards the east and west to Yangon New City and the Kyaukphyu Special Economic Zone.

China’s Double Interest in CMEC

Recently China and Myanmar signed two agreements as a part of CMEC.
One is about construction of Kyaukphyu Deep Sea Port (KDSP).
Second is about setting up a the Special Economic Zone (SEZ) in Kyaukphyu.

Kyaukphyu Deep Sea Port (KDSP)

Chinese are hoping that, Kyaukphyu Deep Sea Port will lower their dependence on the Straits of Malacca.
Strait of Malacca is China’s main trade artery, which links the Indian and the Pacific oceans.
Chinese are desperate to reduce their over-reliance on the strait which is militarily dominated by the US

KDSP

The Kyaukphyu Deep Sea Port is also critical for China’s energy security.
The port houses an oil and gas pipeline, supplying energy to Yunnan.
China is targeting a massive investment of around $100 billion in Myanmar’s economy.

Lesson Drawn from Neighbors

Myanmar’s ministers in civilian government have drawn lessons from experiences of Pakistan, Sri Lanka and Maldives.
In these countries projects funded by China have pushed them into debt trap and increased Beijing’s influence.

Civilian Authorities Cautious about Debt Trap

U Set Aung is the deputy minister of planning and finance and chairman of the Kyaukphyu SEZ Management Committee. He has openly warned against falling into the Chinese “debt trap”. He has stressed that Chinese projects must have commercial viability and benefit Myanmar
The minister has successfully negotiated reduction in the size and cost of the Kyaukphyu project.
The Chinese-funded port is now $1.3 billion in scope from the initial $7.2 billion.

Civilian Authorities Cautious about Debt Trap

Central Bank Deputy Governor

U Bo Bo Nge, the Central Bank deputy governor also nailed the strains in the Beijing- Naypyidaw relationship.
He pointed out that Myanmar had to “go along with China to some extent”, but, in the end, this was a “hated marriage”.

Myanmar can Stand against China

Myanmar government led by de facto leader Aung San Suu Kyi is showing signs of standing up to China.
China has proposed 38 projects under CMEC but Myanmar so far has approved only nine.
Since last year Myanmar has decided that it will only implement the projects that will be mutually beneficial.

Myanmar can Stand against China

Myanmar continues to suspend the construction of Myitsone Dam. The proposed $3.6-billion dam is one of seven hydropower projects planned for the upper reaches of the Irrawaddy River

Myanmar can Stand against China

Work on the project started in 2009.
President U Thein Sein suspended it in 2011 amid widespread public concern over the dam’s social and environmental impacts.
The Chinese were humiliated to learn the news of the suspension.
Myanmar can Stand against China