제주평화연구원

* Source: Odyssey Atlas of the World

  In February this year, I visited Yangon and traveled by car from Mandalay, Myanmar to the Myanmar/China border to Baoshan (保山), China: Mandalay-Lashio-Muse (Myanmar)-Ruili (瑞麗, China)-Baoshan. The ride took 17 hours over two days. I had made a similar field trip along the same route in 2010. This time, I had two goals in mind. First, I planned the trip on land to monitor the regional economic integration between China and Myanmar, and beyond (India). Muse and Ruili is the largest gateway for cross-border trade it covers about 70% of the total trade between the two countries. In addition, I wished to investigate hearsay reports on the large-scale projects that are currently being pursued by China in Myanmar.

Findings

(1) Myanmar-Kunming (昆明) Pipeline Construction in Progress.

  I witnessed many constructions sites, which were very close to the road: some within 100 meters or 1-2 kilometers away from the road I passed. Most of the sites were indeed visible from the road between “Pyin Oo Lin” (located about an hour-drive from Mandalay) to “Lashio” (located about an hour-drive before the border). I encountered repeated processions of trucks carrying construction materials such as large-sized pipes during my journey. In some sections, a pair of pipelines were completed with about 5-10 meters of space lying between them and about a half meter above the ground by my eye measurement. The pipelines have two usages: one for the crude oil imported by China from the Middle East or Africa and one for the gas explored by Korean Daewoo International in the Myanmar waters. According to informed sources, the project will be completed sometime next year, though not within the target date of May, 2013. A Chinese scholar told me that construction on the China side has already been completed.

(2) Mandalay Kunming Railway Construction on Hold.

  Early last year, there was a news report that the government of Myanmar and China signed an agreement to build a railway connecting Myanmar and China along the pipeline route. They also agreed to improve and upgrade the existing road networks between Mandalay and Kunming. However, the new Myanmar government has not yet given a go-ahead signal. According to a rumor circulating in Yangon, China is planning to construct a railway in a space between the two pipelines, but the new Myanmar government is objecting to the idea.

(3) Surge in Cross-border Trade.

  On the way to the border, I was amazed to witness the sharp increase in the cargo-carrying traffic on the road. In my previous trip, I had counted the number of lorry trucks (load capacity of 25 tons) coming from the opposite direction, from the border to Mandalay. The trucks carried heavy loads of international cargo (international cargo is easily recognized since it is fully covered and carried by lorry trucks). The number had been 40 lorry trucks per hour in 2010, but this time it had increased to 92. Surprised to see the surge in cargo traffic, I counted again in the afternoon. The number reached 110, which implies a two to threefold increase in 18 months since July, 2010. Trucks carrying construction materials for the pipeline project are not included in my estimates.

  I was told that 20-30% of shipments from China are diverted to India through Mandalay (of course, officially non-registered). Once the road connection between Mandalay-India is completed in the near future, the China-India trade via Myanmar (trilateral trade) will further expand. If the bilateral/trilateral border trade with China and India continuously grows, the Myanmar government will feel compelled to positively reexamine the aforementioned Mandalay-Kunming railway connection.

(4) “Myitsone Dam” Project in Suspension

  In 2006, China and Myanmar signed an MOU on the hydroelectric power development project constructing seven dams along the Irawaddy River in Kachin State. The project is one of the largest dam construction projects in the world with the estimated total construction cost over USD 16 billion. However, the new Myanmar government announced the suspension of the dam construction in September, 2011 with an excuse that the local residents in the area were opposing the project. The announcement was in stark contrast with the position of the previous military junta, which had been resolute in implementing the project as scheduled. The junta had even sent a military unit to protect the construction sites where militia of the Kachin state used to enjoy self-governing power. The Kachin militia had tried to sabotage the construction and attacked military posts in defiance of the military presence in their area.

  Some Myanmar watchers interpret the government’s decision to suspend the project in two ways: first, the new government wishes to address the public concerns about growing economic dependency on China, and secondly, the position of the new government has become secure enough to be able to rebuff any possible counter-blow by the retired junta.

(5) Democratization Process in Myanmar, “so far so good”

  The democratization process has been successful until now under the leadership of the highly popular President Thein Sein. A wide range of reform and open-door policies have been introduced and received favorably by the public, the opposition parties including Aung San Suu Kyi, and even the military. However, the new government is aware that such a democratization process will not be sustainable without matching economic performance. Moreover, peace accords with local militias are still volatile and many more challenges lie ahead.

Myanmar Overview

  Myanmar is a strategic location for China China needs to cross Myanmar to reach Southwest Asia, the Middle East, and beyond. As such, the US and India will enhance their efforts to check China’s advancement in Myanmar. Under the circumstances, Myanmar will try to make use of these rivalries to promote democracy and economic development. In addition, ASEAN will also utilize the attention and assistance from the powers to promote ASEAN integration programs. Such play-making in this region could be the opening of a Pandora’s box.

* LEE Sun-Jin graduated from Seoul National University in 1975 and joined the Ministry of Foreign Affairs and Trade (MOFAT) of the Republic of Korea the same year. As a distinguished career diplomat, he has served Korea around the world. He is a former Ambassador to Indonesia. At the MOFAT headquarters in Seoul, he also served as a Deputy Foreign Minister for Foreign Policy and International Organizations. He is an author of Southeast Asia’s Response to the Rise of China (in Korean), and has contributed many scholarly writings.