India Bends Over for Myanmar's Generals

- Sudha Ramachandran*, Asia Times Online, November 5, 2007 -

India has finalized a multi-million dollar project with Myanmar aimed at boosting the economy of its underdeveloped and strife-torn northeast region. Loose ends of the project have been tied up and a deal sealed with the generals, even as sections of the international community call for sanctions against Myanmar's military rulers.

The Kaladan multi-modal transport project envisages connecting India's northeastern region with the Bay of Bengal. It involves constructing roads linking the Indian state of Mizoram with Kaletwa in Myanmar, development of the Kaladan River as a waterway and improving the infrastructure of the port at Sittwe, capital of Myanmar's Arakan province. Sittwe is situated at the point where the Kaladan River empties into the Bay of Bengal. The project will give goods from India's landlocked northeast access to the sea.

The project, which India first proposed in 2003, was agreed to in principle by both sides in February. Its finalizing would not have grabbed as much media attention as it did had it not coincided with the political crisis in Myanmar.

The India-Myanmar handshake over the Kaladan project comes at a time when Myanmar's military rulers are being internationally criticized for their refusal to restore democracy in the country and for their crackdown on ongoing pro-democracy protests. It comes at a time when India's (and China's) economic and military support to Myanmar's generals is being blamed for the junta's survival in the face of international sanctions.

It was at the height of the pro-democracy protests in Myanmar and international criticism of India's support of the generals that India's Petroleum Minister Murli Deora visited Myanmar, pledging an investment of U.S.$150 million in gas exploration. Three agreements between India's state-run Oil and Natural Gas Corporation and its counterpart the Myanmar Oil and Gas Enterprise were signed during the visit, providing for exploration for gas in three deep-water exploration blocks, AD-2, AD-3 and AD-9, off the Arakan coast.

Within weeks of that controversial visit, India has sealed another deal with the generals. Agreement on the Kaladan project was not easy to reach. India has been more keen than Myanmar to clinch the deal. Delhi appears to have bent over backwards to get the generals on board.

Given that India is investing heavily in the project, it wanted to retain control over Sittwe port. This was not acceptable to the generals. India subsequently agreed to hand over the port after its upgrade. Besides, the generals after initially committing to put in $10 million backed out. India has now agreed to extend Myanmar a soft loan of $10 million. Thus the project deal was done on the generals' terms.

India's interest in the Kaladan project stems from latter's potential to transform the economy of its northeastern states. Once completed -- it is expected to take about four years -- the Kaladan project will facilitate the transport of goods by road and river from the landlocked northeastern states -- the Kaladan River runs from Mizoram in India through Myanmar's China and Arakan states to empty into the Bay of Bengal -- to Sittwe port and from there on to markets in Southeast Asia and beyond.

The project is not the only one that India is pursuing with Myanmar with an eye on improving the connectivity of its northeast with Southeast Asian markets. India has constructed a road linking Moreh in the the northeastern state of Manipur with Kalewa in Myanmar. Called the Indo-Myanmar Friendship Road and built at a cost of $30 million, the road will eventually run up to Mandalay.

Then there is the old Stilwell Road, which runs from Assam in India through Myanmar to Yunnan in China. Vast stretches of this World War II road are in abysmal condition or simply don't exist. Efforts are on to repair and renovate the road. India (and China) are hoping that once the entire road is repaired and ready for use, Myanmar will be willing to reopen it. Stilwell Road will open Chinese markets to goods from the northeast.

There is a plan too to link by rail the northeastern state of Manipur with Myanmar. This project will involve construction of the Jiribam-Imphal-Moreh railway line in Manipur and the Tamu-Kalay-Segyi line in Myanmar, as well as repairing Myanmar's existing Segyi-Chaungu Myohaung line.

With the construction of the rail line between India and Myanmar, India will be linked by rail to Southeast Asia. And "since Myanmar is getting a rail link with China, to be completed in around three years, a link with Myanmar could help India reach China and then right up to Russia," Jay Prakash Batra, chairman of both the Indian Railway Board and the International Union of Railways (the Paris-based organization that works for cooperation between different railway systems), said late last year.

Indian officials point out that economic development of the northeast requires greater interaction with neighboring countries such as Myanmar. India's northeastern region shares a 4,500 kilometer international border with Bangladesh, Bhutan, Myanmar and China but connects with the rest of India by a 22-kilometer strip of land called the Siliguri Corridor. Ninety-eight percent of the northeast's borders are with other countries, and only 2% with India. Improving ties with these neighbors is essential. Unlike Bangladesh, Myanmar's rulers have been more willing to trade with India.

Besides, links with Myanmar are essential for India, if Delhi is serious about taking its "Look East" policy forward. Myanmar is, after all, India's land bridge with Southeast Asia.

There are other reasons behind India's courting of the generals. It is concerned with China's immense influence and presence in Myanmar, which has implications for India's security. Another is to get the generals to shut down camps run by anti-India insurgent groups on Myanmar's soil. India realized that its counter-insurgency operations in the northeastern states would not be effective unless it had the support of Myanmar's military rulers.

There is also the question of India's energy security. Myanmar has rich gas reserves, which India is eager to access. An Indian government official told Asia Times Online that the visit of the petroleum minister to Myanmar at the height of the protests was poorly timed but cancelation of the visit would have jeopardized India's already tenuous relations with the generals.

Indian officials, who until recently believed that the decision of Asia's largest democracy to tone down its expression of support to the pro-democracy movement and deal with Myanmar's military rulers had paid off, have in recent months become more cautious in their assessment of the influence they wield over the generals.

The Sino-Indian contest for access to Myanmar's gas reserves has gone in favor of China. A couple of months ago, Myanmar announced that it was withdrawing India's status of "preferential buyer" on the A1 and A3 blocks of its Shwe gas fields off its Arakan coast and said it intended selling gas to China.

"India is unable to match what China is willing to offer the generals -- supply of whatever military equipment they demand and use of the veto in their defense in the Security Council. Over a decade after it began engaging the junta, India is still not as comfortable with the generals as China is," the official pointed out.

The limited gains wooing the generals notwithstanding, India is not about to reverse its policy of doing business with the junta. "It is because India refused to engage the Myanmar generals for decades that the space in that country was left open for China to fill. A pullback now would be a repeat of that blunder," the official said.

Indian officials dismiss Western criticism of India's Myanmar policy. India shares borders with Myanmar; the U.S. and others do not. Their economic investment in Myanmar is limited; hence the pontification and their support for sanctions against Myanmar, the official said.

Besides, if India were to do business only with democracies, it would be hard-pressed to find suitable partners in its neighborhood.

Sudha Ramachandran is an independent journalist/researcher based in Bangalore.