OBOR: China’s strategic interests and its potential impacts in Myanmar Khin Khin Kyaw Kyee Lead Researcher ISP-Myanmar Khinkhinkyaw.isp@gmail.com

Content A brief introduction to OBOR The role of Myanmar in OBOR Projects Mapping Expectation Challenges Case Studies

One Belt One Road Chinese President Xi Jinping’s Grand Strategy Initially proposed Silk Road Economic Belt in Kazakhstan in 2013 and Maritime Silk Road in Indonesia Marshall plan- 13,000,000,000 (140 bln)

One Belt One Road 60 countires, 4.4 billion population. 75% of world energy resources. Rejuvenation, attempt to get back to the center of international stage

Six economic corridors China-Mongolia Russia Corridor New Eurasian Land Bridge China Central Asia West Asia Corridor China-Pakistan Corridor Bangladesh-China- India-Myanmar Corridor Indochina peninsula Corridor China Myanmar economic corridor

Chinese version of globalization It covers 60 countries 55% of world GNP 75% of world energy resources

Why OBOR? Domestic realities: need to upgrade the economy, Pollution, narrowing down the development gap, Promoting its advantaged industry. International factors : Energy and resource security, Malacca dilemma, Projecting influence 40% primary1` / 9% secondary/ 50% tertiary

What are the driving factors? Domestic realities: need to upgrade the economy, Pollution, narrowing down the development gap, Promoting its advantaged industry. The share of agri/primary sector is less than 1percent. Even though there is a gradual decrease in the share of agri sector, the it still account for over 30% of the employment. Secondary sector include construction and industry. Industry account for 80%of the secondary industry. (hold 30% of empolyment) Secondary sector only account for 25% of GDP in developed country.

International factors : Energy and resource security, Malacca dilemma, Projecting influence Xi’s ambitious vision : (reviving the history)

Looking at Geopolitical aspect

Components Guiding principles Policy Coordination Infrastructure development Trade facilitation Financial integration People- People engagement Peace and cooperation openness and inclusiveness mutual learning Mutual benefit

The role of Myanmar Western development Project Energy Security (China Myanmar oil and gas pipeline) Two Oceans Strategy

Myanmar’s strategic location

BCIM economic corridor

Indo-China peninsular economic corridor

Projects Mapping

Two Oceans rail link

What does this all mean? OBOR is a very broad development vision and sketch of Central government Thus it is easier to get money and support from the central government if a project is identified to be under the broad umbrella of OBOR. A lot of provincial government, state own operations, private business, academic and scholars are lobbying for business idea to be accepted by the central government.

Major Existing Project

Proposed Project:China Myanmar economic corridor

Expected Opportunities Fair deal Infrastructure development Conflict resolutions Job creations

Case study- CPEC Pakistan – (Balochistan conflict area) Pakistan Authority – the project will contribute to the development of the whole province and address various economic and social problems of Balochistan. Baloch – CPEC will needs thousands of workers and operators. But there will be no employment opportunity for Baloch, instead will being new immigrants to the region. Economic exploitation is the main objective of the CPEC. Baloch are among the economically poorest despite the abundance resources. The CPEC will cause further escalation of this conflict with its accompanying devastations.

Case study 2- Sri Lanka debt trap As western nations accused of Sri Lanka’s former president of grievous human rights abuses during the final stages of 26-year civil war, China extended billions of dollars of loans for new infrastructure projects. Sri Lanka government want to turn Hambantota into a new global shipping hub with the $1.5 billion Chinese loan. But the whole project does not turn out as expected. Sri Lanka government couldn’t repay the debt, and had to hand over the port to the Chinese, as well as to right to built a SEZ near Hambantota to drive some demand for shipping. Sri Lanka owes more than $8billion to state-controlled Chinese firms.

“Among the various developing countries along OBOR routes, there are some with relatively strong governance (such as India, Indonesia, and Vietnam) which will be hard for China to unilaterally dictate to and control. Such countries will most likely not want to accept large numbers of Chinese workers or take on high levels of debt. Other countries along the OBOR (such as Cambodia and Pakistan), however, have relatively weak governance systems. China may be in a better position to dictate terms to these countries,...” (LSE International Development)

Challenges Financial burden and potential debt trap commercial value or strategic value Conflict resolutions or complicating conflict? Environmental and Social impact Jobs for whom? Definition of locals?

China’s interests in Myanmar peace process Before 2015 – To contain the role of the US and other power in its door step and to regain its influence on Myanmar. Under Current government- ??

China’s engagement with NLD government DASSK rapprochement with China Building relations with DASSK 21st century Panglong - DASSK flagship initiative OBOR- Xi’s flagship initiative

After Second 21st Century Panglong China seem to clearly realized that Tatmadaw hold a rigid position and strong leverage. NLD does not have capacity to make it happen. Attaining peace is impossible in the near future. OBOR conditioning on Peace is unrealistic Promoting OBOR for peace It’s basic consideration is not to lose face with any of the stakeholders and to make sure it can implement OBOR having strong opposition

Thank you!!!