Myanmar’s Development needs both ASEAN & China


Authors: Thet Thu Thu Aye and Jamal Ait Laadam

Although Myanmar is one of the least developed countries in the world, it does have a couple of advantages to become an economically middle-level income and politically stable country in Asia. Geographically surrounded by China, India and Indochina, Myanmar is rich in terms of natural resources and has strategic importance as well. In addition, Myanmar won independence even earlier than its neighbors. Yet, during the Cold War, the leadership of Myanmar (then Burma) declared that it did not want to join ASEAN, which was seen as an imperialist pawn given its policy of neutrality. Officially speaking, Myanmar was admitted into ASEAN in 1997, yet the two sides saw each other with suspicion and uncertainties. One of the main reasons is that Myanmar could receive all kinds of its needs including security from China. However, politically since the 1990s, the pro-democracy leader of the country Aung San Suu Kyi wrote an open letter to the leaders of the ASEAN calling on the regional grouping to “nudge Burma towards democracy”. Yet, the reply was cautious as it said that since the ASEAN had advocated a policy of “constructive engagement” with Myanmar, it would do little good now to take a more confrontational approach. Due to this, it is pragmatic not to pursue a policy of exclusion, including economic sanctions simply because it was not likely to achieve the desired end.

But the last three decades of the 20th century witnessed the sea-changes all over the world: China’s start of economic reform, then the end of the Soviet Union as an ideological beacon, and meanwhile increased globalization of trade and FDI. In light of this, many ASEAN member states re-evaluated their interests and oriented the policy tools to meet the new situation. One aspect of this approach was the rekindling of ASEAN’s interest in Burma as a means to fortify its security, economic and political position. With the perception among ASEAN members evolved that China posed more of a threat at a time when the US security presence in East Asia obviously diminishing, this spurred interest in a security arrangement that would come to include China and Myanmar. Equally, by the end of the 1980s, Southeast Asia emerged as one of the most vibrant economic areas in the world. From 1981–90, the gross domestic product (GDP) of the region grew at a steady average of 6.1% per annum, and some countries grew at an even higher rate of 7–10% per annum. Fueling this growth was trade and investment from East Asia, such as Japan, South Korea and later China. Accordingly, ASEAN began to take measures to deepen its integration and engage new markets as its leaders became aware of growing economic competition from other regional trade blocs like North American Free Trade Agreement (NAFTA) and the EU. One aspect of ASEAN’s action to remain competitive has been its enlargement to include all of Southeast Asia, such as Laos, Cambodia and Myanmar included. That means the ASEAN-10 offered a population of about 500 million, an area of 4.5 million square kms and a combined gross national product of US$ 685 billion, a total trade of US$ 720 billion and an ample supply of cheap natural resources. In the long term, Myanmar held the potential of 50 million new consumers for Southeast Asian goods as well as natural resources.

It is true that Myanmar has an abundance of inexpensive natural resources coveted by ASEAN, including lumber, natural gas and minerals. Politically, what had happened in the country also prompted ASEAN’s interest in constructive engagement. Since 1988, Myanmar began to implement far-reaching reforms of its economic system and foreign relations since the military government realized that it would have to seek external assistance to maintain control. As scholar Donald Seekins argued, the open economic policy in Myanmar after 1988 must be understood primarily in power political terms – a device for generating revenues for the military and building a stronger state. One crucial result was the flow of Chinese assistance in terms of military hardware, trade and investment blossomed overnight. In the span of 10 years, trade between Burma and China grew from $15 million to US$ 800 million. One influential aspect of the assistance was increased military training and hardware. From 1991 to 1995, about US$ 740 million of approximately US$ 1 billion in arms purchased by Burma came from China, including quite advanced weapon such as jet-fighter aircrafts, tanks, armored personnel carriers, radar, 3 frigates with missile capability, patrol boats, rocket carriers and small arms. Along with the Chinese hardware came other types of assistance: infrastructure development projects supported by the Chinese including the construction of a road and railways intended to link China’s landlocked hinterland – Yunnan province – with a deep water port on the Andaman. The infrastructure projects also provided easier access for China to the Indian Ocean. Other policy reforms inspired by the political uprising in 1988 included the liberalizing of foreign investment regulations in Burma, so that the regime could earn hard currency to support the country’s ailing economy. FDI flowed in from ASEAN, now that the terms were conducive to investment. One chief interest was the extraction of natural resources such as timber, gems, and offshore oil exploration. Key foreign investors included Thailand, Singapore and Indonesia, along with Big Three from outside ASEAN.

As the region’s largest investor in Myanmar, Singapore’s support for the country’s admission into ASEAN was based upon a different set of concerns. Singapore had little if not nothing interest in human rights issues and no real objections to the Myanmar regime’s treatment of its political opponents, but was concerned about its handling of the country’s economy and particularly its policies towards foreign investment. Through their support of the Myanmar’s status in ASEAN, Singapore hoped to gain influence over the economic thinking of the military leaders and gain greater access to the country’s natural resources and huge market for weapons. Singapore has also long been a major supplier of arms to Burma. Equally, Indonesia’s support had historical roots, given the active role in the 1955 Bandung Conference of Asia-African solidarity. But ultimately it has been geopolitical considerations that tipped the balance of opinion in favor of granting membership to Myanmar. Besides the fear that excluding Myanmar from ASEAN could be viewed as an invitation to China to take a more prominent role in the country, Western condemnation of the regime, culminating in sanctions imposed by the United States, was perceived by some as an attempt to impose alien values on the region. At a time when the supposed superiority of “Asian values” was still a favorite theme of Asian leaders eager to argue that the region’s increasing prosperity was deeply rooted in their countries’ cultures, any attempt by the West to take the moral high ground was met with resentment and derision. For some Asian leaders, particularly Prime Minister Mahathir Mohamad of Malaysia, but to a lesser extent even others with more liberal views, admitting Myanmar was a way for ASEAN to indicate their rejection of Western condescension. The coincidence of these two events – the admission of Burma into ASEAN and the Asian economic crisis – immediately ignited speculation about a possible Western conspiracy. Meanwhile, after 2000 the EU began to adopt a softer approach towards Myanmar in the hope that some fresh overtures between the government and the opposition groups would emerge. Although some EU member states such as the U.K., Sweden and Denmark have continued to maintain their hardline position, they still want to see political openness and are ready to give in to the argument that sanctions against Burma have not worked; therefore it has become necessary to seek a compromise to end the current political deadlock. They urged Myanmar to solve political conflict through dialogue because only through dialogue will there be a national reconciliation that will bring about a stable and prosperous Myanmar.

In sum, the essence of Myanmar’s foreign policy is to develop friendly relations with all the countries of the world, particularly with its neighbors. Therefore it joined ASEAN with a view to promote regional peace, stability and prosperity through cooperation and integration with the other nations of Southeast Asia. While Southeast Asian leaders continue to hope that ASEAN’s constructive engagement policy serves to mitigate Chinese leverage on Myanmar, some are not at all sanguine about the country’s prospects. For example, Singapore’s senior minister Lee Kuan Yew expressed his view that “ASEAN cannot rescue Myanmar even if it wants to, and I have the awful feeling rescuing Burma is beyond the capability of even the USA. The Myanmar’s government may resent its growing dependency on China, but it is likely to remain necessary as long as it finds itself isolated from most of the rest of the international community. Particularly, China is not only a great neighbor but also the most vital economic and security partner, followed by Japan and India. As Myanmar’s leader expects China to act as a defender of its interests and image in the world affairs. In light of this, it is reasonable for Myanmar to work together with both ASEAN and China for mutual benefit in the peace and progress.

Thet Thu Thu Aye
Thet Thu Thu Aye
PhD candidate in International Relations, School of International and Public Affairs (SIPA), Jilin University, China.


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