The coming months may see the government and Suu Kyi's NLD collaborate further to improve governance, and build on the changes introduced on labour laws, media regulations and opening of the economy.

During the past year, starting from the elections in November 2010 and ending with the visit of United States Secretary of State Hillary Clinton in early December 2011, Myanmar has undertaken an exciting journey. Developments relating to its internal politics, external relations and regional equations have received close scrutiny. As optimists and pessimists debate the nature and direction of change, a realistic appraisal is advisable in order to appreciate where Myanmar is heading now.

The past month witnessed significant changes. Ms Clinton's dialogue with President Thein Sein followed by the more gripping visual coverage of her interaction with Aung San Suu Kyi demonstrated that the reform process had gained traction, which the international community is now ready to encourage boldly. Just five months ago, when External Affairs Minister S.M. Krishna visited Myanmar, he was not in a position to meet Ms Suu Kyi.

Ms Clinton's visit was preceded by Asean's decision to allow Myanmar to serve as its Chair in 2014. President Barack Obama had a telephonic conversation with Ms Suu Kyi on his way from Australia to Bali to clear the new U.S. initiative. Separately, the Myanmar government amended the electoral law, paving the way for the participation of the National League for Democracy (NLD) in the forthcoming parliamentary by-elections. Ms Suu Kyi will soon adorn Parliament as the nation's conscience and voice, thus becoming a significant part of the political system that she is determined to reform further from within.

Negotiations in progress

It is evident that complex negotiations have been under way. Within the country, negotiating partners are the Tatmadaw, that is, the military, the government, Ms Suu Kyi and the NLD, and ethnic groups. Outsiders engaged actively in the negotiations are the U.S., the European Union, Asean and the United Nations, whereas China and India display only limited interest.

In Myanmar, reformers in the military and the government have managed to convince the conservatives that the country's — and the military's — interests would be best served by backing the reforms. Both camps agree that the process should be gradual and controlled, and it should unfold within certain red markers. Governance can be liberalised as long as there is no witch-hunt for the previous military leaders, nor an immediate campaign to reduce the military's role as envisaged by the Constitution. Besides, the military's stake in order, stability, and unity of the country will have to be respected. The government wants Ms Suu Kyi to help it to progressively reduce the country's international isolation. It won its first major reward when Ms Suu Kyi advised Mr. Obama to upgrade engagement with Myanmar. Ms Clinton's visit and the decision by Asean resulted from this collaboration.

The NLD now shows considerable resilience, shedding its ideological inflexibility. Responding to critics, Ms Suu Kyi has asserted that participation in elections will not lower her “dignity;” rather, it will enhance her credentials as a key political leader. As to the release of political prisoners, it is no longer an intractable issue as both sides are nearly on the same page. The government has conveyed that political prisoners can be released — but gradually and in batches so that their release “does not rock the boat.” As regards a dialogue between ethnic groups and the government, it is largely on the back burner as the issues are far more complicated. The priority seems to be to secure more progress towards inclusive democracy before concrete steps for ethnic reconciliation can be contemplated.

International dimensions

Among the western countries, the leadership for handling the Myanmar dossier has now been assumed by the U.S., thus indicating that the United Kingdom is no longer the point man. Even within the EU, Germany is guiding to give it a more pragmatic orientation. As a sequel to the partial modification of its restrictive measures, the EU has now launched “a substantial review” of its policy.

Within the U.S., the Administration is becoming convinced that Myanmar deserves more incentives — that is, beyond Ms Clinton's visit and the Asean Chair. But Mr. Obama has a daunting task of convincing Congress. Assuring help from the World Bank and the IMF to study the Myanmar economy and suggest reform measures is the easy part. The key challenge relates to the lifting of sanctions but it may not happen soon. The State Department will have to pilot this carefully. Myanmar is well aware of the difficulties ahead; Nay Zin Latt, political advisor to President Thein Sein, stated that imposing sanctions was easy but lifting them would be difficult. Even if Ms Suu Kyi announced her support for the lifting of the sanctions “today,” they would not be lifted “tomorrow.” He added: “But her voice is important. It is her leverage.” The U.S. has its own demands on the Thein Sein government but some of them could merely be negotiating chips.

In stepping up its engagement, the U.S. is guided by the imperative to re-calibrate its presence in the Asia-Pacific region and by its assessment of threat perceptions relating to China. Americans are now listening to many Asians' plea that the isolation imposed on Myanmar drove it to China's lap. Curiously, even Myanmar officials are now using this argument to convince the U.S. that Myanmar's search for additional options deserves support. Another, longer term, consideration for the U.S. is the lure of the Myanmar market and natural resources.

If there are no mishaps, the coming months may see the government and the NLD collaborating further to improve governance, building on the changes already introduced relating to labour laws, media regulations and opening of the economy. This should encourage the U.S. and the EU to start lifting the sanctions in phases. As that happens, investments from the West could start trickling in. Vietnam, once a sworn enemy of the U.S., is now a major destination for American and European investment. The Myanmar government seems to have set its sights on a similar outcome in the medium run. As to its equation with China, it will not remain static, evolving in the direction in which Myanmar enjoys greater policy space for balancing relations with key stakeholders.

India's choice

With important developments having a bearing on regional power balance taking place along with momentous changes in Myanmar, India needs to re-craft its Myanmar policy with a judicious mixture of pragmatism and boldness. First, it should no longer be content with just a focus on managing development cooperation projects; it must enhance the political quotient of the relationship. It is time to articulate our interest in crafting ‘a strategic relationship' with Myanmar. Second, the External Affairs Minister needs help from his ministerial colleagues. His June visit should be followed by the visits of Minster of Commerce and Industry, the Home Minister and the Defence Minister as economic, security and defence cooperation have much potential for development. Third, other measures need to be implemented such as accelerating Business-to-Business engagement and dialogue between the strategic communities.

Finally, it is noteworthy that 2012-2014 will be of transformational importance for India's ‘Look East Policy.' This period will be marked by India hosting the commemorative India-Asean Summit, and Myanmar serving as the Asean Chair. Prime Minister Manmohan Singh should consider visiting Myanmar soon. Rajiv Gandhi went there in 1987. The spectacle of India's Prime Minster meeting President Thein Sein as well as Aung San Suu Kyi and paying obeisance at Shwedagon Pagoda, will lift not only the India-Myanmar relations but also India-Asean ties to new heights.

(A former Indian ambassador to Myanmar, the author is a visiting senior research fellow at the Institute of Southeast Asian Studies, Singapore.)

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