All is not smooth on the Silk Road
As Myanmar deepens diplomatic ties with other countries, China’s plan to develop a deepwater port at Kyaukphyu faces roadblocks
A new deepwater port that is planned in Myanmar could provide a big boost to the China-backed Maritime Silk Road (MSR) initiative. Yet, the problems being encountered in setting up the port at Kyaukphyu also show that overcoming ‘soft’ impediments posed by a downturn in China-Myanmar diplomatic ties, issues of human displacement, and environmental protection are equally important to reap the full benefits of this mega project.
The second phase of the project will commence in 2030 and four additional berths will be added in the remaining six years. “The Yangon port will become saturated by 2020 and therefore establishment of the Kyaukphyu port has become urgent,” said Kyaw Hlaing, president and research director of Myanmar Survey Research, in a conversation with The Hindu. Mr. Hlaing pointed out that once the port clocks a handling capacity of 7 million twenty-foot equivalent (TEU) containers, it “will play very significant role in Maritime Silk Road and it will be a game changer for the region, especially for Southwest Provinces of China.”
Inspired by the successes of Shanghai and Guangzhou, the Chinese have emerged as the architects of MSR, which will cover coastal zones that spread from parts of the Pacific and Indian Ocean rims to stretches along the Mediterranean coast.
The project has the potential to generate millions of jobs through development of ports, marine industry, industrial parks, smart cities, as well as tourism and entertainment centres along a vast Eurasian maritime space.
The location of the Kyaukphyu port in the Bay of Bengal is of immense strategic significance, as it can service trade not just with China’s Yunnan province — in itself a gateway to Vietnam and Laos besides Myanmar — but also parts of India. In fact, the natural harbour of Kyaukphyu at one time aided the rice trade between Kolkata and Myanmar.
The port will indeed help China avoid the ‘Malacca trap’ by channelling trade through networks that would bypass the U.S. dominated Malacca straits — the narrow passage between Malaysia and Sumatra that links the Indian and the Pacific Oceans. For China, avoiding the Malacca straits has become particularly urgent, as the U.S. has strengthened its military presence in the Pacific under its ‘Asia Pivot’ doctrine.
The Kyaukphyu deepwater project is part of a larger developmental framework that includes the establishment of a Special Economic Zone (SEZ), with a vision of fostering a ‘mini-Singapore’ in Myanmar’s impoverished Rakhine State.
China is already leveraging the Kyaukphyu area for its energy security, by avoiding Malacca straits for some of its oil and gas shipments. A pipeline that transits oil, mainly sourced from West Asia, is already in place.However, the fate of the rest of the infrastructure that will firm up the Kunming-Kyaukphyu channel of the MSR continues to hang in a balance.
As Myanmar opens out to the rest of the world, including the West, the once-thriving ties between Myanmar and China seem to have taken a hit, obstructing big infrastructure projects. It is now obvious that the Myanmar government has, for the moment, scuttled a proposed rail project that would have linked Kyaukphyu port with border town of Muse, prior to its eventual extension to Kunming. “The MoU for the rail project that was signed in 2011 expired last year. But with the development of the port and the SEZ, connectivity would be required. So, in the future, we may also consider the construction of the rail,” observes Mr. Hlaing.
The Myanmar government’s earlier decision in 2011 to suspend work on the 6,000 megawatt China-funded Myitsone hydropower dam had already signalled the growing dissonance in Sino-Myanmar ties.
Nevertheless, some green shoots have emerged, suggesting that diplomatic relationship between the two countries maybe on the mend. Last month Myanmar authorities, in a goodwill gesture, unexpectedly released 155 Chinese nationals who had been earlier detained for illegal logging. Party-to party-relations between the Communist Party of China (CPC) and Myanmar’s influential National League for Democracy (NLD) party have been activated. They were in fact on the top of the agenda, when the NLD leader and Nobel icon Aung San Suu Kyi visited Beijing in June.
Nevertheless, the Kyaukphyu project may have to overcome environmental and human displacement concerns. Complaints abound about low compensation paid for land acquired for the SEZ. There are also fears that without vocational training, outsiders would benefit more from the jobs that the project would create. These criticisms once again underscore the point that the compelling economic logic of MSR-linked projects, including Kyaukphyu, can prevail only when an integrated approach, respectful of local conditions and premised on a lawful grassroots-level dialogue, is pursued.