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Myanmar's challenge

Burmese rays


Manmohan Singh will be the first head of government to visit Myanmar after their historic byelections on April 1, which put Aung San Suu Kyi in public office for the first time in 15 years. By itself, this will signal the important space a reformist Myanmar is creating for itself in global geopolitics.

Think about it, the country sits between India and China, on one of the world's most important sea lanes, it's rich in minerals, oil and gas, and is famously fertile. In the past year, the militarydominated government has taken the first steps to move the country out of hibernation. Add to this the fact that the US is returning to the Asia-Pacific and is on the lookout for a new object of affection, and you see why Myanmar could be on track to becoming the latest Asian tiger. But the country needs help.

Myanmar's challenge will be for its people to keep their nerve on their democratisation process while opening up the economy;and keeping a lid on inflation while inviting investment. But most important, they have to keep China from getting spooked and playing spoiler, and they need an expectant world to not only lift sanctions, but equally to give them time to carry out their reforms.

After the elections, US officials announced they will ease restrictions on American investment and financial services in Myanmar. A new ambassador, possibly Derek Mitchell, will be despatched to Naypyidaw soon. And the first official-political delegation from
Myanmar is expected in Washington soon. Japan has already announced resumption of aid and investment into Myanmar. South Korea is being encouraged to enter Myanmar with investments. Singapore, Malaysia and Indonesia are leading the ASEAN brigade, with Malaysia readying to grow palm oil in Myanmar, for instance.

But China remains the big daddy in Myanmar. The real geopolitical game in Myanmar's glasnost is to be able to balance China and the rest. After Sunday's elections, China was the first to call for the world to lift sanctions against Myanmar.

But China is deeply invested in Myanmar's economy, investing in infrastructure, hydropower projects and twin oil-and-gas pipelines, a space China occupied while other countries had to stay out due to the sanctions. Chinese immigration is also changing the demography of northern Myanmar while cheap Chinese goods flood the markets. Myanmar cannot possibly tune out China in a hurry, even if the Chinese bear hug has become somewhat difficult to live with.

The first signs that Myanmar wanted to 'balance' the China relationship was when the military junta asked India to expand its presence in the 1990s. India too was waking up to the Chinese-at-thedoorstep phenomenon. Indian investment into Myanmar has increased substantially since, but India lags behind in its implementation schedules, incurring a geopolitical cost. But in 2011, Myanmar heightened international interest by suspending a $3. 6 billion hydro project in its Myitsone Dam venture in Kachin ethnic territory. The decision stunned China and the world. Recent reports talk of another agitation against China's crucial oil and gas pipelines. The pipeline is crucial for China as a land bridge for energy to travel to its south-western provinces. It would also help China bypass supply options through the Straits of Malacca, which could prove a choke-point in the event of a conflict.

Yet the Myanmar government seems determined to let that through, not least because China would freak. And China can still cause enough mischief in Myanmar's internal politics for Naypyidaw to keep Beijing in good humour. Some of the ethnic groups with which the Myanmar government is working out deals have militias funded by China. China is clearly worried as the west moves into a reforming Myanmar. Some Karen territory and some Kachin territories are still solidly pro-China, leading many to worry about the threat of blowback to reform.

An unsettled China could have a similar effect on a section of hardliners within the ruling establishment, who would have been rattled by the election turnout last Sunday where Suu Kyi's NLD won 43 out of 45 seats.

Therefore it's important for countries like India, Singapore and Japan to be the shepherds of this Myanmar glasnost and help them set a sedate pace. Equally, India needs to get the US and EU to understand that lifting of sanctions is the other side of the coin in this project. There should not be a transactional approach to lifting of the sanctions, because ultimately, the ordinary citizen should feel the value of such a reform process.

Myanmar's reforms are also deeply dependent on two people: Thein Sein and Aung San Suu Kyi. Thein Sein will need to work on the hardliners in his own party to keep pushing the reform agenda. Suu Kyi has the Barack Obama problem - people will expect her to walk on water, and solve all of Myanmar's problems overnight. Managing expectations - and the indifferent health of both leaders - is key as this isolated nation prepares to take flight.

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