Myanmar: Liberalisation

After five decades of political deadlock, Myanmar is finally going for by-elections on April 1, 2012, which will decide its political and economic fate and set the course for its future. With Aung San Suu Kyi standing as a strong contender, the ruling government is leaving no stone unturned to keep the Nobel Peace Prize winner out of power. This election, unlike previous ones, is expected to change the contours of the nation. But sceptics feel that given the foothold of the dictators, the elections may not bring sweeping changes.

To their credit, the ruling regime has already taken steps towards liberalisation and modernisation of the nation in order to persuade the international community to cut on current economic sanctions. The international community is closely watching Myanmar's transition and has welcomed it.

This paradigm shift in Myanmar has provided the nation with much-needed impetus in shaping their international relations. The recent three-day visit of the US Secretary of State, Hillary Clinton (the first in the last five decades), marked a new beginning for the country. With restrictions and sanctions being removed by EU and US, Myanmar’s untapped natural resources (gas, oil and hydropower) would soon be at the centre stage of trade and commerce. To facilitate their trade, China is developing ports along the Burmese coast in the Bay of Bengal.

If one peels down the changes in international relations after the elections, it can be seen that Myanmar’s perceived closeness with US may come as a threat for China-Myanmar relationship. The growing proximity can scuttle the Myanmar-China trade ties which were estimated to be over $3 billion in 2009.

The recent instance of their hampered relationship is the halted Chinese-aided Myitsone hydroelectric dam which has caused huge losses to China Power Investment Corp. According to Energy Bulletin, to counter the US control over the Strait of Malacca, the Chinese government is building a strategic China-Myanmar oil and gas pipeline which will eventually allow China to completely circumvent the strait. However, America may use its clout in the United Nations Security Council and may halt the whole project.

Such friction between two powers may create the so-called 'resource curse' for Myanmar in the near future. The upcoming government would have to play its cards carefully, ensuring it can profit despite being stuck between the devil and the deep sea.