China port pact in focus as President visits Myanmar

President Ram Nath Kovind’s first visit to Myanmar starting on Monday will be an occasion to build upon the strong bilateral relationship with India’s biggest link with the Asean region. However, with Myanmar signing the Kyaukpyu port project with China in November, officials in India are concerned that this port could become a greater security threat for India than the Gwadar port in Pakistan.

India has committed to execute the Rakhine state development programme, where, among other things, India plans to build 250 housing units for returning Rohingya refugees from Bangladesh. Not many have come back, but the first 50 will be handed over during the president’s visit, said foreign secretary Vijay Gokhale, briefing journalists this week.

But the Kyaukpyu port project keeps Indian security officials awake at night. “We think its a greater potential threat to India than even the Gwadar port,” senior government sources told TOI.

Myanmar and China signed the port deal in November, after Myanmar, worried about debt traps, scaled down the project from $7 billion to $1.3 billion. The project will be executed by a consortium led by China’s Citic Group and Myanmar’s Kyaukpyu Special Economic Zone Management Committee, on a 70:30 investment breakup. Despite this scaled down version, Indian officials monitoring the Chinese project said they detected activities and construction in the area that was not consistent with the stated intent of the project.

Interestingly, India has already built the Sittwe port, also in Myanmar’s Rakhine province which is operational. Japan is helping finance a $3.28 billion economic zone at Thilawa port, south of Yangon. Another Japan-Thailand-Myanmar special economic zone in southeast Dawei is also struggling to be up and running. That means Kyaukpyu’s utility is not really imperative for Myanmar’s development.

Kyaukpyu is the terminus of an oil and gas pipeline, in operation since 2013, an over 700-km pipeline to connect to China’s southwestern Yunnan province, serving over 300 million people. When this is compared to Gwadar, which connects to sparsely populated Xinjiang and Tibet regions, Kyaukpyu’s importance to China is evident.

It gives China an alternative route for energy imports from Middle East that avoids the choke points of Malacca Straits. Connected with this port is China’s sustained efforts to get the Thai government to allow China to deepen and widen the crucial Kra Canal. That is currently problematic, because it could physically separate Thailand’s southern Muslim province from the rest of the country. However, the promise of huge revenues has prevented the Thai government from rejecting the Chinese project entirely. When questioned, the current general-PM of Thailand, Gen Prayut Chan-o-Cha was quoted saying that any decision on Kra Canal development would be taken by an elected government in future.

India finds this position deeply problematic, sources said. “We would have preferred that he had taken a decision on their national interest,” they said. If the Kra Canal is developed, it frees China entirely, becoming a deep water canal for Chinese goods and energy, not to speak of being able to dominate the Andaman Sea, as well as the Bay of Bengal, even the Indian Ocean.

Officials following the growing Chinese footprint concede that Myanmar is not Sri Lanka, and Myanmar authorities have been known to push back against China, notably in 2011 with the Myitsone Dam. But the current government feels deeply threatened by the West as they are caught in the ongoing Rohingya crisis. With western countries threatening sanctions on Myanmar again, including referring some Army generals to the International Criminal Court, NayPyiTaw sees little option but to turn to China for help. India has been trying to sensitise its partner countries but so far there has been little progress.


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