Myanmar Economic NewsBurma business news
China, Myanmar agree 15-point agreement on the economic corridor
Rangoon - Chinese and Myanmar civil servants signed a Memorandum of Understanding (MoU) on the construction of a China-Myanmar economic corridor, part of China's One Belt One Road Initiative, said U Min Zaw Oo, Executive of the Directorate of Investment and Business Administration (DICA). In February, the MoU on the China-Myanmar economic corridor was concluded at working group stage.
According to DICA, the pipeline will run from the Chinese province of Yunnan to Mandalay in Centrally Myanmar and then eastwards to Yangon and westwards to the Kyaukphyu Special Economic Zone (SEZ). As part of the agreement, government agrees to work together in many areas, among them grassroots infrastructures, building, production, farming, transportation, finance, personnel developments, telecoms and research and technologies, to build the China-Myanmar economic channel, said U Min Zaw Oo.
In order to implement the economic corridor, the relevant departments are obliged to establish working groups and common commissions between the two states so that the departments can prioritise infrastructural developments. "Infrastructural developments [SEZ, railway, roads and industry areas] are implemented by the relevant government departments.
We have to suggest to the government's economic committee the creation of working groups and common committees[Myanmar/Chinese]," said U Min Zaw Oo. Following a visit to Naypyitaw in November 2017, China's Foreign Minister Wang Yi heralded China's suggestion to construct the Myanmar-China economic corridor after a visit by State Councillor Daw Aung San Suu Kyi.
Mr Wang said that the economic lane would encourage investments in China/Myanmar co-operation in the One Belt One Road Initiative for aid for developing countries and Myanmar in the area of economic growth and employment. The One Belt One Road is the external relations projects of President Xi Jinping of China. It was inaugurated in 2013 and is also known as the Silk Road of the 21 st cent.
It is aimed at establishing a road, rail and waterway system connecting at least 70 different nations from China to Europe through Central Asia, the Middle East and Russia and promoting commerce and investments. The One Belt One Road Initiative comprises six economic zones covering Asia, Europe and Africa; the New Eurasia Land Bridge Economic Corridor, China-Mongolia-Russia Economic Corridor, China-Central Asia-West Asia Economic Corridor, China-Indochina Peninsula Economic Corridor, China-Pakistan Economic Corridor and Bangladesh-China-India-Myanmar Economic Corridor, according to a Hong Kong Trade Development Council survey.
Burma has a uniquely geographic location in the Belt and Road Initiative, at the interface between South Asia and Southeast Asia and between the Indian Ocean and the Yunnan in southwest China. Strategically, Myanmar is one of the two points of entry to the Indian Ocean for China.
Daw Aung San Suu Kyi pledged at the summit to intensify co-operation with China on the One Belt One Road Initiative, according to reports in the Chinasmedia. Wang Myanmar urged at a June 28 summit with State Councillor Kyaw Tint Swe in Beijing to push forward the economic corridor deal between China and Myanmar and stressed the need to safeguard peacemaking and stabilization in the frontier area.
Myanmar's new Investment Commission President, Union Minister U Thaung Tun, participated in the third Belt and Road Summit 2018 in Hong Kong from 27 to 29 June. Speaking to the present delegation, he said that "Myanmar is now open for trade under the new leadership of the MIC. Mr U Thaung Tun said to the South China Morning Post that Myanmar wants to give priority to economic co-operation with China, in particular the China-Myanmar Economic Corridor Agreement.
Doubts have been expressed, however, about the debts that will be created in the Kyaukphyu Special Economic Zone in the state of Rakhine in the west of Myanmar. Under a shareholders' arrangement under then President U Thein Sein, China would have an 85 per cent share in the venture, while the Myanmar administration would have a 15 per cent share.
The Kyaukphyu Foundation was, however, profoundly disliked by the people of Myanmar, which prompted the Chinese authorities to re-negotiate the shareholders' agreements. The new Planning and Finance Minister U Soe Win said to the Nikkei Asian Review on Tuesday in an exclusive broadcast that Myanmar will try to decrease the extent of the Kyaukphyu SEZ, and in order not to fall into a sovereign default, Myanmar will try to curtail all unneeded spending.
"Burma cannot avoid the One Belt One Road Initiative, even though we have many opinions about the impending debt," said U Maung Maung Lay, the Union of Myanmar Federation of Chambers of Commerce vice-president. The MoU is only a general treaty, he said, which represents the contribution of both sides to the projects.
The two sides need to debate each other' s plans at ministers' work. He said that even if Myanmar signed the China-Myanmar Economic corridor MoU, it can still deal with the detail and finance of this. The Kyaukphyu is not the only trapping game. The China-Myanmar economic transit deal will involve the construction along the China-Myanmar economic transit route of industry, rail, road and other infrastructural developments for which Myanmar cannot find funding.
Myanmar also warns that both goverments must bear in mind that the China-Myanmar economic corridor extends through areas of tension in the states of Shan, Kachin and Rakhine, so there is a risk that the Palestinians will cause clashes in ethnical areas. What about the Myanmar administration? They are ready for the impact of this agreement," said Daw Khin Khin Kyaw Kyee, senior research fellow at the Institute for Strategy and Policy Myanmar.
The Myanmar administration, she said, must take into account the following questions: What will it do to broker the funding processes, in particular the investments in the individual infrastructural projects? And, if the tunnel runs through areas of tension, will the agencies work with the locals who live along the tunnel? Myanmar's biggest investor is China.