Dipanjan Roy Chaudhury


NEW DELHI: China’s headache continues to multiply in its southern neighbour Myanmar with a series of BRI related infrastructure projects that hopes to give Beijing access to Bay of Bengal facing serious pushback.

After the Yangon mega city project where Beijing’s role has been minimised China funded Myitkyina Economic Development Zone (MEDZ) – part of BRI – in Myanmar’s Kachin state has run into rough weather following reservations from both government and local residents in recent week, ET has reliably gathered.

The MoU for the project was signed in 2018 and MEDZ was scheduled to be ready by 2021. But the project is yet to take off due to serious differences between the Myanmar government and Chinese firm over land acquisition and compensation package, according to experts who follow Myanmar China ties.

It has also been learnt that the clauses in MoU were later tweaked to favour the Chinese developer. China’s strict condition about MEDZ being the sole economic zone in Myanmar’s Kachin state for 70 years has also raised suspicion in the minds of Yangon, ET has learnt.

Tin Oo Yu, chairman of the Kachin parliament’s planning, finance and public accounts committee, told local media recently he has not been informed of the details of the project and is worried locals will lose their land. “China always monopolizes these ventures,” he alleged.

According to the MoU 2018 the Chinese company allotted MEDZ will enjoy highly favourable terms at the expense of the public.

Other investment companies would not be able to operate even if the project was delayed or not implemented, Khine Win, Sandhi Governance Institute’s executive director told a local media outlet recently.

The project may lead to an increase in the illegal cross-border trade of jade and timber, the Institute’s report warns. The company’s reliability and expertise in developing economic zones are questionable, the Sandhi Governance Institute said in a report published June 10.

Sandhi Governance Institute is a local organization that monitors the joint ventures between the government and private groups. The institute wrote the ‘Myitkyina Economic Development Zone’ monitoring report with help from The Center for International Private Enterprise (CIPE).

Recently Myanmar decided to involve international partners in the Chinese funded mega Yangon City Project, a key pillar of the Belt and Road Initiative (BRI) in the Southeast Asian country. The Myanmar government decided to open up the project for other foreign firms besides China Communications Construction Company (CCCC), as it is not keen that one single company dominates the mega project, according to people aware of the matter.

The project has been a source of controversy due to its flood-prone location as well as the CCCC’s involvement, said the people. The Hong Kong-listed, Chinese state-owned company has been accused of corruption relating to development deals in at least 10 countries in Africa and Asia. The CCCC has been accused of being party to a major corruption scandal in Malaysia involving a former PM.

The New Yangon City project is an element of the China-Myanmar Economic Corridor (CMEC), which is part of the BRI. The CMEC will connect Yunnan province in China to Mandalay in central Myanmar, Yangon New City in the south and the Kyaukphyu Special Economic Zone in the west.

While Myanmar has joined the BRI and signed up to certain projects that may give China access to the Bay of Bengal, implementation of projects has been slow. Myanmar remains wary of Chinese debt trap and has reduced Chinese footprints in some projects.

In the past few months Myanmar’s generals have publicly expressed their anguish against the Chinese government citing China’s duplicity in supporting the peace process with insurgent groups while at the same time supplying arms to the insurgent groups in the country. The generals have sought to expand Myanmar’s partnership with India to balance Chinese inroads into the country.

The 1,700 km long CMEC runs from Kunming in China’s Yunnan province to Mandalay in central Myanmar, where it then goes both southward to Yangon and westward to Kyaukphyu. Kyaukphyu, which is CMEC’s maritime gateway, has strategic value given its location on Myanmar’s Bay of Bengal coast.

CMEC will give landlocked Yunnan province with access to the sea and will boost its economy. The CMEC would also strengthen China’s footprints in the Eastern part of the Indian Ocean. It would shorten route for Chinese imports from South Asia, West Asia, and Africa. CMEC is meant to reduce China’s dependence on the Straits of Malacca and the South China Sea and therefore a priority for China.