Much has been reported on the recent release of the two Reuters journalists in Myanmar. Whilst the focus has been on issues of press freedom, many commentators have not evaluated the international response to the release. In my view, the response by the likes of Europe, USA, China and Russia, is an indicator of the growing geo-political tensions within the Asian region. More importantly, it highlights the potential that Myanmar has to unify China and Russia’s stance against what they view as the USA’s geo-political and ideological threat.
This Sino-Russia unification is being facilitated by developments along the China Belt Road Initiative (BRI), in which the China Myanmar Economic Corridor is playing an increasing role. As mentioned in earlier articles, Myanmar and the port of Kyauk Phyu, provides China with a solution for energy and trade security by allowing China to bypass the Malacca Straits. It also shifts the previous relations between China, Russia and Myanmar from being military in design to that built around trade.
This is in direct contrast to the US and UN pushing for more sanctions against Myanmar over what they see as human rights violations. Exacerbating this divide, is that the call for increased sanctions comes at a time when Myanmar is further opening its economy through regulatory change.
It is important to provide some context to these claims, particularly how Myanmar’s participation in the BRI presents an opportunity for Russia-China relations. This claim would appear to be contrary to recent reporting of how Sino-Russian relations are good and growing closer, many pointing to the joint military exercises between the two nations. They also report that bilateral trade has grown, reaching an all time high of us$100 billion in 2018. However, an analysis of this trade suggests that the quality in this trade is more favourable to China. Whilst China is Russia’s second largest export market, Russia is only tenth on China’s list. Furthermore, 75% of Russian exports are raw materials with no value add. On the other hand, Chinese exports have in excess of 80% being in value added consumer goods, electronics and machinery.
However, it would appear that Russia is unhappy with China’s Belt Road Initiative (BRI) march into Europe and Central Asia. Supporting this notion is the recent Russian Railway increasing a wide range of tariffs. The notice in effects cuts off all metal raw materials and chemicals freight that they perceive as China dumping onto the European market by applying additional charges onto non-general cargo freight that use Russian rail.
Examples of these wide ranging product listing include the transportation of: household goods, metal goods transported to embassies and foreign permanent missions, dangerous goods (in addition, dangerous goods require customers to provide cargo safety certificates and Russian materials to be confirmed with the Russian Railway can dangerous goods be transported), Goods that need to maintain a constant temperature (food, etc.), Ethanol, Cognac, Raw Tobacco, Tobacco, Wine materials (alcohol and tobacco products through Belarus must be accompanied by security).
It is becoming apparent that whilst Russia has looked for friends as it becomes increasingly isolated, it is still wary of the impact that the BRI is having on its own economy. What the BRI is doing, is escalating the geo-political competition between the two countries. This is particularly bruising to Russia as its own economic woes has prevented it from competing with China. In a sense, Russia’s status is gradually being relegated to a second tier global player as China enters markets previously treated as Russia’s backyard.
Exacerbating the issue is the recently established China Myanmar Economic Corridor (CMEC). This has been done at the expense of investment along the New Eurasian Land Bridge Economic Corridor (NELEC). Particularly noteworthy is Russia participates in the NELEC. Particularly worrying as China looks to secure its energy requirements from the Middle East and East Africa via the Kyauk Phyu – Kunming oil and gas pipelines. At present China relies heavily on Russian oil and gas that does not sit comfortably with the Chinese bureaucracy, with the recent CMEC corridor MOU reducing China’s reliance on Russia.
Further developments include the high-speed rail construction between Kunming and Kyauk Phyu. This 1400 km railroad link is a further crucial strategic economic link that bypasses the Malacca Straits as well as parts of the contested South China Sea.
Furthermore, China has committed to assist with Myanmar’s peace process that promotes national dialogue but is also within Myanmar’s national conditions that allows a sustainable and steady democratic transition.
Russia has also been supportive to Myanmar, particularly in using its veto powers in the UN. It also sees Myanmar as a gateway to ASEAN. Prior to the political changes in 2011, there were extensive technological, training and education exchanges in the 1980s and 1990s, with these recommencing over the last 12 months.
So how can Myanmar influence geo-political alignments within the region? With China having proposed 24 projects under the CMEC corridor, and Myanmar having agreed to accelerate work on nine of them, it could facilitate Russian inclusion in these projects, particularly the Kyauk Phyu Special Economic Zone and the new city project adjacent to Yangon. This multi-lateral involvement would help heal the geo-political wounds opened by Russia increasing rates along the BRI.
In the event of this happening, Myanmar could well act as the catalyst to further cement Sino-Russian relations in their push to further isolate the influence of the USA and the UN in the Asia region.
This may all change should the USA and the UN change its approach to its economic relationship in the strategically located Myanmar.