China-Myanmar Economic Corridor: Challenges and Opportunities

The Belt and Road Initiative is the single largest infrastructure investment scheme in human history. There is a lot of discussion about the BRI all over the world, involving expectations as well as fears.

CMEC

As a direct neighbour to China, Myanmar is right in the focus of the BRI. In September 2018, Myanmar’s government signed a Memorandum of Understanding for creating a China-Myanmar Economic Corridor (CMEC), involving a central road and rail transport infrastructure leading from Southern China’s Yunnan Province through Muse and Mandalay to Kyaukphyu in Myanmar’s Rakhine State where a major port and Special Economic Zone are planned. Gas and oil pipelines are already operational along this route. The CMEC furthermore involves an upgrade of transport connections to Yangon, the establishment of special commercial areas in border areas, as well as cooperation in various fields such as science and education. During the most recent Belt and Road Forum in Beijing in April 2019, Myanmar’s government signed three more cooperation agreements within the CMEC framework.

From China’s perspective, the CMEC provides strategic advantages and connectivity to the Indian Ocean. China sees it as an important tool to forward the economic development of the land-locked Yunnan Province.

Myanmar’s government under State Councillor Aung San Suu Kyi views the CMEC as an important contribution to the country’s development, providing support for the modernization of its basic infrastructure and creating many opportunities – especially so in a time when Western investment, due to the Rakhine crisis, has not come forward as expected.

Still, the government has released preciously little information beyond the most basic details. In Myanmar, the only serious public debate about details of the CMEC investment plans happened in mid-2018, when the costs of the planned Kyaukphyu port - originally billed at more than 7 billion US$ – suddenly became an issue of concern. This led to a renegotiation, with a much smaller version of the project being contracted as its first phase at about 1.3 billion US$.

In order to provide broader information and a platform for public debate, the Heinrich Böll Stiftung’s Yangon office and its partner Good Governance Support Association started the dialogue programme about BRI and the CMEC which are documented in this volume.

The dialogue programme was directed at Members of Parliament of states and regions affected by the CMEC, as well as civil society activists and non-governmental organisations from these areas. Participants came from Kachin, Magwe, Mandalay, Rakhine, Sagaing and Shan states and regions, respectively.

We conducted this dialogue programme on the premise that, while the country clearly needs investment in its infrastructure, it is decisive to strengthen the capacity of actors in Myanmar to negotiate the details of CMEC (and other) investments in the best interests of Myanmar’s people.

In order to assure the best possible outcomes in economic, social and environmental terms, publicly available information and a broad public dialogue are necessary. For the dialogue programme, we decided to bring in expertise from other countries such as Pakistan and Sri Lanka. When it comes to the challenges of the CMEC, these countries find themselves in a similar situation like Myanmar, but for an even longer period and to an even greater extent. Myanmar can and should learn from their experiences.

The CMEC investments planned to come into Myanmar will be important for people and communities directly affected along the corridor – but not only for them. Not all parts of Myanmar will be affected in the same way. But even for areas beyond the immediate corridor, such as Sagaing or Chin or Kachin, it will become relevant in various ways: Labour may come from these regions; economic linkages will be created; and the CMEC may create further connections to neighbouring countries India and Thailand.

Thus, it is important for virtually everyone in Myanmar to be aware what is going on with regard to CMEC planning, in order to be able to make the best out of the opportunities created and to mitigate the risks that come with it. We hope that this volume contributes to this purpose.

You can download the report here