On March 31, a new government was announced by the Burmese Union Council of Parliamentary Representatives to counter the military coup, finally moving Burma’s political confrontation into a long-term one. The UN Security Council also held a closed-door meeting on Myanmar on the same day, and the Secretary-General’s Special Envoy for Myanmar pleaded with the Security Council to take action in response to the worsening crisis in the country. She also warned that the military government’s violent crackdown on pro-democracy demonstrations threatened to erupt into civil war and “massacre. China, however, continues to oppose sanctions and wants a “democratic transition” in military-ruled Burma.
In the event of a military coup in Burma, where the East and the West are torn, various players in the international community are bound to come to the fore. For the United States and other Western countries, Aung San Suu Kyi’s control of power means not only the only remaining Western color revolution in Asia, but also control and influence; for China, political, economic and geopolitical interests; for Russia, it is more about choosing sides in the U.S.-China confrontation in Asia; for ASEAN countries, it is a matter of their own security, and four of them are among the top ten foreign investors in Myanmar. There are economic interests to consider, and they want ASEAN to mediate.
Western concerns in Burma focus on democracy and human rights
Myanmar’s political elites are mostly pro-Western, having been isolated from the West for decades after the military government’s longstanding feud with the U.S. from 1988 to 2010. diplomatically, it focused on improving relations with and gaining support from the West. For more than six years, many Western advisers have been hired to carry out reforms in Myanmar’s political, economic and social spheres, and some of Myanmar’s elites who have been in exile for many years have returned to the country and become advisers to the president and other senior officials or leaders in think tanks, media, NGOs, business, Education and other sectors. After a brief “honeymoon” period and a record high of goodwill toward the West, Myanmar has been at loggerheads with the Rohingya and other issues for more than two years.
When Aung San Suu Kyi was in power, Myanmar was hoping for an “influx of Western investment”, but the reality was not what they had in mind. After the Rohingya crisis, Western companies have invested even less in Myanmar, and Western tourists to the country have dropped significantly. Myanmar has been a major disappointment to the West in terms of economic cooperation. For example, according to the Myanmar Investment and Companies Authority, as of November 2019 (counting from 1988), Myanmar has attracted a total of $82.9 billion in foreign investment, while the West as a whole has invested less in Myanmar: $530 million in total from the United States, $4.55 billion from the United Kingdom (once Myanmar’s colonial suzerainty), $550 million from France, $1.56 billion from the Netherlands, and other Western countries Other Western countries have invested even less in Burma. The reason for this is the West’s dissatisfaction with Myanmar’s democratic human rights situation and investment environment.
Because of the low level of Western investment, Western countries have been slow to announce economic sanctions. The Office of the U.S. Trade Representative announced on March 29 that the United States would suspend “all trade engagement with Burma under the 2013 Trade and Investment Framework Agreement” until a democratically elected government returns to power. The agreement was the U.S.’s response to the Burmese military’s decision to allow Burma to return to democracy. However, bilateral trade between the U.S. and Burma is modest, with only $338 million in U.S. exports of goods to Burma and $1 billion in imports from Burma in 2020. In contrast, Myanmar’s trade with its largest trading partner, China, reaches $12 billion in fiscal year 2019-2020.
China/Singapore/Thailand Concerned About Investment Security
As of December 31, 2019, the top three countries investing in Myanmar were China ($20.93 billion for China and $9.156 billion for Hong Kong), Singapore ($22.3 billion), and Thailand ($11.34 billion), in that order. This is also the largest investment in Myanmar among the 10 ASEAN countries, in addition to Vietnam and Malaysia, two other ASEAN countries that invested $2.165 billion and $1.963 billion in Myanmar, respectively.
In Beijing‘s eyes, Aung San Suu Kyi is friendly to China, but far less reliable than the military government. Myanmar is an important part of China’s “One Belt, One Road” plan, which includes 36 countries. China has envisioned a herringbone “China-Myanmar Economic Corridor” from Kunming, China, all the way to the “Kyaukpyu port” and all the way to Yangon.
China has proposed a total of 38 projects for the herringbone corridor, but the Aung San government has agreed to only nine of them, and has been much stricter in its review of China’s proposed projects than in the past, suggesting that the government has clear concerns about full-scale, larger-scale cooperation with China.
Among them, the Kyaukpyu port project, which Beijing considers very important to China’s security, could bypass the U.S.-controlled Strait of Malacca and break through U.S. control of China’s “offshore oil and gas lifeline,” so that future oil and gas from the Middle East could be disembarked at Kyaukpyu port and transported directly into China via the China-Myanmar oil and gas pipeline. The original plan was to invest $7.3 billion, but after Aung San came to power, he was pressured by the West to drastically reduce the construction plan for Kyaukpyu port, reducing the first phase of investment to only $1.3 billion, reducing the 10 large port berths that China had intended to build to only two, greatly affecting the port’s ability to transport oil and gas. There is also a “Myitsone Hydropower Plant”, one of seven hydropower plants to be built in cooperation with China and Myanmar, with 90 percent of the plant’s power output going to China. Construction of the plant began in December 2009, but was quickly followed by mass protests by the UK-based Kachin National Organization. In 2011, military clashes between Burmese government forces and the Kachin Independence Army forced a halt to the construction of the plant. After Aung San came to power, China repeatedly negotiated the Myitsone hydropower plant, and Aung San made it clear that he did not want to proceed with the plant, but was also unwilling to pay $800 million in compensation as stipulated in the terms of the Sino-Myanmar agreement. For China, therefore, Aung San’s route of multilateral balanced diplomacy is far less convenient than the junta’s pro-China diplomacy.
ASEAN countries want an internal solution to Myanmar’s problems
According to the World Bank, the largest source of foreign investment in Myanmar in 2020 was Singapore, which accounted for 34 percent of total approved investment in the country, with China and Hong Kong coming in second at 26 percent.
Lee Hsien Loong’s attitude has long been provocative, not choosing sides between the United States and China, in fact taking a diplomatic line that is not pro-American. If we want to summarize the political status of this country, it is: Singaporeans currently accept that the main ethnic group of the country is Chinese, identify with the country as a multi-ethnic state (maintaining about 30% of non-Chinese), affirm the main political and economic Culture – the British political system and free market, relying on both the strategic protection of the United States and economic support from China and walking the balance between China and the United States.
Thailand and Malaysia have similar attitudes toward China, taking the route of relying on the United States for national security and China for economic development. So when the Biden administration said it was going to impose new sanctions on Myanmar, according to a BBC report on March 2, it said that for Myanmar, the bulk of foreign investment comes from Asia and that U.S. sanctions would have limited impact. One Yangon businessman, who asked not to be named, said, “There will be a psychological shock, but in terms of actual dollar figures, we have never been dependent on Western investment.”
Vriens & Partners, a consulting firm specializing in government affairs in Southeast Asia, handles projects worth $3 billion to $4 billion for foreign clients investing in Myanmar, mainly in the energy, infrastructure and communications sectors. Already hit by the twin blows of a new crown Epidemic and declining willingness to invest, Burma is now worse than both in terms of political turmoil, said Hans Vriens, the firm’s managing partner. With the Biden Administration threatening to reinstate sanctions against Myanmar, both Western and Japanese companies will hesitate to invest in the country in the future, which could cause related business to shift to China.
For now, the standoff in Myanmar remains intense, with neither side willing to back down. On the NLD side, there are many supporters, nearly 30 Western countries and the United Nations have clearly expressed their support, and the moral card of defending democracy is inspiring, but in reality there are not many Trump cards to play, and the current option is to fund the newly formed government of the NLD. The military government is relying on the barrel of a gun, with China behind it and now Russia, and with China and several ASEAN countries advocating a settlement in accordance with the Myanmar Constitution. The two sides have become a situation of moral superiority versus forceful superiority, with the NLD playing the card of fraud in the general election. Now, in this military coup triggered by Myanmar’s domestic elections, the two sides wrestling on the stage are only the open cards, but the real decisive role is played by the backstage of both sides.
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