Bloomberg News

Myanmar Seeks ‘Win-Win-Win’ in Balancing U.S.-China Competition

December 13, 2011

Dec. 5 (Bloomberg) -- Myanmar aims to leverage friendly relations with both the U.S. and China to grow one of Asia’s smallest economies and boost incomes in the region, according to an adviser to President Thein Sein.

China welcomes greater U.S. engagement with Myanmar because a wealthier neighbor would lift the economic growth of Yunnan province and other inland areas, Nay Zin Latt, one of nine advisers who meet Thein Sein “frequently,” said in a Dec. 3 interview a day after Secretary of State Hillary Clinton completed the highest-level U.S. visit to Myanmar in 56 years.

“I’m going for a win-win-win situation,” Nay Zinn Latt said in his Yangon office. “China wants us to be more developed. Our country is the gateway to the sea from Yunnan. If we are rich, Yunnan will be rich too. If we are poor, China can only get raw materials.” China’s landlocked southwest province of Yunnan adjoins Myanmar.

During her visit, Clinton offered a path to ease sanctions that have been in place for more than 20 years and have left Myanmar dependent on neighbors China, India and Thailand, which have poured more than $25 billion into ports, power plants, and oil and gas pipelines. Myanmar’s moves to roll back more than five decades of military rule have provided the U.S. an opening to rebuild political and economic ties as President Barack Obama shifts his foreign policy focus to Asia.

“It’s not that Myanmar veered toward China in recent decades,” said Thant Myint-U, a former United Nations official who has written two books on Myanmar. “It’s that Western governments, as part of a democratic regime-change strategy, have imposed sanctions that have left the country entirely open to economic influence from just one direction.”

Dam Opposition

Thein Sein surprised China, the U.S. and his own citizens in September when he suspended a $3.6 billion dam being built with China Power Investment Corp. The “very popular” decision was based on domestic opposition and doesn’t mean other Chinese investments are at risk, Nay Zinn Latt said.

“The dam is big, but it’s one project among hundreds with China and cannot damage relations,” he said. “The key thing is assessment. With every project, we should disclose the advantages and disadvantages. If the advantages are more and it benefits our country, we should do it.”

China National Petroleum Corp. is building oil and gas pipelines across Myanmar, a move that would allow it to access Middle Eastern crude without having to go through the Malacca Straits. China, Hong Kong and Thailand account for more than 70 percent of total investment into Myanmar, compared with less than one percent for the U.S., according to government statistics.

Sanctions

U.S. sanctions ban imports, restrict money transfers, curb aid funding and target jewelry with gemstones originating in Myanmar. Chevron Corp., based in San Ramon, California, is one of the few U.S. companies operating in Myanmar through its 2005 purchase of Unocal Corp., which invested in a gas field and pipeline prior to a 1997 ban on new investment.

Thein Sein has freed hundreds of political prisoners, eased censorship and sought a dialogue with democracy icon Aung San Suu Kyi since taking office in February. Clinton said the release of another 1,000 dissidents still locked up would serve as an “important test” of his commitment to reforms.

Clinton’s offer on Dec. 3 to assist groups providing microcredit, health care and English-language training in Myanmar “is an indication that sanctions will be lifted,” Nay Zinn Latt said. “Imposing sanctions is not so difficult but lifting them takes time.”

China Positive

Chinese Foreign Ministry spokesman Hong Lei said on Dec. 1 his country was developing relations with Myanmar “across the board.” He also said the leadership in Beijing hopes Myanmar and western countries “enhance and improve relations,” a statement Suu Kyi said made her “very pleased.”

China’s comment “shows that we have the support of the whole world,” Suu Kyi said during a joint appearance with Clinton on Dec. 2 at her lakeside Yangon home, where she spent most of the past two decades under house arrest. “I’m particularly pleased because we hope to maintain good, friendly relations with China, our very close neighbor.”

Yunnan province has an economy twice the size of Myanmar, whose 62 million people are among Asia’s poorest. China and India, which account for more than a third of the world population, share more than 3,600 kilometers (2,237 miles) of border with Myanmar.

“We cannot move away from China or India, and we shouldn’t move away,” Nay Zin Latt said. “Our duty is to find the best way of dealing with everyone to benefit the country.”

--Editors: Peter Hirschberg, Tony Jordan

To contact the reporter on this story: Daniel Ten Kate in Yangon at dtenkate@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net


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