China has been increasing their investments in Myanmar over the past few years and has just won two more contracts to do so. However, despite attaining the parliament greenlight to go ahead with the projects, China may face some resistance from the local populace.
Overseas foreign investments from China into Myanmar go a long way back. China has played a big role in developing Myanmar’s Special Economic Zones, cooperating closely to build the Kyaukpyu Special Economic Zone specifically. In fact, in 2009, Myanmar’s Ministry of Energy established a memorandum of understanding with China National Petroleum Corp to jointly build an oil pipeline linking the Maday Island in Kyaukpyu and the Yunnan province in China.
The above mentioned project was designed to transport oil from the Middle East to China through the newly built pipeline in Maday Island and was completed in January of 2015.
A Focus on Special Economic Zones in Myanmar
Regarding future projects, China’s CITIC Group Cooperation has just secured two more contracts to develop the same special economic zone in Myanmar, underlining China’s intent to expand its foothold in a country that is now very much on the radar of Western’s investors.
One of the projects was the construction of a deep sea port on the Bay of Bengal while the other was a project to develop an industrial area. Both of the projects are part of Myanmar’s bigger plan to uplift its regional economy while also increasing China’s portfolio of investments in this key region.
Myanmar has pushed for the development of SEZs in an effort stimulate growth to step up the significance of its economy in the Southeast Asian region. There are now two main areas that are developing – Kyaukpyu SEZ ,which is led by the Chinese, and Thialawa SEZ led by the Japanese.
The Locals Aren’t as Thirlled
However, investment in Southeast Asia does not work so simply. Due to the extreme lack of development when compared to other nations in ASEAN along with a high proportion of the population residing in the rural areas, any construction project is bound to displease several groups of people due to the possibility of having a minority group relocated from their homes.
Despite having parliament approval to build, there is still a lot of opposition from lawmakers and activists who regularly criticized the tender process and how it would have a negative effect on the local people.
One member of the parliament argued passionately for the locals saying that there is great uncertainty surrounding the projects, absolutely no transparency, and that many people will be forced to relocate.
This is not the first time that an investment effort from China has been met with unexpected local resistance and will probably not be the last.
With a huge increase in foreign investments in Myanmar, especially from China, it is interesting to see how Myanmar’s landscape will develop to be more competitive in the region especially with the advent of the ASEAN Economic Community. A large part of the world would indeed be looking at how the new Aung San Suu Kyi government will handle things.