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Business Deals before Sustainable Peace
China’s Belt and Road Initiative (BRI) in Myanmar
03. November 2021
Men at work on construction site in the Irrawaddy Delta in Myanmar | Simon Roughneen | iStockChina’s calculations around the China Myanmar Economic Corridor, and its moves to influence the multi-dimensional civil war in the country have profound implications for the people of Myanmar and the international community more broadly. An exploration of these questions also sheds light on the profound dangers of advancing economic and developmental initiatives without reference to conflict dynamics.
In February, just before the National League for Democracy (NLD) government was to begin a second term, the Myanmar army launched a coup, detained the leaders of the civilian government, and set off a political crisis that has reverberated across Myanmar and the globe. In the aftermath of the coup, over a thousand innocent civilians have been murdered for protesting military rule, the economy has lost upwards of 20% of its value, civil war has dramatically escalated, and the health and education systems have been destroyed. Deeply frustrated by the military’s actions, powerful ethnic armed organizations (EAOs) have scaled
up campaigns for autonomy or even independence.
China’s involvement in Myanmar
The chaos has further spilled across borders, bringing unprecedented challenges to Myanmar’s neighboring countries. This is most evident in the case of China, which has invested hundreds of billions of dollars in a connectivity project which harnesses Myanmar’s economy to that of its Southwestern provinces, dubbed the China – Myanmar Economic Corridor (CMEC). In the years leading up to the coup, China advanced the CMEC scheme with the NLD government by signing a series of state-to-state agreements. With civil war engulfing the entire country, these agreements and hundreds of billions in investments are now at serious risk.
As China moved to protect its commercial interests, a strong call for international stakeholders to become involved in prevention of ongoing atrocities against the Myanmar people generated further concerns for Beijing. Worried about Western states getting involved in its periphery, China swiftly mounted a campaign to prevent what it dubbed international “interference” in the growing crisis. China repeatedly blocked efforts of the United Nations Special Envoy and the UN Security Council to get involved. At the same time, China moved to shape the response of the Association of Southeast Asian Nations (ASEAN), which took months to appoint a Special Envoy to even begin looking for a political solution.
Impacts of China’s economic and political activities in post-coup Myanmar
Despite the fragility which the coup unleashed within Myanmar, Chinese business and government stakeholders continued to advance economic projects with the junta. As a result, a new trade corridor linking China’s Southwest to Yangon was launched in late August. This corridor offers a particularly clear example of the impacts that China’s economic activities have had on the trajectory of violence in the country. While many parts of the China–Myanmar border area are under the control of non-state authorities associated with the ethnic armed organizations, this particular corridor crosses into Myanmar via territory controlled by an ethnic militia group under military’s administrative control. Since 2009, this
area has been referred to as the “powder keg” of northern Myanmar, as the army has used this militia to attack other ethnic armed groups in the China-Myanmar borderlands. Since the coup, local Chinese authorities in the border areas have partnered with the representation of the same local militia to enhance economic ties – a move seen as provocative by many powerful armed groups.
While advancing its economic initiatives, China has also engaged around the political crisis with the junta and the northern EAOs. This political engagement has involved some of China’s leading diplomats, who have largely focused on giving reassurances to the junta and encouraging them to identify a political solution. Such a solution attempts to prioritize protecting Chinese interests in Myanmar and stabilizing the situation in the border area. China has also encouraged the junta to use restraint with respect to the NLD party, while simultaneously holding lower-level exchanges with the National Unity Government and the deposed NLD party, largely focused on gaining support for protecting Chinese assets and interests in country.
Business deals before efforts to build sustainable peace
The focus on maintaining the stability needed for economic projects largely follows the approach that China has taken over the past decade around Myanmar’s now defunct peace process: placing business deals before efforts to build sustainable peace. Since in 2013, when China appointed its first envoy for Asia affairs, the Envoy has focused on Myanmar, convening the various parties to the conflict in the north and observing the formal peace process between the government and signatories to a National Ceasefire Accord. Yet these efforts played second fiddle to China’s move to advance economic cooperation with first the military and later the NLD government. As a result, ethnic armed organizations constantly worry about concerns from local ethnic constituencies impacted by economic deals being advanced between China and the state authorities – an issue which state authorities would never entertain in the formal peace process. The same types of mistakes are now being repeated following the coup, as Chinese business and government actors rush to push forward with economic projects even as the Myanmar state disintegrates.
The path to peace in Myanmar: foreign involvement and conflict sensitivity
Given the low priority China gives to prevention of violent conflict, and its desire to prioritize economic initiatives, it is absolutely crucial that Western capitals dramatically scale up their involvement in addressing the crisis. Doing so may involve designating high level officials, envoys or other senior political figures who can become involved in sustained accompaniment and engagement in the region, especially vis-à-vis ASEAN states, India, Bangladesh and of course China. Key should be encouraging China to ensure that its business stakeholders avoid further moves with the junta, which will only result in even greater escalation of conflict in country. Further, China and Chinese companies should be carefully analyzing how their projects might potentially influence local conflict dynamics, and even end up resulting in local armed actors targeting these projects.
What is clear is that Myanmar is not going to “develop” its way out of the current scenario of state decay and anarchy that is emerging in country. Instead, it needs the international community to come together and make the very difficult determination to support the many armed and non-armed actors resisting military rule to build a new government for the future. China might further follow its own guidance regarding investments in conflict zones and stop all efforts to advance new business with the junta. Over the short term, this may be painful for Chinese – and any international business in Myanmar, but over the longer term represents the only pathway to the emergence of a sustainable business environment.