Myanmar has been in the throes of change since 2010 after the first-ever multi-party election was held after two decades. President Thein Sein has surprised all the stakeholders by the speed with which he is transforming the government from an insensitive military dictatorship to a democratic rule of sorts, despite the limitations imposed by the Constitution 2008. As a result Myanmar has become the focus of international attention and even approval.

Geographically located on the eastern borders of India, and on the South and Southeast of China, Myanmar’s strategic value for two most populated nations of the world is immense. This is further enhanced with the impending completion of two infrastructure projects linking Myanmar with China and India. The China-funded Kyaukphyu port project with road links and gas and oil pipelines to Yunnan in China is likely to be completed in the next few months. This would provide China a direct strategic access to the Indian Ocean by passing the choke point at the Malacca Strait. Apart from security implications, it would make Chinese exports to the underexploited South Asian market more competitive, while helping the development of Yunnan province.

Similarly India’s Kaladan multi-modal project providing easier road and river access for India’s troubled northeast to Sittwe port in Myanmar is expected to be completed in May 2014. This link could act as a catalyst for the development of northeastern states of India as it would open a direct route for India’s trade with Myanmar and the rest of ASEAN. In tandem with China’s direct access through Kyaukphyu, Sino-Indian trade will have greater opportunities to flourish. And we can expect China to enlarge its foot print further in South Asia.

China’s increasing belligerence in East and South China seas has become a cause for concern for Japan and its close ally, the US. It threatens to destabilize the US’s dominance in East Asia and longstanding strategic equation with Japan, South Korea and Philippines. China’s contentious territorial claims on the South China Sea have become louder. To contain this development, the US has been trying to enlarge its strategic periphery from Asia-Pacific to Indo-Pacific. As a key geostrategic entity in this region, Myanmar is well on its way to become a focus nation of the US, shedding its out caste status of earlier years.

During the last three decades, China had carefully cultivated Myanmar’s military junta by providing vital economic and political help to soften the crippling effect of international sanctions imposed upon the country after the military refused to hand over power to the democratically elected civilian government in 1990. China chose to ignore the struggle for restoration of democracy by the National League for Democracy (NLD) under the leadership of Ms Aung San Suu Kyi. Although India and ASEAN countries did not observe the sanctions and built their own links with the military regime, it is Chinese influence that predominates in Myanmar, particularly in the armed forces, infrastructure, mining and trade and commerce.

The cosy relationship China had built over the years in Myanmar is under threat now. Sustained international pressures and support to Ms Suu Kyi’s campaign spearheaded by the US ultimately compelled the military regime to come out with the 2008 Constitution which gives limited democracy to the people. China had no option but to go along with the international community on the democratic reforms in keeping with its growing international profile.

Ever since the civilian government came to power and started taking up political, economic and structural reforms process, the US has started rebuilding its relations with Myanmar. As a result the US sanctions are progressively being lifted to facilitate greater opportunities for US business in Myanmar. President Obama’s visit in November 2012 came perhaps as the final recognition of President Thein Sein's earnest effort in the democratic exercise. As increasing US presence in Myanmar is eating into the Chinese sphere of influence, it has become a matter of concern to China.

Chinese media had been lamenting the failure of its policy makers to cultivate the democratic constituency in Myanmar.

Though Chinese are trying to repair their relationship with leaders like Ms Suu Kyi, in the amorphous state of politics in the country it will be quite some time for results to emerge. However, China as a neighbour with enormous economic and military power will continue to enjoy widespread influence in Myanmar for some time to come. However, China would always be on watching with extra attention the US initiatives in Myanmar in the context of regional security and trading regimes. This would become even more important when Myanmar assumes the chairmanship of ASEAN in 2014.

Unlike China, India’s relationship had been more laid back. However, Myanmar's historical cultural and religious experience and shared colonial history with India makes Myanmar more comfortable in dealing with Indians. India’s presence as a friendly and powerful neighbor enables Myanmar to somewhat balance China’s overwhelming influence. This could become a potential game changer as and when India-US strategic relationship grows. Indian efforts to enlarge its economic and strategic relationship are not on the same league as China.

However, given the entrepreneurial spirit of Indians which is second only to the Chinese, we can expect it to grow more rapidly in the coming years. Indian leadership of all political hues is aware of the importance of Myanmar in India’s overall strategic spectrum. And as democracy comes to stay in Myanmar its equation with India is likely to make rapid progress.

Myanmar’s ability to sustain political and economic changes now underway has to be viewed in this overall strategic context.

Political changes

The country owes much of its new-found success to President Thein Sein’s prioritized and action-oriented style of governance. Within two years of coming to power, he has managed to overcome his negative image as a handpicked man of the military junta and a former military officer. Clearly he has impressed not only the people of Myanmar but also Ms Aung San Suu Kyi, who led the struggle against military rule.

Though the reform process still has a long way to go, President Thein Sein appears to have chosen his priorities right. In the last two years in office in the first stage of the reform process, he took up political reforms to produce visible results. Most of the political prisoners have been released, exiles have returned after a number of irksome military-imposed restrictions were removed, and media is freer than ever before.

Thein Sein not only freed Ms Aung San Suu Kyi from house arrest, but persuaded her to bring the NLD back to national political mainstream despite her strong objections to the 2008 Constitution. Electoral laws were amended to enable her and the NLD to contest parliamentary by-elections; now under Ms Suu Kyi the NLD is taking an active part in the parliament as the main opposition party.

In this climate of growing political harmony, Ms Suu Kyi has reciprocated Thein Sein's positive approach. Even in some of the grey areas like ethnic reconciliation, Ms Suu Kyi has chosen to help him than confronting him. Overall, there is a lot of enthusiasm among the people, particularly the youth, who are trying to understand democracy in action. Unless, the government performance matches enthusiasm the danger of the country reverting to army rule and chaos is always there.

The NLD is staging a comeback from two decades of political wilderness. The recently held NLD conclave has shown weaknesses in organisational structure and leadership. The party needs to replace the aging leadership ruling the roost and bring in fresh blood to impart dynamism. Historically the student power had been the catalyst of change in Myanmar.

Though the NLD has planned to bring in younger leadership it may not be an easy task as a popular political party it can become a bandwagon for diverse vested interests. This is the malady that had undermined Myanmar in the early days of independence when political parties gained notoriety rather than fame for schism, power struggle and factionalism.

Fortunately for NLD, Ms Aung San Suu Kyi still remains the only charismatic national leader with grassroots popularity. However, she appears to be a little hesitant in exercising her leadership clout as demonstrated in her reluctant approach to some of the contentious problems like ethnic conflict and attacks on Rohingya people. President Thein Sein appears to have cleverly used her as the cat’s paw by making her to head the Latpadaung Inquiry Commission after public outcry against a copper mine project destroying their environment. Inevitably in the process, she has courted some unpopularity with her recommendation to go ahead with the project as planned by the government.

The Union Solidarity and Development Party (USDP) now in power is backed by the military. Though this background could be a baggage when it is pitted against the NLD in the elections, as a ruling party it has the advantage of being able to dispense favours. Moreover, Thein Sein’s reforms have the potential to improve the quality of life of the people, and win their support to the USDP. Other political parties are yet to establish themselves in the nascent political environment. However, ethnic parties have established constituencies and their support could become useful in jacking up strong coalitions. In this respect the NLD has a better history while USDP as a party in power has a better opportunity to improve the equation with ethnic communities.

So the future of stability in democracy would depend upon the relative ability of Ms Suu Kyi and President Thein to rally the support of smaller political entities. While President Thein has the advantage of power, Ms Suu Kyi has a record of achieving this during the two decades of her political struggle for democracy. However, to achieve this in the present context, perhaps she needs to evolve a proactive strategy to impart greater political dynamism in the NLD.

Potential game changers

Myanmar’s ability to sustain economic and political reforms as planned could be dislocated by two game changers—army and ethnic insurgencies—which had been having antithetical relationship in the history of the country.
The writer, Col. R Hariharan, is a retired Military Intelligence specialist on South Asia, who served as the head of intelligence of the Indian Peace Keeping Force in Sri Lanka 1987-90. He is associated with the South Asia Analysis Group and the Chennai Centre for China Studies.
This article formed the basis for Col. Hariharan’s presentation, “Political and economic change in Myanmar” at the Federation of Indian Export Organisation (FIEO) seminar “Doing Business with Myanmar” at Chennai on March 16, 2013.