Intro: India and Myanmar together can achieve a lot in service sectors. The creation of social and economic capabilities in Myanamar by Indian entities would generate global leaders.
Prime Minister Narendra Modi's visit to Myanmar has opened our eyes to this neighbour of ours which we seem to have forgotten despite our shared heritage. Indian cultural and civilisational links with this land predates history, though conventionally accepted with Emperor Ashoka's despatch of Buddhist monks to spread news of righteousness. In recent times, Myanmar was locale of much of Netaji Subhash Chandra Bose’s revolutionary activities with the Indian National Army (INA) seeing action against the British during World War II. For various reasons, which can be the subject matter of another article, the two countries drifted apart.
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Gradually over last fifteen years, the leadership of the two countries have tried to navigate closer to each other for important strategic reasons. Of course geography helps! An isolated Myanmar was in danger of becoming too dependent on China, and the Myanmarese leadership wanted to push this back as much as practically possible. The new reform minded leadership conducted elections, and gradually created conditions that led Aung San Suu Kyi and her National League for Democracy (NLD) to participate in bye-elections to parliament. This allowed the West to re-engage with Myanmar, and has led to a surge in foreign investments. The Myanmar government cancelled a multi-billionaire dollar dam project (Myitsone) demonstrating its strategic independence. And India has been slow to move into economically engaging with a country, one of whose leading intellectual titles his book on Myanmar as ‘Where China meets India’, clearly establishing both its history and preference. But fortunately that is changing, and it’s a change that would benefit both countries.
We now rightly see Myanmar as India's gateway to Association of Southeast Asian Nation (ASEAN). We should also see it as a member of a subset of ASEAN, namely Cambodia, Laos, Myanmar and Vietnam (CLMV). These four countries are moving from central planning to a market economy. These are the fastest growing economies of ASEAN, albeit only 9% of ASEAN's Gross Domestic Product (GDP) with 32% of its land area. Primarily agrarian, these countries have a certain amount of macroeconomic stability, vast potential, abundant natural resources and low wage labour force. Other than Vietnam, these are all Less Developing Countries (LDCs), which means access to low cost development assistance and critically to preferential access to developed country markets.
Myanmar with a GDP of $56.8 billion in 2013-14, population of 51.4 million, a few million less than estimated before the census, has a per capita income of $1105, one of the lowest in the Asia-Pacific region. Its economy grew 8.3% in 2013-14, and on track to expand by 8.5% in 2014-15, driven by recovery in agriculture, gas production and investment. According to the World Bank, Myanmar has one of the lowest population densities in the region, fertile lands, significant untapped agricultural potential, and a rich endowment of natural resources. Being geographically located next to India and China, it seems well positioned to resume its traditional role as a regional trading hub and a key supplier of minerals, natural gas and agricultural produce.
Myanmar’s natural resources are plentiful, including natural gas, copper, timber and gemstones. Other resources present are petroleum, tin, antimony, zinc, tungsten, lead, coal, marble, limestone, and hydropower. On the face of it, growth in Myanmar would be driven by investments in power, petroleum and infrastructure. There is huge potential for investments in agro-processing, wood and wood products, construction material, downstream products of petroleum & natural gas like fertilisers etc.
India is an important market for Myanmar (3rd largest export market after China & Thailand) but an insignificant part of supplier of Myanmar goods (7th largest supplier accounting for 3% of Myanmar's global imports). India is also largely absent as a source of FDI. Indian FDI in Myanmar is 360 million, 98% in the petroleum & gas sector. Apart from this, India's presence is negligible.
However, Myanmar suffers from considerable development deficit, with about 38% of the population below the poverty line, and almost 73% of the population with no access to electricity. In fact, power generated is barely enough to fulfil half the present needs. About half the roads are inaccessible in the monsoons. The end-result is that these infrastructure inadequacies act as major impediments to the delivery of basic heath and education services and for economic development.
The reasons for citing these statistics is that when we think about the opportunities and challenges of economic cooperation between our two countries, there is a lot that can be achieved through technical assistance and relatively-low levels of investments across a wide spectrum of fields and activities. Both the Government of India and the Indian private sector can partner Myanmar Government and non-government entities leading to mutual benefit. It would be useful to list some sectors where India should partner Myanmar by sharing its own experience, the local expertise developed and occasional small amounts of government-to-government financial assistance.
At present, the Government of India does bring a few hundred Myanmar Government servants for undergoing short-duration training. India needs to broaden this and give scholarship to 200-300 Myanmarese youths annually to study in Indian universities. A similar initiative where 500 Afghans come to study in Indian universities has led to thousands of Afghans coming to India to study at their cost. India has become an educational and health hub for Afghans; something that should be replicated for Myanmarese.
India's experience in development of our banking sector, particularly its reach and technology base, is something we should share with Myanmar. At present, their banking sector is technologically where we were in the 1980s; the Reserve Bank of India (RBI) and the National Institute of Banking Management (NIBM) can be tasked to take the lead in enabling technological up-gradation to help transition to e-banking, and NIBM can run training programs across the spectrum. Similar approach can be taken in the insurance sector with National Insurance Academy (NIA) in the lead.
The mammoth public-private partnership National e-Governance Programme (NeGO) with its locality-based Citizen Service Centres (CSCs) has allowed government, and increasingly private services to be delivered to the people at large providing a one-stop solution. India has developed and implemented an electronic network across 32 towns in Myanmar, which can be leveraged and built upon to roll out Myanmar's version of NeGP. Incidentally, CSCs can also be an important cutting-edge presence for financial inclusion by playing the role of banking correspondent where bank branches are not a viable option.
Growth of Small and Medium Enterprises (SMEs) is a constraining factor in broad-based and sustainable development. SME is a key to become a part of global supply chain. Their growth is constrained by-lack of access to modern technology; limited access to international markets; lack of managerial skills & training, and lack of finances. It is here that India’s success and gains can be fruitfully utilised by Myanmar. Indian institutions as well as private sector financial intermediation are ideally poised to partner Myanmar in its development journey.
The creation of social and economic capabilities in Myanmar would help generate and sustain economic growth in that country, and will in the process allow Indian entities to participate in its growth story, generate profit from such risky micro investments that are critical to Myanmar’s growth. For Government of India providing and backstopping such interventions would be proof of the seriousness with which it builds friendship with Myanmar.
Shakti Sinha (The writer is a retired Bureaucrat and recently visited Myanmar as a part of India Foundation delegation)