By Ashis Biswas
After China, it is the turn of the USA and other powers to establish their strategic and economic presence in Myanmar, Bangladesh and to a .lesser extent,West Bengal.
Over the past two decades, China set the pace in constantly upgrading its economic links with the most resource rich country in the region,Myanmar. In previous columns, details of massive Chinese investments in Myanmar had been given. Before 2010, the Chinese had invested over $1.8 billion in 90 projects in Myanmar. However, they had also sold consumer goods to the Burmese worth $2 billion, over the same period.
This served a two fold purpose for China. First, it established China as the only significant all weather friend for the army-ruled, internationally isolated Myanmar. Second, China put in place crucially important energy linkages with Myanmar near home, against the backdrop of a fierce worldwide scramble to secure oil and gas among major powers. India was left far behind, as China closed lucrative oil and gas deals spread over 30 years with Myanmar, at favourable prices . Worse, for India this became a familiar experience, as China outbid it elsewhere also.
India’s own Look East policy had been announced in 1991. There has been some progress of late in India’s diplomacy in the region, embracing Bangladesh and Myanmar. Several projects were discussed and finalised with Myanmar and after the victory of the Awami league in Bangladesh, with Dhaka.. Indo-Myanmar trade is slated to rise from $2.7 billion now to $7 billion by 2015, as India would help its neighbour build roads, ports, and dams to improve its infrastructure. In Bangladesh, India has written off 20% of its $1 billion loan, is setting up a 1300 megawatt power plant, and helping improve infrastructure by upgrading rail and road links. There have been several bilateral ministerial visits and a fresh momentum in ties with both countries.
But the writing was on the wall: India’s initiative, it seemed had come too late to challenge the Chinese, who used their economic muscle to invest in sums India could not match . Only last week, sections of the Chinese media gloated that India was trying to play catch-up, as it announced infrastructural projects in Myanmar.
As for the US and Europe, which now wants to partner India in its Look East policy, they were not much in the regional picture. The former had vowed to isolate the ruling army junta in Myanmar. For the latter, the region remained a low priority zone. At present, there are signs of a major change in the overall situation in South Asia’s East. The US and Russia, have stepped up their diplomatic efforts and economic activity. The chief gainer has been the US. Beginning with the empowerment of pro-Democracy forces in Myanmar headed by Ms Aung San Suu Kyi, and the Awami league’s victory in Bangladesh, a .large chunk of resource-rich territory has suddenly turned promisingly favourable for Western interests. Under the SLORC regime and ultra Islamic BNP rulers, Myanmar and Bangladesh were palpably hostile to the US and the West. Finally, the defeat of the Communist-led Left Front in West Bengal after long 34 years was the icing on the cake.
Quite apart from the changing political situation in the region which is currently far more receptive than before to the West, long term commercial considerations are emergent as well. Recently, gas and hydro carbon resources had been discovered in West Bengal. It is common knowledge that the state has large deposits of coal. But of late, two additional “finds” seem to have strengthened its economic profile.
First, major reserves of methane bearing coal were found in Birbhum district, prompting the Essar group to take over a big 500 square kilometre block. Gas is already being supplied to Durgapur area. Arrangements are on the carry the supply further to other areas in Bihar and Jharkhand. Second, large shale gas deposits, for the first time in Asia, have been found in the Durgapur region, extending to Dhanbad and nearby areas. Authorities are working out the economic potential of this field.
These discoveries make West Bengal a very attractive investment destination one more. Its coal reserves were known. Now it is found to be energy rich as well, with the further promise of more encouraging discoveries in the coastal Bay region. In terms of water resources again, West Bengal is well placed. There may be grim estimates and forecasts about the water scarcity that may develop in the national Capital Delhi and the high energy consuming Northern states in the coming decades. West Bengal is happily placed in terms of water availability over and underground and its steady quantum of annual rainfall.
Analysts pointed out that at this point of time, it was the proposed deep sea port off West Bengal coast which was of maximum interest to US investors. There were reasons behind such a conclusion.. Before Mrs Clinton’s visit to Kolkata, a US trade and business delegation, including representatives of several shipping lines, had visited the city. They did not meet the Chief Minister. They studied the present capacities of the Kolkata and Haldia ports and were informed of future modernisation schemes. They learnt of the considerable container traffic that runs from Kolkata to Chittagong Ports and vice versa, the route sometimes extending to Singapore.
Initially US shippers were interested in developing facilities in Chittagong port as a trade hub, to facilitate the dispatch of US-made consumer goods and other items within and beyond the region. Now, the Kolkata port was also being thought of as a hub. According to Kolkata-based economists, some US circles favoured the idea of Kolkata as the emerging centre for the local manufacture of FMCG items. The experience of the Frito Lay company operating out of West Bengal has been very positive.
With China asserting its rights in the South China Sea region and approaching similar control in the Bay of Bengal region, the US could not have been expected to sit idle. Its interest in utilizing Chittagong and Kolkata Ports is understandable. Authorities in Dhaka have contradicted reports that the US was about “set up a naval base in Bangladesh,” to bolster its presence in the region, restricted at presence only to Diego Garcia. The US has naval bases in Guam, Japan and Singapore at present. It seems to be making it clear to China that it must respect the rights of Philippines and other countries in the South China Sea, which it must not regard as its own national lake.
Similarly, while it may have moved faster India to establish its naval dominance in South Asia and Bay of Bengal, it need not conclude that other major powers would simply stand by and let it happen.
Intriguingly, the CPI(M) is the only party in India so far to register its sharp disapproval of the ongoing US moves, which it sees as a part of the conspiracy to keep the Seventh Fleet stationed in the region. Strangely, the CPI(M) had never protested the virtual Chinese “takeover” of Myanmar, or its increasing naval build up in the region. CPI(M) leaders always avoided references to the pro-democracy movement in Myanmar and never expressed any public support even for Aung San Suu Kyi, because the “West” supported them ! The CPI(M) never reacted when Chinese analysts proudly asserted that ”China must not think it had no rights to set up military bases abroad. ”China’s” trade routes must be protected and for this a blue water navy in the Indian Ocean and oversea military bases were a must.” The CPI(M) had no reaction when the PLA announced that there was no need for China to regard the Indian Ocean as an ocean for Indians only. Nor had it ever commented on the string of pearls built by China, stretching its naval presence from Pakistan, to Sri Lanka and Thailand.. Worse, the CPI(M) criticises the Congress(I) for playing” a subservient role to US interests by agreeing to joint military exercises “, etc. This, at a time when even the Peoples daily of China admits (April 6, 2012) that India’s Look East policy is not dominated by pro US concerns!
For the moment, it seems closer economic integration, even bonding among countries of South Asia region is only a question of time. Blinkered left leaders must appreciate that quite regardless of their concerns, China, which enthusiastically espouses the cause of the BMIC and other groupings, is an important component in the process of change. (IPA Service)
