Burma: Foreign Diplomacy and Domestic Unrest

Stratfor
Strategic Forecasting Inc.
February 14, 2006

Summary

Burmese Prime Minister Gen. Soe Win will pay a state visit to China on Feb. 14-18. The trip comes amid increased pressure from the United States against the government of Burma, and precedes a trip to the Southeast Asian nation by Indian President Avul Jainulabdeen Abdul Kalam in March. For Beijing, Soe Win's visit is as much about relations with Washington and New Delhi as it is about border trade and energy supplies. For Burma, it is about survival.

Analysis

Beijing is preparing for a Feb. 14-18 visit by Burmese Prime Minister Gen. Soe Win. The visit will focus on economic issues, and the two sides will sign bilateral agreements on trade and economics. Soe Win will visit not only Beijing but also economically important Shanghai and Guangdong.

Soe Win's visit comes amid increased pressure on Burma's military regime from the United States and Europe, as Washington even threatens to take Rangoon (now Pyinmanaa, given the recent shift north of Burma's capital) to the U.N. Security Council over its violation of human and political rights. At the same time, New Delhi is competing with Beijing for access to Burma's natural gas resources. For China, the visit is therefore much more about relations with Washington and New Delhi than about economic agreements with Burma. For Burma, on the other hand, the visit is about survival.

Indo-Chinese Competition

China-Burma trade stood at $1.209 billion in 2005, $935 million of which consisted of Chinese exports to Myanmar. China currently imports primarily timber and minerals from its much smaller neighbor to the south. Beijing is, however, seeking additional access to Burma's natural gas reserves, which are estimated at more than 18.5 trillion cubic feet. In December 2005, the Myanmarese energy ministry signed a deal with PetroChina Fuel for access to the natural gas reserves off the coast of Burma, leaving India stunned at losing out on the bid. Nevertheless, New Delhi will continue to pursue natural gas from its northeastern neighbor, and Indian President Abdul Kalam is set to travel to Burma in March, to be followed in April by India's energy minister.

Beijing and New Delhi compete over Burma's attention not only for access to natural gas, timber and mineral resources, but also because of Burma's strategic location on the Andaman Sea. Through ties with Burma, China hopes to gain naval access and air bases far from its shores, giving it influence and the ability to protect its Middle Eastern energy supplies (or to interdict others' energy supplies or trade between the Middle East and East Asia).

For Beijing, Soe Win's visit is intended to help solidify the economic ties between the two nations. It is also aimed at enlarging China's stake in Burma's energy industry and building a strategic relationship with Pyinmanaa. China worried in October 2004 when Burmese Prime Minister Gen. Khin Nyunt was placed under house arrest and the nation's intelligence organization, which he led, became the target of a massive corruption investigation. Khin Nyunt supported closer relations with China, while his rival Gen. Maung Aye, who apparently led the putsch against him, leaned toward India. Maung Aye, however, dealt cautiously with Khin Nyunt, and Burma's government maintained increasingly close ties with Beijing, triggering a collective sigh of relief from China's leaders.

U.S. vs. China

But China's concerns are not only about India. The United States has grown increasingly vocal in its pressure to bring change to the Burmese government, and raised Burma as one of the places Beijing can show its commitment as a global stakeholder by pressing Burma's government for change. By welcoming Burma, Beijing reminds the United States that China deals with "problem" states through dialogue, not threats or military action. This question of China's global role in association with, rather than opposition to, the United States is the subject of much debate in Beijing.

In a recent signed commentary in China's Global Times (reprinted in the People's Daily), Beijing responded to a U.S. offer of conditional cooperation. Washington proposed China demonstrate its role as a stakeholder by using its influence to bring about change in countries the United States considers problematic, like Iran, Burma and North Korea. Beijing countered by saying that it will cooperate, provided the United States recognizes that cooperation is not the same as simply doing Washington's bidding. Beijing added that the United States must accept that China's national and strategic interests, as well as its methods of international relations, will often differ from Washington's.

The Soe Win visit will be a test of this difference. At stake will be an early assessment of whether China and the United States can work toward a mutually acceptable goal -- Burma's reintegration into the global system -- while pursuing divergent and often contradictory paths. In some sense, there is even less coordination than on the North Korea issue, but that is because the stakes are much different. Both Washington and Beijing are concerned about the ramifications of a nuclear North Korea, albeit for different reasons; but in the case of Burma, there is little at stake for Washington, and more strategic considerations for Beijing.

An Embattled Regime

For Burma, however, the visit is of even more significance: It is about the survival of an embattled and internally fracturing regime. Maung Aye's 2004 putsch against Khin Nyunt represented an attempt to solidify power within a single faction inside Burma. The outcome was intended to be a more unified position both on internal issues and international relations, which in turn was supposed to lead to stronger central control and a steady, though slow, move out of the economic crisis and political isolation that has beleaguered Burma.

When Khin Nyunt was put under house arrest, not all those with economic or political ties to his faction were purged, which led to a sense of insecurity for the regime. While the purgers could not simply eliminate all of the economically powerful individuals with ties to Khin Nyunt, neither could they feel comfortable about their own positions as long as he retained economic and social influence.

In August 2005, Burma's leader, Gen. Than Shwe, was rumored toppled in a coup. The rumor later turned out to have been a fabrication by Than Shwe and the government itself as part of an elaborate, astrologically advised scheme to avoid a real coup while the aging general was ill. Than Shwe was reportedly in nearby Singapore for medical treatment at the time of the "coup."

Then came the abrupt decision in November 2005 to move Burma's government from Rangoon to the jungle redoubt of Pyinmanaa -- which will reportedly be referred to in future as Nay Pyi Daw, or Place of the King -- between Yangon and Mandalay. The move was rumored for some time, but came unexpectedly for Burma's neighbors; The Association of Southeast Asian Nations (ASEAN) complained it was never notified. Even Myanmar's civil servants were surprised; though also deemed auspicious by astrologers, the new location was not ready to accommodate the shift in personnel, and bureaucrats are fleeing Burma rather than live under the primitive conditions and arbitrary rule prevailing in Pyinmanaa.

The ruling State Peace and Development Council (SPDC) remains insecure, because of perceived (and real) domestic challenges as well as pressure from the international community, particularly the United States. Numerous local reports and sources suggest the decision to move the capital was in part motivated by the desire to add strategic depth in case the United States decided to invade in a bid to initiate regime change.

A major reason for the move, however, is the internal threat to the regime. The SPDC no longer feels secure in Rangoon, where it cannot keep a close enough eye on all residents.

Commodity prices are rising astronomically, there are frequent anecdotal reports of rice and cooking oil in the markets being replaced with plastic pellets and old industrial oil, and electrical availability is more and more erratic. There have been a few instances of bombings in the capital as well, though it is unclear if they are politically or economically motivated. Pyinmanaa, by contrast, is much more isolated, with a largely handpicked population. The new capital thus offers the regime the ability to exercise much tighter control over the population and the movement of people.

The regime is thus feeling embattled, its international space shrinking as even ASEAN pulls back from justifying or supporting it, and the capital move reflecting internal distrust and a loss of control. In its desperation, the regime is turning to Beijing for protection, support and perhaps even guidance. The visits to Shanghai and Guangdong are therefore intended to reflect a new interest in economic innovation, not unlike the recent trip by North Korean leader Kim Jong Il to the same part of China.

While the visit itself is unlikely to lead to any major breakthrough in the issue of Burma's internal or international relations, it does highlight the growing importance of Burma in broader regional and international relations. This importance extends beyond the traditional conflict between ASEAN and the European Union over Burma's human rights and political freedoms and the geostrategic rivalry and energy competition between China and India into the realm of China-U.S. relations. And all of this is occurring while the SPDC grows less predictable and more unstable.