Never before has a road meant so much to external relations: there?s a move to re-open Stilwell Road, which connects India, Myanmar and China, and which passes through Thailand and Cambodia. Hence the feeling of keen anticipation, bordering on euphoria, as Prime Minister Manmohan Singh embarks on a three-day official visit to Myanmar from May 28.
The reluctance of the Myanmar government to open the road with India had to do with the fact that it passes through the country?s Kachin region, home to an age-old insurgency.
Dr Singh?s visit comes at a time when Indo-Myanmar relations are on a rising trajectory after the recent withdrawal of sanctions by nearly all the advanced economies against Myanmar. This vindicates India?s quiet diplomacy, by which it had maintained working relations with the ruling regime in Myanmar and at the same time encouraged them to move towards adopting a democratic system in the country. It was as a part of this quiet diplomacy that India constructed the road to Mandalay and participated in the exploration and exploitation of hydrocarbon resources in Myanmar.
The Prime Minister?s visit, the first by an Indian Prime Minister in a quarter of a century, therefore comes at a most appropriate time and has the prospect of unlocking the huge untapped potential of bilateral trade between the two countries. With the military regime in Myanmar moving slowly but surely towards genuine democracy, this is India?s golden opportunity to leverage its relations with Myanmar and to push hard a more vigorous Look East policy encompassing members of the Association of South East Asian Nations (ASEAN).
Stilwell Road is significant because it could make Myanmar a gateway for India?s trade along the corridor that runs from the Northeast region to Southeast Asia. The road starts at one end from Ledo Road in Assam, passes through Nampong and Pangsau Pass in Arunachal Pradesh through Bhamo and Myitkyina in Kachin State of Myanmar, to Kunming in China?s Yunnan Province. The largest section of this currently dysfunctional route lies in Myanmar (1,033 km), a 61 km stretch traverses India and the remaining 632 km passes through China.
Border trade could indeed get a major boost with the opening of Stilwell Road; Indian automobile components, fruits, grain, vegetables, textiles and cotton yarn could witness strong demand in almost all the Southeast Asian countries. At the same time, Indian traders have shown a keen interest in importing electronic gadgets, synthetic blankets, teak, gold and semi-precious stones.
The list of tradeable items between India and Myanmar was recently expanded from 22 to 40, and it is hoped that demands for further expansion will be met soon. In a 2011 meeting, an agreement was reached between Anand Sharma, India?s Minister for Commerce and U Khin Maung Lay, Chairman of the Myanmar Trade Council, the aim of which was to triple bilateral trade from $1 billion to $3 billion by 2015.
Yet, this is small considering Myanmar?s $4.4 billion trade with China in 2010. India is Myanmar?s fourth-largest source of foreign investment, far behind China, which had a cumulative investment of an estimated $12.3 billion in 2010.
There is huge potential for tourism to be developed between India?s Northeast region and Southeast Asia, but security considerations will need to be kept in mind so that insurgent groups do not take advantage of any relaxation in travel regulations.
However, merely opening Stilwell Road and making it serviceable will not suffice. The road connectivity among the Northeastern states needs considerable improvement. At the same time, if there is to be a substantial step-up in trade with Southeast Asia along the land route, bureaucratic hurdles and corruption will have to be eliminated.
If Myanmar is to become India?s ?gateway? to Southeast Asia, India will have to increase investment in trade, communication and infrastructure in the Northeast region. Myanmar?s deputy foreign minister, Myo Myint, indicated in February 2011 in New Delhi that if India was looking to boost trade with Southeast Asia using Myanmar as a point of entry, it would have to invest in developing Myanmar?s infrastructure.
While China?s side of the Stilwell Road has been developed into a six-lane mountain highway, the Indian side has only progressed from a two-lane all-weather road to a partially-paved one-way tract. It is small wonder then that China is one of Myanmar?s top two trading partners while India comes in at seventh place. This could change if Stilwell is opened to border trade.
The opening of Stilwell Road could cut costs of Chinese exports to India and vice versa by as much as 30%. Currently Sino-Indian trade is worth $74 billion annually; this cost-cutting could result in a new surge in trade.
The reform process in Myanmar is in its nascent stage. Myanmar?s investment, labour and land laws need considerable strengthening; the country has no stock market and maintains a narrow tax base. It is expected that India?s inputs and active help in pushing Myanmar?s reform agenda will be welcomed.
There will be a plethora of opportunities for Indian business; the substantial energy resources of Myanmar are waiting to be harnessed. Strategic interests, however, must be pursued with care because history has shown that big brotherly attitudes can only result in negative consequences. India?s diplomatic skills will indeed be put to test.
All in all, Dr Manmohan Singh?s visit to Myanmar holds immense potential and the time is propitious for a new surge in political, economic and strategic ties. It makes eminent sense for New Delhi to reach out to Myanmar and use its territory and good offices to spread its influence in Singapore, Malaysia, Indonesia, Thailand and the Philippines.
The author is Secretary General, FICCI