8 - Shan State in Myanmar's Problematic Nation-building and Regional Integration: Conflict and Development

Summary

Myanmar's (formerly Burma) strategic geographic location at the tri-junction of South Asia, Southeast Asia and China has been attracting foreign countries as it is a dynamic crossroads linking Southeast Asia, Western China and the Indian subcontinent and serves as an economic gateway to a colossal potential market of more than two billion consumers as well as a primary gateway to energy supplies and trans-shipment. In the context of energy security, Myanmar's emergence as a significant regional exporter of natural gas including its immense hydropower potential has become a pivotal stake to energy-hungry superpowers such as India and particularly the economic powerhouse, China.

Indeed, Myanmar's geostrategic location is of critical significance for China as it is a “land bridge” for the economic development of its south western provinces, a strategic corridor allowing China to secure access to the Indian Ocean, trans-shipment of oil and source of natural gas. Currently, China is building oil and gas pipelines linking Kunming, the capital of Yunnan Province, to the deep-water port of Kyaukphyu on the Bengal coastline to tap Myanmar's huge gas reserves and to provide an alternative route for its crude oil imports from the Middle East and Africa, reducing shipping time and its dependence on traffic through the Straits of Malacca.

However, Beijing's influence in Myanmar has been challenged since the November 2010 national elections in Myanmar. Following the elections, the junta, the State Peace and Development Council (SPDC) was dissolved by the parliament and a new civil government — mainly composed of newly retired generals and military officers — was formed. The elections aimed to institutionalize the junta's political role and gain domestic and international legitimacy, and respectability with its new civil government. The end of the military rule was perceived as a move to attract foreign investment. At first, the handover of power by the junta was greeted with scepticism, since then, the international community has been seeking engagement and adopting a more flexible approach with the new government after the April 2012 by-elections that marked the return of the main opposition National League for Democracy (NLD) party into the Myanmar political system.