Mizzima News | Tuesday, 19 August 2008
Junta benefits from regional economic tug-of-war
India and ASEAN have announced that talks on services and investment are set to commence next month ahead of a comprehensive free trade agreement (FTA) to be signed later this year, according to Indian officials.
This latest step in deepening regional economic integration, with an Indian-ASEAN FTA hopefully to be finalized this December at ASEAN’s Bangkok summit, is further evidence of an ever expanding matrix of competing regional economic interests, of which Burma finds itself at the heart of.
ASEAN, India and China are all working toward an expanded and interconnected web of economic relations - bilateral as well as multilateral - to be set in place by the first half of the next decade.
The agreement to undertake talks on services and investment between India and ASEAN comes two months after the signing of four additional economic pacts between the two entities, including the Bilateral Investment Promotion Agreement, and indicates India has little desire to stray from its Look East Policy.
China, India’s regional hegemonic neighbor and rival, had previously reached an understanding with ASEAN over the services industry in January of 2007. China and ASEAN hope to have the world’s largest FTA in working order by 2010 - though ASEAN’s less developed countries, including Burma, are not slated to join till two years later.
While India and China continue to compete for favoritism with ASEAN as a bloc, they are also vying for supremacy in the arena of bilateral relations with members of the ten nation bloc.
Both India and China are pursuing plans to construct infrastructure linking India’s northeast and China’s Yunnan Province, respectively, with port facilities on Burma’s west coast.
For ASEAN’s part, in conjunction with further economic integration with the world’s two most populist countries, it continues to strive for a FTA within the Southeast Asian consortium; the goal being the establishment of an ASEAN economic community by 2015.
The further entrenchment of the Burmese economy with that of its regional neighbors and partners continues to spoil the effectiveness of a United States led sanctions policy vis-à-vis the business interests of Burma’s generals.
Fiscal Year 2006/2007 saw Burma generate eight billion dollars in foreign trade, the largest such figure since the countrywide unrest of the late 1980s.
ASEAN, China and India are Burma’s three leading trading partners, with ASEAN accounting for over half of all foreign trade and transactions within Asia totaling over 90 percent of Burma’s sum exchange.
However, despite the record eight billion dollars in foreign exchange for 2006/2007, it is still estimated that a third of Burma’s citizens exist below the poverty line.
The initial ASEAN-India summit was held in 2002.