The National Unity Government (NUG) policy statement in August 2021, in which it welcomed international companies leaving Myanmar as an effective means to bring Myanmar’s Military junta to heel, may well be a significant “own goal” in its fight to address autocratic governance.

This self-defeating policy direction, lauded by inner city elites and political activists, took another step forward late last month with the Australian oil and gas major, Woodside, announcing that it is divesting of its gas and oil interests in the country. This withdrawal follows that of Total Energies and Chevron.

REGIONAL POLITICAL RAMIFICATIONS

Those applauding these companies for taking a stance for “human rights”, shows a naivete and a lack of understanding of the geo-political ramifications of such actions in a region undergoing significant economic and political alignment.

This is a region that is feeling the rise of China, a decline of Western influence and increasing tensions as India and Japan respond to this significant geo-political reset. Myanmar’s central role in shaping the new focus on the Indo-Pacific was discussed in a previous article: https://www.mizzima.com/article/why-myanmar-needs-be-aware-economic-sign....

When talking to key economic decision makers in and around Yangon, the mood is one of disappointment – the overwhelming majority believe that the decision by Woodside is a poor one and will not enable a peaceful resolution to the current crisis in Myanmar.

As one such business leader said: “It is a reactionary decision to the crisis”.

One wonders what strategic or critical thinking has been used by these multi-nationals to make this decision. For example, how can they justify a decision based on “humanitarian grounds” when they continue to support trade and ties with other autocratic countries based on separating politics from commerce. Why can Woodside still engage with LNG sales, not just of gas but of asset ownership with China? Thirty percent of Woodside’s LNG goes into China and the new CEO of Woodside appears to celebrate their relationship with China. Yet China – currently hosting the Winter Olympics – is constantly rapped over its abuse of human rights, including alleged genocidal policies against the Uyghurs in the northwest of China.

CLOSER TO CHINA

Taking the argument further, did they not consider that Myanmar, in particular the Military, is adept at working around sanctions and isolation. At a basic level, all this decision does is to subject seventy percent of the population to continue living in poverty. At the same time by trying to use economic coercion to bring an authoritarian regime to heel, potentially pushes the country further down the autocracy road by pushing it closer to China.

In a sense adopting a “poke in the eye” strategy has merely made the parties blind to the consequence of their actions.

The timing of this “poke in the eye until blind approach” could not have come at a better time for China. It is a well-known fact that the relationship between the Myanmar Military junta and China had become strained towards the end of 2021. With little progress being made on key Belt and Road Infrastructure projects within Myanmar, in particular Kyauk Phyu Port, it looked like that this relationship was starting to fracture as the junta needed to show development of some kind as the economy continued to fail under their rule.

With multi-nationals and their respective governments, withdrawing projects strengthens the hand of China when bargaining around investment into Myanmar. Without alternative sources of funding, and China’s interest in investment, China is likely to secure a greater hold on the Myanmar economy.

GRAND CHINA PLANS?

How does all this help China in its ambitions to be the Regional Hegemon and to shape economic engagement within the Indo-Pacific region?

In simple terms, it addresses China’s two major weaknesses in its ambitions: trade and economy and energy security.

In the first place, Myanmar will deliver China access to the important trade and shipping lanes in the Indian Ocean through its China-Myanmar Economic Corridor or CMEC. It gives greater shipping connectivity between the China controlled Hambantota Port in Sri Lanka and the Kyauk Phyu deep sea port. This eliminates a key economic and trade risk for China as it provides a supply line that no longer runs the risks associated with the Malacca Straits being a supply choke point.

This addresses a key concern found in the China CP’s statement of intent, namely trade and economic security.

Secondly, it addresses the other key concern of China, namely energy security. Not only does Myanmar give China greater access to energy supplies out of the Middle East and Africa, but it also offers up significant oil and gas reserves in Myanmar without having to have gone through the expensive exploration and development phase. There are reports already circulating within Myanmar that China is staking a claim for these oil fields – and with the absence of any competitors, it is almost guaranteed that China will gain greater control.

So, whilst the NUG, activist groups and Governments celebrate another poke in the eye for the Military Junta, they have gone blind to the potential of Myanmar embedding an even stronger and more extensive form of autocracy through adopting everyday business and activity through the lens of Chinese Characteristics.

Perhaps it would be more prudent for multi-nationals, such as Woodside, to look at effective ways of engagement to improve the chances of Myanmar returning to some form of participatory and inclusive form of government.

Who knows, should China get the anticipated trade and energy security from these actions, the Indo-Pacific may well deliver a new hegemon. How ironic would this be?

Andre Wheeler is CEO of Asia Pacific Connex with more than 20 years’ experience in international business, with a diverse network throughout the USA, Asia, SE Asia, Africa and the United Kingdom. Holding a B. Science (Hons) degree and an MBA, he is currently working towards his Doctorate on the

Impact of the China One Belt One Road initiative. Andre has expertise in oil and gas, construction, marine services and mining.