This week Myanmar’s newly elected democratic government presided over by Suu Kyi will begin its term. The transition has been relatively stable so far, with the military and USDP apparently aware that any untoward incident could trigger international opprobrium. The desire to earn the world’s trust and subsequent investment while moving out of China's shadow has been a major motivating factor in Myanmar's tentative embrace of democracy. Central to the military’s approval of a Suu Kyi-led government is the need to establish Myanmar as a credible, stable, independent and sovereign nation in Asia. Nyapyidaw needs the respectability that Suu Kyi bestows to ensure an equal standing with other ASEAN countries.

A view of the China/Myanmar border region (Photo courtesy Flickr user David and Jessie)

After its landslide victory, Suu Kyi’s NLD is forming a government fully controlled and orchestrated by its leader. Suu Kyi’s experience in dealing with the military, her proficiency in handling international attention, and her extreme pragmatism is dealing with national issues makes her the most experienced person in the party today. Nowhere is her vision for herself and Myanmar more evident than in her decision to take control of the foreign, energy and education ministries along with the presidential office. Notwithstanding the fact that the army still controls critical departments like national security and defence, and will have a say in legislation, Suu Kyi’s new position in the parliament means she will drive the country’s broader engagement with the rest of the world.

Myanmar's location in the Indian ocean and its abundance of natural resources makes it an important player in Asia. Its major challenge will be striking a balance between its two biggest neighbours: China and India. The dynamics of the triangulated relationship between these three lends itself to a narrative of two competing giants fighting for strategic control over a much less powerful nation. In reality, India and China have different motivations and means of working with Myanmar that belie the notion of competitors.

Narendra Modi's NDA government’s recasting of the ‘Look East’ policy to ‘Act East’ was meant to signal the centrality of East Asia for India. It has focused attention on economic development and improving regional trade and investment. Connectivity with Myanmar will provide an added impetus to the government’s policy to bring better access and development to India’s Northeast region. The government believes improved development, security and border control in the Northeast will help to bridge the gaps, both economic and physical, between this region and the rest of India.

For its part Myanmar, with Suu Kyi directing foreign policy, will want to expand foreign direct investment and, importantly, will look towards the West for bilateral partnerships to help rebuild the country. In the past, China’s unilateral investments in Myanmar have been encouraged even though they have come at the cost of national development and, more critically, fanned ethnic tensions in the regions bordering China. However attitudes have changed, as evident in the decision to halt the Mytisone dam and the Letpadaung mining projects due a perceived lack of benefits and the cost to Myanmar, environmentally and otherwise. It's clear Myanmar has become more cautious about Chinese investments, in spite of the Bejing's nudging and generous promises. While China is bound to remain the largest investor in the region, Myanmar has signaled that it would welcome cooperative approaches to FDI in the country from other quarters.

In the future, Myanmar is likely to carve out a position from which it can balance the expansionist goals of China with investments in the country from Western and other Southeast Asian countries. To this end, Myanmar has already inked partnerships with Japan, South Korea and ASEAN countries including Thailand. Connectivity with India can help in creating a land corridor to India's north east, and further into India's heartland, which could greatly diversify the nature of trade. Exports to Myanmar currently have to go through Kolkata, which is more than 1500 kms away. An alternate route would reduce the cost of moving goods and people from across India to Myanmar and Southeast Asia.

India looks to be more focused on completing its own connectivity in the region which includes the Tamu-Kalewa highway connecting India and Myanma, a trilateral highway connecting India to Thailand via Myanmar, the Kaladan Mutli modal transport system, and investments in energy and infrastructure. India is also focused on dampening the insurgency on its border, and seeks greater security cooperation with the Tatmadaw to protect its borders in the Northeast and the waters of the Bay of Bengal.

A stronger relationship between India and Myanmar and subsequently the rest of Southeast Asia would enhance overall economic and security cooperation in the Indian Ocean region. India’s interest in Myanmar is not a competition with China for either strategic space or energy resources. Rather, the policy should be seen in the context of formalisation of a relationship which had got mired in a moralistic outlook adopted by the India's foreign policy establishment soon after independence. This led to ad hoc policies that alienated both the junta and the pro democracy movement in Myanmar. The current shift in policy, with emphasis on bilateral connectivity and neighbourhood first outlook, will help in building a more realistic relationship between India and Myanmar.