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The physical terrain of Myanmar does not lend itself to easy east-west travel. Parallel mountain ranges slice this part of mainland Southeast Asia from north to south, and divide the country from its neighbours. The mountains have meant that access to neighbouring countries has always been difficult and time-consuming. It was only the unique pressures of the Second World War that motivated the first motorable east-west link across the country: from northeast India to southwest China on the other side. And only in the last few years have some sections of that old road been upgraded for the consistent, year-round use of trucks, buses and private vehicles.
Today, all across Myanmar, even in many major towns and cities, most transport infrastructure remains basic. The country's endowment of potholed roads, antiquated railways and lacklustre airline services are the direct result of neglect and poverty. Over the past two decades there has, however, been increasing government effort to improve transport infrastructure. Nowadays, new joint ventures and private investments are leading the way.
Since the first ceasefire agreements were signed with major armed groups in 1989, the Myanmar military government has sought to capitalise on its pacification of many border areas. Part of the resulting program of national unification, market capitalism and Myanmarisation relies on the expansion of connections to neighbouring countries. The sprawling commercial conglomerations around Myawaddy-Mae Sot, Tachilek-Mae Sai and Muse-Ruili are the most prominent outcomes of this program. There are, however, many other less famous border crossings that serve as nodes for trade between Myanmar and all its neighbours.
To further facilitate trade with neighbouring countries, the government has sought to encourage the construction of new road links to border areas. Across the Shan State, in the Kachin State and in other "ceasefire" areas, the Myanmar military has supported this investment through its collaboration with a number of loose road building alliances. These link the government to ceasefire groups, commercial elites and foreign investors, predominately from China and Singapore. Concessions - particularly in logging, mining and agricultural areas that will be made accessible by new roads - have proven to be attractive incentives for road building consortia. The standard pattern sees the government consent to semi-private road construction projects that also serve its direct interests. Many of the most lucrative opportunities do, however, accrue to "national entrepreneurs" (government-speak for sympathetic businessmen) and foreign investors.
As China and India both look for trade and strategic opportunities in their shared Southeast Asian backyard, the implications of new roads linking Myanmar to its neighbours will be profound. While these roads will elicit a level of excitement inside and outside the country, it is worth remembering that these projects remain captive to the uncertainties and ambiguities that plague all current development activities in Myanmar. In particular, the agendas that have led to the current wave of investments are clouded by the enmeshment of newly rich local entrepreneurs with ceasefire groups and the government. Whatever the final shape of the inter-regional road network, this infrastructure will play a vital part in the future of the Asian borderlands where Myanmar meets its neighbours.
WATCHPOINT: The final session of the Myanmar military government's National Convention is currently underway. It brings together delegations from across the country at a time when many analysts are noting increased tensions between ceasefire groups and the government. At the National Convention, what difficult compromises will ceasefire groups be willing to make to preserve the commercial relationships that have developed in recent years? Are any of the major groups in a position to sacrifice their immediate development goals for the sake of political principles?
About our company:
AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
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