ECONOMISTS say Myanmar is well-placed to take advantage of its proximity to nearly half of the world’s population by making itself a critical destination of the region’s transit trade.

Dr Maung Aung, an economist with the Union of Myanmar Federation of the Chambers of Commerce and Industry, said Myanmar can easily benefit from transit trade between China, India and the ASEAN bloc.

China and India have suggested to Myanmar’s government that the 1726-kilometre-long Stilwell road, which could serve as an important road link between the world’s most populous nations, be reopened.

China is also planning to build a deep-sea port at Kyauk Phyu in western Rakhine State. If this port was linked by road and rail to China, it would amount to big time savings as it would obviate the need to ship cargoes via the Malacca Strait. This would also provide easier access to the markets of Africa, the Middle East and Europe for Chinese manufacturers.

Road and rail infrastructure across Myanmar from Kyauk Phyu to Kunming, in China’s southeastern Yunnan Province, would also need to be built for this project.

Myanmar Oil and Gas Enterprise (MOGE) and China National Petroleum Corp (CNPC) have been jointly studying routes for a planned oil and gas pipeline since January last year; this pipeline will likely be built along the proposed Kyauk Phyu-Kunming highway.

The Stilwell road is named after an American general, Joseph Stilwell, and was built during World War II to free China from Japanese occupation. The road linked Ledo, in India’s northwestern Assam State, with Kunming. About 1033km of the road, which traversed northern Kachin State via Myitkyina, is in Myanmar.

Trade between China and India has expanded rapidly in recent years and both countries would benefit from a road link.

Indian Prime Minister Manmohan Singh has told AFP that his government is keen to further the country’s “Look East Policy”, which aims to strengthen trade and other ties with countries in Southeast Asia.

Assam State Minister for Industry, Pradyut Bordoloi, said in August: “We are widening and developing Stilwell Road on the Indian side, which will be completed in four to six months. But the rest of the project depends on the three countries agreeing to reopen the road.”

Dr Maung Aung said there are strong arguments for reopening the road.
“The population living in India, China and the ASEAN countries is nearly three billion people,” he said.

“India and China are eager to reopen this road; India wants to open its landlocked northeastern states to trade with China and the ASEAN nations, while China is willing to send its products through the same route.”

Myanmar would be able to profit handsomely from this trade, Dr Maung Aung said.

“We could charge transit fees and gain spinoff benefits from tourism. The long-term benefits and revenues from this project are certainly there if we can open the road,” he said.

Another economist, retired deputy rector of the Yangon Institute of Economics, U Yupa, said that the proposed Kyauk Phyu deep-sea port and connecting highway projects would create growth.

“China wants those projects to avoid the Malacca Strait. They want to send their products to the west and Middle East through Myanmar, instead of passing through the strait.

“This will shorten the overall distance by thousands of kilometres and will save money and time,” he said.

He added that Singapore is a good example of a nation that has used its strategic location to profit from transit trade, adding that Myanmar could do the same.