The Relationship between Myanmar and the Gulf States: Developments, Opportunities and Tensions

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Guest Contributor: Anne Gillman

One IDP camp near Sittwe can only be accessed by sea with boats transporting vital aid supplies such as rice and cooking oil. Rakhine State, Myanmar/Burma, September 2013. (Mathias Eick, EU/ECHO/Flickr Creative Commons)

One IDP camp near Sittwe can only be accessed by sea with boats transporting vital aid supplies such as rice and cooking oil. Rakhine State, Myanmar/Burma, September 2013. (Mathias Eick, EU/ECHO/Flickr Creative Commons)

Since Myanmar’s 2011 reforms, the country has been widely re-evaluated by the international community. The US has moved from a policy of isolation and economic sanctions to offering partnership. With diplomatic missions now re-opened, Myanmar has been allowed for the first time to chair ASEAN in 2014. Driving these re-calculations is Myanmar’s geostrategic borders with India and China. It occupies the second largest area in Southeast Asia, has a population around 60 million and offers a significant market opportunity.

The Gulf States have been increasingly looking to their east in search of new markets, labor sources and diplomatic support. Their expanded relationship with Southeast Asian countries, and increasingly Myanmar, is evident through increased trade, foreign aid, investment and tourism. A shared religious culture with the Muslim population in the region has further characterized the relationship.

Interaction between the two regional multilateral organizations, the Association of Southeast Asian Nations (ASEAN) and the Gulf Cooperation Council (GCC) has increased; they have a two-year action plan and there are ongoing ASEAN-GCC meetings regarding opportunities to expand and build on their relationships for security and economic gain.

Despite being geographically close, with some common cultural and religious threads, and generations of intermarriage stemming from migration and trade interactions, Southeast Asian countries and the Gulf States used to feel more strongly connected to the West than to each other. However, Myanmar’s earliest Muslims were traders, mercenaries and court servants of Persian, Indian and Arab ethnicity who settled in the country in the 13th and 14th centuries and married Burmese women. Another strand of shared history is that Myanmar was a British colony for more than 60 years, and the UAE, Oman, Bahrain and Qatar, although not colonies, were British protectorates for decades.

Yet, many stark differences between Myanmar and the Gulf States can be observed. For example, while Myanmar is predominantly a Burman society, only an estimated 60-70% of the people being ethnic Burmans. In contrast, the Gulf States’ native populations are very homogeneous. Myanmar claims to have 135 different ethnic groups, while migrant workers supply most of the diversity in the Gulf States, thus creating different issues for these countries to manage. Myanmar’s aspiring democratic government will have to learn how to respond to public opinion, while the authoritarian Gulf States largely ignore public opinion.

With respect to religion, the Gulf States have majority Muslim populations; in contrast only about 4% of Myanmar’s population is Muslim. The majority of Myanmar’s Muslims are Sunni, aligning them with the Muslims in the Gulf and worldwide, 90% of whom are Sunni. Due to recent Buddhist-Muslim conflicts within Myanmar and the humanitarian crisis with the Rohingya population in Myanmar’s western Rakhine State, a small but very visible percent of the population receives international media attention. Increasingly the Gulf States feel compelled to stand by fellow their fellow Muslims and respond to Myanmar’s dismal treatment of the Rohingya and its Buddhist-Muslim clashes. At an August 2012 extraordinary meeting of the Organization of the Islamic Conference the Gulf States supported a statement condemning Myanmar’s treatment of the Rohingya. The Saudi cabinet also spoke out against the violence asking for action from the international community to protect Myanmar’s Muslims. Saudi Arabia provided US$50 million in aid for Rohingya refugees and has also accepted groups of Rohingya as migrant laborers.

Yet, one development regarding this issue concerns the thousands of Rohingyas now held in Saudi prisons after an earlier asylum offer by King Faisal was reversed with the change in monarch. This shows that the Saudis are speaking out of both sides of their mouth on the issue, which may weaken their leverage with the international community when they urge action. Another complicating factor is that the Myanmar government’s failure to adequately respond to the poor treatment of the Rohingya could incite extremist Muslim groups. The religion factor will continue to complicate the relationship because Gulf countries must balance investment in Myanmar, yet admit they are working with a government that mistreats Muslims. In Myanmar the famous opposition party leader and Nobel Peace Prize Laureate, Aung San Suu Kyi, has also failed to speak out strongly on the issue, to the disappointment of the international community (a reticence on her part because it would probably be domestically unpopular).

While the diplomatic relationships between the Gulf States and Myanmar are complicated by religious ties, at the same time the Gulf States have great motivation to build a strong relationship with Myanmar. For example, Saudi Arabia has prioritized economic gains rather than religion in foreign policy, especially in its drive to become a major economic and political power by 2020. The emergence of Iran as an adversary and the collapse of Mubarak’s regime in Egypt also increased the Gulf States’ need for new friends and wider circles of influence. Thus they have invited Myanmar to open embassies in their countries. To make this a feasible reality for such a poor country, some of the Gulf States, such as Kuwait, pay half the salary of the new Burmese embassy diplomats.

Because Israel interestingly has had close ties with Myanmar in the past, the Gulf States could also be improving their relationship with Myanmar in order to have as much influence in the country as Israel. China, too, has been very invested in Myanmar and was taken by surprise by the country’s dramatic opening in 2011. Saudi Arabia’s relationship with China has been drastically improving over the past 10 years. As Saudi Arabia seeks to increase its influence with Myanmar, it will want to carefully consider Chinese perceptions of the Saudi involvement in Myanmar, as China is now one of Saudi’s largest clients, importing 19% of it’s crude oil from Saudi.

The Gulf States view the growing market in SE Asia as an opportunity for Gulf business, and they are interested in using land in Myanmar for food security. For example, they foresee that if there is a war between Iran and one or many Gulf States, then the Strait of Hormuz could be cut off making it hard to get food into the region; food concerns are also due to growing Gulf populations and rising food prices. The Arab Spring vividly showed the potential firestorm the region could erupt in if regimes do not keep their populations happy. In contrast Myanmar’s population is mostly rural, working in agriculture. As a result, Myanmar would be a great market for Saudi Arabia’s agricultural chemicals and fertilizers industry.

On another front, Saudi Arabia is extremely interested in possibly using the newly built pipelines in Myanmar to get their oil to China. This would avoid using the Malacca straits, a passageway that could be blockaded in the event of a conflict in the South China Sea or if anyone was trying to cut off China’s energy supply. The realization of this possibility depends on whether Saudi Aramco is the sole and exclusive partner with China National Petroleum Company (CNPC) in the move of oil to the southwest Chinese state Yunnan. Saudi Aramco and CNPC have a contractual agreement, but the details of the contract, and if/when government action kicks in is hard to obtain. CNPC owns and operates the pipelines and so it is most likely it would be required to pay transit fees to Myanmar’s government. Saudi Arabia has decided not to export natural gas, but rather to use that energy for domestic development. It will be interesting to see if this decision is reversed over time because the dual pipelines consist of one for natural gas and one for crude oil. Qatar, the world’s largest producer of natural gas, may also try to utilize the pipelines to export liquid natural gas to China.

A Qatari company, Ooredoo, is one of the two granted a telecoms license in a recent high profile bid in Myanmar. The license is good for 15 years and allows the largest foreign investment to date. Ooredoo said it would invest up to $15 billion in two years to bring all but 10% of the population on a 3G network, a quicker time scale than the government requested. Estimates as to when the company can expect to turn a profit on its investment are not clear.  Vodafone and China Telecom withdrew their bids saying the project did not offer sufficient returns. If this is the case, it may be that Ooredoo, which is partly a state owned company and a subsidiary of Qatar Telecom, has been told by the Qatari government that it will be compensated for the low returns; it may signal that the project is more important for its diplomatic and profile building investment rather than profit.

With respect to migrant workers from Myanmar, there are many in the Gulf States. As of 2004 it was estimated that there are 1.5 million Burmese migrant laborers in the UAE, Bangladesh, Pakistan, Saudi Arabia and Jordan. There is a general concern with the treatment of foreign laborers in the Gulf countries and Burmese workers have been subject to the same dismal conditions that have been reported about other groups: for instance, reports have stated they are not paid the amount originally promised, work in different functions than what they signed up for, and have extremely long hours. However, the Myanmar employment agencies may be unfairly providing misinformation to the laborers being sent to the Gulf States.

There is no information about increased Gulf tourism in Myanmar, though growing numbers of Gulf citizens have been documented visiting Indonesia and Malaysia. Myanmar has a growing sense of nationalism and if Myanmar citizens feel that the Gulf States are expanding the relationship only to extract resources, obtain agricultural products or use the pipelines to get oil to China, the Burmese could resent the Gulf States for not taking the time to invest in the surrounding community. Tourism could be an opportunity for growth in the relationship, especially since Qatar Airways is one of the main airlines providing service to Yangon.

There is nevertheless a danger – if the religious conflicts in Myanmar spiral out of control, which is not an unlikely possibility given the violence in Rakhine State – that the Burmese will attack anything they view as a connection to Muslim Rohingya, such as companies from the Gulf States. Sensationalist press, in a country where free press is less than a year old and the media and population are still figuring out how to handle responsible journalism, could start rumors about the connections of these companies to Rohingya and encourage people to boycott the businesses.

Among the opportunities also lying in the Gulf States and Myanmar relationship, Myanmar could learn lessons from the Arab Spring as it works to build democratic institutions. Although the majority of the Gulf States survived the crisis without radical change, Myanmar could, for example, learn from Kuwait and Bahrain, which seem to be working towards a constitutional monarchy, a strategy to involve a new class of ruling elites and political participants, while at the same time keeping the old guard engaged and not threatened from an overthrow of the government.

Conversely, the Gulf States can observe Myanmar’s challenges as the country transitions from an authoritarian to a democratic government, assuming their governments could easily find themselves in a similar position. Because Myanmar’s military has long been the most influential force in the country, one challenge as the country transforms is to avoid spooking the military into clamping down for fear there will be retributive action against them or that they will be dramatically disenfranchised.

Many Gulf States and Myanmar also have comparative circumstances with both being well endowed with natural resources. The Gulf States have generally been able to use their natural resources profits to develop the state and to benefit the population. Myanmar could learn from the distributive states. It is hard to imagine what Myanmar could have been like today if natural resources profits coming from, for instance, energy sold to China and Thailand, had been invested in education and healthcare (allocated less than 5% of total budget), rather than the military (currently allocated at over 20% of the budget).

The Gulf States could further increase their influence in Myanmar by providing scholarships for Burmese students at Gulf universities. Graduates of strong engineering programs would produce qualified candidates for Myanmar’s energy sector, infrastructure, agriculture and service industries that in turn would benefit Gulf companies investing in Myanmar. Myanmar would benefit greatly in a technology transfer from Gulf States companies, and that could attract more investment by Gulf state owned enterprises, especially those supported by deep pockets and capable of taking on large scale projects with risky returns.

Lastly, although unlikely to happen, the Gulf States could play a constructive role in the Rohingya conflict. They could offer asylum or agree to resettle portions of the Rohingya population, initiate a mass guest worker program (adhering to international labor standards), or instead of providing aid money to the Rohingya, which makes the Burmese government suspicious, invest in Myanmar’s peace process.

The relationship between the Gulf States and Myanmar is one of contradictions, but also one with possibly immense growth. A mutually beneficial, although highly complicated and potentially politically difficult partnership between Myanmar and the Gulf States currently is in the making in the ongoing expansion of their relationship, a process that should be most interesting to follow into the future.

Anne Gillman recently graduated from The Johns Hopkins School of Advanced International Studies and is currently a Presidential Management Fellow in the International Trade Administration in the Department of Commerce.

The views expressed by the author do not necessarily reflect those of the Glimpse from the Globe staff, editors, or governors.

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