Barack Obama will be the first American president to visit Burma on Monday. He follows in Secretary of State Hillary Clinton’s footsteps who traveled to the country in December of last year, marking an opening in American-Burmese relations after half a century of diplomatic estrangement.
The Southeast Asian country of sixty million was long considered a pariah state in the West because of its closed military dictatorship and affiliation with the communist bloc during the Cold War. Up to this day, neighboring China is Burma’s most important strategic and trading partner. Chinese companies are heavily invested in Burmese infrastructure and pipeline construction and aim to import natural resources, including oil and natural gas, from the country. A proposed Sino-Burmese oil pipeline would enable China to bypass the Strait of Malacca in its petroleum trade with the Middle East.
China also enjoys access to Burmese ports and sells military equipment, including fighter jets and navy ships, to the country. Its base in the Coco Islands allows its to monitor Indian military activity, drawing criticism from New Delhi that China aims to erect a “string of pearls” of military installations across the Indian Ocean region.
Burma is diversifying its strategic relations, however, boosting trade with India and Pacific nations, including the United States, that are hoping to check Chinese ambitions in South Asia.
International sanctions that prohibited foreign investment in the country have been suspended since Burma initiated political reforms last year, including amnesty for political prisoners, the enactment of labor laws and the relaxation of press censorship. As a result, in April of this year, Japan could pledge up to $21 billion in aid and investment while the next month, South Korean president Lee Myung-bak visited Burma and promised similar loans.
In July, while announcing the easing of restrictions on American companies to do business in Burma, President Obama argued that “investment will help facilitate broad based economic development and help bring Burma out of isolation and into the international community.” But he cautioned that the United States remain concerned about “the lack of transparency in Burma’s investment environment and the military’s role in the economy.”
That is unlikely to change in the short term. Even if the military, which has ruled the country since 1962, is open to political reform, deputy defense minister Aung Thaw insisted in an interview with Reuters this week that it will not relinquish its privileged role in either the management of the state or the economy. “The government is leading the democratization,” he argued. The army will retain its presence in parliament and continue to control some of the country’s largest commercial enterprises which are therefore barred from doing business with the West.