Myanmar and Thailand, historically linked with India, hold strategic importance as gateways to India’s connectivity with Southeast Asia.
India’s relations with Myanmar and its four neighbouring countries—Thailand, Cambodia, Laos, and Vietnam—have been marked by cordiality, with few significant points of contention. This creates a strong foundation for further strengthening these ties. Recent road and rail connectivity projects, aimed at linking these nations to the Indian subcontinent via the Northeastern states, hold great potential for closer cooperation. Enhanced connectivity would significantly boost the movement of goods and people between all seven ASEAN nations—these five, plus Malaysia and Singapore. The removal of transportation bottlenecks would unlock numerous complementarities, creating a win-win situation for all involved. The prospect of near economic integration, similar to the European Economic Community or Mercosur in South America, is within reach. With the right geopolitical alignments, such a development could help realize the goals of India’s “Look East” and “Act East” policies.
MYANMAR
Myanmar, till 1989 known as Burma, is India’s immediate neighbour, sharing a 1,500 km border along its five Northeastern states. With its multi-ethnic population of 55 million, the country is well-endowed in natural resources and was once called the “land of rivers and rice.” Rich soil and adequate water made it capable of growing quality rice, cotton, and teakwood. With deposits of natural gas, tin, zinc, feldspar, red rubies, and jade, and being an independent nation for most of its history, it had become militarily strong and economically well-off. In 1767, it defeated the powerful kings of Chiang Mai and Ayutthaya in Thailand, extending the Kingdom’s boundaries. Unfortunately, in the twentieth century, and particularly after securing independence, the country has been on a downward trajectory.
For decades, the nation has experienced internal armed conflict, with military rule being the norm. Economic and social progress has been halting. Democratic institutions, with their built-in checks and balances, have not taken root, and requisite governance reforms have rarely been implemented, except briefly in the initial years after independence, the decade between 2010 and 2020, and in early 2021 when civilians were in power. Due to yet another military coup in late 2021, businesses have been struggling with rising commodity prices, soaring transaction costs caused by the destruction of infrastructure, electricity outages, logistical constraints, currency fluctuations, foreign exchange restrictions, and the severance of foreign trade. Between June 2022 and June 2023, consumer prices rose by 29%, and half of rural households faced acute food shortages. Widespread disruptions in law and order have caused tourism, a major revenue earner, to decline. Public services in healthcare, education, banking, and telecommunications have almost collapsed.
The Civil Disobedience Movement, protesting the military takeover in 2021, and the Army’s offensive to crush it have been accompanied by extensive violations of human rights and freedoms. As per the UN human rights office, since the latest military coup at least 5,350 civilians have been killed, 3.3 mn persons displaced and 27,400 arrested. Smuggling of everyday goods, stolen weapons, and a steep rise in the production of opium and amphetamines have become the bane of the well-meaning majority, which believes in the tenets of Theravada Buddhism.
These regressive developments have been compounded by several rounds of economic and political sanctions by the US aimed at pressurizing the military junta. Severe cutbacks have impacted the demand for Myanmar’s products, including natural gas. Without new investments, hydrocarbon reserves are depleting. Other than Thailand’s PTT Exploration and Production Co., international gas majors have pulled out. The resultant global isolation has impacted trade and capital inflows. The economy, which should have grown by about 30% in the three years after the Covid pandemic, has instead shrunk by 12%.
The ongoing territorial setbacks being inflicted upon the military forces by the Three Brotherhood Alliance, especially in the provinces of Rakhine and Kokang, through which much of the trade with China takes place, are unsettling the situation. Key external players—China, Russia, and Thailand—are no longer siding with the Army against the resistance forces. These events suggest that a future without Myanmar’s generals is not only desirable but entirely possible.
India, which is dealing with a sizeable influx of displaced persons, has rightly exercised restraint and minimized its comments on Myanmar’s internal affairs. In 1951, the two countries had signed a mutual Friendship Treaty and India remains committed to it. Continued military conflicts between the ‘revolutionary forces’ and the Army could sizably increase refugees. India has been extending humanitarian aid and lines of credit for various essentials and infrastructure- creation. India has had close cultural relations with Myanmar for centuries—Buddhism and Hinduism have been significant faiths there. Indian workers have gone there for centuries to supplement the local workforce in agriculture and mining. The Chettiars from Tamil Nadu for decades lent money to indebted farmers and others.
Since 1886, Myanmar was a province of British India, and after the Government of India Act of 1935, it became separated from India. The locals protested, apprehending the “Imperial Ploy” was aimed at ruling Myanmar indefinitely. Strong pressure from nationalist groups, especially after India had been granted independence, compelled the British rulers to grant Myanmar independence in January 1948. The much-admired nationalist leader U Nu, who became its first Premier, declared it a republic after severing all ties except the normal diplomatic, with Britain and not joining the British Commonwealth of Nations.
Continued vigilance and significant development assistance, growing trade, and other support from India to beleaguered Myanmar must remain intact. Stability and prosperity in Myanmar are imperative for India’s Northeast. It is India’s gateway to the Southeast Asian nations, most of which exhibit significant potential for economic and social growth. On the lines of the 1,300 km long trilateral highway project between India, Myanmar, and Thailand, the feasibility of rail links between a few Myanmar and Indian towns in the Northeast has been established. India is working closely with local authorities to ensure the continued operation of the Sittwe port, which meets the goal of the Kaladan multi-modal transit transport project by linking it with inland water transit through the river Kaladan and thereby making shipping possible between Kolkata and Sittwe. China, traditionally Myanmar’s main trading partner, with about $2 billion of trade (compared to India’s one billion), is undoubtedly monitoring the developments, especially India’s role.
THAILAND
Thailand, till 1939 called Siam, a country the size of France or Spain, remained independent and survived the European colonization wave in Asia. It was fortuitous that neither France nor Great Britain, the two dominant Western powers in Southeast Asia in the last century, wanted to share borders with one another’s colonies. Both saw Thailand’s huge land mass as an adequate buffer between them. At the same time, deft diplomacy by the Thai rulers had helped maintain friendly relations with both, and with the USA and even Japan during the Second World War. For decades in the last two centuries, Thailand was a regional power, exercising suzerainty over parts of Myanmar, Cambodia, Laos, and Malaya.
Remaining free has enabled the Thais to preserve their culture, traditions, and enlightened societal norms. The evolved constitutional monarchy with an elected Parliament, an independent judiciary, and responsive governments has stood the test of time. Remarkable levels of social progress and the standards of public services in healthcare, education, public transportation, electricity, and water supply stand out in comparison to neighbours. With a per capita income of about US $8,000, Thailand is an upper-middle-income economy moving towards fulfilling the UN Social & Development Goals. Unlike India and most developing nations, its fairly developed manufacturing caters to demands of residents as well as export markets in China, Japan, the Philippines, India and the UK. It has become a recognized exporter of electrical equipment, electronic components, technical fabrics, garments, household textiles, rubber and plastic products, and food.
Despite having an adequate workforce of 40 million, Thailand has not closed itself to migrant workers—3.3 million work- permits have been issued to foreigners. Its services segment continues to progress. Tourism, financial services, hospitality, and retail are large employers. At present, unemployment hovers around 1%. The appointment of Paetongtarn Shinawatra, daughter of former Premier Thaksin Shinawatra, as PM through a royal decree, after the Court ordered dissolution of the Move Forward Party, has angered the pro-democracy opposition, but the new conservative government is expected to survive.
Softening of exports and lowering of GDP growth to 2.3% (from last decade’s average of 3.4%) despite its currency remaining weak is attributed to its vulnerability to global developments, especially fuel prices, geopolitical tensions, and volatile financial markets. However, it is expected to recover with increased domestic consumption, facilitated by a US $14 billion stimulus package, tourism growing from 28 million to 35 million this year (with an expected 39 million in 2025), and a possible recovery in exports. An elephant in the room is the high household debt, aggregating 86% of GDP. It could impinge upon consumer spending unless banks continue lending. Also, a program of debt moratorium on government bank loans to farmers and the Digital Wallet Scheme, promising 10,000 bahts (US $380) annually to 45 million adults, would undoubtedly impact the national fiscal position and its borrowings.
The country relies heavily upon FDI inflows from China, Japan, Singapore, and USA. Despite a reduction in Chinese funds, the lowering of interest rates in USA and the economic upsurge in Japan might ensure that the inflows are maintained. Earlier this month, Google announced a $4 billion investment to add capacities in its data centers and related AI and cloud infrastructure in Bangkok and Chonburi, a province southeast of the capital, where it has been extensively engaging with the youth and small businesses.
India and Thailand have long enjoyed cordial relations. The ‘export’ of Buddhism goes way back. Its Sri Lankan version, Theravada Buddhism, is followed by 85% of its population of 72 million. The Hindu epic Ramayana was adopted by its residents into its Ramakien or Ramakiriti. A dynasty of monarchs Rama I to Rama VII ruled the country benevolently for several decades. Hindu temples have been preserved, and their rituals remain popular.
In more recent days, there is a growing bilateral trade under the 2010 pact with ASEAN. Last year, 0.65 million Indian tourists traveled to Bangkok and its numerous other resorts. Visas are no longer required by Indians. To utilize its natural endowment of rubber, Indian businesses have invested for the export of tires, etc. A bilateral trade pact, in the absence of India from the multilateral RCEP, could further boost trade in goods and services, as well as capital flows.
India and Thailand need to be on the same page in facing the expected huge increase of refugees from Myanmar. India should support Thai endeavors to mediate for a possible reconciliation between the ruling military junta ,the opposition leaders like Aung San Suu Kyi and the resistance -forces .Unlike other ASEAN nations, Thailand has been directly grappling with this issue. Thailand being a key player in the South Asia trilateral highway project from the Indian border through Myanmar to Thailand and beyond, India must engage with it in developing a similar rail link. Multilateral development agencies like ADB have indicated willingness to fund it.
Dr Ajay Dua, a development economist, is former Union Secretary, Commerce and Industry.
Part 4 on ties with Vietnam, Cambodia and Lao PDR would follow.