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Economy

India, Myanmar broaden cooperation in infrastructure, energy

NAYPYITAW -- India and Myanmar are deepening their economic ties as part of a regional initiative encompassing seven Southeast and South Asian countries, creating an alliance that could serve as a counterweight to China's influence in the region.

     Leaders from the seven countries gathered in the Myanmar capital on March 4, pledging cooperation on 14 fronts, including distribution infrastructure, energy, trade, anti-poverty measures and disaster management. Known as the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, the group includes Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan and Nepal.   

     The group will set up a permanent office in Dhaka, Bangladesh, and draft trade rules with an eye toward a future free trade zone. They also plan to hold ministerial-level talks on energy and other areas and build a framework for financial cooperation to fund infrastructure investments.

     A major bottleneck hampering regional economic development is the lack of roadways across the mountainous terrain separating India and Myanmar, the main nodes linking southern and Southeast Asia.

     At the meeting, Indian External Affairs Minister Salman Khurshid said that roadways for efficient intraregional transportation are the top priority. India drew up a plan in 2002 to build a 3,000km network of roads connecting northeast India with Bangkok via Myanmar. A leading Indian construction company is also developing a large port in Myanmar.

     New Delhi hopes to use the initiative to further advance projects involving distribution networks. Improved access will facilitate trade in northeast India and provide a springboard for its manufacturing sector.

     For its part, Myanmar sees the initiative as a way to strengthen relations with India and achieve its goal of tripling cross-border trade with the subcontinent in fiscal 2015 compared with fiscal 2012.

     Economic sanctions placed on Myanmar while it was under military rule effectively closed off the region and restricted the flow of goods between southern and Southeast Asia. But now that Myanmar is embracing democracy, its international relations have improved, providing a more conducive environment for infrastructure investments.

     When the economic sanctions were in place, Myanmar looked to China for help in developing its natural gas and hydropower resources, giving Beijing a dominant presence. But its influence could weaken as Myanmar forges closer ties with India, shifting the geopolitical landscape in the region.

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