The Bay of Bengal: the scramble for connectivity
4 Dec 2014|

Bengal tigerThe Bay of Bengal has long been the poor cousin of the long Asian littoral. Thailand is often seen as one of the Asian ‘Tigers’, but Bangladesh, Myanmar and Sri Lanka missed out on the economic miracles experienced in East Asia, due to a large extent to the political instability and civil conflicts that plagued the region. But that’s changing fast: economic growth for 2015 is projected at 6.4% for Bangladesh, 7.5% for Sri Lanka and 8% for Myanmar with similar rates projected for following years. Indeed, while there are still many hurdles to be overcome, it’s possible that over the next decade they could experience breakout growth similar to that experienced by core ASEAN states in previous decades.

Two key factors constraining growth are a low level of economic integration within the region and a dearth of infrastructure: especially transport connections within those countries to neighbouring states and the rest of the world. A key driver of prospects of Bay states will be their ability to take advantage of the economic opportunities presented by their huge neighbours, China and India, in terms of regional integration and infrastructure development. Indeed, the simultaneous expansion of Indian and Chinese interests in the area is turning it into a zone of economic and strategic competition. We’re seeing a remarkable scramble by China, India and now Japan to build new ports, roads, pipelines and railways throughout the region.

For several reasons, it’s important to see those infrastructural developments through an intensely strategic lens. The Bay of Bengal is semi-enclosed, and the east-west sea-lanes across it carry a good proportion of the world’s trade. That means ports in the region have considerable military value. Of even greater strategic significance are China’s attempts to break from the constraints that have historically made it a continental power. Formidable geographic barriers along the southern edge of the Asian continent mean overland transport links between China and the Indian Ocean are extremely tenuous. Indeed, until well into the twentieth century, there were no major transport routes—roads, railways or rivers—connecting China with the Indian Ocean. Through building new connections, China is now reaching for the Indian Ocean through the Bay.

China is sponsoring several grand projects that would create new transport routes from the southern Chinese province of Yunnan to the Bay through Myanmar. Those include a road-river route from Kunming to Yangon (partially completed), oil and gas pipelines from Kunming to the Indian Ocean at the port of Kyaukpyu (completed) and a proposed new road/rail corridor that would follow the same route (on hold). Another project, the so-called BCIM Economic Corridor, would involve the creation of a transport and manufacturing corridor running from Kunming in China to Calcutta through Myanmar and Bangladesh at a claimed cost of another US$20 billion. The project would involve Bangladesh, India, and Myanmar granting each other transit rights to allow the transport of goods across their territories.

India and Japan have also jumped into the game, but on a lesser scale. India is developing a river-road transport corridor to its landlocked northeast states via Myanmar’s port of Sittwe. Japan is also actively developing port and other infrastructure in Myanmar. And in May 2014, Japanese Prime Minister Abe announced the ‘BIG-B’ initiative (Bay of Bengal Industrial Growth Belt) for Bangladesh, which includes the development of an economic corridor from Dhaka to the sea and new deep-water port facilities. The Japanese government has already pledged $6 billion and much more private Japanese investment seems likely. A key objective is to develop the economy of Bangladesh through better connections to the Indian Ocean.

But it’s China’s massive infrastructure projects that would potentially have the biggest impact on the region. They’re part of its ‘bridgehead strategy’ of turning China’s landlocked Yunnan province into a gateway for engagement with the Indian Ocean and growing China’s manufacturing ‘base’ facing South Asia and Southeast Asia. Those connections could stimulate the development of China’s southern provinces and would likely considerably expand China’s influence in the region. The BCIM economic corridor linking southern China with India could also significantly increase their economic interdependence. Indeed some believe that it could even have a transformative effect on the Indian economy.

The projects have considerable strategic significance. Myanmar has blocked some proposals due to concerns about their implications for China’s influence in the country. Some in Delhi fear that these new connections will challenge India’s interests in the region and that the BCIM proposal could threaten India’s national cohesion by integrating India’s estranged northeastern states into the Chinese economy. There’s little doubt that the new connections may also give Beijing a much greater stake in the internal security of its Bay of Bengal neighbours. They may also mean that China can no longer be regarded as just a Pacific Ocean state.

David Brewster is a Fellow with the Australia India Institute and a Visiting Fellow with the Strategic and Defence Studies Centre at the Australian National University. He is the author of India’s Ocean: the Story of India’s bid for regional leadership. His research on the Bay of Bengal was funded by a grant from the Australia India Council. Image courtesy of Flickr user Gaurika Wijeratne.