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NEWS UPDATES Asean Affairs    29 May 2012

$500m line of credit to Myanmar from India

29 May 2012

On the second day of Prime Minister Manmohan Singh's visit to Myanmar, both India and Myanmar in an unprecedented move signed a slew of agreements and MOUs covering almost all aspects of their bilateral ties.

These agreements promise to bring the two neighbouring countries closer than ever before and to not allow their territories to be used by terrorists.
One of the most significant MOUs concerned the granting of US$500 million line of credit by India to Myanmar, which this country will utilise for upgrading its agriculture, irrigation, rail  transportation and electric power system.

After the signing ceremony Prime Minister Manmohan Singh said the MOU and  agreements will usher in a new era of cooperation for mutual development. He said India's economic growth was there to help Myanmar to march further on its path of progress.

The captains of the Indian industry like Sunil Mittal  and Navin Jindal, who are part of the Indian  delegation, called the signing of the MOUs a historic event.

Both said that this was the right time for the Indian industry to come and invest in Myanmar in a big way. Indian industry should not miss this opportunity to make its contribution to Myanmar's economic and all round growth possible."For Indian investment in Myanmar this is the most opportune time. It's now or never", they said.  

A more significant MOU signed by both sides concerned the socio-economic development of India-Myanmar border areas. It proposes to bring this geographically strategic isolated area of India's northeast  into sharp development focus and significantly improve its connectivity.

The most ambitious project to be undertaken jointly by the two countries along with Thailand involves the construction of a road from Moreh to Mae Sot in Thailand via Myanmar.  

A land customs station will be opened at Zorinpui in Mizoram to promote border trade between Mizoram and Myanmar. The border trade points on the Indian side will have banking facilities.

Border haats (stores) like those on the India-Bangladesh border too will be set up along northeast's border with Myanmar. A host of other projects will be taken up on both sides of the India-Myanmar border which will upgrade roads and highways, construct schools and health centres, bridges and promote agriculture related training activities.

India has offered assistance for the production of large cardamom in the Naga Self Administered zone in the Naga inhabited areas in Myanmar bordering India's northeast. Both sides have agreed to ensure border  security through cooperation and exchanging intelligence inputs.  

India has decided to help Myanmar in higher education and has offered scholarships and fellowships to Myamarese researchers.

The agreements signed by both the countries have attracted snide comments from Beijing.

Indian firms start moving in
Meanwhile, private Indian companies have started moving in but the volume of their investment is negligible compared even to those of Thailand and Singapore. India is the fourth largest trade partner of Myanmar (second largest export destination and seventh largest import source) next to Thailand, China and Singapore though it has the potential to be the first.

As one Myanmar official put it aptly " We are like long forgotten friends of India which suddenly has discovered that we still exist." The official said it would have made a lot of sense if the Indian Prime Minister had brought with him here some of the northeastern chief ministers which would have made the outcome of his visit more meaningful and spectacular.

After all he had made this unique experiment during his visit to Dhaka last year. A repeat of that would have contributed significantly to the visit's substance and outcome. Because a large part of the last two days’ talks between the leaders of the two countries centred around the improvement of infrastructure, connectivity and trade between the northeastern states and the adjoining provinces of Myanmar.

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