May 27 (Bloomberg) -- Indian Prime Minister Manmohan Singh said his three-day visit to Myanmar starting today will define a road map for future cooperation between the neighbors, including forging economic ties.
“Stronger trade and investment links, development of border areas, improving connectivity between our two countries” are areas to focus on, Singh said in a statement today.
India and Myanmar are likely to sign agreements in these areas during the visit, the prime minister said.
Singh, 79, the first Indian leader to visit Myanmar in a quarter of a century, is resurrecting ties to a neighbor with 64 million people and reserves of natural gas and lumber, as Myanmar reconnects with the global economy following five decades of isolation during military rule.
“India welcomes Myanmar’s transition to democratic governance and the steps taken by the government of Myanmar toward a more broad-based and inclusive reconciliation process,” Singh said in the statement.
The prime minister said he’s scheduled to meet with pro-democracy leader Aung San Suu Kyi during his visit to Yangon and looks forward to “addressing a cross-section of Myanmar society.”
India, which in British colonial days oversaw the monetary and financial system of what was then Burma, ranked 13th last year in investments in Myanmar, with $189 million pledged in five projects, according to data compiled by IHS Global Insight. China led with $8.3 billion, and South Korea, whose president visited Myanmar earlier this month, pledged $2.95 billion.
“There is a huge gold rush going on in Myanmar right now and everyone is jockeying for position,” said Rajiv Biswas, chief economist in Singapore at IHS. “India is being left behind. They are not as aggressive in their economic diplomacy as countries like China and South Korea.”
Myanmar Prime Minister Thein Sein’s steps to end military rule have been rewarded with an easing of U.S. and European sanctions, bolstering prospects for a nation the International Monetary Fund said in January could be “the next economic frontier in Asia.” South Korean President Lee Myung Bak earlier this month pledged to increase aid to Myanmar and the countries agreed to enhance cooperation on energy and developing resources.
Singh will relax terms on a $500 million line of credit, announce a new bus service between India’s northeast and the tourist city of Mandalay and oversee the opening of branches of Indian banks, according to an Indian Foreign Ministry official, who asked not to be named because he isn’t authorized to speak publicly on the matter.
Also on the agenda is cooperation to contain insurgent groups with bases in Myanmar that have sought independence or greater autonomy for some of India’s northeastern states.
India, Myanmar’s fourth-largest trading partner after China, Thailand and Singapore, approved plans in 2010 for Oil & Natural Gas Corp. and GAIL India Ltd. to invest a combined $1.3 billion in a natural gas project in Myanmar. Tata Motors Ltd., India’s biggest commercial-vehicle maker, said in March last year it will help set up a factory in Myanmar to build trucks.
Myanmar’s economy is set to grow 6 percent in the fiscal year ending March 31, the fastest pace since 2006, on higher natural gas sales and government measures to make it easier to do business, according to the Asian Development Bank. The country has one of the lowest per capita gross domestic products in Asia, according to IMF estimates.
The nation, which borders China and India and has the second-largest land area in Southeast Asia behind Indonesia, earlier this year implemented its biggest economic policy shift since Thein Sein took office a year ago. The central bank scrapped a 35-year fixed currency system in April, and is moving to unify multiple exchange rates for the kyat that have discouraged trade and foreign direct investment, according to the IMF.
The last Indian prime minister to visit Myanmar was Rajiv Gandhi in 1987. The next year marked the public emergence of Suu Kyi, daughter of a Myanmar independence hero. She was first detained before 1990 elections in which her party won about 80 percent of seats for a committee that was designed to draft a new constitution. The military rejected the results.
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