Later this week the World Economic Forum (WEF) will host its forum on East Asia 2013 in Naypyidaw. For most of us who are unfamiliar with South-East Asia, the choice of venue may not ring a bell immediately. For the uninitiated, it is the new capital of Myanmar (which some still refer to as Burma), replacing Yangon (erstwhile Rangoon). Well, if you are not up to speed, then do so fast, because the WEF event, a watering hole for global movers and shakers, is the formal signal from the business community that Myanmar has emerged as the new centre of the world. Setting the stage for the meeting was the release of the report, Myanmar’s moment: Unique opportunities, major challenges, by McKinsey Global Institute last week (Mint published a charticle, Myanmar: Future Bright, on 30 May).

The country so compelling described by Thant Myint-U in his prescient book, Where China Meets India, has gone from being a pariah state to one which is now being wooed by almost every power or wannabe power in the world. The book foretold this perceptional transformation as an inevitable outcome of the dynamics of internal forces within the country that had reached a tipping point. Almost forgotten by history, the region has come alive due to a combination of circumstances.

Though it got independence from colonial rule about a year after India, the country descended into chaos following a military coup in 1962. Thereafter, it went into isolation, abetted no doubt by the fact that subsequently brutal economic sanctions were put in place. Consequently, it was as though time froze on Myanmar. A pity, because it was till the onset of World War II a bustling centre of economic activity, along with India, to serve colonial interests. The exit of the British should have, like it did in the case of India, opened up an opportunity for the country.

In fact, its economic potential far exceeded that of India. Its geographical location, at the cusp of the two borders of India and China and its long coastal border along the Bay of Bengal, gave it this inherent advantage. To Indians it was the West Asia of that period. They rushed here in the early 20th century and adopted the country. At a personal level, my father too (along with a colleague’s grandfather and another’s father-in-law, unrelated of course), as a teenager, was among immigrants who came to what they fondly referred to as Rangoon to eke out a living. All this ended rudely when the second world war broke out and the Japanese unleashed their characteristic aggression. I have heard stories growing up about how people had to dodge the aerial bombing. Most of the Indians (my father and his family, like many other Indians, had trekked back across the Arakan Yoma mountain range back to India after the British retreated) who braved the war departed after the military coup in the sixties.

Now, the wheel has turned a full circle. Ironically, it is for the very same strategic reasons that it is once again back in the reckoning. Of course, it has also helped that first China, and more recently India, have emerged among the new growth hubs in the world. Things were hastened, of course, after the junta allowed democratic forces to take root. The calibrated manner in which this has been permitted may put off the purists, but in a way it has ensured against an abrupt regime change that inevitably results in a vacuum (like in the case of Afghanistan, Iraq and Libya), something that can in turn rapidly force a situation of chaos. And like India, Myanmar is a delicate balance of various ethnic hues and a wrong step can be catastrophic.

While they may deny it, the new found love of the rest of the world for Myanmar is primarily to blunt the naked mercantilist ambitions of the Chinese. It is almost as though every major western power has come together on cue, even as there is a visible element of self-doubt that has crept into the nation’s mindset on China. Two years ago, the government pulled the plug on a $3.6 billion Myitsone dam being built in Kachin—the province that hugs India and China on its two international borders on either side—ostensibly following vehement opposition from the locals.

With sanctions no longer in place, life has become a lot less complicated for international companies and countries to pursue their interest. The Japanese (no doubt egged on by the US), whose rivalry with China is now acquiring a new form, are taking a lead role. Plans are afoot to provide connectivity across the country even as efforts are on to put in place the requisite infrastructure. As the McKinsey report rightly points out, the late bloomer factor may be to Myanmar’s advantage, especially as it is the first country to really look at such a fundamental transformation by exploiting the power of the digital economy (think what Aadhaar is trying to do with managing direct benefits transfer).

While all this may be true, presumably the powers that be in Myanmar know that none of this new found affection of the world comes without strings. The future success of the country depends on how it skilfully balances its own interests against the interests, often competing, of foreign investors. There are no free lunches. Yet, any wrong move by any of the stakeholders, particularly on the part of the US, China or Japan, could be disastrous for the nation. So then, will it be third time lucky for Myanmar?

Anil Padmanabhan is deputy managing editor of Mint and writes every week on the intersection of politics and economics. Comments are welcome at capitalcalculus@livemint.com

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