Introduction

Myanmar (formerly known as Burma) is strategically located in Southeast Asia between China and India. It is the largest mainland Southeast Asian country by area (slightly smaller than New South Wales) and has an estimated population of 48 million.

In the early 20th century, the capital Rangoon (now Yangon) was a prosperous and cosmopolitan trading centre with some of the best educational and medical facilities in the region. Decades of military rule and isolationist policies in the latter part of last century caused living standards to plummet. For much of the past 50 years, Myanmar has been relatively closed to the world and Australian engagement has accordingly been limited.

This is changing. Myanmar has embarked on a program of political, economic and social reform and is beginning to regain its standing in the region. It is a country in transition. The changes underway are some of the most profound since the country’s independence from British rule in 1948. The magnitude of Myanmar’s potential has captured international attention.

If reforms continue, Myanmar could again become one of the more prosperous countries of the region. It has abundant natural resources, including oil, gas, coal, timber, minerals and gems. Its emergence offers new opportunities for the region, including in addressing transnational challenges such as food and water security. With a long Indian Ocean coastline and deep‑sea ports, Myanmar has the potential to become a strategic bridge linking East, South and Southeast Asia.

Currently, however, Myanmar is the poorest member of the Association of Southeast Asian Nations (ASEAN), and an estimated one-quarter of its people live in poverty. The challenges facing the country are extensive, but its commitment to reform appears strong. Considerable new opportunities are emerging for expanded engagement between Australia and Myanmar.

Government, business and people-to-people links

Australia’s official ties with Myanmar date back to 1952, when a representative office was opened in Rangoon. The Australian Embassy is small, reflecting the limited nature of the bilateral engagement to date. The relationship focuses on development assistance, but is gradually expanding to encompass more interaction on trade and investment, education, border security and countering transnational crime.

In response to recent positive developments, travel and financial transaction bans on individuals were lifted in July 2012, having been imposed in 1990 because of concerns about human rights and democracy under the ruling regime at that time.

Bilateral trade has been modest (around $83 million in 2011) and the Australian business presence in Myanmar small. The scope for trade and investment links has expanded following the easing of sanctions and Australia’s decision to shift from a neutral policy to one of promoting trade with Myanmar.

There is growing commercial interest by Australian companies in likely opportunities in mining, oil, gas, education and training, tourism, agribusiness, food and beverage and consumer products, and legal and business advisory services. Myanmar’s membership of the ASEAN–Australia–New Zealand Free Trade Agreement should also help to build trade relations over time. Australia plans to assist Myanmar with capacity building under the agreement’s Economic Cooperation Work Program.

Myanmar remains a high-risk and high-cost place to do business, but the magnitude of the country’s potential attracts attention. Trade and investment, pursued in a responsible way, will help Myanmar achieve its economic promise, which will be critical for raising the living standards of its people.

Helping the people of Myanmar is at the core of Australia’s engagement. Their needs are great. Health outcomes are among the worst in the region, and many die from easily preventable illness and disease. Myanmar has an under‑5 mortality rate of 71 deaths per 1,000 live births (compared to 24 in Vietnam). Close to half of Myanmar children do not complete primary school, and almost half of the country’s teachers have not received adequate teacher training.

As Myanmar opens up to the world, Australia is expanding its engagement. With its current annual program of around $64 million, Australia is the second-largest bilateral aid donor to Myanmar. The aid program will continue to be a central element of Australia’s engagement in Myanmar and will grow to $100 million per year by 2015–16. Australian assistance is focused on improving education, health and livelihoods and support for the country’s transition to a stable, more democratic and prosperous nation. In addition to humanitarian work, assistance includes support for the country’s broader reform program, in areas ranging from ethnic conflict resolution and peace-building, to human rights, law reform and macro-economic reform.

Australia will seek a bilateral aid arrangement with the Myanmar government. This will give our program more influence and allow our officials to engage more deeply with Myanmar Government counterpart agencies.

We also have an expanding scholarships program, which is now in its third year of operation. Australia doubled the number of long-term postgraduate scholarships to 20 in 2012. There is emerging interest from Australian educational institutions in establishing links with Myanmar institutions—much as is the case in some other Southeast Asian countries.

Australia has started new programs to help members of Myanmar’s public and private sectors gain international experience and to promote better understanding between our countries, including through visits to Australia for trade policy training and media interaction.

Two-way contact is growing in other ways. Asialink has begun work in Myanmar to explore the implications of the changes now underway and the opportunities they will bring. Australian charitable organisations—some of which have connections dating back many years—are ramping up their engagement. The Myanmar community in Australia, numbering some 20,000, is also seeking to re-establish links in the new environment. It is likely to grow in size as linkages develop. Tourism has considerable potential for growth, with the number of Australians visiting Myanmar already increasing.

There is good cooperation on security issues of critical importance to Australia and the region, particularly combating drug trafficking and people smuggling, and growing cooperation on border control.

Regional security links date back to World War II, when more than 13,000 Australian prisoners-of-war worked on the Thai–Burma railway. Of the 2,800 Australians who lost their lives, 1,380 are buried in Myanmar. As a consequence of the country’s years of isolation, Australian war graves in Myanmar have in the past been difficult to visit (the war graves over the border in Thailand receive as many visitors in a day as those in Myanmar receive in a year). With the opening up of Myanmar and increasing ease of travel, more Australians who wish to pay their respects will be able visit the graves.

Myanmar’s changing role is highlighted by the fact that it will assume the chairmanship of ASEAN in 2014. This is an opportunity for Australia to extend its links with other ASEAN countries to encompass greater cooperation with Myanmar. There are likely to be new opportunities for Australia and Myanmar to pursue joint interests through regional structures such as the ASEAN Regional Forum, the ASEAN–Australia–New Zealand Free Trade Agreement and the East Asia Summit.

Towards 2025

Australia wants to see Myanmar make the most of its enormous potential, first and foremost to raise the living standards of its people and to expand their opportunities and prospects. The scale of the reform process underway in Myanmar is massive, simultaneously encompassing political, economic and social change. It will be a long and challenging path, but with the right policies and support from the international community, Myanmar can make great strides.

Australia stands ready to continue to do all it can to help Myanmar navigate this reform path. Australian engagement will help Myanmar develop its capacities—through basic health and education assistance, and will support sustainable economic and social development through responsible trade and investment.

Our uninterrupted diplomatic relations with Myanmar for some 60 years, together with our leading role in providing development assistance, particularly since Cyclone Nargis, mean we are well positioned to build up mutually beneficial and constructive relations with Myanmar.

There are many areas in which the interests of Australia and Myanmar will intersect and on which cooperation will be mutually beneficial, such as regional security, increasing trade, and addressing regional challenges such as climate change, food security and disaster preparedness.

Taking into account Myanmar’s resources, its potential as a labour and consumer market, and its strategic location and transport corridors, the opportunities for Australian commercial engagement, and for provision of Australian expertise, are likely to grow over time.

There is also great potential for building up cultural linkages. Australia is supporting urban heritage projects to help Myanmar conserve the magnificent early 20th century streetscape of downtown Yangon, and through sporting links with the Myanmar people. Goodwill and an abiding interest will help to underpin greater collaboration and interaction between the Australian and Myanmar people.