Issue Brief • June 15th, 2023 • Center for Arakan Studies

# The Investments of China and India in Rakhine State: The Perspectives of Rakhine Stakeholders on Ground in Post-Coup Myanmar

### Executive Summary

The Rakhine State in Myanmar offers immense potential for foreign direct investment (FDI) owing to its strategic location, abundant natural resources, and diverse opportunities in sectors such as agriculture, fishery, tourism, oil and gas, and services. In this context, it is essential to examine the major investments made by China and India in Rakhine State to understand their implications for the local stakeholders. China's Kyauk - Phyu Special Economic Zone (SEZ) and Deep Seaport project aims to reduce its dependence on the Strait of Malacca for transporting oil and liquefied natural gas from the Middle East. India, on the other hand, is involved in the Kaladan Multi-Modal Transit Transport Project, which seeks to enhance transportation infrastructure and connectivity with neighboring countries. However, the Kyauk-phyu SEZ project has faced criticism for being a last-minute deal approved by the previous government without adequate public discussion. Therefore, it is crucial to consider the public perception and the perspectives of the Rakhine stakeholders regarding the investments made by China and India in the region. The stakeholders have mixed opinions on the investments, with concerns around the impact on the environment and potential displacement of communities. To mitigate negative impacts, the project stakeholders need to increase transparency and engagement with local communities during project implementation. Moreover, it is important to ensure that these projects are implemented for the local welfare while adhering to environmental laws.

Oil Piped from Myanmar to China Hits 3.9 Million Tonnes in 2017

### Introduction: Why Arakan Matters

Rakhine State is an attractive location for foreign direct investment (FDI) due to several compelling factors. Firstly, its strategic position along the Bay of Bengal makes it a geostrategic hub for business ventures. Additionally, the region is endowed with abundant natural resources, breathtaking beaches, and fascinating cultural and historical sites, which make it a prime destination for investment in tourism, mining, and other related industries. Furthermore, the State boasts of vast stretches of land, majestic mountains, and rivers, all of which provide ample opportunities for diverse investment ventures. In addition, the state shares borders with key regions in Myanmar such as Magwe, Bago, Ayeyarwaddy, and others, providing easy access to neighboring markets. Finally, its proximity to populous markets such as Bangladesh and India, makes Rakhine State an attractive investment destination for those seeking to tap into the immense potential of these markets. In leveraging for detail, Rakhine State, located in the western part of Myanmar, covers a total area of approximately 14,184 square miles, of which 18% (1,635,850 acres) is net arable land.

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The CAS is an independent, non-partisan and research-oriented group conducting research and analyzing issues related to Arakan/Rakhine affairs.

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