Russia and Myanmar intend to strengthen economic ties, which are hampered by sanctions

On September 14, Russian Foreign Minister Sergei Lavrov met in Moscow with Foreign Minister and Deputy Prime Minister of Myanmar Than Swe. Contacts between the leadership of Russia and Myanmar have become regular since 2021. Lavrov last visited this country in August 2022. In September of the same year in Vladivostok at the Eastern Economic Forum (EEF), Vladimir Putin met with the leader of the military provisional government of Myanmar, General Min Aung Hlaing.

Lavrov, opening the meeting, announced “intense” cooperation in the trade and economic sphere. But at a press conference following the negotiations, he stated that “for objective reasons, there has been a slight decrease in trade turnover.” “We considered the tasks of changing this trend and restoring positive growth,” Lavrov said, announcing a meeting of the Russian-Myanmar intergovernmental commission on trade and economic cooperation until the end of 2023, where specific proposals were prepared on both sides.

In the first half of 2023, trade turnover between Russia and Myanmar amounted to about $200 million (with neighboring Thailand – $1.2 billion). The basis of Russia’s exports to Myanmar are equipment, tools and transport. Russia imports from Myanmar – textiles, shoes, agricultural products. According to Ekaterina Koldunova, director of the ASEAN Center at MGIMO, logistical difficulties and the Western sanctions regime led to a decrease in trade turnover. At the same time, according to her, although Myanmar’s main partners are traditionally China and India, the Burmese authorities expect to diversify their contacts by strengthening ties with Moscow. Myanmar is heavily dependent on imports and suffers from a shortage of foreign currency, says orientalist Peter Kozma, who lives in Myanmar.

Separately, the ministers discussed issues of civil aviation. Vedomosti wrote on September 5 about Myanmar Airways’ intention to open direct flights between Yangon (Myanmar) and Moscow in 2024. Than Swe arrived in Russia on a flight of this company.

Before the meeting of the foreign ministers of Russia and Myanmar in Moscow, a high-ranking Myanmar delegation visited the EEF in Vladivostok on September 10–13. On September 10, Myanmar Industry Minister Charlie Tan announced that the parties plan to sign an agreement on tourism. On September 12, Russian Minister of Economic Development Maxim Reshetnikov met with the Minister of Transport of Myanmar, Mya Tun U, and the Minister of Investment of the country, Kan Zaw, on the sidelines of the EEF. The parties discussed trade and economic contacts and the development of “secure mutual settlement systems.” The Central Banks of the two countries agreed on the use of the Mir payment system by December 2023 back in mid-June. Reshetnikov announced the interest of Russian business in Myanmar agricultural goods and reported on the study of regular purchases of Myanmar coffee by Russian retail chains. For now, the Peace Card agreement is unlikely to help boost tourism to Myanmar, which is quite safe in tourist areas, Kozma says. The official local currency rate that will be used when withdrawing money from an ATM is significantly lower than the black market rate, he explains.

Although military-technical cooperation (MTC) was not directly mentioned following the meeting of foreign ministers in Moscow, it is one of the key areas of Russian-Myanmar contacts. The core direction of relations between Russia and Myanmar is military-technical cooperation, Ilya Kramnik, a researcher at IMEMO RAS, is sure. According to him, this is aviation: Su-30SM fighters, Yak-130 combat training aircraft, maintenance of previously delivered Mig-29 fighters, Mi-24, Mi-17 and Mi-35 helicopters, air defense systems. To maintain the level of military-technical cooperation, the increase in students from Myanmar in Russian military universities continues, Koldunova recalled.

At the meeting in Moscow, Lavrov added that he discussed with Than Swe “special prospects for interaction” in energy, the peaceful use of nuclear energy, telecoms and information technology, and space, including remote sensing of the Earth. Myanmar people are counting on large Russian investment projects to solve the currency problem and revive the economy, Kozma says. But Moscow is discouraged by the Myanmar approach, when a foreign delegation is brought “into an open field” and offered to build something instead of providing the ready-made projects required at this stage, included in the fundamental documents, the expert explains. Russia may be interested in “orphan” projects of departed Western investors, for example, the Shweli-3 hydropower project of the Swedish-Finnish engineering company AFRY and the French EDF. While no such decision has been made, Russian companies are extremely cautious. But Myanmar people, living in conditions of a serious power supply crisis, are ready to pay money for energy projects, in particular, for example, the Rosatom project to build low-power nuclear power plants. Perhaps this will be the main of 2-3 future Russian “success stories” in Myanmar, the expert suggests. Currently, work is underway in the nuclear energy industry through Rosatom, including the training of local personnel, says Koldunova.