In this webinar, Dr Kaho Yu shared on Covid-19 and its impact on Myanmar’s energy sector, the prospect for Myanmar in the Belt and Road Initiative, and the risks and opportunities amid the 70th anniversary of Myanmar-China diplomatic relations.
REGIONAL STRATEGIC AND POLITICAL STUDIES PROGRAMME WEBINAR
Tuesday, 7 July 2020 – The ISEAS – Yusof Ishak Institute hosted Dr Kaho Yu to a webinar on the topic “From Covid-19 to Belt and Road Initiative: What to Watch in Myanmar’s Energy Sector in 2020?” A senior analyst at global risk consultancy Verisk Maplecroft, Dr Yu is an expert in the political economy of energy in the Asia-Pacific, China’s energy policy and the Belt & Road Initiative. His discussion is timely as Myanmar’s energy industry is reeling from the impact of the coronavirus pandemic and the global economy is suffering from sustained disruptions to supply chains in manufacturing, transport and construction.
Dr Yu addressed the impact of Covid-19 on the global, domestic and company levels to highlight how the Myanmar’s energy industry is facing both supply and demand disruptions. At the global level, logistics restrictions in China, especially in regional manufacturing hubs such as Hubei, has not only delayed the delivery of key components, but has also limited the use of fuel, with a reported 3 million barrels of global oil demand lost daily in the first quarter of this year. Domestically in Myanmar, containment measures and travel restrictions have also caused significant operational disruption to the energy industry. Moreover, at the corporate level, international companies are looking to reduce the scale of their overseas commitments, which means that countries like Myanmar will receive fewer foreign investments.
Considering the drop in external demand from the U.S. and European energy market, Dr Yu surmised that a domestic fiscal stimulus alone will not be sufficient to drive the recovery of the energy industry in Myanmar. What it needs is an “external momentum”, which could come in the form of Chinese megaprojects. This is a very possible prospect, especially in terms of getting Chinese help to build up Myanmar’s energy infrastructure, given the various Memorandums of Understanding (MoUs) signed by Chinese President Xi Jinping and Myanmar State Councillor Daw Aung San Suu Kyi during the former’s state visit to Myanmar in January 2020 to mark the 70th anniversary of Myanmar-China relations. However, particularly given the economic disruptions caused by Covid-19, Myanmar is cautious about the risks associated with such megaprojects and remains worried about their commercial viability. The other possible driver of the Myanmar’s energy industry is the launch of another round of oil and gas bidding aimed at attracting a fresh tranche of foreign investments. However, this is easier said than done in view of not only the current depressed oil prices, but also the negative economic impact brought about by Covid-19. Myanmar would further need to reform a lot of its fiscal terms to attract foreign investors into this sector.
During the Q&A session, Dr Yu fielded questions relating to the internal competition within the region to secure the supply chains displaced from China, the impact of the megaprojects on the security situation in Myanmar’s restive regions, the likelihood of translating the various MoUs signed during President Xi’s visit to Myanmar into actual projects on the ground, and the impact of the upcoming elections in Myanmar on China’s megaprojects in the country.
Around 60 people from both Singapore and overseas attended this webinar session.