Despite China’s power and proximity, the US has more influence than it recognises in Myanmar, writes Hunter Marston.

On 7 October, President Obama signed an executive order lifting nearly all of the remaining economic sanctions on Myanmar’s government, following a meeting with the country’s leader Aung San Suu Kyi during her September trip to Washington. American businesses are eager to invest in “the last frontier” in Asia, fearing that China has already dominated economic opportunities there.

Despite China’s enduring influence over its neighbour, the United States enjoys several unrecognised – and underutilised – advantages over the Asian giant, flowing from its substantial soft power, an asset China has failed to cultivate.

Myanmar watchers often frame the country’s democratic opening as Naypyitaw’s attempt to balance the influence of Chinese and Western powers. Many credit the political transition to the former junta leaders’ desire to pivot away from Beijing’s long-time dominance by leveraging US support for systemic reforms.

With the Obama administration’s easing of sanctions on the country, some now suggest that the US and China are locked in a competition for influence in Myanmar, which finds itself at an historic crossroads. Were it that simple, Myanmar would have been “lost” to China many years ago, given Beijing’s proximity, power, and history.

However, Myanmar is a country, not a prize, and as events such as Brexit recently illustrated, nationalist impulses nearly always trump more rational, economic motives. Despite the relative absence of US investment in the country, Myanmar’s people still look to the West as a force for good.

Yet, as Monish Tourangbam and Pawan Amin note in a recent New Mandala article, China still enjoys a strategic advantage. Given years of Chinese economic clout and Myanmar’s chronic underdevelopment, this situation likely won’t change for some time. As Myanmar scholar Bertil Lintner said in a recent interview, “Myanmar remains of huge economic and strategic importance for China.”

China is Myanmar’s largest trade partner, with bilateral exchange in goods reaching nearly $10 billion in the first 10 months of 2015-16. Seeking to escape that trade imbalance, Aung San Suu Kyi’s government has courted the United States and most recently made the case that the time was right for lifting sanctions. The Obama administration and US Congress continue to advocate for Myanmar’s democratic progress as they seek to deepen cooperation with the country.

But as Lintner argues:

Nice words about enduring friendship and progress in implementing democracy and respect for human rights may have been said during Suu Kyi’s visit to Washington. But realities on the ground will not change. China is there, just across the northeastern border. And the US, despite its “pivot”, is far away.

Myanmar’s massive economic needs ensure that Western investment alone cannot fill the void. However, the United States possesses a few key – and underappreciated – advantages that China should envy: a hugely positive reputation (compared to that of China); values of democracy, rule of law, and respect for human rights, on which that positive perception rests; and unique and desirable business brands (these include globally recognised products such as Apple’s iPhone and Pepsi soda), which pose opportunities for inroads in Myanmar’s rapidly growing market. When asked, Myanmar people voice a clear preference for democracy, English language, Western culture, and business standards.

Despite its massive economic leverage in the country, China suffers from a reputational trust deficit. Chinese projects such as the Myitsone Dam have left a negative perception of the country’s investment strategy, with its lack of consideration for labor standards, the environment, and human rights.

Where Chinese businesses have rushed to secure investment deals, often displacing local people and wreaking havoc on the environment, American corporations have committed hefty sums of capital to invest in education, job training, health and water infrastructure, earning goodwill from the Myanmar people.

However, US companies have been extremely reticent to commit to the country in the near term, wary of political risk and fearful of getting involved with “cronies” sanctioned by the US Treasury Department. The Obama administration hopes the recent move to ease restrictions will boost investment.

The United States, viewed as a responsible business partner and staunch supporter of Myanmar’s democracy, wields enormous influence over the country’s leaders and people.

While China will continue to hold an outsize presence in the country with its massive infrastructure investment, the United States has an untapped reservoir of goodwill. Myanmar businesses and consumers are eager for expanded US trade and investment in the country. The recent lifting of remaining sanctions will pave the way for expanded economic cooperation.

At the same time, Washington should continue to press Myanmar’s leaders on democracy and human rights. Aung San Suu Kyi values US opinion and has a strong relationship with both President Obama, his likely successor Hillary Clinton, and the American Congress.

When President Obama first visited the country in 2012 (he again visited in 2014), he received a massive show of support, passing by tens of thousands of cheering Myanmar people in the streets of Yangon. As Secretary of State, Hillary Clinton was also instrumental in US-Myanmar policy, traveling to the country in 2011 and spearheading Washington’s rapprochement with Naypyitaw as part of the US “pivot” to Asia.

In the long run, the US can explore further military-to-military engagement with Myanmar’s military under its International Military Education and Training (IMET) program. The US trained Myanmar military officers in the United States in the 1980s. Resuming US-Myanmar military engagement is a surefire way to build links with the latter’s most powerful institution.

As the US and China compete for influence in Myanmar, it is important to recall that the “great game” may not have a clear winner (after all, Myanmar is a country, not a prize). But there are a variety of instruments available for Washington to take advantage of the massive support it enjoys in the country.

Hunter Marston is an independent Myanmar analyst based in Washington, DC. You can follow him on Twitter at @hmarston4.

This article is published in collaboration with Policy Forum and The Myanmar Times.