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As Myanmar grapples with the impacts of natural disasters, political instability, and economic fragility, the future of foreign-backed infrastructure development will remain precarious
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On 28 March, Myanmar experienced a powerful earthquake measuring 7.7 on the Richter scale. The epicentre was in the Sagaing Region, near Mandalay, the second-largest city in the country. Since then, around 67 aftershocks have been felt. The earthquake has severely impacted 17 million people across 57 townships, with over 9 million critically affected, exacerbating an already dire humanitarian crisis in the region. As of 6 April, the death toll has risen to 3,471, with over 4,671 injured and 214 individuals reported missing. These numbers are expected to increase further. According to the United States Geological Survey (USGS), there is a 35 percent chance that the death toll will be between 10,000 and 100,000 and a 33 percent chance that more than 100,000 people will die. USGS also estimates there is a chance that the cost of destruction may exceed US$10 billion, which is 70 percent of the country's gross domestic product. The tremors were felt as far as Thailand and China.
In response to the earthquake, junta leader Min Aung Hlaing declared six regions, including the Sagaing, Mandalay, and Magway, as emergency zones and is conducting rescue operations. He has also issued an “open invitation to any organisations and nations willing to come and help the people in need within our country.” To help Myanmar, India, China, the United Kingdom (UK), the United States (US), and Singapore have provided financial aid, medical personnel, and relief materials. China made the highest contribution, committing US$14 million in humanitarian assistance. UN agencies and their humanitarian partners have allocated an initial amount of US$15 million and deployed emergency medical teams, shelter materials, etc. In the recently held sixth Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) Summit on 4 April, Min Aung Hlaing and other regional leaders also issued a joint statement pledging support through its established mechanisms.
The earthquake has severely impacted 17 million people across 57 townships, with over 9 million critically affected, exacerbating an already dire humanitarian crisis in the region.
Apart from lives, the earthquake caused severe infrastructural damage, destroying roads, homes, and heritage sites. Major landmarks such as the Sky Villa, Mahamuni, Ananda Pagodas, and the University of Mandalay suffered severe damage. In Sagaing Region, the nearly 90-year-old Ava Bridge, which connects Sagaing with Mandalay across the Irrawaddy River, has collapsed. Several monasteries and religious sites, including the Ma Shi Khana Pagoda, were also affected.
Given the scale of destruction and the regions affected, it becomes crucial to assess how this disaster could disrupt ongoing foreign-backed infrastructure projects, particularly those supported by China and India, which hold significant economic and strategic stakes.
China’s key projects in Myanmar include roads and railways under the China-Myanmar Economic Corridor (CMEC) and large-scale mining and industrial ventures such as the Letpadaung copper mine and the Tagaung nickel processing plant. The political and security landscape in Myanmar has shifted significantly post-Operation 1027, with Ethnic Armed Organisations (EAOs) gaining control over vast territories, including strategic areas in Rakhine, northern Shan State, the Sagaing region, and central Myanmar. As a result, 23 of China’s 34 major projects in Myanmar have come under the influence of these groups.
Moreover, China’s perceived alignment with the military junta has fuelled resentment among sections of the Myanmar population, culminating in an attack on the Chinese consulate in October 2024. In response, China and the junta agreed to establish a China-Myanmar joint security company to safeguard Chinese investments. The supporters of the joint security argue that it protects investments against attacks from ethnic groups and local resistance; critics, however, warn that it undermines Myanmar’s sovereignty by permitting foreign security forces to operate within its border.
China’s perceived alignment with the military junta has fuelled resentment among sections of the Myanmar population, culminating in an attack on the Chinese consulate in October 2024.
The security company can protect investments from violent groups and locals opposing the projects, but not against natural disasters. The recent earthquake exemplifies this challenge, as it has impacted regions where major CMEC projects are operational or under construction, particularly in the Mandalay region. Projects like the China-backed Alpha Cement plant, located in Madaya Township, 32 kilometres northeast of Mandalay City, and the China-Myanmar pipelines, which transport oil and gas from Rakhine State through Mandalay and Magwe to Shan State before reaching Yunnan, remain crucial, with China National Petroleum Corporation as the primary stakeholder.
Another key project, the Muse-Mandalay-Kyaukphyu railway, remains in the planning phase but is a priority for Beijing. China has been working to accelerate many such projects, especially following the January 2025 ceasefire in Shan State. This effort was highlighted by the Chinese Ambassador to Myanmar, Ma Jia's visit from 26-28 February, during which she met with the Shan State Chief Minister to kick start the work on the projects. However, the earthquake and its widespread devastation will inevitably disrupt these timelines, further complicating China’s investment strategy in Myanmar.
As Myanmar’s fifth-largest trading partner and 11th-largest investor, India maintains strong economic and strategic interests due to shared borders and historical ties. Indian investment in Myanmar is in different sectors. However, it concentrates on oil and gas. India’s state-owned Numaligarh Refinery Limited has been exporting oil to Myanmar via the 421-kilometre road linking Numaligarh in Assam to Moreah on the border with Sagaing.
The earthquake has likely impacted India's key connectivity project, the India-Myanmar-Thailand Trilateral Highway (IMT-TH), which passes through the Mandalay and Sagaing region. Both regions suffered extensive structural damage, including the collapse of a dam that led to flooding and affected the Mandalay–Yangon highway. In Sagaing, one of the hardest-hit areas, nearly 700 fatalities have been reported, and 90 percent of structures, including much of the Ava Bridge, have been destroyed. Given this widespread devastation, it is plausible that the IMT-TH infrastructure in the region has sustained significant damage, though specific assessments are yet to be reported. Even before the earthquake, the project faced delays due to political instability and security concerns in Myanmar, with key sections like Kalewa–Yagyi still under construction and completion timelines uncertain. The impact of the earthquake may further delay the construction of these projects.
Both regions suffered extensive structural damage, including the collapse of a dam that led to flooding and affected the Mandalay–Yangon highway.
Meanwhile, the Kaladan Multi-Modal Transit Transport Project, another major Indian initiative in Myanmar, may not have sustained direct damage, as its key locations—Sittwe Port and the inland waterways to Paletwa—are situated in Rakhine and Chin States, far from the earthquake’s epicentre. However, the combined effects of the disaster and Myanmar’s ongoing conflict could still disrupt the timelines and operational aspects of the project.
Ongoing conflicts in Myanmar remain a significant challenge to the timely completion of the infrastructure projects in the country. Research indicates that natural disasters often escalate conflicts, particularly in politically fragile and economically weak countries, as seen in Myanmar. In the five days following the earthquake, Myanmar’s military carried out 32 air bombings across 11 areas, including the quake-devastated Sagaing and Mandalay regions, killing 50 and wounding 49 citizens.
Many large-scale, foreign and domestic infrastructure projects now face an uncertain future, with funding, construction, and security all in jeopardy. If the situation does not improve, investors may abandon some projects.
Japan is the largest creditor to the country, lending 36 percent of total debt through its Official Development Assistance and concessional loans.
Furthermore, Myanmar may need loans and assistance to rebuild infrastructure, adding debt to the country. According to the International Debt Report 2024, Myanmar’s total debt was about US$ 12.1 billion. Japan is the largest creditor to the country, lending 36 percent of total debt through its Official Development Assistance and concessional loans. 15 percent is owed to private lenders, around 28 percent is owed to multilateral financial institutions, including the World Bank and the Asian Development Bank, and around 6 percent to China. Any additional loan will continue to pile up the country's debt.
As Myanmar grapples with the compounded impacts of natural disasters, political instability, and economic fragility, the future of foreign-backed infrastructure development will remain precarious, caught between ambition and instability.
Amit Ranjan is a Research Fellow at the Institute of South Asian Studies, National University of Singapore.
Sreeparna Banerjee is an Associate Fellow at the Strategic Studies Programme at the Observer Research Foundation.
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Amit Ranjan is a Research Fellow at the Institute of South Asian Studies, National University of Singapore. He recently co-edited The Aftermath of the Bangladesh Liberation War of ...
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Sreeparna Banerjee is an Associate Fellow in the Strategic Studies Programme. Her work focuses on the geopolitical and strategic affairs concerning two Southeast Asian countries, namely ...
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