Dec 18, 2012

Myanmar - Patience a necessity in Myanmar

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Thein Sein's government has made a number of high-profile reforms since his inauguration in March 2011.

The release of political prisoners including Aung San Suu Kyi, the easing of media censorship laws and the National League for Democracy party's victory in this year's bi-elections, have been reciprocated by the suspension of European Union and United States sanctions. However, the true intentions of reform remain unclear.

Aside from the reforms, there has been minimal structural change in the government. The military has veto power over any proposed changes to the constitution. The defense services are represented by 25% in the upper house and 33% in the lower house. Major constitutional changes can only be made with the approval of 75% of parliamentarians from both the lower and upper house, meaning that the military retain power over proposed reforms.

Added to this, it is generally accepted that one of the leading political parties, the Union Solidarity and Development Party (USDP), which is made up largely of former senior generals, is a vehicle for the military. A very likely scenario is that the USDP will remain in control and continue to window dress for the international community, allowing for decreased economic isolation whilst rehabilitating the regime's appearance in the Association of Southeast Asian Nations. This is an image change that is at present underway. Ultimately the ruling party will lead the re-branding of the country to allow for international approval for wider foreign investment.

However, this current reality, while not ideal, is likely a positive scenario out of a number of worse ones. These reforms, regardless of the intent of their makers, have opened up the country to non-Chinese foreign investment, international assistance and the chairmanship of the Association of Southeast Asian Nations. These reforms should be seen as the start of a process not the conclusion.

A new investment bill that no longer requires a local majority shareholder may bring in a much-needed injection of overseas companies that are bound to uphold corporate social responsibility and, although probably limited, it would be an alternative to the actions of Chinese state-owned enterprises that have operated with near impunity for years.

The opening up of the country to new investment, most importantly from regional heavyweight India, will also allow for a convergence of trade routes and energy corridors in Southeast Asia. Multi-national organizations such as the EU and countries such as Norway and Australia, offering much needed assistance can also assist in economic and political reform. Inter-governmental organizations and non-government organizations will be important in stabilizing the investment climate through the establishment of peace initiatives in ethnic areas.

The beginning of a democratization process in previously autocratic countries is usually a time of instability if the old guard suddenly disappears, leaving a power vacuum. One could draw comparisons to Egypt after Hosni Mubarak or the Balkans after Josip Broz Tito. Or one could simply refer to Myanmar's history. For example, the coup d'etat in 1958, under General Ne Win, occurred following a decade of weak government, wide-spread insurgencies and political violence. Again, in 1962 after only two years of civilian rule, the military were forced to seize power after ineffective civilian government, continued insurgency and a growing independence movement in Shan state.

The present structure, with the military at the apex making incremental reforms, should be seen as the start of a process. It is a mistake to assume that overnight democracy is the cure to the ills of Myanmar. This was a mistake that has been made by the West in many other places. In Iraq when the dictatorship of Saddam Hussein fell or Yugoslavia after the demise of the communist superstructure are examples of this.

This process could lead to a number of scenarios, the most likely of which are: a golden-era where imperfect political reforms continue to gain momentum, increasing international trade and investment, increasing peace agreements in ethnic areas (with limited skirmishes) and greater power for reformists in the administration; or a democratization process that moves too quickly, where the opposition demands rapid change, with calls for the ousting of the military government and splits between reformers and hardliners, which in turn lead to a resurgent military and the roll-back of reforms.

The outcome will depend on the actions of the present administration, the opposition and the international community and how they view this current process. As they say, patience is a virtue. In the case of Myanmar, it is a necessity.

Christopher O'Hara

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