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
Business & Investment Opportunities
Saigon Business Corporation Pte Ltd (SBC) is incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Health care and Life Science with expertise in ASEAN 's area. We are currently changing the platform of www.yourvietnamexpert.com, if any request, please, contact directly Dr Christian SIODMAK, business strategist, owner and CEO of SBC at christian.siodmak@gmail.com. Many thanks.
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