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Making Sense of Change in Myanmar

Ko Ko Gyi

Introduction of Myanmar

Burma-Belarus Round Table, Prague, 24 October 2012

Myanmar used to be known as a golden land because of Buddhist temples shining allover the country and the rice bowl of the world: the worlds largest exporter of rice inearly 20century.For a half-century after the military took over in 1962, Myanmarbecame a land of fear. Fear permeated the whole society. Not only the oppressedpeople but also the oppressive rulers lived with fear because fear of losing power

made the rulers to commit all human rights violations. On virtually every index bywhich human development is measured, the country of 56 million people has lostground and now sits near the bottom of world rankings. When even as many othernondemocratic countries in Asia have embraced economic reforms and foreignpolicies that have helped to integrate them into the global community and in somecases made them less authoritarian, Burmese military dictators got stuck in isolation(either self-imposed or externally imposed). Despite the efforts of a prodemocracyopposition movement and its best-known figure, Nobel laureate Daw Aung San SuuKyi, Myanmar seemed fated to remain unfree, poor, and trapped in on-going ethniccivil war.

Much to the surprise of observers, however, that picture began to change in early2011. Despite retaining a firm hold on power and facing no urgent domestic orinternational threats, the military began to shift course.

One of the questions that I have been asked these days is that whether or not Myanmarhas entered the process of change. Let me make it clear that Myanmar has changed.The change is significant as fact. Within a year, the transformation was unmistakable.The government freed most political prisoners, including prominent figures such as

Daw Aung San Suu Kyi. The regime allowed the opposition, including Daw AungSan Suu Kyi and her National League for Democracy (NLD), to take part in politics;entered ceasefire negotiations with a number of ethnic groups; abolished presscensorship and control of civil society; and permitted leading dissidents in exile toreturn. The democratic opposition responded to the openings favourably andenergetically. Daw Aung San Suu Kyi re-registered the NLD, and contested in theApril 1 by-elections. Winning 43 of the 45 seats available and winning all but onerace. Daw Aung San Suu Kyi was among the 43 winners, and now sits in parliamentand chaired a parliamentary committee for Rule of Law. She travelled abroad andgave speeches at the World Economic Forum, British parliament and the US.

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However, the on-going developments in Myanmar, which President Obama calledflickers ofProgress, has not substantially contributed to resolution of the power distributioncrises that the country is facing for several decades. In other word, the process is notwithout free of major obstacles and challenges.

Since 1962, military has ruled Myanmar in different facades, and two major problemsof power distributions have stood out: first, the vertical nature of power distribution,meaning that the people do not have rights to choose their own government, andsecond, horizontal nature of power distribution, meaning that the ethnic minoritygroups do not have equal rights and power vis-a-vis the Burmese-dominated center.These are the questions of democratic governance and ethnic equality. The process ofliberalization or opening (rather than democratization) has not substantiallycontributed to resolution of these two power distribution challenges.

In an institutional term, Myanmars constitutions since the Independence have notresolved these fundamental power distribution problems. Unless Myanmar manages tointroduce the security sector reform, the country will not experience substantivechange in the above-mentioned power-distribution challenges.

Having said that, I didnt mean to trivialize the change we are witnessing. As I noted,this is really significant. In short, just over a year ago this country was condemned asone of the worst tyrannies in the world. But now it is praised as a democratictransition model for other dictatorial countries. It is fascinating and puzzling. Here Iwould like to address three major questions regarding what has happened in Myanmar

since 2010 election. The three puzzles are:

1) Why is the reform taking place now?2) How do we make sense of the ongoing changes, and3) What is prospect of this reform?

I. Why Change? (Puzzle 1)

There are three explanations that are complimentary to one another to set up aconducive condition for this regime-led reform. The regime wanted to

1) Reduce its over-reliance on China,2) To address serious poverty problem (in other word, there was an economicimperative), and3) To avoid public revolt and mass uprising similar to what happened in 1988 and2007 (mainly due to the failure to address poverty/economic imperative), especially inthe context of Arab Spring.

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REDUCTION OF OVER-RELIANCE ON CHINA

When the military crackdown the prodemocracy uprising in 1988, the military facedinternational sanctions and had to rely on China. Since then the relations betweenMyanmar and China have profoundly deepened in terms of political, economic and

military cooperation between two neighbours with regional and internationalramifications. Myanmar has acquired key importance to China in terms of naturalresources and security.

The constructions of pipelines from Myanmar to China through ethnic minority areasof North eastern Myanmar have started in full swing in late 2009. The oil and naturalgas pipelines will run in parallel and start from Kyaukphyu port on the west coast ofMyanmar and enter China at the border city of Ruili in Yunnan province, that willtransport Middle East and African crude oil from Myanmar's Arakan coast to China'ssouth western Yunnan province avoiding the strategically vulnerable Malacca Strait

while also drawing on Myanmar's own gas reserves. Not only gas and oil but also onother natural resource extraction businesses Chinese engage in Myanmar are verycontroversial. For instance, the most sea-change moment in public opinion and alsowithin the ruling elites regarding Chinese influence in Myanmar came with thecontroversy over the Myitsone Dam project.

Chinas state-owned China Power Investment Corporation (CPI) started a multi-billion dollar project in 2006 to dam the Irrawaddy river at eight locations. TheMyitsone dam, which is the largest of these dams with a planned reservoir area biggerthan the size of Singapore, and which was being built just below the confluence of the

Irrawaddy river, caused the greatest public outcry. Moreover, the Myitsone dam islocated less than 100 km from a major tectonic fault line.

Experts warn that an earthquake could cause the collapse of the dam, with devastatingconsequences. When researchers, campaigners and independent media organizationsstarted ringing alarm bells by citing the Chinese-funded Environmental ImpactAssessment report,

which called for the abandonment of the project or its replacement with two smallerdams upstream, the issue captured the national imagination and prompted a sense of

public urgency to protect the Irrawaddy River. When the issue become a rallyingground for national mobilization,

The president U Thein Sein eventually made a partial concession to the public demandby announcing a temporary suspension of the project on September 30, 2011.

By the year 2050, China is expected to achieve world-class blue water navy status.Myanmar's geographical location offers a "land bridge" for the People's LiberationArmy Navy (PLAN) to reach the Indian Ocean, by reducing five to six days voyageand avoiding the Strait of Malacca. Myanmar also serves as a land-bridge connecting

the poor economies in South western part of Inland China with the growingeconomies of Southeast Asia, India and even with African and European markets.

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Thus, Myanmar is part and parcel of China's grand strategic design to achieve itsoverall goal of becoming a great power in the 21st century.

On the part of Myanmar, the military regime finds itself lacking the capacity to steerthe country away from China's orbit, given the imbalanced relation between twocountries. It would be possible only if Myanmar gain acceptance and engagement ofthe US and the West.

Perhaps, the most important driving arena for Burmese regime to reduce its over-reliance China would be in security relations. After the 1988 military coup, Burmese

junta that faced western arms embargo found China as the major source of armssupplies, and training. In 1990, US$ 1.2 billion arm sales. Burmese were increasingunhappy with low quality Chinese weapons and services. Burmese diversified theirsources of supply from Pakistan, North Korea, Russia and etc. In 2002, Myanmarpurchased 10 MiG-29 jet fighters from Russia, to Chinese displeasure. According toreports over one thousand Burmese technicians have been trained in Russia since2001and hundreds of Burmese soldiers have undertaken courses on military science inRussia from 2003-04. Myanmar also attempted to make a deal worth US$ 5 millionwith Russia for the construction of a 10 megawatt nuclear reactor in Myanmar.Myanmar's military relationship with North Korea was publicly noted since the early2000s.

Therefore, the nominal transition could be the best excuse for new generationBurmese military leaders, who have focused on modernization of the military in orderto bring their forces up to the level of their Southeast Asia counterparts, to steer awayfrom their overreliance on China, which they believe take advantage of Myanmarsisolation, and seize opportunity to socialize with and benefit from the West. U.S.delegations to Myanmar are generally impressed by the openness of the leadership ofthe Tatmadaw (the armed forces). Whenever senior U.S. officials meet a Burmesemilitary chief or defense minister and raise the issue of human rights violationscommitted by the army in ethnic areas, the military doesnt deny it, says a source.They admit that things are not very pretty on the ground, and ask for U.S. assistance,including training for the Tatmadaw officers. Earlier this year, Burmese generalsexpressed their wish to participate in the annual, multinational, U.S.-led Cobra Gold

military exercise in the Asia-Pacific region. Secretary of State Hilary Clinton has alsoreportedly asked CIA chief David Petraeus to visit Myanmar later this year. This isnot mere coincidence.

2. ECONOMIC IMPERATIVE (Puzzle 2)

Secondly, international pressure and western economic sanctions - especially targetedfinancial sanction - started biting. The major crises are that economy does not trickledown, job creation is virtually none, and the regimes negligence of public welfare istantamount to a crime. Although Myanmar's exposure to trade and FDI is higher todaythan ever before, and even higher than that of some comparable ASEAN countries,countrys growth rate and corresponding improvements in the lives of its citizens

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remain one of the lowest in the region. For instance, since 1988, Myanmar's GDP hasgrown at an annual average rate of 2.9 % the lowest in the Greater Mekong Subregion. The 2010 UNDP Human Development Index ranked Myanmar 132 out of 169countries. The country is the lowest in Southeast Asia (Laos and Cambodia ranked122 and 124 respectively). Thanks to the western sanction regime and governmentsbad policy, foreign trade and investment mainly benefit the natural resource extractionsector, which does not create jobs. Agriculture and manufacturing received a mere 1%of FDI. Even though the regime has received massive windfall from resource sector,they do not re-invest that revenue in education, health care, or necessaryinfrastructure. Instead, for example, it has plowed money into building the wastefulnew capital Naypyidaw at a cost of about 1 to 2 % of GDP, according to the IMF. Bythe government's own official statistics, it allocated 23.6 % ($2billion) of the 2011budget to military spending, while the country spends a mere 1.3 % on health ($110million) and 4.13 % ($349 million) on education. Some experts estimate thatactual military spending amounts to as much as 60 % of the overall budget. Thecountry is mired in poverty. Therefore, a new leadership in post-Than Shwe era hasshown a realization that Myanmar is falling even further behind the rest of SoutheastAsia. The government has set up a think-tank advisory group to help them ineconomic policy formulation, and initiated poverty elimination workshops andseminars, and etc. However, the country needs international assistance and economicties with the West in order to lift itself out of poverty and achieve growth. Thus, thenew government was trying hard to persuade the Western governments to removesanction regime by liberalizing the polity. Now they have mostly managed to do soexcept the security sector embargo.

3. AVOIDING POPULAR UPRISING (Puzzle 3)

Third explanation is related to the economic failure as well as regimes effort to re-engage with western countries. The economic woes are hurting the general publicrelentlessly. The bad policy of ruling regime often disrupts people quotidian. If historyis any guide, it is bread and butter grievances that trigger Burmese people to take tothe streets and challenge the status-quo. Then, when the authorities use force againstthese initial protests instead of peacefully managing popular demands, popular outragemushrooms into a full-scale uprising. That's what happened with the pro-democracyprotests in 1988 and the Buddhist monk-led "Saffron Revolution" in 2007. The firstwas triggered by a confiscatory currency reform along with police brutality againststudent protesters, the second by a hike in fuel prices in combination with policeattacks on monks. Given the bread and butter crisis is not resolved even under newpseudo-civilian government, the oppositions would still manage to rally publicsupport for their causes, and derail the Tatmadaws grand strategy to reduce over-reliance on China and re-engage with the West. In its efforts to court the West, theTatmadaw wants to avoid cracking down on any Arab Spring-style of popular revoltthat may arise at home. Therefore, military leaders are tolerating politicalliberalization, the incorporation of urban dissidents and ethnic rebels into the regime-led transition, and even the surging assertiveness of opposition forces. This toleration

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will likely continue so long as the reform process does not challenge the militarysveto-wielding political supremacy and economic interests.

II. How do we make sense of change?

Constraints (Obstacles and Challenges)

The dynamic of change has been constantly contested by several challenges. Asidefrom two power distribution challenges I noted earlier. Another crucial obstacle tosmooth and fair transition process is the uneven playground.

Over forty year of military rule has created a skewed playing field, which allows themilitary and their cronies to gain unparalleled access to resource, media outlets andprotection of laws. The democracy activists and ethnic groups, who continuously facerelentless persecutions of the state, and are deprived of resources, skills andinstitutional setups, will continue to languish in underdog position. The opening has

thus far benefited only to (war) criminals, cronies, and crooks and help them gaininglegitimacy/acceptable stature. The lives of people on the ground have worsened:poverty deepening and humanitarian crisis is dire, especially in ethnic areas suchas Kachin region. The President U Thein Sein seems to realize the danger of hisgovernments failure to deliver basic public goods to the citizens. In his speechaddressing a coordinating meeting of his cabinet early this month, President U TheinSein said, Our government must make a drastic improvement for the peoples needsincluding residential housing, water, power, transportation and jobs. The voice ofunderdogs are silenced because elites in various sectors including many media outletsare being

co-opted by the power-that-be. There should be no doubt on political will on allsides. (The process can even be dubbed as competitive reforms because everyonewants to score as a reformist.) But the real trouble lies other layers of challenges: themost visible one is structural constraints such as dire poverty, civil war in ethnic areasand etc, and another key constraint is institutional incompetence such as dysfunctionalbureaucracy and worsening corruption , lack of budgetary resource to address verybasic public good provision, and lastly, authoritarian political culture.

Of course, the actual process of opening up can unfold with unforeseen political twistsand turns, and lead to unintended consequences: The sweeping victory of Daw AungSan Suu Kyis National League for Democracy (NLD) in the April 1 by-elections is acase in point. But such an outcome is neither a linear/automatic nor predestined to beoptimum. For instance, sectarian violence in the western region of Myanmar thatshares a long border with Bangladesh claimed several dozens lives.

President U Thein Sein has declared an emergency in Arakan State, where a feudbetween ethnic Arakan Buddhists against stateless Rohingya or Bangalis Muslims hasspiraled into full-blown communal violence. The looting, arson, and mob clashes werespreading fast. President U Thein Sein was right when he warned in his televisedspeech in June that "if we put racial and religious issues at the forefront ... if wecontinue to retaliate and terrorize and kill each other ... the country's stability and

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peace, democratization process, and development ... could be severely affected andmuch would be lost."

At the same time, the geographical and functional reach of Myanmar state has beenhighly constrained by multitude of societal forces, growing civic challenges as well asethnic insurgencies that have plagued the country for several decades. Protests ofworkers calling for wage increase and other labour rights, of farmers fighting againstland confiscations, of general publics demanding for 24-hour electricity, and of peacemovements such as prayer campaigns, and so on and so forth are hallmark ofMyanmars opening. Unresolved ethnic conflicts and fragile ceasefire agreements areperhaps the most important source of potential friction between military leadershipand the current hybrid government (also any possible future civilian governments).

The positive and gradual outcome could happen only if the status-quo is challenged bypublic pressure and a negotiated settlement is reached with the hybrid regime locally,sector ally (such as labor rights, media rights and etc.) and nationally. DespiteMyanmar is now undergoing the regime led political transition, societal pressures willplay a crucial role in intermediating the outcome.

One might wonder whether Myanmar is now on its road to democracy or it is merelytrapped into authoritarian corporatism. In any case, no one now seems to deny thatMyanmar is now at a crossroad.

III. Prospect

If the hybrid regime manages to address pressing challenges includingelite/institutional rivalry, provision of basic public goods, Western aid and investment,ethnic civil war in Kachin state and fragility of ceasefire deals, and further cooperationwith Daw Aung San Suu Kyi and other opposition activists, an institution-buildingprocess will begin in Myanmar, and economic rationality will likely reign. Thisinstitution-building, however, must be understood in the context of state-buildingrather than democratization. For the substantive democratization process, the real testwill be how transition (from institution-building to institutional autonomy) proceedsin post-2015 election.

The 2015 general elections will become a beyond-symbolic benchmark ofconsolidified political transition and reconciliation in Myanmar since it could be moreinclusive with participation of all key stakeholders of the country including at leastsome major ethnic rebel groups. Failure of addressing above-mentioned conditionswill end up in tragic disillusion of ordinary people with the on-going reform.

At the same time, the soft form of authoritarian corporatist arrangement will not besustainable as it is going to face challenges from both above (i.e. hardliners within theregime) and below (frustrated and angry underdogs): the former challenge couldreverse the country back to some forms of autocratic rule, and the latter will lead to anattempt of extra-institutional solution such as turbulent popular uprising.