Sunday, January 24, 2016

Myanmar Needs a Deng Xiaoping

There would be greater confidence in the future if Aung San Suu Kyi, despite her colossal charisma, could demonstrate a clearer competence to run a country.

Journalistic folk myth has it that in 1975 the highly reputed Far Eastern Economic Review predicted that by the year 2000, two countries would lead in Asia – the Philippines and Burma.

The rest, as they say, is history – and so much for the predictive powers of journalists.

The Philippines to this day continues to disappoint, though there have recently been a few years of encouraging growth. But no prediction could have been more sombrely wrong than that for Burma – or Myanmar as we now call it.

So the assembly on February 1 of a democratically elected parliament for the first time since the overthrow of U Nu in 1962 is profoundly important, not just for the 53 million long-suffering people of Myanmar, but for Asia as a whole.

After numerous “false dawns” – in particular the savagely suppressed 1988 national uprising – Myanmar might just be on the cusp of rejoining the rest of the normal world after half a century of sanctions and pariah status. Hopes have risen steadily since the release of Aung San Suu Kyi in 2010 and partial elections in 2012, through to the full national elections in November which saw her National League for Democracy sweep the board.

The coming two months are pivotal because the military that have for half a century ruled over Myanmar are at last being put to the test: are they truly willing to relax the control that has enriched them, but driven the country into the dirt? Or will the reality of losing power, and of the newly elected parliamentarians under “The Lady” taking decision-making control, prompt an 11th hour retreat back into authoritarian military rule?

For most observers, it seems improbable that the military can recoil at this late stage. But it is fascinating that the possibility of a major setback is still being seriously discussed fully five years after Thein Sein released “The Lady” from house arrest and began the process of liberalisation, and after peacefully concluded national elections two months ago.

Why can such doubt still remain? First, large numbers in the country’s military leadership retain Kleptocratic control of many key industries and industrial franchises. Myanmar is one of the world’s most resource-rich countries – ranging from marine resources off its shores to minerals, rubies and jade, and to forests full of some of the best hardwood in the world – but much of this resource wealth today enriches the families of the military elite. Without “defector” amnesties and other comforting gestures, the potential for backlash remains.

Second, the military retains significant real power despite the electoral success of the National League for Democracy. For example, they automatically retain 25 per cent of the seats in parliament, have reserved the power to run the security and home affairs ministries, and control the country’s “administrative spine” right down to township level. Even if The Lady’s party passionately wanted to sweep military-connected people out of office, the huge “technocratic deficit” that exists in a country that has been cut off from the outside world for most of the past half century would make this impossible. The country is going to remain chronically short of technocratically equipped people for decades to come.

There would be greater confidence in the future if Aung San Suu Kyi – despite her colossal charisma – could demonstrate a clearer competence to run a country. When in 1976 Mao Zedong finally recognised that he had run China into the ground, and was left with no choice but to change course in order to rebuild a wrecked and starving economy, he was able (undoubtedly through gritted teeth) to pull Deng Xiaoping back from house arrest in Nanchang to manage the challenge. China’s revival from those dark days of politically correct mass starvation is inconceivable without the monumental intellect and political astuteness of Deng. But where is Myanmar’s Deng? The Lady has the charisma and the charm, but where is the competence to turn a country that in many ways is as badly wrecked as China was in 1976?

There would also be greater confidence if the 70-year-old Lady had stronger links back into the country’s impatient millennial generation. In spite of the huge affection people have for her, there is less enthusiasm about the ageing kitchen cabinet she consults and confides in. There are real questions about the strength of the party leadership’s links with the young, who are impatient to see rapid change for the better. Poor performance in office could quickly provide the military with excuses to step back into power.

Peaceful management of the transition from February 1 to April 1, when a new president, and the ministerial team will take office, is thus going to be critical not just for Myanmar’s people, but for the thousands internationally who have been poised to re-enter the country as investors.

After a surge of international investment after The Lady’s release – FDI jumped in 2010 to almost US$20 billion, compared with less than US$1 billion a year over the previous decade – foreign investor interest has slowed to a walk, averaging around US$4 billion a year over the past four years. If the transition to civilian rule suns smoothly through to April Fool’s Day, then it is fair to expect that investment may surge. Huge infrastructure needs exist, and many international investors and investment institutions are poised to move.

It is perhaps the current uncertainties that explain why China’s “One Belt One Road” policy stays so peculiarly silent on Myanmar. China is already by far the largest investor in Myanmar and the route from Kunming down to the Indian Ocean is a screamingly obvious component of Xi Jinping’s “silk road” vision. Perhaps the silence is a diplomatic one, since so much Chinese investment is linked to outgoing military influences. Perhaps it also defers to Myanmar’s own anxieties about foreign – including Chinese – interference inside the country.

At this point, I don’t think anyone is going to make the Far Eastern Economic Review’s mistake over prospects for Myanmar. Even with a smooth transition to April 1, the country has far to travel. But we can be more optimistic today about Myanmar and its people than we have been over the past five decades. I just wish I could see their equivalent of Deng Xiaoping.

David Dodwell is executive director of the Hong Kong-Apec Trading Policy Group Photo: Reuters


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