Monday, March 14, 2016

The traps that await The Lady - As the military scrambles to lock in massive infrastructure projects, Suu Kyi is taking the reins in a country riven by ethnic conflict and land grabs

The traps that await The LadyArrow PrevArrow Next - As the military scrambles to lock in massive infrastructure projects, Suu Kyi is taking the reins in a country riven by ethnic conflict and land grabs

The Burma of old was a beacon for Southeast Asia as it began its development process; a nation that sent some of the best doctors and teachers out into the region.

Too bad that General Ne Win initiated the slide after he grabbed power in 1962.

Insecurities about holding together a nation with so many ethnicities and fear of outside interference probably influenced Ne Win's thinking, but these days even the military knows that long years of rule by generals have set the nation back several decades during which trampling of human rights and democratic freedoms also made it an international pariah.

And so now Myanmar has the unfolding spectacle of a double transition - economic and political. Few nations have tried to do so much all at once and Myanmar will have to feel its way across the stones of the Irrawaddy riverbed as it copes with this difficult task.

One small step in that journey came last Thursday when Aung San Suu Kyi's National League for Democracy nominated 70-year-old Oxford graduate Htin Kyaw as a presidential candidate.

From the Upper House, it nominated Henry Van Thio, from the Chin ethnic minority. The Union Solidarity and Development Party, soon to yield power, also put forward candidates.

Lawmakers will today elect a president from this panel, with the losing candidates becoming vice-presidents. What is clear is that Suu Kyi has, for now, dropped her own push to become president in the face of resistence from the military. She has said, however, that she will be "above the president" - which would make whoever is picked today her proxy.

It's not easy to fathom why the military, which scrapped the result after losing the 1990 election, should be more willing to accommodate the forces of democracy this time.

Perhaps it comes from a deep well of concern that it risks losing the affection of the people it seeks to protect. More tangible is anxiety that years of turning its back on the West has led Myanmar to dependence on China, for everything from support at the UN Security Council to arms shipments and infrastructure needs.

As one Western development expert in Yangon puts it, nothing frightens the military as much as the thought of being perceived as the North Korea of Southeast Asia as well as Beijing's vassal state on foreign policy.

Yet, letting go never comes easy.

Military top brass are preparing a tight rein for the incoming de facto leader of the country, Suu Kyi. They have rushed a decision to extend the tenures of the top general and his deputy by five years. The Thein Sein government has also hastily handed the contract to build the Kyaukpyu Special Economic Zone in coastal Rakhine state to China's Citic corp.

Having sat on the files for nearly a year and a half, the government could have waited a couple of months more without any eyebrows being raised. But by handing the Kyaukpyu SEZ to China, less than two years after cancelling the Myitsone Dam project with the Chinese, it has locked Suu Kyi into another tricky project with strategic ramifications.

Many such traps lie ahead for her and it will take all her dexterity to escape falling into one, particularly as she works to find a lasting peace with the ethnic insurgencies that wrack Myanmar. Crucially the military retain control over the Defence Ministry, leaving Suu Kyi's government dependent on the army's goodwill in ongoing peace negotiations.

Suu Kyi's to-do lists

Suu Kyi has a 100-day plan, a six-month plan and a one-year plan.

But those road maps lead into treacherous territory with no guarantee of success.

Just take land. In the last 20 years, military leaders have been encouraged to fund the welfare of their troops by grabbing land, often renting it back to the original owner.

Today, a huge issue facing investors is the lack of proper land records.

Then there are the crony networks that infest business and provide more lucrative pickings for the military. Closer to hand, bureaucratic corruption is going to be tough to control. "How can you expect to check corruption when key decision-makers are paid less than foreign embassy drivers?" muses one Yangon diplomat.

And beyond the day-to-day stuff there is also no shortage of long-term challenges.

Suu Kyi must find ways to unleash the entrepreneurial energiesof a nation that has more than 600,000 enterprises in the informal sector.

The small pool of overseas educated talent is being snapped up by multinationals arriving to tap into the market of 60 million people.

Any perception that global firms are gaining more from the fruits of reform than local companies will lead to more fault lines opening up. The stubborn Burmese instinct for isolationism could surface any time.

Fortunately, circumstances beyond its borders may help raise Myanmar's allure. Neighbouring Thailand has done considerable damage to itself as an investment destination with its 2014 military takeover.

That helps push the case for Myanmar, particularly in areas such as agriculture and food industries. Thai agrifood business is staffed largely by Myanmar people anyway.

Thailand's high tariffs on exports of rice to China and pulses to India are a big incentive to move production to Myanmar. And with only 20 per cent of the land cultivated, Myanmar is a potential breadbasket of Asia.

More tricky is manufacturing.

With duty-free access for its goods to the European Union's market - a privilege the EU restored in July 2013 - Myanmar exports have an advantage over shipments from China, India and many other economies.

This is particularly useful in garments, where neighbouring Bangladesh has emerged as a significant power.

Bangladesh is poised to move to a higher benchmark of labour and human rights conditions to keep its EU duty-free status, which opens a window for Myanmar.

For now, labour in Myanmar is cheap and plentiful. But labour legislation, thus far largely absent in Myanmar, is now emerging. Minimum wages have been announced, if not fully imposed. Democracy usually also brings trade unions.

Externally, there is a balancing act to be performed.

Myanmar needs to navigate its way without nudging Asia's two tectonic plates - China and India - that nestle against its borders. As Asean members confront China over territory disputes in the South China Sea, Myanmar will have to tread a careful path through competing loyalties.

There is more than enough to do, and others must step up to share the burden piling on the slender shoulders of one woman. Ravi Velloor, The Straits Times
Asia News Network

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