Myanmar’s president Thein Sein has said his country has no intention of backtracking on its democratic reforms.
The U.S. imposed sanctions on Myanmar soon after its military failed to recognise the results of the 1990 elections, kicking-off an extended period of economic isolation from the West. The sanctions included a blanket ban on their imports and a ban on U.S. financial services to Myanmar.
Reconciliation With The West
The country first began making overtures to the West with its 2010 elections, and the release of its most famous political prisoner Aung San Suu Kyi that same year.
On January 4, 2011, the country’s independence day, its nominally civilian government released some of its political prisoners. This was followed by the release of 651 prisoners on January 13. Myanmar is also engaging in peace talks with ethnic rebels. This was a crucial criterion for any hopes of a reconciliation with the U.S. and prompted U.S. Secretary of State Hilary Clinton to say that the U.S. would restore full diplomatic relations with Myanmar.
David Steinberg, Distinguished Professor at Georgetown University, and a Myanmar specialist thought Clinton’s visit was well timed:
“Clinton’s visit was brilliant for two reasons. It was in response to a Burmese need for support for the reforms. First, by sending Hilary we didn’t promise anything, but had a response that was appropriate to for the situation. Secondly, her visit didn’t need Congressional approval, which will be needed to eliminate the sanctions.”
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Rich ResourcesSome argue that U.S. sanctions haven’t done the U.S. any favours. The U.S. hurt its own economic interests leaving Myanmar’s resources to be plundered by Asian countries, like China, with no competition from the West. Myanmar is vastly rich in resources like teak, oil and gas, jade, and provides cheap labour.
Recently, the country awarded 10 onshore oil and gas blocks to eight firms. The country had proven gas reserves of 11.8 trillion cubic feet at the end of-2010, and is being tapped by energy hungry China and India. London-listed Indian company Jubilant Energy won one block and is planning to invest $70 million – $80 million in it, and is already in talks to buy another stake.
With Western countries still kept away by sanctions on Myanmar most of the blocks are being awarded to Asian companies. Dr. Thein Swe, Senior Professor of Economics, Finance and Globalization at South East Asian Institute of Global Studies said:
“Although Western investors and energy companies are late to compete in the 10 oil and gas blocks, there are many areas and regions in the resource rich Myanmar for Western companies for investment opportunities when the economic sanctions are removed.
…US companies are already visiting Myanmar getting ready to invest and participate in the economic development of Myanmar. Similarly, UK, Japan, South Korea, France, Norway, Denmark, and many other countries including other ASEAN and Asian countries are already sending their companies to look into opportunities for investments in Myanmar.”
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Strategic RelationshipsMyanmar is also becoming important from a strategic point of view. President Obama has already said that the Asia-Pacific region is fast becoming a priority for the U.S. Steinberg agrees:
“The U.S. has diverse national interests in Burma that the US has not articulated, and the Obama administration has rethought US policy as effectively as it could given US domestic political concerns.
If the reforms continue, the Obama administration can point to their only successful foreign relations achievement in East Asia– they can’t do that in Korea, Iran, Palestine, but they will say we contributed to that change. And the sanctions… they will likely be eroded rather than eliminated.”
But it’s unclear how much a civilian government could control the economy. Myanmar’s GDP figures are considered wildly unreliable, its inflation is high, and its infrastructure is in shambles. Even if the country had fair elections in April and the U.S. and the West lifted their sanctions on the country, the military would still be able to interfere with the economy.
Steinberg points out that the military still controls three huge institutions. The Ministry of Defence – which controls not only the army, navy, and air force, but also the office of procurement which produces goods for the army and the civilian population. It also controls the Union of Myanmar Economic Holdings, which controls gem trade, banking and construction, directly and through subsidiaries, and the Myanmar Economic Corp which controls economic activities as varied as tourism, trading companies, and, the sale of petroleum and natural gas. According to Steinberg:
“…The military will still control their own consumption and all these elements mean that they can interfere and strongly influence where the economy is going.
The military is important to the economy but the economy does not depend on them. The problem is that there is very little credit for economic enterprises, and the concern is that the Chinese will control private credit as they are playing an increasingly important role. It is important that the Burmese perceive that they control the economy, not foreigners, otherwise there could be a strong nationalistic response like there has been in the past.”
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European RelationsThe European Union is considering beginning the process of lifting its sanctions on Myanmar as early as February to reinforce Myanmar’s reforms. It lifted its visa ban and asset freeze after Suu Kyi’s release, but kept up its ban on trade and financial sanctions. While the UK wants to wait and watch, countries like France and Germany want to speed up the process.
Though Myanmar’s President is trying hard to prove that he is sincere in his reforms, his country is still considered a failed state. Not only because it is in desperate need for economic development but also because some argue that the benefits have not trickled down to the people. Some see civil unrest brimming under this much lauded reconciliation.
What to expect
If Myanmar expects to see these reforms stick, it needs to show its people some change and it needs military backing. Swe says:
“We need to be realistic that these process of reforms will succeed if the decades-long powerful military also support and accept these changes and reforms.
Secondly, the civil war and ethnic violence that began since Independence in 1948 need to be resolved peacefully and equitably.
There are many dangers on the road to reforms. The most crucial factor is how far the powerful military which traditionally dominated the political process of the country support this reform process.”
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Meanwhile, Steinberg thinks the Burmese need to believe the reforms are their idea:”The real question to ask about the reforms is not whether they are moving too quickly from a foreign perspective, but when would the Burmese feel comfortable doing it? I have long advocated the Burmese pushing through reforms on a Burmese calendar, so as not to appear like they are being done on U.S. terms.
I do think these reforms are intended to be permanent. There are some forces that don’t want to see these reforms. What’s important though, is that the Burmese think the reforms are coming from them rather than foreigners.”
Leading up to the April elections, Myanmar’s story will develop rapidly. The world will watch closely as she continues her transition.