04 June 2016
Young people dreaming of democracy

Myanmar -- from dictatorship to democracy?

Myanmar's transition from a corrupt military dictatorship to a full-fledged democracy and open market economy has only just begun, writes John West.

Myanmar’s tragic history

The poor people of Myanmar have lived through a tragic history since the country's independence from Great Britain in 1948. A young democracy was snuffed out by a military takeover in 1960, ushering in a regime which virtually closed the country to the rest of the world.

This country of immense natural resources, which had been the world’s biggest rice exporter, descended into corruption and cronyism, with much of the population living in squalid poverty and suffering from appalling human rights abuses. The economy was run by the military and its cronies, which plundered natural resources like oil and gas, jade, and tropical timber, as well as trafficking in narcotics.

Civil war began at independence between the country’s Bamar Buddhist ethnic majority, led by the army, and the dozens of ethnic minorities living in Myanmar’s mountainous borderlands. Ethnic minorities make up one-third of the country’s population. Control of Myanmar’s abundant natural resources is at the heart of the conflict.

The military regime virtually destroyed the country’s economy, infrastructure, institutions, and society. The country’s woeful education system is reflected in its “human development” ranking of 148th in the world (out of 188 countries) by the United Nations.

Following student protests in 1988, the military government decided to hold elections in 1990. But it then annulled the results when the National League for Democracy (NLD) won, under the leadership of Madame Aung San Suu Kyi. She is the daughter of General Aung San, leader of Myanmar’s fight for independence from Britain.

The government imprisoned NLD leaders and activists. Aung San Suu Kyi would spend 15 of the next 20 years under house arrest. She was thus unable to the Nobel Peace Prize that she was awarded in 1991. The US and the EU began imposing heavy trade and financial sanctions on Myanmar.

In 1989, the military regime changed the name of country from Burma to Myanmar.

Steps towards democracy

In 2003, the military government outlined a seven-step roadmap to “disciplined democracy”, by which the army would still retain much power. And then in 2008, it drafted a new constitution, which it had approved by a sham referendum.

This is a very special constitution, through which the military is able to keep its very strong grip on national power. The army is reserved 25% of the parliamentary seats. And to change the constitution requires the votes of more than 75% of members of parliament.

The army also has the control over three powerful ministries, namely, defence, border affairs, and home affairs. It nominates one of the two vice-presidents.

And then there is the National Defense and Security Council which is the most powerful body in Myanmar, and can overrule the government. It has eleven members, six of whom come from the military.

The military is so fearful of the popularity of Aung San Suu Kyi that it drafted a clause in the constitution that prevents her from becoming president. The clause bars anyone with a foreign spouse or children from occupying this position.

2010 and 2012 Elections

Myanmar's military dictatorship surprised the world by holding elections in 2010. These elections were however boycotted by the NLD, and were won decisively by the Union Solidarity and Development Party (USDP), the main military-backed political party.

The military government was thus replaced by a new military-backed civilian government led by President Thein Sein, a former military officer. Although the elections were dismissed as a sham by the international community, they paved the way for gradual political and economic reforms, and opening up of the country.

One week after the elections, Aung San Suu Kyi was released from house arrest, and agreed to cooperate with the government. And responding to public opinion, in 2011 the President suspended construction of a controversial Chinese funded hydroelectric dam.

Reforms included the release of many political and other prisoners, and child soldiers. Freedom of association for trade unions was authorized, media censorship was relaxed, and ceasefire agreements were signed with eight major non-state ethnic groups, even though conflicts continue with groups like the Kachin, Shan and Wa.

Economic reforms included liberalization of foreign investment, privatization of state-owned enterprises, anti-corruption measures, and exchange rate reform. Thanks to the opening up of the telecommunications sector, virtually everyone can now have a smartphone and Internet access.

But most of the benefits of reforms have gone to urban centers like Yangon. The military and crony have benefited greatly from privatization and infrastructure contracts.

Rural Myanmar, where some 70% of the population lives and where poverty is endemic, has been been forgotten. Indeed, farmers have suffered from rising prices and land grabbing. The gap between rich and poor in Myanmar is massive.

In 2012, the NLD members, including Aung San Suu Kyi, won 43 out 45 seats in landmark parliamentary by-elections. In the same year, Barack Obama became the first US President to visit Myanmar, following a visit by Secretary of State Hillary Clinton the previous year. The US and the EU began easing many sanctions.

But also in 2012, there was a wave of atrocious atrocious human rights abuses, allegedly with government complicity, against the Rohingya, a Muslim minority in the Rakhine state. More than 100,000 Rohingya are now internally displaced people, living in refugee camps. Most regrettably, Aung San Suu Kyi has been silent on this issue, fearing a backlash from the extreme Buddhist nationalists.

November 2015 elections

In November 2015, general elections were held. The NLD won landslide majorities in both houses of parliament, with about 80% of the votes cast. According to most observers, Myanmar’s elections were a resounding success, free and relatively fair.

Over 6000 parliamentary candidates from 93 political parties contested the elections (but Muslim candidates were excluded from NLD lists). The outgoing President handed over power peacefully. And the head of the army, Min Aung Hlaing, supported the country’s transition.

Mr Htin Kyaw, a long-term confidante of Aung San Suu Kyi, was appointed President. The army refused Miss Suu Kyi’s lobbying to change the constitution to allow her to become president. She was thus appointed minister of the prime minister’s office and foreign minister, as well as “state counsellor”, a position which she has indicated will be “above the president”.

Some have argued that this is subversion of the Constitution which calls into question her own democratic credentials. But this is merely a reaction to a sham Constitution.

However, many have also observed that Miss Suu Kyi does have an authoritarian and inflexible manner, which may not bode well for pluralistic governance. She has been quoted as say that “I will make all the decisions, because I am the leader of the winning party”.

The hybrid civilian-military nature of the new government was highlighted by the remarks of army head Mr Min Aung Hlaing at a parade on March 27th when he reminded Myanmar’s citizens that the army “ensure[s] the stability of the country” and “has to be present in a leading role in national politics.”

Thant Myint-U, an historian from Myanmar, summed up the situation neatly when he said this “was not an election of a government. It was an election for a spot in a shared government with the army.”

What motivated Myanmar’s surprising political changes?

There has been much debate and speculation about the reasons for Myanmar’s surprising political changes.

It seems clear that sanctions imposed by the US, EU and other countries on Myanmar’s military regime had little impact. If anything, the sanctions may have hardened the resolve of the regime. Nor is Myanmar a case where a country’s emerging middle class has pressured the elite into sharing power through democratization.

As Joshua Kurlantzick and many others have argued, Myanmar’s “new openness may stem from leaders’ fear that they had grown too dependent on Beijing”. Myanmar “was becoming virtually a Chinese client state, with Beijing offering a rich source of trade, aid, investment, and diplomatic cover for Myanmar’s military regime”.

Democratization was the only way of resuscitating relations with the US and the EU, and thus breaking the hold of China’s suffocating embrace. “China sort of looks at the country as a province of China, in their sphere of influence”, said Priscilla Clapp, a former Chief-of-Mission to the U.S. Embassy in Burma, told a conference at Brookings in 2015.

Another factor is that Myanmar’s high unpopular military rulers may have judged that a gradual reform process could enable them to retain their ill-gotten gains, and position of economic and political dominance, and avoid the risks of a more violent popular upheaval that several Middle East countries have experienced during the Arab Spring.

In this regard, Myanmar’s military has been brilliantly successful. It has greatly improved public support. It has achieved an end to many sanctions and its pariah status. The military and its cronies have been benefiting from the opening of the economy.

At the same time, the military has maintained its dominant control of the country. This has been called by some as “democracy on a leash”.

It is not surprising that, even after the elections, the Economist Intelligence Unit Democracy Index classifies Myanmar as having a “hybrid regime”. It is ranked only 114 out of the 136 countries covered, and is way below both the full and fragile democracies.

For its part, Freedom House still classifies Myanmar as being “not free” in terms of political rights, civil liberties, and press and Internet freedom. The Heritage Foundation’s Index of Economic Freedom puts Myanmar in the “repressed” category, ranked at 158 out of the 178 countries covered.

Notwithstanding all these qualifications, Myanmar and the lives of many of its citizens have changed immeasurably these past few years. Most commentators are convinced that a return to the past is not possible.

An optimistic scenario for Myanmar would be that continued economic development and an emerging middle class would eventually lead pressures for full democracy. A great risk for the country, however, will be the transition to a post Aung San Suu Kyi era. She is 70 years old, and despite her saintly aura, she is far from immortal. Myanmar’s new politicians have no experience whatsoever in governing, and are not well placed to succeed her. (In point of fact, Aung San Suu Kyi herself has no experience in governing.)

Thus, another realistic scenario is that Myanmar descends into political instability following her eventual passing, and that the military reasserts great control over the country.

Challenges facing Myanmar’s new government

Overall, Myanmar’s military dictatorship has left the country in a deplorable state.

Despite rapid economic growth over the past decade or so, Myanmar’s GDP per capita in purchasing power parity terms of around $5000 is still one of the very lowest in Asia, only ahead of countries like Bangladesh, Cambodia, Nepal, and Pakistan. It has the highest poverty rate in Southeast Asia, with 26% of the population living below the national poverty line. Poverty is twice as high in the rural areas where 70% of the population lives.

The country’s infrastructure and overall competitiveness would be among the worst in the world, according to the World Economic Forum. And it is still one of the very most difficult countries in which to do business, according to the World Bank, whose “Doing Business” report ranks it 167th out of the 189 countries surveyed.

Economic wealth and power are concentrated among the army elite and their cronies. Myanmar would be one of the world’s very most corrupt countries, according to Transparency International’s Corruption Perceptions Index, where it ranks 147th out of the 168 countries. It also is one of the weakest countries when it comes to the rule of law according to the World Justice Project’s index where comes in at 92 out of 102 countries.

Myanmar is also a major center in Asia's narcotic trade, being an important source of opium and exporter of heroin, second only to Afghanistan. And since the mid-1990s, Burma has also become a regional source for amphetamine-type stimulants.

In short, the government faces the daunting task of trying to manage three systemic transitions -- from conflict towards peace, authoritarianism towards democracy, and closed economy towards an open economy. Even in the most optimistic of scenarios, it would take several decades for Myanmar to even catch up with its Southeast Asian neighbors.

What are the most important challenges the country faces?

The greatest challenge that the government faces is that of working with the military, which still retains great power, and is not accountable to any civilian authority. Unfortunately, a very large share of the government budget is spent on the military, at a time when it is necessary to invest massively in education, health and infrastructure.

Further opening and liberalisation of the economy would inevitably lead to some clashes with the military and cronies, given their deeply entrenched interests in the economy. Tackling the rampant corruption and other illicit activities will similarly also be a challenge.

Developing the state capacity to effectively govern the country is one of the greatest challenges that Myanmar faces. This will be necessary for investing in infrastructure, education, and health, and managing the rapid urbanization currently underway.

Recalibrating Myanmar’s relationship with China will also be essential. While Myanmar had become overly dependent on China, cooperation with China has holds great promise for the economy, given their shared border, and Myanmar’s rich endowment of natural resources, low-cost labor, and access to the Indian Ocean.

Lastly, great patience will be necessary, together with managing high expectations of a public who have suffered repression and lack of opportunity for over six decades.
Tags: asean, myanmar, burma, Aung San Suu Kyi

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