It’s time to be cautiously optimistic and give Myanmar a chance. While ASEAN may not have been right, perhaps it wasn’t mistaken in its much-maligned gambit of “constructive engagement” with the nation.
Change is indeed occurring in Myanmar. From the quaint roads of decaying colonial mansions to the idyllic plateau where the Shwedagon Pagoda sits, opportunity, opportunism and a sense of readiness are palpable.
The world, too, has noticed. Foreign dignitaries and tycoons have been lining up at Yangon International Airport, anxious to take credit for encouraging change — or fearful of missing out on the next big thing in Asia.
The reasons for this “sudden” political turnaround are as complicated as the ethnic rivalries within Myanmar.
It was not due to a single cause or person. Sanctions alone did not bring about change, nor did ASEAN’s constructive engagement. Neither Aung San Suu Kyi nor Thein Sein was the prime mover.
Ultimately, change resulted from a confluence of factors.
Two decades of “Western” sanctions did not bring about change — but their detrimental impact on Myanmar’s society stymied the potential for growth, leaving the nation to fall further behind its ASEAN peers.
A teetering economy, a high poverty level and widening wealth disparities have always made for a political powder keg. Very much as happened in Indonesia, uprisings in 1988 and 2007 in Myanmar were sparked by increases in the prices of basic staples and fuel.
Limited access to development funds also limited Myanmar’s capacity building. The nation receives US$6 per capita in development assistance, compared to $42 for Vietnam, $52 for Cambodia and $62 for Laos.
Myanmar’s leaders realize that the nation cannot afford to become a pariah while everyone else prospers from liberalized trade arrangements. It cannot afford to be left behind, competing with North Korea for the title of the “sick man” of Asia.
The sanctions must be eased, hence the changes, made in effect to attract outside assistance and foreign currency and to diversify investment sources.
Since the British sailed up the Irrawaddy River to Mandalay and toppled King Thibaw in 1885, rejecting foreign dependence has weighed heavily upon the minds of Burmese.
It is not Britain that worries Myanmar now, but China. In a relationship of mutual trust and suspicion, Naypyidaw is seeking to offset the dominance of its northern neighbor, with which it shares a 2,185-kilometer land border (twice the length of Java Island).
There seems to be a conscious effort to not become a satellite of China, as evinced in President Thein Sein’s cancellation of the controversial $3.6 billion Myitsone Dam project with China.
China is Myanmar’s largest foreign investor. However most Chinese investment focuses on extractive industries, rather than much-needed development of the labor-intensive manufacturing sectors.
Countries such as Singapore, Thailand, Malaysia and Japan are well placed to reap economic benefits of Myanmar’s liberalization. Further reforms and the lifting of sanctions will undoubtedly open the door for many other nations.
Despite the continued need for structural reforms, there is another reason for confidence in Myanmar’s economy: The world is experiencing unprecedented inflation in the price of food and extractive commodities; Myanmar is well endowed with both.
Myanmar has historically been the “rice bowl” of Asia: Three-quarters of Myanmar’s population raise crops grown in the largest, best-fertilized area in Southeast Asia.
Apart from precious stones, foreign companies have also been eager to tap into Myanmar’s oil and gas reserves. The nation is one of the world’s original oil exporters, first shipping oil in the mid-19th century.
Last month, Myanmar awarded 10 onshore oil and gas blocks to eight firms, including one block to Indonesian company PT Itstech Resources Asia.
Myanmar holds the largest gas reserves in ASEAN behind Indonesia and Malaysia, with 283.2 billion cubic meters in proven reserves.
Though the advent of liberalization will benefit the people in the long term, in the short term one must conclude that Myanmar’s internal power structure has not changed much.
The suspicion that reforms were enacted as an exit strategy for an aging regime cannot be easily dismissed.
In the last two years, a quiet “privatization” of state assets has occurred, in which many key assets were sold to buyers reportedly connected to the regime.
This in itself is not unique in developing democracies, but it does potentially explain some of the reasons behind the transformations.
Analysts have often likened Myanmar to Indonesia for the way it has emulated the Indonesian Military’s [TNI] dwifungsi (dual military-civilian role), its political reforms, and even the way former generals are transforming themselves into business brokers for a soon-to-be-booming economy.
Some say that the regime has also learned from the collapse of Soeharto on the dangers of making political changes too late.
One significant difference between the nations, however, is that Myanmar’s reforms have had a gradually managed, top-down approach–made primarily at behest of those in Naypyidaw. Anything imposed from the top can just as easily be overturned from the top.
Indonesia’s own reformasi in 1998, by comparison, was a chaotic groundswell that was impossible to suppress and impossible to predict.
For us in ASEAN, one key indicator of the genuine nature and pace of Myanmar’s reforms will be the intensity of internal debate that occurs within society, specifically the degree of freedom of the press and of expression
It is up to us to hope and help in these developments. We must suspend our cynicism so as to realize Kipling’s words “Come you back to Mandalay!”