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Speaking Of Asia

The traps that await The Lady

Myanmar is poised for a dramatic economic and political transition - and its most iconic leader Aung San Suu Kyi will have her hands full leading that change

YANGON • There was a time when the tallest structure in Yangon, visible for miles around, was the Shwedagon Pagoda. These days, the proliferating spires of telecom towers share that space in the city's sky.

On the ground, things are stirring. New special economic zones, bridges and ports are being set up. Mitsubishi Estate has plans to build a $600 million complex of office towers and residential apartments billed as the "Marunouchi of Myanmar".

But in no sphere are the fruits of reform so evident as in telecommunications where, from a mere 4 per cent less than four years ago, mobile phone penetration has already reached 60 per cent after Myanmar Posts and Telecommunications, the state-run operator, lost its monopoly. Companies from Dubai to Sweden are pouring in billions to scale up the infrastructure even as a fourth telecom operator has been given a licence to tap into Asia's last big frontier market.

The mind goes back to another Buddhist nation, Bhutan, which three decades ago dropped its isolation and decided to step into the modern world, including allowing its people access to satellite television. But unlike tiny Bhutan, which had sought to preserve its culture from contamination, Myanmar's motives for its isolation were different. Besides, this is the start of a second coming for the nation.

The Burma of old was a beacon for South-east Asia just as it was beginning 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. The 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 their rule have set the nation back several decades while its trampling of human rights and democratic freedoms made it an international pariah.

And so now we have 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.


ST ILLUSTRATION : MANNY FRANCISCO

One small step in that journey came yesterday when Ms Suu Kyi's National League for Democracy put forward the name of Mr Htin Kyaw, a 70-year-old Oxford graduate, for the vice-presidential position from the Lower House. From the Upper House, it nominated Mr Henry Van Thio, who is from the Chin minority community. The Union Solidarity and Development Party, soon to yield power, also had its candidates.

Lawmakers will now elect a president from this panel, with the losing candidates becoming vice-presidents. What was clear yesterday was that Ms Suu Kyi did not intend to press her own case and set up a confrontation with the military. In the past, she had said she would be "above the president".

It is not easy to fathom why the military, which so unceremoniously disregarded the election results of 1990, 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. Senior Myanmar military figures who travel to the United States and visit military memorials such as the Arlington National Cemetery and Pearl Harbor are known to come away impressed at the respect and regard America shows its veterans and war dead.

As they near the end of their careers, it is possible that these thoughts also cross the minds of the top brass - "What will they say about me when I am gone?"

That, and one other thing. Fear that years of turning its back on the West has led Myanmar to depend too much on China, from support at the United Nations Security Council to weapons transfers and infrastructure needs.

As a Western development expert in Yangon puts it, nothing frightens the military as much as the thought of being regarded as both the North Korea of South-east Asia and Beijing's vassal state on foreign policy.

Yet, letting go never comes too easily, for anyone. So, even as they do the right thing by their nation, the military leaders can be counted on to also keep a close watch on the government, and a tight rein on the dignified woman who, without doubt, is the most acceptable political face of Myanmar - Daw Aung San Suu Kyi. For those who think otherwise, just look at the military's decision to extend the service tenures of the top general and his deputy by five years.

Why was that decision rushed before the transition had taken place? Because the generals did not want to give Ms Suu Kyi the option of getting involved in the matter. Ditto, the Thein Sein government's decision to give China's Citic corporation the contract to build the Kyaukpyu Special Economic Zone in the western Rakhine state, which faces the Bay of Bengal.

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 presented Ms Suu Kyi with a fait accompli on another tricky project with strategic ramifications.

Make no mistake, there is little love lost between the military and the nationally popular Ms Suu Kyi. 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. Some serious-minded people in the country even worry for the personal safety of The Lady, as she is called. And that begs the question: After Suu Kyi, who?

For now there is no clear answer.

History is littered with examples of leaders who do well as campaigners, then falter as helmsmen when the nation's tiller is in their hands. Her biggest task is to fix the moribund economy that's kept incomes depressed to some of the lowest in South-east Asia.

THE LADY'S TO-DO LIST

She has a 100-day plan, a six-month plan and a one-year plan. But getting there will not be easy. At every level, headaches await.

Just take land. In the last 20 years, concurrent with rapid expansion of the military which led to unit leaders being encouraged to finance the welfare of troops (remember Indonesia in the Suharto years?) land grabbing had gone on apace with some land subsequently rented back to the owner.

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

Then there are the crony networks that bedevil business, particularly where some corporates have close ties with the military.

Closer to the ground, 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 a diplomat stationed in the city.

That's the day-to-day stuff. There is no shortage of long-term challenges as well. She will need to find ways to unleash the entrepreneurial energies in a nation that has more than 600,000 enterprises in the informal sector. The small pool of overseas educated talent is snapped up by multinationals arriving to tap into the market of 60 million people. Should it be perceived that global, not local, companies are drawing more on the fruits of reform, more fault lines could open up. That stubborn Burmese instinct for isolationism could surface any time.

Fortunately, circumstances beyond its borders may help raise Myanmar's attractiveness. Thailand, its most important neighbour, has done considerable damage to itself as an investment destination, thanks to the military. 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. Now suffering high tariffs when exported from Thailand - China buys rice and India is a big buyer of pulses - there is every incentive to move such factories to Myanmar. And with only 20 per cent of the land cultivated, Myanmar could well be a future breadbasket of Asia.

More tricky is manufacturing.

Thanks to its so-called GSP (Generalised System of Preferences) status that provides duty-free access for its goods to the European Union's market - a privilege the European Union 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 GSP 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 coming to life. Minimum wages have been announced, if not fully imposed. Democracy usually also brings in trade unions.

Externally, there is a balancing act to be performed. Myanmar needs to navigate its way without rubbing against Asia's two tectonic plates - China and India - that nestle against its borders. As Asean confronts China on the South China Sea, more significant decisions will need to be made, even as Myanmar is not a claimant state.

There is enough to do, and it is a job for more than one frail woman to handle. And then there are the generals with their tripwires.


  • Ravi Velloor's Speaking of Asia column will run on Fridays in The Straits Times Opinion pages.
A version of this article appeared in the print edition of The Straits Times on March 11, 2016, with the headline 'The traps that await The Lady'. Print Edition | Subscribe