Burmese reforms – the real deal?

After decades of isolationism, ethnic tension and repressive government, Myanmar (Burma) embarked on an ambitious programme to liberalise its political system and economy. The programme began with elections in November 2010, which brought the pro-military Union Solidarity and Development Party (USDP) under Thein Sein to power. At the time, the elections were widely dismissed as a ploy to preserve military power under the guise of democratic rule.

By the end of 2011 however, there was a marked shift in the way the outside world views Burma. A more open and outwardly looking government has – to date- made all the right moves in assuring international players such as the US and EU that the country is serious in reforming and moving towards a semblance of representative, if not genuinely, democratic government.

But is the West prematurely celebrating these first steps to reform, and does the government in Burma have political will and capacity to follow through with them?

Shifting views…

The new president has surprised the international community with his fast pace of reform.

Thein Sein’s inaugural address in March 2010 announced sweeping reforms to Burma’s political system and economy. The speech has been seen by many observers as groundbreaking – it contained the first acknowledgement by the country’s ruler of the previously overlooked misery caused by decades of internal conflict, as well as identifying publicly for the first time poverty and economic development as a key goal for the country, and importantly, its civilian government.

Source: Bloomberg
Burmese President Thien Sein (Source: Bloomberg)

Subsequent relaxation of political restrictions and censorship laws and the release of hundreds of political prisoners was undertaken, and previously-launched measures to liberalise the economy were accelerated.

Most importantly his moves to bring the National League of Democracy and Aung San Suu Kyi into the political mainstream mean that a form of representative government will be instituted in the country.

Political situation still finely poised….

President Thein Sein faces a delicate balancing act. Though he enjoys broad-based support in the government, military, the business elite, and the broader population he also has powerful enemies in parliament, the military and at the ministerial level. Many of Thein Sein rivals are in his own party, which one source said was largely a result of former hardline President Than Shwe’s efforts to deliberately create a divided political system. His Vice President Tin Aung Myint Oo is seen by many as the main rival to Thein Sein. Tin Aung Myint Oo is described as a hawkish, anti-reform former military man.

Still, Thien Sien appears to be testing the limits of his power, and challenging opponents to test his authority. A former diplomat stated that the recent halting of construction on the $3.6bn Myitsone dam by Thein Sein was significant in this context. Seen by many as a project mainly sponsored by his political opponents, by halting construction Thein Sein not only signalled he was ‘prepared to do things differently’, it was a test of Thein Sein’s authority, challenging his opponents to follow through with his request.

Is ‘The Lady’ prepared for power?

Aung San Suu Kyi, leader of the National League for Democracy (NLD) has been the most potent symbol of the repression in Burma. While the bringing in of Suu Kyi and more broadly, the NLD, in from the cold is seen as symbolically important, some have raised doubts as to the effectiveness of the NLD, and in some cases, ‘The Lady’ herself.

Sources close to CLC Asia have described the NLD as being split between old hardline NLD members who favour no engagement with the government until it allows them to stand in free and fair elections, and more moderate and pragmatic factions aligned with Suu Kyi who believe that the NLD should use the current political openness as a way to push for more reform.

Critics of Suu Kyi agree that while she possesses considerable charisma, she is ultimately an inexperienced politician who possesses little policy substance. This criticism extends to the party as a whole, who have yet to develop a comprehensive set of policies in response to the country’s challenges.

Progress on the ground

Since March 2011, the government has embarked on an unprecedented political reform process that has created new-found democratic space in Burma. These measures include reduced media censorship and an end to government blocking of opposition media. The Myanmar Times newspaper now appears to have significantly more leeway to publish articles about the National League of Democracy and about government mishaps; and photos of Aung Saan Suu Kyi frequently appear on the cover while opposition orientated satellite TV channels seem to be freely available and is viewed openly in teahouses across the country.

The government too has poached U Myint, a respected and influential former UNESCAP chief economist to be an advisor. Interestingly, U Myint was also Suu Kyi’s economic advisor for a time, and this appointment is seen by many as a sign of the government’s seriousness in tackling poverty as well as developing a more outwardly looking economic policy.

Hard to put this progress back in a bottle

While welcomed by the west, these reforms will be viewed by hardliners as too fast, and likely, a threat to the military’s power base. Beyond the military’s economic and political influence, there is a fear amongst some that they could eventually face prosecution in the International Criminal Court for actions against ethnic minorities. As such, while Tien Sien should not be viewed as a democrat in the Western sense, a coup by hardline elements should never be ruled out.

Thein Sein’s challenge, and ultimately Suu Kyi’s, will preserve some sort of interim role for the military in Burmese politics while at the same time improve relations with the West – code for ending sanctions – and reduced dependence on China.

Still, it is hard to believe that a coup would be successful beyond the short term. The proportion of moderates in the army with a less isolated view of the world appears to be growing, with many frankly embarrassed of the country’s lack of economic progress when compared with close neighbours such as Thailand, India and Malaysia. The carrot of sanctions being ended and the diluting of Chinese influence appear to be too seductive.

CLC Asia is aware of Fortune 500 firms sniffing the wind in Burma (though discreetly given that sanctions are still in force). Of primary interest are the potentially huge oil and gas reserves in the country, as well as the potential for mining projects in what is regarded as a highly prospective country.

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