from Markets and Democracy in the 21st Century

How Myanmar Changed and What It Means

Myanmar’s sudden transition from repressive pariah to potential democracy should be viewed through the lens of a military alarmed by people power revolts and by the country’s increasingly shaky economic condition, says CFR’s Joshua Kurlantzick.

February 1, 2012

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Myanmar, which has been one of the most repressive states in the world for five decades, launched a sudden political transition in the past year. The government, run by former military man Thein Sein, is preparing for by-elections in April in which longtime dissident Aung San Suu Kyi will run. The government is inviting outside experts, observers, and even human rights activists to witness the elections. It is also apparently trying to end its numerous civil conflicts with ethnic minority armies and freeing a large number of political prisoners.

This rapid shift has surprised many political activists in the country; only a year ago, most top U.S. officials argued the country’s generals would never voluntarily hand over power. At the same time, it is worth noting the almost negligible impact of U.S. and E.U. efforts to sanction and pressure the regime over the past twenty years.

A Political Opportunity

The pace of change in Myanmar has sped up since national elections were held in November 2010. At the time, the international community condemned the polls as a way for the military to create a front government behind which it would continue wielding power. Suu Kyi’s National League for Democracy (NLD) declined to participate. Yet the elections do seem to have opened up some political space and provided a modicum of hope for change. The elections were followed by the installation of Thein Sein as president and the creation of a civilian parliament.

Since then, both the parliament and Thein Sein have shown significant signs of reform, while former junta leader Than Shwe has vanished from public sight. Freed from house arrest, Suu Kyi began a dialogue with Thein Sein that resulted in the reintegration of her NLD into politics and the rebuilding of the party. The parliament, though dominated by former military men, has been unexpectedly active in questioning government policies.

The government also has set up a national human rights commission, invited political exiles to return, and dramatically loosened censorship of the domestic media. Last month, the government freed hundreds of political prisoners. In response to Myanmar’s actions, the Obama administration upgraded diplomatic relations last month and may push Congress to relax or waive sanctions during the next year.

Stage-Managed Transition

In a government isolated for so many years, it is impossible to know for sure why change is suddenly happening. Some Western policymakers have argued that after two decades of sanctions on U.S. and European investments, the regime was anxious to be readmitted into the international community as a normal state and gain access to Western investment and aid for its battered economy, one of the poorest in East Asia.

But the reality is far more complex. Sanctions did not really deter foreign investment in Myanmar; they simply blocked Western investment. But Chinese, South Korean, Thai, and Indian companies invested heavily, particularly in the oil and gas sector. According to "The Diplomat," a leading Asian news site, Myanmar received some $20 billion in approved foreign investment in 2010 and 2011. This investment reportedly enriched the most senior generals. Sanctions also did not prevent Myanmar from joining the most important regional organization, the Association of Southeast Asian Nations, in the 1990s.

Instead, other factors seem to have led to the surprising changes. Than Shwe and other generals may believe that by allowing a gradual transition led by Thein Sein, an ally they trust, they can avoid any sudden popular uprisings that might lead to harsh reprisals. Than Shwe, who is in his late seventies and reportedly ailing, may want to ensure that his family maintains the significant amount of wealth it has amassed.

[Military leaders] may believe that by allowing a gradual transition led by Thein Sein, an ally they trust, they can avoid any sudden popular uprisings that might lead to harsh reprisals.

The generals’ strategy appears to be working. Although Thein Sein has launched a process of liberalization, he has been careful not to touch much of the military’s power. The defense budget remains largely off the books and unscrutinized in parliament. However, reports in the Southeast Asian media, referencing a leaked government document, suggest that Myanmar’s 2011 defense budget comprised about 25 percent of the country’s total budget--a staggeringly high figure for such a poor nation. Army commanders in the field clearly retain enormous power to wage war against remaining insurgencies, no matter what the civilian government says.

Suu Kyi the Conciliator

According to several Myanmar officials, the military also finally realized that with Suu Kyi still on the political scene, they had their best potential ally in a peaceful transition. Like the Dalai Lama in Tibet, Suu Kyi is perhaps the only person in Myanmar with the moral legitimacy to get the population to accept slow reform and only marginal accountability for former military rulers.

Perhaps also realizing this may be her last chance to help the country, Suu Kyi has been extraordinarily willing to work with Thein Sein, despite continued abuses in ethnic minority areas of the country and the fact that hundreds of political prisoners remain in jail.

Some ethnic minority leaders even have begun to criticize the once-unimpeachable opposition leader, worrying that she has ignored the fighting and abuses by the army against the Kachin ethnic group in the north. Suu Kyi appears to have understood the need to balance accountability with keeping the generals in the barracks. Speaking to public audiences (including the Council on Foreign Relations) over the past year, she has repeatedly called for the country to move on from the past, suggesting that she is not going to push for a tribunal for former military leaders or other such judicial proceedings.

Though Western sanctions may not have affected the wealth of top military leaders, some of the younger and less craven officers were clearly upset by how far Myanmar had fallen behind its neighbors, according to several officials in the country. President Thein Sein admitted in a public speech that Myanmar had lagged behind in development, a tacit admission of the failures of past policy by military regimes.

In addition, the prospect of closer ties to China amid growing isolation from the West might have indirectly helped spark change. Many of the senior generals had no real affection for Beijing, having fought the China-backed Communist Party of then-Burma as younger officers in the 1960s and early 1970s.

Myanmar’s present-day leaders have become wary of too much dependence on one strategic partner. Launching reforms would allow them to diversify their partners and avoid becoming too reliant on Beijing. In one major sign of change, the government last year canceled a large China-funded project, the Myitsone Dam, in northern Myanmar. Later, the government seemed prepared to postpone or cancel a large Thailand-backed project called the Dawei Port.

A Partner for Washington?

Over the past five years, Myanmar has become more strategically important to the United States. Besides oil and gas, it has other significant natural resources and could be a major new market for American companies.

More ominously, evidence has emerged in recent years that show that the regime may be importing nuclear and missile technology from North Korea. Moreover, refugee flight spurred by Myanmar’s ethnic minority insurgencies in recent years poses a destabilizing risk to bordering areas of Thailand, India, and southwestern China.

Given these potential dangers, the gradual change occurring in Myanmar, though frustrating to many longtime activists and ethnic minority insurgent groups, may actually be the best means of peaceful reform. Keeping Suu Kyi at the center of the process is vital. She will be the only figure who can lead some kind of nationwide initiative fashioned on the 1947 Panglong Conference and designed to work out autonomy agreements for the largest ethnic minority groups.

At the same time, by slowly pushing the seniormost generals into retirement rather than immediately pushing for accountability for their vast crimes, foreign actors and Myanmar’s civilian leaders can create the kind of stability that will allow the country to take advantage of the large numbers of companies, donors, and international financial institutions waiting on their doorstep hoping to spend significant amounts of money in Myanmar.

Some stability would also give international inspectors, including Americans, a better opportunity to canvass the country for any nuclear or missile sites and to reduce or terminate the North Korean presence in Myanmar. Delayed accountability does not rule out developing some form of accountability later, perhaps modeled on Timor Leste’s truth and reconciliation commission. But for now, any signals that draw the senior generals back into politics will only scuttle Myanmar’s chances, preventing the year of reform from growing into more profound changes.


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