Monday, July 23, 2012

Can we fine-tune the sanctions against Burma?

Posted By Min Zin  

Last week, the Obama Administration suspended some of the most important financial sanctions against Burma. U.S. companies are now allowed to invest in Burmese industries (including oil and gas) and to sell services.
Yet on Wednesday of this week, the U.S. Senate Finance Committee took a decision that pointed in exactly the opposite direction. It voted to renew trade sanctions passed nine years ago inresponse to the military junta's attempted assassination of Aung San Suu Kyi. (She survived, but the attack resulted in scores of other deaths.) The renewal of the legislation -- if it passes a vote of the full Senate and the House, which still have to confirm the decision -- will technically ban all imports from Burma for another three years. Since the ban was first imposed in 2003, imports from Burma to the U.S. have fallen to almost zero, a sweeping prohibition that has done a lot of damage to Burma's nascent manufacturing industry. For that reason, Aung San Suu Kyi actually askedU.S. Senator Mitch McConnell to remove the remaining sanctions early last week. But her plea didn't seem to help.
Burma's nominally civilian government has been working hard lately to persuade the U.S. to remove further western sanctions against the country. President Thein Sein (shown above with Hillary Clinton) last week called for all sanctions to be lifted in order "to make possible the sort of trade and investments that this country desperately needs at this time."
Lower House Speaker Shwe Mann, an ex-general, told a visiting U.S. official that the suspension of U.S. investment sanctions was one-sided and mainly benefited U.S. firms. He asked the U.S. to review the trade sanctions and to take the interest of Burmese citizens into account. He asked his interlocutor, Under Secretary of State Robert Hormats, to convince Congress not to renew the sanctions.
(Shwe Mann's remarks showed that he doesn't entirely get it. He doesn't seem to understand is that lifting the investment ban will allow a considerable inflow of capital into Burma and bring immediate benefit to the country. Foreign investors, by contrast, will have to wait some time to enjoy the fruits of their investments -- assuming that they make a profit, of course.)
In any case, it's hard to make sense of U.S. policymakers' decision to maintain the ban on imports, which hinders the possible emergence of diversified business players in labor-intensive sectors such as the textile industry. The ban on imports has never hurt the military and its cronies, which have always managed to find profitable alternatives (usually involving the exploitation of Burma's rich natural resources). In fact, U.S. policymakers have failed to aim sanctions at those who propped up Burma's dictatorship (and their business cronies).
"By reauthorizing the import sanctions for three years, we maintain pressure on the Burmese government to undertake reforms," Senate Finance Committee Chairman Max Baucus said. To be sure, maintaining leverage is a good strategy. But why does it have to take the form of misguided import sanctions that do more harm than good?
The renewal of the import ban will actually force the Burmese government to continue relying on capital-intensive resource extraction, and the benefits will keep accruing to the state-owned oil and gas conglomerate and the military's proxies, who own most of the capital in this sector. (U.S. law still doesn't allow American companies to do business with the Burmese military.) Foreign investment in capital-intensive industries tends to alienate unskilled laborers and exacerbates unemployment. Failing to create jobs for the broader Burmese population will only worsen the already dire state of inequality in the country.
A growing gap between rich and poor (and its larger political implications) will likely threaten the vested interests of the ruling elites and cronies, and serve as a disincentive to pursue broader reforms. (Political liberalization can encourage impoverished population to claim their socio-economic rights -- a process that can range from demands for income redistribution to physical onslaughts on elite individuals, property, or privileges.) One possible scenario is that the rulers will seek to protect themselves with a "reactionary alliance" of multinational corporations, the ruling elites, their cronies, and even some ethnic insurgent leaders, since almost all of the natural resources are located in ethnic minority regions, potentially leading to development-driven abuses committed against local populations.
In fact, what Burma needs is not just the removal of trade sanctions, but also favorable trade conditions from the U.S. and the West that will help the country to attract more investments in labor-intensive sectors, ultimately enabling its products to gain a competitive edge in the international market.
In short, the strategy should be to favor measures that can empower the autonomy of positive forces (like labor) while reinforcing the sanctions that target oligarchic criminals.
Let's hope that the renewal of sanctions doesn't get final approval. If it does, we can gain some consolation, perhaps, from the fact that the law will preserve the White House's authority to waive the sanctions (and "reward" Burma) if need be.

Sunday, July 15, 2012

The latest intrigues in Burma

Posted By Min Zin  

When the news broke earlier this week that military appointees in Parliament had nominated a new vice president, some media outlets reported that a new hardliner was replacing an old hardliner, while others confidently stated that "yet another hardliner is being replaced by a reformist."
Let's start by unpacking the facts. Last week the Burmese government announced the resignation of the country's first vice president due to "health reasons." An ex-general, Vice President Tin Aung Myint Oo was known as a corrupt hardliner. The man likely to take his place, Myit Swe, is also a former general as well as a member of the military-backed Union Solidarity and Development Association (USDA) and chief minister of the Rangoon division of the government.
Burma's next vice president has a close personal relationship with former dictator Senior General Than Shwe that contributed to Myit Swe's successful career in the military. Myint Swe was given the critical job of overseeing security in Rangoon, the former capital, in 2001. In the late 1990s, he was brought in to take over the position of general staff officer, a powerful role in the War Office, which was then occupied by ex-Brigadier General Thein Sein, the current president. (He's shown above earlier this week, along with newly appointed U.S. Ambassador Derek Mitchell.) When the former intelligence chief and prime minister, Gen. Khin Nyunt, was purged in 2004, Myint Swe got the job of restructuring the country‘s intelligence agency.
According to Irrawaddy Magazine (which last May accurately predicted Myint Swe's appointment as vice president), Myint Swe was directly involved in the crackdown on the Buddhist monk-led "Saffron Revolution" of 2007, which resulted in scores of deaths. Most recently, Myint Swe has confronted local journalists working with exile media outlets and reporting on the sectarian violence in western Burma. He threatened journalists who violate the military's strict censorship with up to nine years imprisonment, under existing law.
The question is whether or not Myint Swe's vice presidency can constrain President Thein Sein's reform initiative. Regardless of whether Myint Swe is a hardliner or a moderate, it's highly unlikely that he'll be able to disrupt the reform course. The reforms are beginning to gain momentum, spurred increasingly by the government's emphasis on improving the domestic economic situation. Since last year, all the generals-turned-civilian power-holders are competing to prove their reformist credentials.
The first event to undermine the hardliners last year was President Thein Sein's decision in September to suspend construction of the Chinese-backed Myitsone Dam, a multi-billion dollar project to generate hydropower from Burma's Irrawaddy River and sell it China. At first, Beijing was shocked by the decision, but soon backed down and has since tried to reason with the Burmese government to resume the project. So far, China has not tried to complicate Burma's internal politics by giving pro-China foes of the reforms (such as retired vice president Tin Aung Myint Oo and Electric Power Minister Zaw Min) external leverage, and that lack of support from Beijing seems to be weakening the hardliners within the regime. (There are reports that the president is likely to reshuffle his cabinet and remove Zaw Min and other hardliners soon.)
The second event to shake the hardliners' control last year was when a group of conservatives in the ruling USDP party lobbied ex-dictator Than Shwe to ask that President Thein Sein cancel the April 1 by-election (which subsequently brought Aung San Suu Kyi's NLD to parliament). According to sources close to the USDP, Than Shwe turned out to be indifferent to political details so long as the policies of his successors did not jeopardize the political safety or material well-being of his family. The failure to secure sufficient backing from Than Shwe was a major blow for the hardliners. Now no one in the government is willing to openly show sympathy with the conservatives.
But here's a caveat. Though the ruling elite remains broadly united on the big questions, there's still one factor that could cause a split within the leadership. The ex-generals have to figure out a strategy to contain Aung San Suu Kyi's popularity and prevent her from winning another sweeping victory in the 2015 general elections. Since Thein Sein and some other reform-minded leaders see themselves as one-term leaders, they're relatively unconcerned about losing the next election; what worries them more is preserving their reform agenda and making a reputable exit. This sets them off from the younger generation of leaders-in-waiting within the USDP, who still can't shake the bitter aftertaste of their party's humiliating defeat in the April by-elections. This divergence of interests could yet lead to a fundamental schism within the political establishment.

Thursday, July 5, 2012

Burma or Myanmar: The name game

Posted By Min Zin  

Aung San Suu Kyi has given the Burmese authorities the cold shoulder after being warned not to refer to the country as "Burma."
"I call my country ‘Burma' as we did a long time ago. I'm not insulting other people. Because I believe in democracy, I'm sure that I can call it as I like," the Nobel laureate explained at a July 3 press conference in Rangoon about her recent 17-day tour of Europe.
Burma's election commission, which supervises laws dealing with political parties, issued the complaint in the state-run media last Friday, warning her to "respect the constitution." Authorities said she should use the constitutionally-decreed name for the country: The Republic of the Union of Myanmar.
But Suu Kyi told the reporters that the previous junta, which seized power in 1988 after crushing a popular protest, changed the name without a public consensus: "They didn't bother to consider what the public opinion about the new name was. They didn't show any respect to the people."
The Lady has a valid point. In the wake of the massive crackdown and coup at the end of the 1980s, the much-despised generals announced plans to change the name of the country, and many of the places inside it. The junta considered this renaming exercise to be so important that they appointed a 21-member commission to look into the matter. (Only four of the people on the commission were academics. The rest were soldiers and bureaucrats.) From now on, they decided, the capital Rangoon would be "Yangon." The ancient city of Pagan would be spelled "Bagan." And so on.
They claimed that the old words used for these places were symbols of the "British colonial past," and that the newer, supposedly more authentic, names would "give a previously divided and fractious country a sense of national unity under a new banner of the ‘Union of Myanmar.'" The military was, in effect, proclaiming its ownership of the country.
As Suu Kyi notes, no one among the powers-that-be took the trouble to ask the citizens if they agreed. In a politically polarized country like Burma, the name of the country is both a cause and consequence of the vast divide between rulers and ruled. The rulers of Myanmar live in their country. The citizens of Burma live in theirs.
The U.S., which has always supported the pro-democracy movement, followed the opposition's lead by refusing to accept the new name. (This has led, for example, to the rather odd situation that the U.S. Embassy in Burma doesn't refer to itself using the country's official name.) Just to make matters even more confusing, the United Nations and the members of the Association of Southeast Asian Nations accepted the name changes, while the European Union followed the U.S. at first, but later on invented a new name for the country: "Burma/Myanmar." When Hillary Clinton visited Burma at the end of last year, she dodged the controversy by referring to "this country."
I'll spare you the linguistic details. The renaming of the country, however, did not make virtually any difference to the people of Burma who speak the Burmese language, because they refer to the country interchangeably as Burma as well as Myanmar. The former is taken from a spoken and colloquial language. The latter is rooted in literary language.
But the renaming had even more serious implications for ethnic politics, which concern me more than the legitimacy contest between the opposition and the generals (now generals-turned-civilian rulers). Burma is a hodgepodge of many different ethnic groups. One of the effects of the renaming effort was to give new Burmese names to many places that had previously been officially known by names in local languages. For instance, the Burmese renaming of towns of the Shan, which is the second largest ethnic group in Burma after the majority Burmans, invariably leads to a corruption of the original pronunciations, and often also to completely inauspicious meanings in Burmese. The Shan word for "town" is "Mong," but it is now spelled as "Mine," which means "bomb" in Burmese. As a result, the Shan town "Mong Kerng," which means "a town producing saddles," becomes "Mine Kaing" -- "holding a bomb." And so on. Even though the generals claimed to be unifying the country with their renaming project, the effect was actually deeply divisive.
Over the past two years, senior U.S. officials have quietly sounded out the opinions of some Burmese opposition activists about whether Washington should start referring to the country as "Myanmar." In the aftermath of Clinton's visit in December, some policymakers even suggested rewarding the Thein Sein government by adopting the new name, thus offering an incentive for continuing the reforms. (A few months ago, the Financial Times changed its usage from "Burma" to "Myanmar" -- the change was then assailed by leading Burma-watcher Bertil Lintner, whoargued that the paper had its linguistics wrong.) On the face of things, I find it hard to dispute the argument that promoting real change in this ill-fated country is a lot more important than fussing over names.
However silly it might seem to outsiders, though, there is serious political substance to the whole dispute. It's impossible to accept the renaming project by calling Burma "Myanmar" without also using the Burmanized versions of ethnic minority names.
Until Burma enjoys genuine freedom and equal rights for all its citizens, regardless of ethnicity, the feud over what to call it will continue.

What we have here in Burma is a failure to communicate

Posted By Min Zin  

Burma's president is aware that his reforms have so far failed to bring material benefits to the general public. Speaking to his cabinet in May, President Thein Sein said: "Our government must make a drastic improvement in addressing people's needs, including residential housing, water, power, transportation, and jobs." He seems to understand that his government's failure to deliver basic public services can lead not only to electoral losses (as exemplified by the opposition's sweeping victory in the April 1 by-elections), but also to instability and potentially to the reversal of the reforms themselves. There have been street protests demanding basic labor rights, stable supplies of electricity, and the reinstatement of confiscated land. Thein Sein recently urged his administration to avert street protests "by addressing the issues of the people at the lower level."
One major issue the president has been tackling (though this is underreported by the mainstream media) is the large demand for cheap mobile phones. A series of small public protests have been taking place in Rangoon, Mandalay, and other cities, with the demonstrators distributing leaflets, bumper stickers, and T-shirts with the slogan: "Allow cheap mobiles for the people!" In Rangoon, 11 people who took part in the protest were briefly detained for questioning.
Mobile phones might seem like a trivial issue in a country with so many other problems, but actually it's hugely important. There is a dearth of traditional landline telephones in Burma; a ITU (International Telecommunication Union) statistic shows that there were 1.03 fixed telephone lines per 100 inhabitants in 2010. Thus, allowing the wide distribution of mobile communications could would vastly improve the spread of information and create new opportunities for private business creation. In other parts of the world, mobile phones are even being used to facilitate money transfers and enable government welfare payments.
In Burma, the mobile phone story began to heat up in early January, when Shwe Pyi Tagon Co Ltd (SPT), a private telephone company in Rangoon, announced that as a part of the president's Poverty Reduction Plan, it would sell 1 million 3G SIM Cards for only 5,000 kyat ($6), pending government approval. At the time, the government's fixed price for a reliable SIM card was 500,000 kyat ($625). The news that phones would soon be affordable to average citizens was greeted with much enthusiasm. Within a week, however, the Ministry of Communications, Post, and Telegraphs rejected the proposal, stating that the plan was not possible under the MCPT's existing regulations, and that more time would be needed to upgrade the country's mobile phone networks. This triggered protests in several cities.
Thein Sein even tried to capitalize on popular sentiment at the ceremony to mark his first year in office in March, saying that "as regards the matter of mobile phones, we will seek the best way to fulfill the wishes of the people." In fact, the government has a project to expand the number of mobile phone connections from 650,000 to 30 million over the next five years, with the aim of adding four million new connections within the first year. In an attempt to appease rising public anger, the MCPT cut the cost of a SIM card in half in March, from 500,000 kyat ($625) to 200,000-250,000 kyat ($250- $312). But even the reduced price remains beyond the reach of most Burmese, as an estimated 26 percent of the country's population lives below the poverty line.
The question is: Why is the government (or some hard-line elements in the government) so resistant to having cheap phones? The answer is greed. Cheap phones would pave the way toward at least some liberalization of the private sector, but this clashes with the urge among the army and its cronies to monopolize the entire market. A local phone retailer in Rangoon explained to me that the state-owned Myanmar Post and Telecommunications (MPT) company, which controls the entire system, grants phone distribution rights to only two companies: Yatanarpon and Elite. While revenues from Yatanarpon go to the Defense Ministry, the Elite is a subsidiary of Htoo Trading Company, which is owned by crony businessman Tay Za, who was blacklisted and sanctioned by the U.S. government in 2008. All retailers have to seek sale rights from these two giants.
Some sources tell me that the postal ministry, the army, and its cronies want to continue with the fixed prices for mobile phones -- at $250-$312 -- for at least a few more years in order to reap maximum profits. The introduction of a 5,000 kyat ($6) phone would be a devastating blow to their vested interests. The Shwe Pyi Tagon Company -- which announced the $6 phone - was planning to install a new operating system, with its own towers and networks, because the government will not allow it to use the existing one. But the ministry rejected the plan to install an alternate communications system as unconstitutional. The issue will be submitted to parliament, but the ministry and the crony companies aim to draw out the process so that they can make as much money as possible from the status quo.
This episode shows that the so-called reform process is taking place on a skewed playing field -- the product of nearly half a century of military rule -- that allows the military and its cronies to act above the law and enjoy unparalleled privileges and access to resources. Despite the president's talk of poverty reduction, clean government, and better economic performance, the market itself is being distorted by the entrenched corrupt system at the expense of the public's well-being. It would seem that the Burmese dream of access to cheap mobile phones is unlikely to become a reality any time soon.