Thursday, July 5, 2012

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.

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