Burma’s Ethnic Violence ‘Poses Threat to Foreign Investment’

Debris litters the main street of Gyobingauk, Pegu Division, after anti-Muslim rioting in late March 2013. (Photo: Steve Tickner / The Irrawaddy)

Continued religious and ethnic violence in Burma could deter much-needed investment by fostering a “wait and see” attitude among foreign companies and entrepreneurs, according to a study of the recent spate of anti-Muslim rioting and arson in the country.

“Failure to prevent the spread of sectarian violence could dampen the influx of critical foreign investment,” the briefing on Burma by British business risk consultants Maplecroft said.

The report identifies the booming tourism industry as the most vulnerable, with the negative impact quickly spreading to the retail and infrastructure sectors.

“[Burma] has attracted significant interest from investors since the US and EU pared back sanctions in 2012. However, stakeholders remain cautious about making significant investments in the country, preferring to wait and see how the reform process moves forward,” said Maplecroft’s principal Asia analyst Arvind Ramakrishnan.

“The important oil and gas industry is unlikely to be directly disrupted by the present level of sectarian trouble but it could cause problems for supporting logistical work, such as transport,” the Maplecroft study said. Further widespread violence “could create hazards to personnel operating in the vicinity of riots,” which would be an additional disincentive for commercial development.

The Ministry of Energy has signaled that it plans to hold an international auction this month for up to 20 offshore exploration licenses to hunt for oil and gas off Burma’s coast, where large volumes of natural gas are estimated to exist beneath the sea floor.

Many of these sea blocks are adjacent to the coastal Arakan region where many of Burma’s Muslims live.

The auction has been delayed already, since last September.

Peace and stability in Burma’s commercial capital, where most foreign investor activity is initially concentrated, is seen as key to uninterrupted economic development.

“Due to the economic and cultural significance of [Rangoon], if violence were to occur in the city it would likely spread further throughout the country,” said Maplecroft.

“While the Muslim community is believed to be a very small minority nationally, the US Department of State reported in 2005 that the size of Myanmar’s non-Buddhist population may be grossly underestimated.

“According to the report, the country’s non-Buddhist population may be as high as 20 percent of the total population, rather than the 7 percent reported by the government,” the Maplecroft study said.

The US government has already issued a warning to US citizens working or holidaying in Burma to avoid some commercial parts of Rangoon where Muslims are concentrated and also to stay away from the Mandalay region.

The Burmese government’s slow reaction to the violence and apparent failure to deal with extremists fanning anti-Muslim views have been criticized by Burmese academic Maung Zarni, a fellow of  the Civil Society and Human Security Research Unit at the London School of Economics.

“In spite of [President] Thein Sein’s softly-softly official messages of religious harmony and coexistence in society, he has so far done virtually nothing to nip the neo-Nazi Buddhist movement of 969.

“Rather, the impunity and inaction are more likely anchored in Naypyidaw’s strategic calculation to create a general climate of fear and uncertainty, consistent with the divide-and-rule tactics it has always used to exert unrivaled control and influence over the state and economy,” said Maung Zarni in the Asia Times.

Maplecroft’s advisory to potential business investors makes a similar assessment: “The military will use the security situation as a means to maintain strong influence over the democratic transition.

“While a coup remains very unlikely, the government has shown an inability to completely contain the situation. Civilian control over the military remains non-existent. This was highlighted by the military continuing its campaign against Kachin rebels earlier this year, in spite of calls from Thein Sein to end the campaign,” said Maplecroft’s Ramakrishnan.

Ironically, one of the biggest areas of potential foreign-led infrastructure investment, telecommunications and the Internet, is being blamed for helping to fuel rumors which have helped spread some of the recent sectarian violence.

“Anti-Muslim postings on Facebook, including those with images of the recent deaths and destruction in Meikhtila, have been ‘liked’ by thousands and solicit approving howls from Burmese netizens who show no restraint in expressing their neo-Nazi views in public on-line domains,” Maung Zarni commented.

“Religious tensions are now being whipped up again in the main city, [Rangoon], largely by Buddhist nationalists using what many pro-democracy activists here thought would be a tool for promoting peace: the Internet,” reported the Wall Street Journal. The paper quoted leaders of the 88 Generation movement of pro-democracy activists expressing dismay at the Internet becoming a tool of extremists.

Only two weeks ago the chairman of Google, Eric Schmidt, visited Rangoon to lend support to encouraging telecommunications development.

“The Internet will make it impossible to go back,” Schmidt was quoted by Radio Free Asia as telling students. “The Internet, once in place, guarantees that communication and empowerment become the law and practice of your country.”

Maplecroft said that if the signs of “neo-nationalistic discrimination” spread beyond anti-Muslim sentiment, there is a wider risk to the business community.

“Although the violence has so far been directed at Muslims, the leaders of the 969 Movement have also spoken out against other non-Burmese ethnicities, particularly those of Chinese descent.

“Failure to stop the group’s growing influence could result in foreign-owned businesses being targeted or boycotted. This could have strong implications for extractive industries, as the group’s main accusation against the Chinese is based on their profiting through the export of Myanmar’s natural resources without benefiting the local population.”


13 Responses to Burma’s Ethnic Violence ‘Poses Threat to Foreign Investment’

  1. As an outsider I dare to speak it out:
    I don’t think so that it will affect investment. Look Indonesia, the situation over there was worse than in Myanmar. Most businessmen in the meantime understand the “background problems” :
    For a moment we should switch off our emotions and ask ourselves WHY all those things could have happened in Myanmar. We can be sure that NOTHING had happened if there would be no CERTAIN REASONS. Everybody who understands a little bit about Islam, knows, how they are using strategies and tactics to expand their influence. In Myanmar as well. Particularly the socalled Rohingyas have their “strategic function”. All the hidden games were unbearable for many Myanmar people. Therefore the revolutionary like counter reaction . It might sound cynical but the Buddhist Burmese reacted in self-defense. Especially Islamic leaders (and strategists in the background) should reflect on it.

    • My foot, you are dumb and deaf and have no mercy for the human beings….go to hell with your business….

      • Mr. Niaz Khan,
        I understand your personal (‘Muslim’-) feelings and also your (uncontrolled) outburst. It serves at the same time as an example for the (worldwide) problems between ISLAM and non-ISLAM. Unfortunately most religious & ideological indroctinated people cannot keep emotional distance to their “brain & heart load” when it comes to (even slight) disturbences connected to their ‘beloved believe/faith’. AGGRESSION is the normal reaction. Individually no big problem but collectively it is. Worldwide we are facing it every day. Mostly the Islamic side is involved and Moslems are the aggressors. That is no anti Moslem propaganta but a definite fact. Now, in Buddhist Myanmar some Moslem groups experience the same what non-Islamic minorities experience in Islamic countries, since long and almost daily. The Islamic side in Burma is justifiably outraged but at the same time not ready to reflect on the fact that they basically deliver the “secret explosive” themselves. Exactly on that, Islamic leaders and intellectuals should start thinking about.

    • I don’t know weather you are from Germany i have doubt.Nazi killed six million jewish ethnic but blame To Nazi not all German.do you think all German responsible for 6 mln Jewish who are killed? of course AL-Queda, Taliban they are terrorist for me they are not human or Muslim.their claim as Muslim is self serving.Rohingya ethnic, Myanmar Muslim have nothing to do with extremism.Muslim in Myanmar seeking justice,equality,human right they deserve under with their ethnic birth right which is stripped unjustly. Muslim are victim in Myanmar with false allegation.

    • Companies are interested in making money only..if the house is burning they will sell water…and thats called business…turning adversities to opportunities,

  2. Mr. William Boot,
    You are using the term “neo-Nazi” for certains Buddhist groups.
    As a German, I protest vehemently. You are using this political ‘western fashion word’ in order to discredit people who do not belong to your (seemingly left-wing) “ideological world”. Would you also dare to name the numerous fanatic Moslem killer gangs “neo-Nazi Islam movement” ??
    You first should seriously study the real background reasons of the conflicts in Myanmar, before using frivolous terms to stigmatise certain religious groups, in this case Buddhist monks.

  3. We truly agree with the German Traveller who expressed and extracted the exact words from our true Myanmars mouth. The outsider could see it happening but none of the politician including Mr Jimmy Carter the former president of the US or they are deliberately turning their back on us just for political gains. We could understand Mr Carter but I could not our home grown Buddhist politicians and frustrated with their tactics. We would like to urge all Myanmar people to boycott not only the Rohingyas descendant Bangladeshis businesses but also rejecting the political speeches from non-expressive Myanmar politicians whom have failed in safe guarding our religion and cultural values. We must resist at all costs in such backdoor entry way of colonization by the Bangladeshis using their religion. We would urge our home grown Myanmar Muslims to join us and resist any talks about the religion in this conflict by limiting the reference to Rohingyas descendant Bangladeshis communities. We would urge our Government to stop issuing nationality certificate to this Rohingyas descendant Bangladeshis Community otherwise our coastal oil rich area will be flooded by the beard wearing Bangladeshis.

  4. Religious extremism of all faiths is a scourge. Hypocrisy abounds. The violence has nothing to do with belief in their religion – those who they follow, if they were alive today, would never support their behavior. It’s about fear. Fear of losing ground. It’s gang oriented turf war. True Buddhists follow the truths. True Christians follow Jesus’s words on helping the poor. The Qur’an teaches peace. Those who kill in the name of these men of peace are nothing less than heartless hypocrites.

  5. I do not think Burmese government will make trouble for foreign companies. The government is believed behind this violence or some Buddhist monks visibly participated. All was orchestrated by the government and some Buddhist monks. But this will not happen to foreign companies which are granted by the government.

    • Too bad no one can control the mobs going around looting, killing, burning, demanding unreasonably with no civility — and getting away unpunished?

  6. BURMA GOT HISTORY OF VIOLENCE AGAINST MUSLIM WHO SETTLE IN INDIA.BURMA WILL BE CURSE IF THEY WILL BE ON MUSLIM AND WILL BE DESTROY IT SELF.BUDDHIST MONKS SUPPOSE TO TEACH GOOD THINGS BUT ARE INVOLVE IN HUMANITY CRIME.

  7. By killing Muslim, thein sein and than shwe think US will release sanction on them easily and readily. They make a miscalculation now from US. EU now releases sanction on Burma due to their poor economy ( Greek, Italian, Spain are in trouble in economy). Than shwe and crony do not want all ordinary Burmese to become rich and rich to be their rivalry in future. That is the difference between Chinese leaders and Burmese military thugs. Thein sein now changes his mind in the respect of offering the rich oversea Burmese to come back to help the poorest country, Burma.
    Those thugs feel insecure especially in business rivalry. Those thugs like foreigner investment because they can change their business contracts what they like with any reason and any time. Those thugs start to worry about local strike on them because news media is started to be more free in expression. However, those media owners are crony related ones.

    Those thugs point their finger to ethnics , Chinese and Muslim whatever and whenever they have failure in economic policy ( Ne win did it in the past to let killing local Chinese). They have no responsible for all business deal with foreigners. See the outcome of the greedy and naive Chinese investment in Burma. China is now facing the local strike for business with Burma. Those thugs like to get foriegn bank loan easily and readily because next generation and all ethnic resources will or must pay back for those loan. Than shwe can kill more ethnics as well as local Muslim for his time tempo and gaining business because than shwe has paramilitary apart from private army.

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