Rehabilitating Burma’s Cronies

Burma’s richest tycoons are back in the news again—not for their shady ties to Burma’s former ruling generals, but because of their recent efforts to cozy up to the National League for Democracy (NLD), led by democracy icon Aung San Suu Kyi.

Tay Za, Zaw Zaw and several other notorious figures who came to prominence during the bad old days of military rule have been making headlines recently for donating generously to NLD causes. This, in turn, has led to criticism of the NLD, which has been accused of defending cronies whose names are virtually synonymous with corruption.

On Dec. 27-28, the NLD held a fundraiser in Rangoon to mark the second anniversary of the party’s Education Network. The event netted around 500 million kyat (US $580,000), including a sizable portion from some of Burma’s richest men.

During the event, Sky Net, a television operator and a subsidiary of Shwe Than Lwin Company owned by Kyaw Win, donated 135 million kyat ($155,000), while the Htoo Company, owned by Tay Za, donated 70 million kyat ($81,000).

Kyaw Win is known to be close to the office of President Thein Sein, while Tay Za has been accused by the United States of being an “arms dealer and financial henchman” of the former junta—a claim he denies.

Aides to Tay Za have told me that it was the NLD that approached him first; leaders of the party tell that that is not the case.

Aung Zaw is founder and editor of the Irrawaddy magazine. He can be reached at [email protected]

Tay Za is known to be close to Burma’s senior military leaders, including ex-dictator Snr-Gen Than Shwe. When I met him at his residence in Rangoon last year, however, he told me that he never met the reclusive former strongman until after his helicopter crashed on a snow-capped mountain in the far north of Kachin State in February 2011.

Than Shwe—who three years earlier refused for a full month to allow foreign aid workers into the Irrawaddy Delta after Cyclone Nargis claimed more than 140,000 lives and left millions homeless—immediately ordered hundreds of troops to conduct a search-and-rescue mission for Tay Za and his crew, all of whom survived.

Tay Za told me he later went to the residence of the recently retired junta supremo to express his heartfelt gratitude.

Tay Za also quietly met Suu Kyi soon after her release in November 2010. He had reportedly offered to assist the NLD. Party sources told me Suu Kyi did not reject his offer.

Suu Kyi has also recently been seen visiting a children’s hospital that Burmese tycoon Zaw Zaw of the Max Myanmar Group helped to renovate. Like Tay Za, Zaw Zaw wasted no time finding an opportunity to meet with the Noble Peace Prize laureate. Soon after she was freed from house arrest, Zaw Zaw, who is the chairman of the Myanmar Football Federation, invited her to watch a match together with him. This reportedly earned him a scolding from some senior generals, but that hasn’t stopped him from meeting her again.

When I met him in Rangoon earlier this month, Zaw Zaw—who is still in his mid-forties—said that people should support Suu Kyi. He admitted that sanctions were a big hindrance in making business as the country is opening up to the outside world. He said he cares about his image and his company, but added that if he can’t shed the label of crony, he wants to at least try to be a “a good crony.”

Zaw Zaw is media savvy and friendly. He will proudly tell visitors and the media that he once washed dishes in Japan before coming back to Burma to run his own business selling used cars and later getting involved in the jade mining business in Kachin State.

“I have nothing to hide,” he told me. He was a university student during the 1988 uprising in Rangoon and he witnessed the crackdown and his fellow students being gunned down.

True or not, he doesn’t hide his admiration for Suu Kyi. Indeed, many businessmen who are on the US sanctions list know that Suu Kyi holds the key to their future.

She is the one who can recommend the US government to remove some tycoons from the list. It’s no wonder why some tycoons have been seen making public donations to the NLD and Suu Kyi.

Since his early days, Zaw Zaw’s business empire has expanded considerably. In addition to his mining interests, he now has his own bank (Ayeyarwady Bank, one of the largest in Burma), a cement factory, gas stations and a major construction company. The latter company was awarded numerous lucrative contracts in Naypyidaw, the new capital, including a stadium for the 2013 Southeast Asian Games.

Zaw Zaw may be rich, but he also know that he needs to contribute to society.

In 2010, he set up the Ayeyarwady Foundation, a charitable organization. Since then, he has been building schools across Mon and Karen states and Irrawaddy and Mandalay divisions. Recently, the chairman of the Max Myanmar also attended the wedding of a former student leader and member of the 88 Generation Students group.

But many Burma watchers say that providing cash to the NLD and local community and civil society groups isn’t enough to redeem Zaw Zaw’s reputation. One Rangoon–based observer said that Zaw Zaw and other cronies need to show not only that they support current political reforms, but also that they are willing to make a long-term commitment to the development of civil society. They should also return land that they acquired under the former regime, he said.

“The cronies must show that they are part of the solution, not part of the problem,” the observer added.

From the point of view of the US, which was long the staunchest critic of Burma’s former military rulers, the cronies must make fundamental changes in the way they operate if they want to be removed from the sanctions list.

There has been wild speculation in Rangoon recently that the US is looking into potential waivers of entities, particularly banks, to allow foreign businesses to do business in Burma. This would open up some opportunities for some cronies, but it is unlikely that those involved in drugs or who helped purchase arms for the regime will be removed from the list anytime soon.

Providing cash and building schools and hospitals here and there isn’t enough, one Rangoon-based diplomat said firmly. Some cronies now realize that strong recommendations from Suu Kyi and prominent activists such as Min Ko Naing and Ko Ko Gyi and other actors in the civil society movement are important, as the US is closely monitoring them.

Suu Kyi surprised many by saying that those who became wealthy during military rule should be given another chance to reform themselves. They should be considered innocent until proven guilty, she said, before adding that cronies of the former ruling generals should be investigated for any alleged wrongdoing.

“People may have become rich in different ways. But whether they were involved in any illegal action to make themselves rich must be investigated,” said the opposition leader.

Now, many in Burma are asking whether the tycoons are trying buy off Suu Kyi.

In early January, senior NLD leaders held a press conference to explain the activities of the party’s education network. The press conference was held at the Kandawgyi Palace Hotel—owned by none other than Tay Za.

At the reception, Soe Win, a senior leader of the NLD, told me that he welcomed tycoons’ contribution to education and health. When I asked if the tycoons approached Suu Kyi, he smiled and nodded.

But the question now is: can Suu Kyi rehabilitate some of Burma’s most notorious cronies?

Suu Kyi, who is now the chairwoman of the rule of law and tranquility committee, said that even if they have committed crimes, they should be given a chance to reform themselves.

The right of criminals to rehabilitate themselves should be regarded as part of the rule of law, she said, adding that punishment that is solely intended to inflict suffering is barbaric. “What civilized people should have is a vision that punishment is for reform,” she said.

“Those who are considered cronies have supported the social activities of the NLD and others. What is wrong with that? Instead of spending their money on things that have no purpose, they have supported things that they should support. It’s a good thing,” said Suu Kyi.

Indeed, there are many questions that need to be asked. Can cronies become builders of industry and national economic power? How can they contribute back to society by building philanthropic foundations and provide life-long assistance to society? Many showy tycoons and cronies in Burma are not interested in helping society.

In fact, critics have charged that contributions from cronies are tiny compared to the money they spend on their posh Italian sports cars.

Cronies who have quietly supported Suu Kyi and the opposition movement and donated to the Burmese community in the past were upset to see some cronies who just popped up and threw some cash at the NLD. “They are just opportunists, because they want to be removed from the [US sanctions] list, a young tycoon told me.

“In fact, we have been helping opposition groups for many years,” he said.

He also warned the US not to overlook the fact that several big-time businessmen who were arms smugglers and involved in the opium trade and other shady business are still not on the US sanction list. Moreover, there are several tycoons who have provided profit shares to the generals’ family members.

Sean Turnell, an expert on Burma’s economy at Macquarie University in Sydney, Australia, thinks the cronies are destructive and resistant to reform. “I think the majority are cronies of the destructive sort—but some might turn out for the better.”

“They are rent-seekers pure and simple rather than builders of genuine enterprise,” he added.

“[They are] living off government regulatory largesse, the recipients of monopoly and quasi-monopoly profits and so on. As such, they are political animals as much as economic ones. But certainly there are some too who may emerge as something else. On this front, I guess we have to hope so, since they are amongst the few with sufficient capital to do transformative things, if this is what their desire is.”

A question now is how can cronies be rehabilitated in Burma?


15 Responses to Rehabilitating Burma’s Cronies

  1. Didn’t they say ‘money and religion are the roots of all evils’? Religion teaches them to do good and donations becomes their ‘doing good’; the money, obtained through fair or foul means, they have plenty to throw around. That does remind me of the story of a bat in the war between the birds and the mammals. When the mammals questioned him for his wings he showed them his teeth to say that he is a ‘meat eater’. The tide turned and the birds were on the ascendancy, the bat showed them his wings to say that he is one of them. Should we be surprised that these cronies are sucking up to the NLD. That’s Burmese politics and Burmese personality at their very best.

  2. Jean Veljoung in reality life? So far, I do not see any bad man who changed their criminal way. It just exist in Les Miserable. The people who pray upon the weakest members of the society and bribing the stronger one in order to get what they want, hardly will change their way. On the other hand I don’t want to be inspector Javear in Les Miserable. However, Aung San Suu Kyi is pretending to be holy preacher Bishop of Digne and bying the soul of Cronies by accepting bribe from cronies. In Les Miserable, Bishop of Digne bought Jean Veljean criminal soul by forgiving for the theft of his silver ware by Valjean and by forgiving a blow by Valjean during robbary. However, ASSK give her blessing to cronies by receiving bribes. I still do not see clearly how the cronies will change their way!!!! You can not change the devil, only devil have way to change you. The way of rightousness is always harder. It doesn’t mean that we are not capable of forgiving. I simply do not see any behaviour that is worth to forgive from these cronies. Slowly ASSK is becomming the figure of corrupt people heaven.

    • Well done Saya Tom Tun. You exactly made the point and Daw Aung San Su Kyi mixed religion and politics like Dictator Ne Win used Budhisim to create Burma Socialist Program Party ; a road to total ruin.

  3. Now is apparently the time to consider the perpetrators’ human rights to rehabilitation so the peoples of Burma, the victims, must wait for their turn. Unless we let the generals and their cronies mend their ways we the powerless and the penniless have no chance of recompense precisely because we are powerless and penniless. Great circular logic, blatantly elitist with not a drop of faith in the people in moving this country forward. Top down democracy with a truly touching faith in the vultures and hyenas turning vegetarian. Wonderful.

  4. “Suu Kyi surprised many by saying that those who became wealthy during military rule should be given another chance to reform themselves. They should be considered innocent until proven guilty, she said, before adding that cronies of the former ruling generals should be investigated for any alleged wrongdoing.”
    If so and correct , all Burmese can build their own business empire by any means. like Tayza and Zaw Zaw. Then, all will be forgiven by next , next bama governments with donation. I will do the lucrative business ( timber and jade ) particularly in Kachin lands. Investigation for any illegal business is done under the nargic-than shwe 2008 constitution.

  5. I have never heard this kind of words and phrases in other countries before. Taming wild animals might work but rehabilitating cronies and let their bosses slipped away happen only in Burma. NLD Headquarters may be changed to “Institute of Cronies Rehabilitation” and ASSK hands them certificates when they graduate. And, NLD will make tons and tons of laundered money from their new members, cronies.

  6. George Than Setkyar Heine

    Hence MONEY TALKS man!
    Even the HIGH and MIGHTY Daw Suu is NO EXCEPTION when it comes to MONEY of course.
    SPLITTING the SPOILS is the NAME of the GAME in TOWN today folks!
    MONEY is the KEY in MAKING THINGS HAPPEN YOUR WAY as most men say.
    Of course Daw Suu and NLD NEED the MONEY to RUN THINGS today.
    And that’s WHERE TAY ZA, ZAW ZAW and other CRONIES COME IN for the KILL no doubt.
    The VULTURES CERTAINLY KNOW THEIR PREY/CARCASSES as well of course.
    Daw Suu should GIVE CONSIDERABLE THOUGHT OVER WHO SHE SHOULD MAKE FRIENDS WITH and ACCEPT DONATIONS FROM WHOM as well today.
    ACCEPTING MONEY from the CRONIES like TODAY certainly DIMINISHED HER LUSTER and CREDIBILITY in the EYS of MANY specifically, PEOPLE WHO HAVE GIVEN THEIR ALL for BURMA’S DEMOCRACY, FREEDOM and HUMAN RIGHTS of course.
    It is APPARENTLY A CASE of BUYING Daw Suu and her NLD on the part of CRONY IN CHIEF Tay Za and his ilk I should say.
    Specifically BY ACCEPTING the ILL-GOTTEN MONEY of the CRONIES’ Daw Suu has TURNED HERSELF into AN ACCESSORY to the CRIMES of the CRONIES who had ROBBED, SEIZED the LANDS and PROPERTIES of the FARMERS and PEOPLE on the backs of Than Shwe and his thugs DURING their HEY DAYS for a fact.
    The CRONIES HAVE ABUSED/STOLEN the COUNTRY and PEOPLE’S RIGHTS, LANDS, LIVELIHOODS etc. by SUCKING UP to Than Shwe and his generals no doubt.
    And Daw Suu MAKING UNHOLY ALLIANCES with not to mention ACCEPTING DONATIONS (black money as well) from the DEVILS (cronies) and their MENTORS,Than Shwe’s CLERK (Thein Sein) led lot at Naypyidaw is the WORST SHE COULD DO today of course.
    BELIEVING in the CRONIES CHANGING their WAYS (color and creed) ONE DAY on the part of Daw Suu is WORST THAN EVE FALLING FOR SATAN’S PLOY and EATING THE APPLE in the GARDEN of EDEN and SHARING the FRUIT with ADAM as well no less I say.

  7. George Than Setkyar Heine

    The right of criminals to rehabilitate themselves should be regarded as part of the rule of law, she said, adding that punishment that is solely intended to inflict suffering is barbaric. “What civilized people should have is a vision that punishment is for reform,” she said.
    Criminals committed crimes “WANTONLY” in the first place mostly, Right?
    Hence, JUSTICE should be SERVED in PROPORTION with their CRIMES as well. Agreed?
    Whether they REFORM while in prison or in the next life after their date with the hangman/guillotine/firing squad etc. is THEIR BUSINESS, NOTHING CONCERNED with CIVILITY nor CIVILIZATION for that matter as well.
    The primary objective of the RULE of LAW/LAW and ORDER to take ROOT in Burma is to RENDER JUSTICE on the CRIMINALS and that INCLUDES the CRONIES as well to FACE the MUSIC first and foremost like ALL PEOPLE in the COUNTRY who have COMMITTED CRIMES.
    The BOTTOM LINE is NOBODY is ABOVE the LAW, get it?
    “Those who are considered cronies have supported the social activities of the NLD and others. What is wrong with that? Instead of spending their money on things that have no purpose, they have supported things that they should support. It’s a good thing,” said Suu Kyi.
    THERE SHE GOES ASTRAY AGAIN as well of course!
    It is a CLEAR INDICATION and OFF HAND COMMENT as well on her part that CRONIES WHO THROW MONEY on HER and NLD are GOOD GUYS!
    This EVIDENCED the LACK of AWARENESS much more so as well the fact she MISSED the MOST OBVIOUS POINT: The cronies are BUYING HER and her NLD with their BLACK MONEY (ILL-GOTTEN WEALTH) with a view to HIGHLIGHT/THROW the LIGHT on the POINT – even the high and mighty Daw Suu is NOT IMMUNE to GRAFT when MONEY/FAVOR is THROWN HER WAY!
    Of course Daw Suu NEEDS NO MONEY from CROOKS or CRONIES for that matter – run her party nor Burma, her country – as well. Any bets?
    Hence, FORMING UNHOLY ALLIANCES with Than Shwe’s MOB at Naypyidaw and not the least the CRONIES today as well DOES NOT ADD UP much less ENHANCE Daw Suu in terms of her REPUTATION, DIGNITY, HONOR, CREDIBILITY, INTEGRITY etc. in the first and last place as well I say.
    “Sean Turnell, an expert on Burma’s economy at Macquarie University in Sydney, Australia, thinks the cronies are destructive and resistant to reform. “I think the majority are cronies of the destructive sort—but some might turn out for the better.”
    “They are rent-seekers pure and simple rather than builders of genuine enterprise,” he added.
    And DITTO for me as well for that matter!
    Hence, it is BEST for Daw Suu to STEER CLEAR and STAY AWAY from the CROOKS/CRONIES who are only PUPPETS/PROXIES of that PUPPETEER (Than Shwe) at present RESORTING to USE his PUPPETS (CRONIES) for a change as well to DISFIGURE/DISMEMBER Daw Suu in the EYES of the PEOPLE of BURMA specifically among the 8888 Generation Students, Buddhist monks and the PEOPLE in general as well at this most CRUCIAL TIME and JUNCTURE going ALL OUT to CLAIM their RIGHTS and DO the RIGHT THING as well today, in case Daw Suu fails to note.
    And most importantly LEOPARDS NEVER EVER CHANGE THEIR SPOTS as well lest Daw Suu forgets!

  8. Please remember ; Burma is in the process of national reconciliation and moving forward to democracy country. I do not see any wrong doing about accepting help and /or donation from the good or bad cronies . The fact is that all leaders from NLD and 8888 students members are well experienced politicians . They know how to play the game political arena.
    The majority of Burmese people trust DASSK.

  9. “Can Suu Kyi rehabilitate some of Burma’s most notorious cronies?” My answer is simply and definitely NO. It would be a miracle if military cronies would become ethical. U Aung Zaw, you are asking the impossible from Daw Suu.
    “How can cronies be rehabilitated in Burma?” Well, I guess they can be rehabilitated the day when everyone dealing businesses with them become ethical and have the wisdom to know right from wrong and have the strength to do the right thing. That could take a very long time but it could happen, perhaps in the next two or three generations provided those future generations are taught morals, ethics and civics from a very young age.

  10. Well, the powerful generals and their cronies have joined the club of the wealthiest people of the world whereas the country and the Burmese people have become the poorest in the world!!! Does the furure of our country depend on their ( wealthy cronies) largesse? I shudder at the thought.

  11. Hey ASSK – cronyism is unethical. Time to break up the small elite group powered by cronyism and patronage.

  12. Crony capitalism is corrupt and anything but neutral. It is a barrier to broad participation in prosperity. The problem is that ASSK is the product of nepotism – a close relative of cronyism. Thank goodness for Gen.88!

  13. I am against government by crony.

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