Getting to Grips with ‘Suukyinomics’
By The Irrawaddy 16 February 2019
Ye Ni: Welcome to Dateline Irrawaddy! We are going to discuss the economic policies of Daw Aung San Suu Kyi, or “Suukyinomics”. I have invited entrepreneur U Myint Zaw and business columnist Daw Yamin Myat Aye to our studio. I’m Ye Ni, senior editor of The Irrawaddy Burmese Edition.
First of all, I’ll turn to U Myint Zaw. I think you may be aware that the term “Suukyinomics” was coined in an article in The Bangkok Post at the end of January. It adapts a general term used to refer to the economic policies of national leaders, like “Abenomics” and “Thaksinomics”. It refers to the economic philosophy or policies of Daw Aung San Suu Kyi. The focus of the article is the creation of a free market economy by restricting cronyism and establishing rules-based free market competition. I would like U Myint Zaw to discuss the implications of “Suukyinomics”.
Myint Zaw: First of all, I would like to talk about the terminology. Frankly speaking, the public is not interested in “Suukyi-nomization” or anything else. I prefer perfect policies to wordplay. It has become common to choose beautiful terms for propaganda. To be honest, the public cannot understand it. Although I am a knowledgeable entrepreneur, I can’t understand it either. Even though I can’t fully understand this term, I can guess what’s in it. I can generally understand that it is a policy for political, social and economic development of the country. As you just said, other countries like Japan have coined words like “Abenomics”. I think [The Bangkok Post] chose “Suukyinomics” because it’s catchy. However, the substance is more important. The political landscape is slowly changing. We had the tenure of the first democratic government, and we are now undergoing that of the second one. We expected much more from the NLD government. So we will have to look into its policies. The government will try to reconcile with cronies and make them tycoons. First of all, I would like to point out that tangible policies are very important. No country can be built on a single policy. What’s needed is a range of policies that are linked, connected and harmonized. Will the government move forward with only one policy or “Suukyi-nomization”? When we talked about development of ethnic regions recently, there arose an issue. It was said that Kayah State had received no foreign investment. There are states and regions that have received no foreign investment during nearly 10 years of two democratic governments. Five years from now, if there are still states and regions that have received no foreign investment under whatever policy, playing with words is an issue we have to deal with. I am just stating the obvious. Aside from states and regions, there are issues like survival of factories and the minimum wage in the Hlaingtharyar Industrial Zone. When we are talking about an economic policy, we need to think about its coverage. Does it cover the daily wages of ordinary people? How does it treat migrant workers, let alone rural people? What I always want to highlight is that wages are not sufficient in the private sector. When it comes to raising incomes, the theory that higher skills will bring higher incomes has never been applied. Spending on education and health is completely insufficient. I don’t want to touch upon grand policies of the state. The issue of enhancing workers’ skills is neglected and workers are still laboring as bricklayers and tailors. I don’t know what “Suukyinomics” contains. What I would like to point out is two things. The first one is concerned with tangible policies. Policies must be linked with one another and be practically workable. The second is the inclusion of the entire population. Are people allowed to participate for political support and votes? Is the entire population of over 50 million people covered by “Suukyi-nomization”? When we talk about “Suukyi-nomization”, we need to ask if it covers the approximately 3 to 5 million people who are working in Thailand and people working in Malaysia. Are there any pragmatic incentives that encourage them to return to their country of their own accord in the policy?
YN: However, “Suukyinomics” emphasizes reliance on China rather than what you talked about. Myanmar has to rely on China for its main needs, like infrastructure such as the Kumming-Mandalay railroad, which is under way, and the Kyaukphyu deep seaport. They will build the Kyaukphyu railroad and finally they are even trying to implement the New Yangon City Project. Do we still need to rely on China as usual? As there are also concerns about the Chinese debt trap, what do you think of the situation as a business columnist, Ma Yamin?
Yamin Myat Aye: We had to rely on China in the past during the terms of previous governments, and we still have to rely on it. First of all there is the debt issue. The largest portion of our debt is held by China and its interest rates are very high. It amounts to as much as US$4 billion. We don’t have enough money to pay it back if they asked for it. The Central Bank of Myanmar (CBM) has just enough reserves to cover four months of imports, according to Vice Governor U Bo Bo Nge. As one month of imports for Myanmar stands at US$1.5 billion, it can be assumed that they have US$6 billion worth of reserves. However, they cannot spend all of it and must keep reserves equivalent to at least three months worth of imports, in accordance with the regulations of the IMF. As a result, we have to continue to rely on China. However, concerns about the Myitsone Dam Project have been raised recently, amid “Suukyinomics”. China has invested not only in Myitsone but also in Kyaukphyu and others places. The investment and size of the Kyaukphyu project has been reduced. As for Myitsone, the public will never accept the project. We still don’t know whether we will have to compensate for it or not, or how the government will negotiate with China. Actually, we would be liable for about US$800 million in compensation. Another factor is that China is implementing the China-Myanmar Economic Corridor. An MoU was signed for it in September 2018. According to information from the government, the project will be implemented by China before 2020. One of the indicators is that the Tatmadaw [Myanmar’s military] announced a unilateral ceasefire on Dec. 21 in regions of the corridor. As a result, there are assumptions that China is pressuring them behind the scenes. At any rate, we cannot shift away from China. We will have to deal with it. Will we always have to depend on China alone? Daw Aung San Suu Kyi may know [the answer], but it is very difficult, because we cannot take a step back. However, when we think about continued dependence on China, its policy toward Myanmar is always ambiguous and it applies double standards whether we depend on it or not. That is why the CBM [Central Bank of Myanmar] adopted a policy permitting trade in yuan and yen. Instead of entirely relying on China, the CBM is adopting a policy shift toward Japan and South Korea. However, we cannot stand without some dependence on China. Therefore it is important for policymakers to shift toward Japan and South Korea cleverly, as we don’t want suffer like Pakistan.
YN: As you were saying this, it occurred to me that since the eruption of the northern Rakhine issue, foreign investment and tourist arrivals have dropped and the government has been forced to adopt a “Look East” policy. As it doesn’t want to rely only on China, it has to diversify its reliance on other countries like Japan and Korea in accordance with this policy. U Myint Zaw, I would like to ask whether you expect the economy will grow under “Suukyinomics” and if there will be job opportunities for Myanmar if investment from China, Japan and Korea come in?
MZ: As I just said, I always remind organizations about tangible policies. The term “tangible policy” is very important. We have been adopting a new policy when the previous one is not successful. “Suukyinomics” is an economic term. As Ma Yamin said, there are separate policies for issues like ethnic groups, neighboring countries and the international community and foreign investment. I would like to advise that we must consider all measurable policies at the same time. And each policy must interact with the others. What’s important is something in engineering we call the “time dimension”. Policies adopted in 2018-19 may not apply in 2020-22. If we are thinking in terms of 30 years, a constant policy may not work. Policies will have to be adjusted over time. As you said, dependence on China is not good. However, we cannot change the situation immediately. We must adopt a policy that can allow us not to rely on China in the mid- to long term, although we cannot [avoid such reliance] in the short term. What policy shall we adopt? Relying on Japan because we don’t want to rely on China is not good. For example, even among siblings, the younger brother is not born for the elder brother and vice visa. They are born for themselves. Therefore, China is for China and Japan is for Japan. Japan is not for Myanmar. A policy of dependence on Japan because we don’t want to rely on China may work, but only in the short term. If a country does not want to rely on its own people, whom can it rely on? I haven’t seen any policy that relies on Myanmar citizens yet. Even if there is no policy that relies on Myanmar people in the short term, will there be such policies in the mid- and long terms? Does “Myanmar people” mean cronies, or people from the NLD, or people close to the government? What I would like to ask is whether the policy is inclusive and comprehensive. Is inclusiveness of people just for political support? When it comes to development, does the government work only with people close to them? Some policies are confidential and some are inclusive, but I doubt whether they have conducted the required public consultations before adopting the important policies that are steering reform. I am not interested in policies as they are tabled, but in how they are developed and how [leaders] have brainstormed for it. That’s more important. Since I returned to Myanmar in 1996, I have noticed that there are very few inclusive practices like brainstorming. They adopt policies only in consultation with their confidants and people close to them. For example, before “Suukyinomics”, there was a book titled “30-Year Plan of the Military Regime”. It may be referred to as “Aungthaungnomics”, because it was written by U Aung Thaung. There are unbelievable, surprising and inappropriate ideas in that book. As I am from the electronics sector, I would like to point out an example from that sector. It stated that the country would produce parts before manufacturing electronic devices like cameras, computers and phones. However, parts manufacturers produce parts only and device manufacturers produce devices in other countries. The ideas in that book were very childish. It is very unfortunate. They have published many books and adopted many policies. Before that there was “Newinomics”—the Burmese way to socialism. We had to chant their socialist slogans. During the time of the military regime, we no longer needed to chant slogans, but we had to work under one command. We generally support “Suukyinomics” in principle, as a country must reform itself based on a firm economic policy, but it needs to be comprehensive, as it is important. A policy must be developed from various points of view, including China and peace issues. Another thing is that China will not sit idly by while Myanmar people are trying to be proficient. They will also continue to change their policies, like us. As long as the world exists, China will adopt policies that influence Myanmar. They won’t wait for us if we say we are not ready or we haven’t finished negotiations. Every second matters to them. To sum up, the military regime said the strength of the country lies within. The NLD government also invited public participation but I don’t think so. I would like to point that out.
YN: What would you like to add, Ma Yamin?
YMA: What Ko Myint Zaw said is informative. When the NLD government took office, it formed a cabinet. As a business columnist, I looked at who the cabinet members are, how many people in it are academics and how many of them are aware of the issues on the ground. I studied the ministries related to the economy like I studied the ministries related to the economy like the Ministry of Planning and Finance and the Ministry of Commerce. I don’t think it worked. For example, the CBM permitted trade in yuan and yen recently. There were complaints. Although the currencies are allowed for use in trade, exports from Myanmar to China in goods like rice, corn and sesame are legal only in Myanmar, but China doesn’t permit them legally. So we are smuggling them into China. But with payments for illegal trade being legalized, how do we proceed? This has been discussed since Brigadier-General Tin Naing Thein was the minister of commerce in the military regime. I am not sure. On this issue, it was necessary to conduct G2G [government to government] negotiations to ask China to permit legal trade in these items. The Commerce Ministry may be working on it, I don’t know, but China often freezes the bank accounts of Myanmar merchants in China because it is illegal trade. Businessmen have requested that the Ministry of Commerce adopt a G2G approach, but nothing has materialized. The Myanmar Rice Federation requested that the government, including the president, adopt a G2G approach with China recently, but the Ministry of Commerce thinks Myanmar merchants will be hit with taxes by China and has not done so. As a result, border trade remains illegal and there are losses. Now it seems that the Commerce Ministry is legalizing this illegal trade. So it is necessary to adopt a G2G approach. When a minister is appointed to a political position by the NLD, it is just a leadership change. Inside the ministry, there are many processes. It is usually said in a crisis that it is important to check that the system and structure are in line. Is the system working? Is the structure suitable for the system? Are there institutions supporting the system and the structure? It concerns policy and prioritization, and proper implementation. I haven’t seen any sign of these so far.
YN: Thanks for your comments at a time when we are seeing both discouragement and expectation.