Transformation of Cronies Key to Burma’s Development: 88 Leader

By The Irrawaddy 24 September 2013

Leading pro-democracy activist Ko Ko Gyi says a careful transformation of the way that Burma’s cronies do business is important for the country’s socio-economic development, as their resources can support its fragile democratic and economic transition.

88 Generation Students group leader Ko Ko Gyi wrote in an op-ed for The Irrawaddy’s Burmese-language version on Monday that some businessmen could become assets for the country’s development if they are willing to be transparent about how they made their fortune under the former military regime.

“We need businessmen with international qualifications to compete or cooperate with foreigners [investors] but unfortunately, most of them are close to members of the military regime,” he wrote. “So, how to transform them has become a major question.”

He said that Burma is at a crossroads in terms of political, economic and social changes, and finding a way to transform the cronies’ business model and make them support the fragile transition through investment is now a key challenge.

In this effort, Ko Ko Gyi said, nationalization of crony properties and taking legal action against them is not a pragmatic approach and will not bring positive results to the state’s economic development and reform process.

However, there should be transparency regarding the source and size of the cronies’ wealth, said the activist leader, who was released from prison in January 2012 and has since met with numerous political, economic and social interests in Burma.

Those businessmen who were involved in large-scale land grabbing and forced evictions—a growing and widespread human rights concern in Burma—should provide appropriate compensation to affected communities before they are allowed to participate in the economy, according to Ko Ko Gyi.

“They should also declare their assets within a certain period of time that they are given in order to pay proper taxes, such as property tax and revenue tax to the state,” he added.

The issue of changing Burma’s crony businessmen is also tied to attracting foreign investment, Ko Ko Gyi argues, as international investors will soon have to choose which Burmese firms they are going to partner with.

He stressed that the US government needs to carry out careful assessments before it takes any Burmese cronies from its sanction list.

“Basically, we need to know if they were involved in illegal activities such as narcotic drugs trade and/or arms smuggling or profiteering such as excavation of gems and other natural resources in different war-torn ethnic areas,” Ko Ko Gyi wrote. “We have to object if the United States now lifts economic sanctions it had imposed on them.”

Ko Ko Gyi’s op-ed appears at a time when the Obama administration is seeking to identify a few cronies who can play a more constructive role in rebuilding Burma’s underdeveloped economy.

Even though many international investors follow global Corporate Social Responsibility standards, Burma should take steps to ensure that international firms spend a certain percentage of their profits on local development projects, he said.

Ko Ko Gyi said the government should also put in place laws that prevent large crony-owned firms from obtaining monopoly positions, while labor rights protection should be put in line with international standards. Civil society groups, he added, should be allowed to monitor and address the social and environmental impacts of investment projects.