Fanning the ‘Flickers of Progress’

By Marwaan Macan Markar 29 December 2012

It was in Bali, on November 18, 2011, that Myanmar really moved onto the stage of international respectability after decades of condemnation as a rogue state. Offering a helping hand shortly after noon on that day in the Indonesian resort was US President Barack Obama. He did so through his much commented upon “flickers of progress” statement, which acknowledged the reforms ushered in after Myanmar came under the leadership of President U Thein Sein. “After years of darkness, we’ve seen flickers of progress,” he said. “President Thein Sein and the Burmese Parliament have taken important steps toward reform. A dialogue between the government and Aung San Suu Kyi has begun.”

And now, exactly a year later, with the winds of a presidential re-election victory behind him, Mr Obama has flown into Myanmar to what foreign policy analysts in Washington have described as one of the fastest stories of engagement ever between the leader of the world’s superpower and a one-time international pariah. Until this visit, the conventional wisdom was that such a historic trip by a sitting US president would occur in 2014, when Myanmar takes over as the head of the 10-member Association of Southeast Asian Nations (Asean). By then, there would be a bigger canvas (time-wise) to measure the progress of the quasi-civilian government that U Thein Sein heads, and reward it with an unprecedented visit to Myanmar by the current resident of the White House.

Yet this rush by Washington to embrace the U Thein Sein reforms is not out of step with what unfolded earlier this year. In April, days after a groundbreaking by-election that saw the hounded opposition heroine Daw Aung San Suu Kyi lead her National League for Democracy (NLD) party to an emphatic victory, the Obama administration announced plans to ease some of the punitive sanctions that had been imposed on Myanmar for decades. “That was a risky move since it was before Daw Suu and her NLD colleagues took their seats in Parliament to confirm the spirit of reform,” said a Washington-based foreign policy source regarding the economic carrots announced on April 4. The latter included an easing of the ban on US financial services and paving the way for US-supported international development assistance to flow in.

Then, in July, the Obama administration gave the green light for US oil companies to explore deals with the Myanmar Oil and Gas Enterprise (MOGE), the notorious state-owned petroleum company whose earnings (including US $500 million annually from the Yadana natural gas pipeline) had helped to prop up the repressive military regime that had preceded the U Thein Sein administration. The relevance of this move for America’s new Myanmar policy was brought to relief given who it was up against—Daw Aung San Suu Kyi.

“She opposed lifting the embargo on investments in Myanmar Oil and Gas Enterprise because it was the source for the nontransparent flow of cash that built Naypyitaw,” said Michael Green, senior vice president for Asia at the Center for Strategic and International Studies (CSIS), a Washington, DC-based think tank, at a press conference on the eve of Mr Obama’s visit. “But [when] the administration did it, she said, well, it’s not that big a deal. She kind of adjusted.”

According to Mr Green, the Obama administration brought Daw Aung San Suu Kyi around to its way of thinking after some careful consultation. “The administration has been leaning forward or has been taking steps and then talking to [Daw Aung San Suu Kyi] and talking through it, and she’s realized that in a close call, she’s better to say, let’s go with the administration’s stance.”

The rapid shift in Washington’s policy towards Myanmar has been mirrored in other corners of the West, where indignation at the human rights violations of the country’s former military leaders had also given rise to similar sanction regimes. The end of April saw the European Union reward Myanmar’s reformists by announcing it would suspend its punitive economic restrictions for a year. This nod paved the way for prospective European investors to join their American counterparts to explore a landscape that has all the attributes of a frontier economy.

“I think the business sector, notably in the case of the United States (which had the strongest restriction on private-sector engagement) is one important driving force behind this emerging trend,” says Jared Bissinger, an economist specializing in Myanmar affairs at Australia’s Macquarie University. “Many Western companies are eager to do business in Myanmar and have pushed their respective governments to help make this possible.”

And foreign business consultants and advisers are already leaving their mark in the rush to fill up hotel rooms and rent office space in Yangon. What was on display at the “Global Investment Forum” in Naypyitaw in mid-September offered a pointer to a direction the rapprochement between the West and Myanmar is taking. Scores of foreigners sporting black and gray business suits filled an ornate hall in the administrative capital to get a primer about what is on offer since U Thein Sein eased the iron grip of the previous military junta to herald a raft of political and economic reforms.

Little wonder why young Myanmars who took a gamble to return home and taste the air of change have no regrets. Among such risk takers is Ko Thuta Aung. The then 26-year-old, armed with a British education, made the journey back from the comfort and order of Switzerland in November last year. Six months later, he had set up shop to tap the economic opportunities that have bubbled to the surface in Yangon.

“We help foreign businesses by organizing delegations, business matching, event matching and business research,” says the co-founder of the HamsaHub Company of Business Developers. “Our latest projects have been contributing to data gathering and arranging meetings with senior government officials.”

But are the reforms that have attracted those such as Ko Thuta Aung to build a future in the new Myanmar the result of tough Western government-led sanctions precipitating change? Not so, argue the likes of Derek Tonkin. “Sanctions were seriously counterproductive and entrenched the military in power, causing only symbolic and psychological irritation, but inducing no deviation at all from the Seven-Point Roadmap [toward a military-dominated ‘disciplined democracy’] declared in 2003,” says Mr Tonkin, a former British ambassador who had four postings in Southeast Asia. “There is as yet no general acceptance of this reality, as both the US and European hawks as well as Daw Aung San Suu Kyi herself continue to argue against all the evidence that sanctions, which could not be targeted at the regime, were of major importance in inducing political reform.”

But did Washington have an alternative following the military’s brutal crackdown on the 1988 pro-democracy uprising? No, says Robert Fitts, a former US diplomat who served in three Southeast Asian capitals, arguing that the tough measures imposed during the Bill Clinton presidency were justified under the circumstances. “In Burma, in the 1990s, with the repression, you could prove that the US was standing for something,” he explained. “This moral component—doing something good against oppression—is a must to get domestic support for a president’s foreign policy.”

Consequently, Washington banned new investments in Myanmar, blocked imports, restricted banking and financial transactions, denied visas and blacklisted military officers and their business cronies. For its part, the EU targeted over 1,000 Myanmar firms with visa bans and asset freezes, banned the sale and transfer of weapons, and targeted the country’s key exports such as rubies and timber. International development assistance, even through the United Nations, became scarce. By 2010, according to the World Bank, Myanmar’s roughly 60 million people—many of whom live below the poverty line—were receiving just $7 per capita of Overseas Development Assistance, compared with $67 per capita for the nearly 6.5 million people of Laos, and $34 per capita for Vietnam’s population of nearly 90 million.

By the time of U Thein Sein’s inauguration, the combined impact of sanctions and gross economic mismanagement by the former junta had reduced Myanmar—a nation endowed with abundant natural resources, and once regarded as Southeast Asia’s most promising economy—to dire poverty. Long after the indignity of being given Least Developed Country status by the UN in the 1980s, Myanmar’s current per capita GDP of $857 still lags behind that of Cambodia ($900) and Vietnam ($1,411), according to Asian Development Bank figures.

There are hopes that the West’s return to Myanmar will help restore the country’s battered economy to its former glory. But it would be wrong to assume that the new US policy, though promising an influx of investment, is primarily about getting Myanmar back on its feet. After all, it comes in the context of a much broader effort by the Obama administration to deepen America’s ties in the Asia-Pacific sphere. This shift towards Asian regional issues marks a departure from the previous George W. Bush administration’s military forays in Iraq and Afghanistan. China’s hawkish policies in 2010 and 2011 in the seas it shares with its smaller neighbors even prompted US Secretary of State Hillary Clinton to spell out some of Washington’s strategic interests in the region at a meeting in Hanoi. And by the end of 2011, as Myanmar’s year of reform was drawing to a close, the Obama administration began to talk of a “pivot” in Washington’s foreign policy towards Asia.

“The context of [Mr Obama’s] trip [to Thailand, Cambodia and Myanmar in November] is the pivot to Asia,” said Mr Green of the CSIS at the press conference in the US capital, calling the Myanmar visit “the most fascinating trip by far.” He added that while the issue of China’s growing influence in Myanmar was downplayed as a reason for the country’s sudden departure from its former refusal to make democratic concessions, it couldn’t be discounted completely as a cause for the former ruling generals’ apparent change of heart. “Burma was leaning heavily towards China in part because of Western sanctions. We heard repeatedly in Naypyitaw and Rangoon that this is not about China. But to some extent it really, beneath the surface, has to be.”

Still, he said, Myanmar officials and opposition leaders alike have stressed that they don’t want their country to get caught up in a power struggle between the world’s superpower and its most potent rival for influence in the region. “[They] don’t want to be in a game between the US and China. What they want is help developing their economy after decades of ruining the economy and struggling with ethnic conflict,” said Mr Green.

Besides the economic incentives the US is dishing out to keep the reforms on track, Washington has also begun engaging with Myanmar’s armed forces. “One of the most challenging aspects of reform is enlisting the country’s military, which governed the country through authoritarian rule for five decades,” wrote Samantha Power, the special assistant to the president and senior director for multilateral affairs and human rights at the National Security Council, in a White House blog about Mr Obama’s Myanmar visit. “US Army Lt-Gen Francis Wiercinski [has drawn] on his experiences to make a powerful case to senior officials from the Burmese Defense Ministry that national security is helped rather than hindered by transparency and independent monitoring, and by compliance with international humanitarian law and human rights law.”

But it is not an easy mindset to change, warn trenchant critics of the Myanmar military. They are dismissing parallels being made between Myanmar and other countries that witnessed dramatic change of political systems, with an old oppressive order giving way to newer liberal institutions, such as Poland, South Africa and the former Soviet Union. “There has been no real power shift in Burma, no power restructuring, since the army still retains power,” notes Maung Zarni, a prominent Myanmar political activist in exile.

“The military wants to land on its feet under the current reforms, and not give up its power,” adds the author of an upcoming book, “Life under the Boot: 50 Years of Military Dictatorship.” “The military has always believed it is the modernizing force in Burma and even now it has begun to believe its own propaganda that it is a democratizing force in the country.”

The conflict raging in the north, between government troops and Kachin militants, mirrors such a warning—that the old order, while having retreated to the shadows in Yangon, is still as much a presence with muscle and firepower as it always was.

This story first appeared in the December 2012 print issue of The Irrawaddy magazine.