Lifting Burma’s Sanctions: Who is the Real Winner?

By Aung Zaw 19 September 2016

Burma’s long oppressed ethnic groups and critics of the country’s military generals are beginning to understand that Daw Aung San Suu Kyi’s US visit will bring business opportunities, wealth and blanket amnesty to many rich and powerful people who remain out of favor.

Growing criticism went as far as to suggest that the decision to lift all sanctions meant that the United States and the White House do not really care about the civil war, ongoing human rights abuses in ethnic regions, a patchy transition, students, activists, or crimes committed by greedy cronies and their dodgy associates.

The question now is: Who is to blame?

During the visit, Daw Aung San Suu Kyi acknowledged that US assistance and moral support aided Burma’s transformation. But before thanking the US and the Obama administration, it is noteworthy to remember that cronies, criminals and some mass murderers feel that they have gotten what they wanted, thanks to President Obama’s lifting of sanctions on the country.

In this economic landscape, who will hold the moral high ground in Burma? Surely not neighboring China.

Some fear that Daw Aung San Suu Kyi will have less and less leverage to negotiate with the military—which controls 25 percent of the seats in Parliament, can declare a nationwide state of emergency, refuses to amend the 2008 military-drafted constitution and continues its ground offensive and air strikes in ethnic areas. Some wait and hope that military leaders will reward Daw Aung San Suu Kyi with constitutional changes. We will see what happens, but we won’t hold our breath.

Back home, Daw Aung San Suu Kyi faces questions from ethnic and community leaders on her position on sanctions, which may serve as a hurdle to achieving nationwide peace. Some ethnic leaders say it was too early to lift sanctions, as an ongoing war continues in the north and negotiations are only at at early stage.

Her supporters posit that Daw Aung San Suu Kyi wanted to maintain some measure of sanctions until the political transition was irreversible but that she was not well informed regarding the termination of the US National Emergency Act and that its removal would jointly remove all remaining sanctions.

Last week, the London-based BBC quoted a source who hinted that Daw Aung San Suu Kyi was not in full agreement with the decision to lift all sanctions but was left with little choice. “US officials told her it was all or nothing, and the historic decision was made to lift all sanctions,” wrote the BBC.

Some think that pro-business groups and lobbyists for military enterprises in Burma—including the Union of Myanmar Economic Holdings Ltd (UMEHL) and the Myanmar Economic Corporation (MEC)—along with some US and White House officials, were largely responsible for the removal of all sanctions.

The UMEHL and the MEC are the two biggest industrial conglomerates controlled by the military, and they have managed to dominate many of the country’s key economic sectors.

Under the previous regime, the two were under the direct management of the old War Office or, as it is now officially called, the Ministry of Defense.

The UMEHL was formed in 1990 as “a special public company, with shareholders limited to the Directorate of Defense Procurement, Ministry of Defense, Defense Regimental Institutes, and other bodies of the Defense Services and War Veterans.” Senior figures in the armed forces manage the enterprise.

The corporation is involved in jade mining, gems, tourism, imports, real estate, exportation of foodstuffs, automobiles, banking, the Myanmar Brewery, transportation, large-scale construction and Myawaddy Bank—which is listed as a private bank.

The MEC is also involved in the harvest of teak and the extraction of natural gas and oil, as well as in communications. The list is endless and the corruption no doubt is deep.

But the military and its enterprises are moving fast – faster than the elected government could have fathomed.

In February, the Burma Army’s Commander-in-Chief Snr-Gen Min Aung Hlaing said he intends to privatize all military-owned companies at an appropriate time.

On March 31, the UMEHL applied to the Ministry of Planning and Finance to become a “public company”—to register according to country’s Companies Act and as a show of offering greater transparency and accountability.

However, the military is thriving and remains a key player in Burma’s military enterprise. It will continue to do so as they are, in fact, a government within the government.

The country has seen a long history of military business interests and activities in Burma. To ensure greater accountability and transparency regarding these enterprises will be challenging. In Burma, no one is well equipped to hold them responsible.

The fact is, the military enterprise is bigger than the government’s. With the latest rewards from the US and the White House, they will feel like they are the real winners, as opposed to the ordinary Burmese citizens who sanctions were purportedly intended to support.