Cronies Still Deserve Blame for Burma’s Poverty

By The Irrawaddy 14 June 2016

Burma was subjected to military rule for nearly five decades between the late dictator Ne Win’s coup in 1962 and former Snr-Gen Than Shwe’s abdication in 2010. Everyone says the country was destroyed by the authoritarian rulers. Generally speaking, they are right.

The military is not supposed to govern the country or manage the people. It is supposed to protect the country against external dangers and provide emergency rescue and relief in case of natural disasters. But in the case of Burma, the country descended into chaos because of the military elite’s gross mismanagement in politics, the economy, education, social policy, health care and diplomatic relations.

What’s worse is former dictator Than Shwe adopted and carried out a policy of producing rich Burmese nationals. Dubbed by many as “cronies,” they achieved success during the dark era of the military junta, especially from the 1990s to the early 2000s. They won lucrative no-bid contracts from government ministries and accumulated wealth out of the country’s coffers. Some even amassed substantial fortunes and became billionaires.

Most cronies, however, did not build up their fortunes through their entrepreneurial flair or years of hard work in a fair business environment. Quite the contrary, they became wealthy by exploiting the country’s natural resources and forests. Meanwhile, the country and the people today are still suffering from the consequences of over-exploitation of natural resources. The most prominent example is deforestation in northern Burma caused by the excessive logging carried out by companies close to the military and previous government. As a result, several upcountry regions faced unusually extreme floods last year, and more severe flooding is expected this year.

Cronies included generals in their business dealings, further entrenching their monopolies over key government industries. The generals also pulled some of the cronies into politics, like Yuzana’s Htay Myint and Zaykabar’s Khin Shwe. Both became lawmakers in 2010 on the military-backed Union Solidarity and Development Party (USDP) ticket. Htay Myint represented Myeik in Tenasserim Division where his company had been running a massive palm oil plantation. Khin Shwe represented townships like Kawhmu and Kungyangon in southern Rangoon, where his Zaykabar company was building and operating roads under a government concession system. Under Thein Sein’s government, which ruled from 2011 to 2015, the situation was not very different from the military regime. The cronies still had their place and some who were close to then-president Thein Sein were granted even more business concessions—from introducing international debit cards to nationwide television and radio broadcasting.

As a result of this nefarious collaboration, the country has spiraled downward into abject poverty while the generals and cronies have amassed wealth for themselves and their offspring.

Burma, which was once expected to become an Asia tiger in the 1960s because of its great economic potential and quality education system, must not forget the reason behind its position today. While we need to have more clarity on the economic policies of the National League for Democracy (NLD), we also need to recognize that many people have misappropriated the country’s funds and resources over the past few decades.

It is not wrong to say the cronies are among those who are mainly responsible for Burma’s grinding poverty today.