Risks and rewards for Myanmar as it opens up to the world
WHEN the process of political and economic reform began in Myanmar in 2010, the only neighbouring government where it was not welcomed was China.
Myanmar feared that China could sabotage the reform process because of the strength of its economic standing in Myanmar and its control of at least three ethnic militias in Upper Burma.
The Myanmar military, the Tatmadaw, came to the conclusion in 2010 that it would have to engage with the West to fend off the growing influence of China. It had to release pro-democracy leader, Aung San Suu Kyi from house arrest, in addition to its package of reforms, to get the West to lift economic sanctions.
One result of the sanctions was that China’s economic profile in Burma, which was already large, became even larger.
Concerns about China were a decisive factor behind the decision of the Myanmar military to support a political reformer like Thein Sein as president.
China is still watching for signs that Myanmar could gravitate towards the West. But the Myanmar regime appears to have largely allayed China’s concerns about the reform process because, in spite of the flood of new foreign investment into Myanmar, China is still in a leading economic position.
Cumulative foreign direct investment in Myanmar in 2011-2012 reached US$42 billion, of which China’s share amounted to US$14 billion, according to the government’s latest figures. China and Thailand each control about a third of Myanmar’s external trade.
But China has not been Myanmar’s only problem. There have been sectarian riots between the Burmese Buddhist majority and Myanmar's Muslim minority. While the marginalisation and persecution of the Rohingyas is not new, the lifting of the military’s tight political control has helped feed an upsurge in overt violence.
Islamic militants who carried out bomb attacks in India and Indonesia have cited the plight of the Rohingya Muslim minority in the coastal Arakan province as their motivation. This has fuelled fears that the province is a possible recruiting ground for Islamic militant groups and that Myanmar is emerging as a future terror target.
One of the big rewards of the political and economic reforms for Myanmar is that it is attracting interest from a number of countries. Japan is building infrastructure such as the Thilawa special economic zone near the mouth of the Yangon River. It also wants to ensure that Yangon, Myanmar’s largest city, has good east-west transport infrastructure, with new roads and, possibly, rail in the future.
Tokyo also sees Myanmar as a place to move Japanese investment out of an increasingly expensive and politically hostile China.
Indian firms have also been active in Myanmar in oil and gas exploration.
Myanmar’s 2015 presidential elections now dominate political manoeuvring in the country. The relatively strong relationship and overlap in interests between President Thein Sein and Aung San Suu Kyi has provided an unusually stable political foundation among the dominant Burmese ethnic group.
It is clear that genuine democracy will not be created in Myanmar in the near future. Aung San Suu Kyi, who won a parliamentary seat in 2012, has indicated that it is her intention to work closely with the military to carry out gradual, incremental reforms.
Both sides appear to need each other. President Thein Sein and the military cannot fully lift sanctions and maintain the economic bridge to non-Chinese investment without political reforms and the stamp of legitimacy provided by Aung San Suu Kyi.
Aung San Suu Kyi needs the military to agree to amend the constitution to allow her to run for the presidency in 2015.
The most likely post-2015 scenario remains a broad continuation of what is happening now, with Aung San Suu Kyi sharing a degree of power with the generals and ‘pushing the envelope’ if her mandate is large enough. But the army’s pre-eminent position is almost certain to remain.
What many observers regard as a ‘nightmare’, but unlikely, scenario would be one of internal military bickering and an electorally-charged Aung San Suu Kyi who decides she has an opportunity to expand the limits of civilian authority. This could drive the country back into the sort of conflict that led to sanctions.