Myanmar Investments International (MIL) is eyeing two new investments in tourism and pharmaceuticals
The Ruby Financial Company, part of the Loi Hein Group, in joint venture with Vietnam-based Dragon Capital to provide microfinance services.
One Year On - As its first year of tenure comes to a close, many question whether the government has managed to accomplish its aims. One certain thing is that the government led by Aung San Suu Kyi is still struggling to bring about peace, national reconciliation, as well as increase economic growth and development in the country, left in disarray after more than 50 years of military dictatorship. The most valuable thing that Burmese people can still appreciate in this government, in comparison to former administrations, is that its ministers still appear “corruption-free” one year on. Under the previous regime led by ex-general Thein Sein, a persistent fear was whether the reform process, led by former military men, could potentially reverse at any given time. That nightmare vanished along with his administration after the NLD government took office on March 30, 2016. Since then, the NLD’s successes and failures have been explored concerning its capacity, policies, leadership style, inevitable legacies, and the continued existence of dark elements in the country.
The Unwanted Past
Myanmar is still suffering from many of the problems inherited from the past. A 70-year civil war continues. The military, the country’s most powerful institution, still calls the shots on conflict with ethnic armed groups. In a recent interview with the BBC, Suu Kyi said “They [the military] are free to go in and fight. And of course that is in the Constitution. Military matters are to be left to the army. That’s why we are trying to change the Constitution. Amending the Constitution is one of our aims.” One of the biggest challenges for the NLD government is still the 2008 charter drafted by the previous military regime, which guarantees the political power of the military in the government with three key ministerial positions; defense, home and border affairs and 25 percent of all legislative seats reserved for military appointees. That’s why one of the NLD’s main aims is to adopt a Constitution which “ensures that all the people of our country can live together in tranquility and security,” according to its 2015 election manifesto. The NLD faces resistance on multiple fronts to their vision of change. The military, known as the Tatmadaw, is always in a position to fight the NLD’s attempts to amend the current Constitution or adopt a new one. After all, the military’s main stated duty is to safeguard the Constitution, according to Chapter 1, the Basic Principles of the Union. Regarding the peace process, a priority of the NLD government, the military’s offensives were disruptive, as the State Counselor told the BBC. But the current Constitution prevents the NLD from reining in the army at all. The NLD government has still not managed to convince the military leadership to collaborate with the government regarding armed conflict that has intensified since their administration came to power. There is also a certain persistence of unofficial or unlawful resistance to the NLD, which could be classified as “dark elements” likely comprised of radical groups or members of old establishments. Among them are those who assassinated NLD legal adviser Ko Ni in broad daylight outside Yangon International Airport in January. Ko Ni was strongly advocating for the amendment of the Constitution or the adoption of a new one. Most of those suspected of involvement in his murder are ex-military officials. Some critics think that the killing is a setback to the NLD government; others see it as an act of sabotage by those who have disdain for the NLD’s political vision. Suu Kyi’s policy to prioritize national reconciliation with the military and the old establishment has arguably incapacitated her government. When the NLD formed its government, it allowed high-ranking officials from the previous regime, like directors and permanent secretaries of the ministries, to retain their positions. Most of them are ex-military officials, and there have been reports that some have blocked mechanisms that the new government hopes to implement. Another particularly tragic legacy is the crisis surrounding the Rohingya in Arakan State. The problem dates back decades, and consecutive governments, including the administration headed by Thein Sein, turned a blind eye to reports of abuse, rather than identifying solutions and responses. Suu Kyi has faced international criticism for failing to take action against government security forces for human rights abuses against the Rohingya. If Myanmar’s security personnel committed the atrocities which rights groups have accused them of, her government must punish them according to the law. These are some of the most difficult obstacles that need to be overcome in order to bring radical change to the country.
Yet these challenges do not stand in the way of the NLD government improving the education, economic and legal sectors, if the political will is there. There are many areas where the government, as well as the NLD-dominated parliaments, can potentially make positive changes. Here’s one political misstep which could serve as an important lesson for the NLD. The result of the by-election held on April 1 indicated how the ruling party’s popularity had declined in ethnic constituencies. This differed from results of previous elections in 1990, 2012 and 2015 in which the NLD contested. In those elections, the NLD won by a landslide nationwide, including in most ethnic constituencies. Out of 18 constituencies where the NLD contested in this year’s by-elections, it won only nine seats, two of which were in ethnic constituencies in Shan and Chin states. In the remaining nine seats in ethnic constituencies, the NLD was defeated. In Shan State, the Shan Nationalities League for Democracy, an NLD ally in the 1990 election, won six seats. The victory of Arakanese politician Aye Maung in Arakan State’s Ann Township was not surprising, as the NLD won a minority of seats in the state in the 2015 election. The USDP, which was formed by the military and defeated by the NLD in the 2015 general elections, won two seats, one each in Mon and Shan states. The victory of the USDP in Chaungzon Township in Mon State was likely a result of the NLD’s missteps in ignoring local people’s desires. The NLD took advantage of its position in the Union Parliament to name a bridge in the township after the late Burmese independence icon Gen Aung San, while many of local Mon people wanted it to be called the Salween Bridge (Chaungzon), referring to the river that it spans and the area in which it is located. The NLD was later defeated in this constituency, where it had won in the 2015 general elections. The NLD leadership believed that resistance against the government’s move to name the bridge after Aung San was organized by its opponents and radical Buddhist monks. But even though it was true that the resistance was politically motivated, the leadership should have understood that many locals viewed the NLD’s tactics in naming the bridge as coercive. They argued that the NLD did not honor the autonomy of ethnic people even on the matter of naming a bridge. The defeat of the NLD in Chaungzon is therefore a great lesson for the NLD nationally, even though it is not a national issue.
Friend or Foe?
Many of Suu Kyi’s long-term supporters, including veteran activists from the 1988 pro-democracy uprising, feel that she, her party and her government have politically alienated them. Some have described being marginalized, rather than treated with the camaraderie they had expected from an NLD-led administration. That’s one of the failures of the NLD and its government’s stance regarding some of its key allies: one year on, she should have much greater support nationwide. Better relations with ethnic leaders, for example, would help in efforts toward achieving peace. On March 30, on the day marking the first anniversary of the NLD government’s time in office, Suu Kyi said in her State of the Union speech that she had changed her party’s slogan from “Time for Change” to “Together with the People.” But the incident surrounding Chaungzon Bridge obviously contrasts with this message as does the alienation she employs as part of her leadership style. She admitted in her speech that some of her ministers have been inactive and some are not in the right positions. Regarding these cases, the government will make necessary changes, she added. One year is not a long period of time for a government to do its work. But it is time for the NLD administration to fix their political missteps, unpopular policies and controversial leadership style. It is time for a reshuffle of the cabinet. The State Counselor must axe incapable ministers and high-ranking officials and replace them with those who can make her government more competent. The NLD’s term from 2016 to 2021 is a time in which to build a foundation from which those in power can confront the unwanted legacies of military rule, and establish laws and regulations to forge a solid path for a new country.
USDP Fund Use Illegal - The chief justice of Magwe Division said the former ruling USDP’s spending of a public fund was illegal and could lead to the party’s cessation. “According to the Political Party Registration Law, you can’t use any public property. It openly states that any mishandling of it must put an end to a party,” the division’s chief justice San Lin said recently. He referred to the Union government’s recent instruction to the previous divisional government led by Phone Maw Shwe to return more than 3 billion kyats, including more than 1.7 billion kyats allegedly spent on the USDP when they were in power from 2011 to March 2015. Chief Minister Dr. Aung Moe Nyo of Magwe Division said that legal action against his predecessor would follow if missing regional development funds collected in taxes from small-scale oil producers under the previous government were not returned. “We will request anyone involved in the case to return the funds. If they fail to follow the instructions, action will be taken according to the existing laws,” he said. The Bureau of Special Investigations under the Ministry of Home Affairs launched an investigation and found that the missing funds amounted to 7.5 billion kyats. The investigation’s findings were submitted to the President’s Office earlier this month. The office then instructed the USDP to return more than 3 billion Kyats. The chief minister said his regional government would order the return of the remaining 4 billion kyats and “ask the Union government for help if needed.”
Sean Turnell Speaks Out - Government economic adviser Sean Turnell has hit back against a barrage of recent criticism over the performance of the NLD-led administration during its first year of office. The government’s achievements on the economy were “considerable” and “too often overlooked” he said. Aung San Suu Kyi’s government has been bruised over the past week by a chorus of mainly negative judgments at home and abroad for its one-year performance, on everything from peace to human rights to the perceived slow pace of economic reform. He suggested that much of the negativity on the economy was misplaced. The full extent of fiscal and other problems inherited by the current government was not widely understood, he said at a presentation in Yangon. There was also widespread underestimation of the “bad economic legacy” that had been bequeathed by the previous government, he said. During its final year of office, the government under former Thein Sein had increased the budget deficit by more than three times the level of the year before, according to Turnell. The former government had also overseen a “dramatic deterioration” in Myanmar’s trade deficit. In addition, according to the adviser, the administration had inherited several “very questionable loans, mostly from China,” taken on by the Thein Sein government. “The loans added significantly to Myanmar’s debt burdens, on projects of very questionable value,” he said, without elaborating on the details.
The economist provided a list of what he identified as significant achievements of the NLD government on the economy. Firstly, the government had been fiscally responsible. “If we look around the world we observe a miasma of fiscal crises, sovereign defaults, currency demonetizations, drastic austerities, monetary gambles, and so on. The NLD inherited a budget deficit that, as a percentage of GDP, increased threefold across the last year of the Thein Sein government. Since then, and in the face of a slowing global economy, all the global headwinds noted, as well as the pent up demand of 60 years of spending misallocations, the deficit has barely moved.” This showed that the “fiscal extravagances” of Myanmar’s previous governments were not the practice of its newest one,. The government had facilitated the easing of international sanctions, and the dividends for this were only now starting to come in. Other achievements were that the administration had successfully initiated a bond tender as a critical foundation for fiscal reform, he said. This would be the basis for future budgetary increases in health, education, infrastructure and other useful social expenditures. Mobile financial services were promoted and the opening up of payment systems to international credit-card providers was making life easier for businesses and consumers and giving a boost to the tourism sector, he said. The liberalization of rules in the microfinance sector “would greatly expand access to capital to smallholder farmers and other rural enterprise in the years ahead”, adding that the upcoming foreign investment law would provide greater certainty to international investors and stimulate more investment. Myanmar’s economy has been dominated for decades by the state and state-linked business interests. Mr. Turnell’s presentation suggested that the government had made headway in efforts to reduce the part played by legacy interest groups. An ambitious program of privatization of state-owned enterprises had been initiated, he said. “Half of all state-owned factories are now public/private partnerships and we are currently inviting proposals for private partners for 17 more factories.” Referring to the jade mining sector as “currently the source of expropriations, human rights abuses and despair,” the economist said that licenses had been suspended until the sector “can be the location of shared revenues.” Other achievements on the part of the government included its work on restructuring state banks and “turning them into the institutions the country needs to aggregate and allocate capital.” The NLD-led government had supported entrepreneurs and small and medium enterprises as the engines for economic growth, Turnell said. Loans had been provided by the state to more than 450 entrepreneurs. The administration was working with the Japanese government to provide additional loans to almost 200 other businesses. A credit guarantee insurance system had been established to facilitate loans for entrepreneurs who could not provide collateral, he added. He went on to emphasize the importance of enhancing the potential of Myanmar’s long-neglected “human capital.”
Calling the country’s population and its people’s potential “the true and lasting capital for the 21st century,” he pointed to government achievements on health and education. The NLD-led administration was improving health care through the introduction of the Myanmar National Health Plan and the rebuilding of Yangon General Hospital. Taken together, the government’s actions so far “constitute a secure down-payment on the transformational measures that will follow in the years ahead,” he maintained.
The Ministry of Electricity and Energy will appeal to the public to support hydropower and coal-fired power plants. One year into the new administration, the ministry finds it difficult to generate sufficient power because of people’s strong opposition to hydropower and coal-fired power plants, according to the minister. “People oppose hydropower and coal power generation, saying that there are negative environmental impacts. But we have limited natural gas resources and it is difficult for us to generate more power,” he told the media at the ministry’s annual press conference. The ministry will establish hydropower and coal-fired power plants but will ensure minimal environmental impact, Htein Lwin said, adding that the plans will be publicized in order to try to convince the public. Currently, the ministry, with the financial assistance of the French government, is implementing the Laymyo hydropower plant—with a capacity of 690 megawatts—in Arakan State, as well as the Shweli hydropower plant—with a capacity of 1,050 megawatts—in northern Shan State. The secretary said power generation from hydropower, natural gas and coal costs less than renewable energy from solar or wind power. “We can’t just sit by because people object. We will generate power from these sources and supply the people,” said the secretary. However, it is up to Union-level commissions to decide whether to implement mega projects like the China-backed Myitsone Dam, which has faced strong opposition from the public. China, Thailand, and Australia have proposed plans to generate electricity in Myanmar, according to the ministry. At present, only 34 percent of the country has access to the electricity grid. The remaining 66 percent, mostly rural areas, still does not have access. Ministry officials restated a goal to provide universal access to electricity by 2030 at the press conference.
Kyaukphyu SEZ - During a trip to Arakan State’s Kyaukphyu Township recently, Chinese official Wang Yajun emphasized that his country aims for the Kyaukphyu Special Economic Zone (SEZ) to be up and running as soon as possible. Kyaukphyu Township administrator Nyi Nyi Lwin said that along with Wang Yajun, assistant minister of the international department of the Communist Party of China’s (CPC) central committee,a regional official from the Chinese CITIC investment conglomerate and several diplomats were present on the visit, holding talks with local authorities and businesspeople. Nyi Nyi Lwin said that CPC delegates expressed an eagerness to begin the SEZ project without delay, as the state-owned conglomerate CITIC was already awarded the tender to develop a deep sea port and an industrial zone by the previous government. The visitors also explained how they would promote relationships between locals and Chinese businesspeople. Local businessman Tin Aung Soe, who operates a seaside hotel asked Wang Yajun whether the Chinese government would develop a railroad in near future, linking Yunnan Province’s Kunming with Kyaukphyu, but was told a that memorandum of understanding on the project had not yet been reached. Another attendee, Hla Myo Kyaw, said that the Chinese delegates asked for opinions on the ground regarding the SEZ development. He told them that locals still have not yet recovered from land confiscation suffered during the pursuit of offshore gas terminals and pipelines by the China National Petroleum Corporation. “Negative images of previous projects could hit the forthcoming SEZ project,” he said. Chinese delegates said they assumed that a lack of interaction between locals and the Chinese officials had contributed to misunderstandings, and promised to arrange more meetings in the future.
Culture and Tourism
Thingyan 2017 - Tu Po melodies float in the air. There is no need to look at the calendar. Traditional Thingyan rhythms and a festive atmosphere mean that people are preparing for Thingyan and the New Year. Young people are ready to celebrate, and parents are anxious about the revelry getting out of hand. In recent years, Thingyan has shifted away from the traditional washing away of sins and doing good deeds toward a party atmosphere. Drugs and alcohol have caused an increased number of injuries and fatalities during Thingyan around the country. Mon State is said to be one of the liveliest areas of Myanmar during Thingyan, with people throwing water and celebrating. But drunk driving and traffic violations caused four car accidents and four motorbike accidents in Mon State during Thingyan last year. Thirteen people were killed and 26 were injured in these accidents. Mi Non Tal Pon, a first year university student living in Yay Township said she will celebrate at Yay and Zee Phyu beach as well as at a pagoda festival near Moulmein. She has put a lot of thought into what colour to dye her hair and what to wear for the festivities. But her mother said she worries about road accidents and has warned her to take extra care during this time. During Mon State’s Thingyan Festival it is common to see young people rocking punk, rock, or emo hair and make-up styles. Many ride their motorbikes in groups, showing off stylized group stickers, graffiti and flags. Some show up to the pavilions in cars, speakers blaring, and water barrels ready to go. “We usually hang out in a group—five or six, all about the same age,” said Ko Badin from Moulmein. And while young people enjoy the different styles, some of the older generation think the fashions disrespect tradition. There is a tug-of-war between individual freedoms and cultural norms during Thingyan—the younger and older generations brandishing their conflicting views. “I want to see girls dress elegantly. But today, they wear low-cut and tight-fitting dresses, which tarnishes cultural norms. Parents need to talk their children into preserving our traditions and customs during Thingyan,” said a teacher. This year, the Mon State government has banned drunk driving, loud motorcycle exhaust, racing, more than two people riding a motorcycle at a time, and motorcycle flags. They also reminded drivers to ride with helmets and display plate numbers. In recent years, alcohol consumption has led to fighting and sexual assault during the holiday. “Adults know their limit and can control themselves, but teenagers booze and run wild,” said a university student. “People paint their faces and act aggressively. They sometimes carry sticks and swords,” said another. In the past, people used to playfully rub soot on each other’s faces during Thingyan. This custom has faded away, either being replaced by Thanaka and talcum powder, but being seen altogether less often and replaced by more raucous partying. Accounts of sexual assault against women have been reported, and authorities cite a lack of sufficient security for the number of people and the scope of the festival. It is hard provide security at this time of year. “Police have to provide security at various places, and so there are only one or two policemen at a place. If revelers are drunk and cause trouble, it is hard to control them. Maybe they are not only drunk, but also on drugs,”