Myanmar Capital Partners will now publish its newsletter in association with IDG Acumen, a corporate intelligence and political risk consultancy with offices in Yangon, Bangkok and Singapore
By Myanmar Capital Partners, in association with IDG Acumen, a corporate intelligence and political risk consultancy with offices in Yangon, Bangkok and Singapore
IDG Acumen Analysis
Elections – what does the vote mean?
On November 8, Myanmar will hold general elections and it looks as though Aung San Suu Kyi’s opposition NLD party will win the greatest share of votes, signaling a sea-change from more than five decades of military rule and beckoning the next phase of Myanmar’s transition. However, even if it were certain that the NLD will win an outright majority on 8 November, it is still far from clear who will comprise or lead the next government. And it will be around another six months before anyone finds out. …So what are people voting for?
The electorate will be voting in their constituencies for parliamentary members of both the upper and lower houses at the national level and at the state/regional parliament level.
The next national parliament will convene as early as March 2016. The military automatically have 25% of the seats in both houses – these are direct military appointments, in addition to the military-affiliated incumbent USDP party. The parliaments will be split into three groups: the lower house (excluding military); the upper house (excluding military); and the military appointees. Each group will vote for a presidential candidate. These three candidates will then be taken for a vote before an assembly comprising of all three groups.
Even if the NLD have the requisite majority to unilaterally choose the president, it is not clear who their candidate will be. Suu Kyi is barred under the constitution from being president or vice-president as she has foreign children. Thura Shwe Mann, the speaker of the lower house and a senior ex-general, could still be a frontrunner. He has good ties with Suu Kyi and has built on his reformist credentials. On 13 August, however, he was unexpectedly deposed as head of the USDP party in an internal party coup, which did not follow party rules and was implemented using armed guards. He is still running as a USDP candidate and retains his position as speaker of the lower house.
In an interview on 7 October, Suu Kyi said that the NLD presidential candidate would be from within the party, undermining expectations that she would put her weight behind Shwe Mann. It is not clear who an NLD candidate might be, as many of the senior figures in the party are very old, and Suu Kyi appears to have followed a common Burmese political trait in running her party along autocratic lines, and not fostering much depth in leadership. In this vein, it is likely that she might view the appointment of a weak NLD candidate positively. In the same interview she stated: ‘If the NLD wins the elections and we form a government, I'm going to be the leader of that government whether or not I'm the president.’ She reiterated this at her last press conference on 5 November, just three days before the elections saying she would be ‘above’ the president.
It is also possible that Thein Sein will remain as President for a couple of years, in a compromised, phased transition. What is certain is that the six months between the elections and the appointment of a government offer plenty of opportunity for instability and political maneuvering.
So what does this mean for investors looking at Myanmar? What would be a positive outcome?
No parties really have a manifesto, and all the credible presidential candidates have reformist credentials. To this end, it does not so much matter who ends up as president. What matters is that one is appointed, the constitution is upheld and that the democratic transition retains its credibility. The greatest threat to this is from conservative forces within the government and military. The recent report by Global Witness into Myanmar’s illicit jade industry has estimated that the trade generated as much as 30 billion USD last year alone. The report makes clear that there are some in Myanmar who still benefit under the current system, and stand to lose under the reform process.
So the premium is on stability, and avoiding a volatile situation in which conservative forces might act with political violence. …Myanmar has six months to hold its breath. While no one can credibly predict what will happen, the political wind feels like it is pointing in a positive direction.
A constitutional government transition will allow Myanmar to continue its process of legislative reform and increasing institutional capacity. Key investment and banking laws, for instance, did not get passed before the end of the last parliamentary session.
It is also worth noting that in the short term, until a new government is formed, any minister who is running for election has had to resign and the ministry is now run by a permanent secretary. It is not clear what authority these civil servants will have in practice to sign off on many of the licenses and permissions required by foreign entities wishing to make an investment, though they do in theory have ministerial signing authority.
Furthermore, whatever happens in the elections, some of the most important ministries remain under direct military control: Defence, Border Affairs and Home Affairs. The latter includes the police force, special branch, immigration, and the General Administration Department (GAD), which staffs all regional and state-level governments and provides administration for the country's multiple districts and townships. These bodies are also responsible for the execution and security of the elections at a local level.
While Suu Kyi cannot rule as president, a weak NLD candidate would afford her greater influence in running the country. A coalition is likely; it is also desirable in order to balance democratic progress with governing experience, and to ensure that the different constituencies of power, democratic or not, do not feel alienated from the democratic reform process.
IDG Acumen is a corporate intelligence and political risk consultancy with offices in Yangon, Bangkok and Singapore
Twitter: IDG Acumen@Acumen_Myanmar
Aung San Suu Kyi holds large rally in Yangon a week before elections.
Opposition leader Aung San Suu Kyi addressed a huge rally on the outskirts of Myanmar's biggest city today, offering a message of reconciliation with political opponents if her party sweeps the upcoming general election. Suu Kyi also called for calm and stability as the campaign period nears its end ahead of the November 8 election. Tens of thousands of ecstatic National League for Democracy supporters swarmed onto a large playing field, waiting for hours in the blazing sunshine for Suu Kyi to make her entrance. She had hoped to hold the rally in the center of Yangon, near the revered Shwedagon Pagoda, reviving memories of her first-ever political speech in 1988, but city authorities refused her request. The 1988 speech put her on a collision course with the then-military junta and marked the beginning of Suu Kyi's long and often difficult political odyssey. Just days after an NLD member was wounded in a stabbing, Suu Kyi asked the crowds to maintain stability right up to the end of campaigning. Without naming names, she said that "there are some who are thinking to use bad ways to try to win." Suu Kyi spent 15 years under house arrest under the former military dictatorship. She was finally released five years ago. The junta stepped back from power in 2011 with the election of President Thein Sein, and the country has moved toward democratization, though the military still maintains a powerful position. Though her party is expected to do well in the election, Suu Kyi herself is constitutionally barred from the presidency because her late husband was British and her two sons hold foreign passports.
Speaker rejects responsibility for ruling party’s election results
Ousted Union Solidarity and Development Party chair Thura U Shwe Mann further evidenced the threat of a ruling party split last weekend as he abdicated responsibility for the party’s election results and acknowledged that his collaboration with Daw Aung San Suu Kyi could have played a part in his dismissal. The former general, 68, who retains his position as Speaker of the Pyidaungsu Hluttaw despite being dramatically stripped of his seat at the top of party leadership in an internal coup last August, was addressing constituents in Pyu, Bago Region, his hometown. Currently an MP for Zeyathiri in military stronghold Nay Pyi Taw, some believe the former third-ranking official in the pre-2011 junta swapped constituencies for fear angry officers would vote him out for backing changes to the military-drafted constituted. He is suspected to have antagonised former military allies by threatening the constitutionally guaranteed 25 percent bloc of parliament held by the officers. Before his ouster, however, he successfully stacked the USDP ticket with a cast of supporters, while blocking some military elites requests for “safe seats”. In some cases USDP candidates currently running who were selected by Thura U Shwe Mann are directly opposing supporters of the president. In tiny Kayah state for instance, two government ministers, U Soe Thein and U Aung Min, are running as independents against two “official” USDP candidates nominated by the Speaker. Asked if the division in the USDP between supporters of President U Thein Sein and his own followers was related to his close working relations with opposition leader Daw Aung San Suu Kyi, he said on October 30, “It might be.” “It is an issue in the party. Some members agree with me that we need to collaborate for the good of our country. But the other side doesn’t see that,” he said. Thura U Shwe Mann also took pains to distance himself from the conduct of the ruling party’s election campaign which has been riddled with allegations of vote buying and intimidation tactics. “As chair, I was responsible for waging and winning the campaign in free and fair elections. I no longer have that responsibility,” he told the media. In previous interviews the Speaker has gone so far as to suggest that even bolstered by the military bloc, a majority for the men in green remains elusive. A formal general who shed his own uniform to take part in the ruling party, U Shwe Mann has widely broadcast his presidential ambitions creating yet another power struggle in the party between backers of President U Thein Sein’s administration and those in the Speaker’s corner. Just last week, speaking in his constituency, Thura U Shwe Mann appeared to reignite the internal party conflict by proposing that the USDP nominee for the presidency should be selected by MPs, rather than by a closed-door decision of the party’s executive committee. Observers believe such a manoeuvre would favour his own aspirations for the presidency. The Speaker’s nomination push was prompted by a BBC interview last month, where party general secretary U Tin Naing Thein said that if the USDP secured a majority in parliament next month it would nominate U Thein Sein for a second five-year term. Issuing a plea for electoral candidates not to see rival parties as the enemy, and a perhaps veiled attempt to address his party’s upheaval, U Shwe Mann said in Pyu that collaboration is badly needed. “Democratic reform cannot be carried out by one individual or group. All parties need to join in. This campaign has seen some strong competition in a delicate situation. I am very sorry to see some parties treating their opponents as enemies rather than competitors, and hope that is not the case in my constituency,” the Speaker said. On October 31, Thura U Shwe Mann urged voters to back high-quality candidates of good will who vowed to serve the people. “We should all be aware of the need for national solidarity, national reconciliation, making peace and respecting the rule of law. Refusing to participate because we don’t like a person or a group on the other side could be dangerous for the country,” he said. Senior civil servants in charge of government departments should act without bias, supporting the rule of law by recognising that nobody is above the law, he said.
Myanmar's radical monks shaping historic elections
A powerful Buddhist ultranationalist group is helping Myanmar's ruling party win votes in Sunday's election after the government pushed through laws seen as anti-Muslim. Known by its Burmese initials Ma Ba Tha, the Buddhist nationalist group is not running a single candidate in the Nov. 8 election - monks are barred by law from running for office. Yet it has been in the forefront of campaigning and could influence the shape of Myanmar's first popularly elected government in more than half a century. For the first time, a Ma Ba Tha co-founder, a monk named Parmaukkha, disclosed some of the details about closed-door discussions between the group and the government on securing the passage of the bills. The laws require citizens to seek government approval to convert to a different religion, force some women to have children at least three years apart and set punishments for having more than one spouse. An overwhelming majority of Myanmar citizens are Buddhist. The new laws discriminate against Muslims and women and could stoke religious tensions, human rights groups say. The ruling Union Solidarity and Development Party (USDP) used its parliamentary majority to push through the laws in the belief that "Ma Ba Tha would help them get votes in the election," said Parmaukkha, who helped found the group in 2013. "They know we are a strong organisation." Tha Win, a USDP lawmaker and senior party official in Yangon, denied any connections with Ma Ba Tha. "We're just engaged in politics. Our party's rules don't allow us to carry out religious affairs." Parmaukkha's description of Ma Ba Tha's role was also challenged by the group's spokesman, Thurain Soe, who said his organisation was grateful for USDP's help in enacting the laws, but was not supporting any party. "We needed our religious four bills. Who could we ask? We needed to ask this government. This is a very normal process," Thurain Soe said through a translator. "We thank the president and the parliament. But it's just 'thank you', not supporting (the USDP in the election)." Ma Ba Tha's influence in Buddhist-majority Myanmar might prove crucial in the election campaign, especially in rural areas where monastic authority is unquestioned. Its influence might sway enough votes from Aung San Suu Kyi's National League for Democracy (NLD) to deny the opposition party an all-important parliamentary majority, and save the USDP - created by the powerful military and chaired by President Thein Sein - from an embarrassing electoral debacle. Fearful of potential Ma Ba Tha intimidation, the NLD decided not to field any Muslim candidates on Nov. 8, two senior NLD leaders told Reuters. In recent years, religious violence in Myanmar has killed hundreds of people, mostly Muslims. Formally known in English as the Committee for the Protection of Nationality and Religion, Ma Ba Tha grew out of the "969" movement, also led by monks, which called for a ban on interfaith marriages and a boycott of Muslim businesses. Ma Ba Tha began cooperating closely with the government and the USDP in a series of meetings about the race and religion laws in 2014 and 2015, Parmaukkha said. One meeting in the capital Naypyitaw in May 2014 was attended by officials from the ministries of religion, immigration and home affairs, as well as presidential advisors, he said. Three other leading Ma Ba Tha monks confirmed that they had attended the May meeting to discuss the bills with the government task force. Members of the governmental team, including Soe Win, Myanmar's Minister of Religious Affairs, did not respond to requests for comments regarding the government's contacts with Ma Ba Tha. Ma Ba Tha's leadership has openly expressed support for the USDP and scorn for Suu Kyi. Wirathu, 47, one of the most prominent of the Ma Ba Tha monks, endorsed President Thein Sein in an interview, saying his administration "opened doors and worked step-by-step for peace and development." He poured scorn on Suu Kyi and her party, saying: "NLD people are so full of themselves. They don't have a high chance of winning in elections." Another monk who helped found Ma Ba Tha, Vimalabuddhi, said that since most of the USDP leaders are from the military they understood the situation in the country better than the NLD who were "politicians and civilians". "They don't really understand our situation," he said. Asked about these criticisms from Ma Ba Tha, senior NLD leader Win Htein told Reuters: "According to the teachings of Buddha, monks shouldn't get involved in political affairs. They should be neutral." He said Ma Ba Tha has targeted the NLD from the start for not being supportive of their race and religion laws and being more sympathetic to Muslims. "That's why we decided not to field any Muslim candidates, for fear of antagonising Ma Ba Tha, losing votes and failing to win a parliamentary majority. "It has caused some very hard soul-searching," he said.
Armed ethnic groups call for an end to Myanmar military offensives
The leaders of 11 armed ethnic groups that did not sign a nationwide ceasefire accord with the Myanmar government last month have called for an end to military offensives in the country during a three-day summit just a few days before citizens head to the polls to elect government representatives. The summit, held at the headquarters of the United Wa State Army — Myanmar’s largest ethnic rebel group — in Pangsang, Wa Special Region, ended Tuesday with the groups issuing a seven-point statement urging the government army to stop its offensives in the northern and eastern parts of the country. “We urge the current government to stop military offensives and to create good opportunities for national reconciliation,” the statement said. “We also reject resolving problems by fighting and urge that they be resolved through political means. We all wish to move forward to political dialogue together with a new government that will be born after the election.” “We also urge an end to the fighting in the northern and eastern parts of Myanmar and to make peace in the China-Myanmar border area by discussing together with government, military, armed ethnic groups and representatives from the Chinese government,” it said. Clashes between government troops and ethnic armies have forced tens of thousands of villagers to flee their homes and resulted in some casualties among government soldiers and rebel troops. Some ethnic regions have controversially cancelled elections for security reasons. The government signed a so-called nationwide cease-fire agreement (NCA) with eight armed ethnic groups on Oct. 15 in an attempt to bring peace to the country before the Nov. 8 general elections and proceed with political dialogue in the developing democracy early next year. More than half of the country’s rebel groups, however, did not sign the document. Besides the UWSA, the others groups that participated in the summit in eastern Shan state included the Kachin Independence Organization, Shan State Progress Party/Shan State Army, New Mon State Party, Karenni National Progressive Party, National Democratic Alliance Army, Myanmar National Democratic Alliance Army (MNDAA), Ta’ang National Liberation Army (TNLA), Arakan Army (AA), Karen National Defense Organization and Kayan New Land Party. The Naga Nationalist Socialist Council was also invited, but representatives said they could not attend because the distance to the summit was too far to travel. The conference was the second one organized by the UWSA, which hosted a six-day summit in May to discuss a draft NCA and call on the government to include all ethnic rebel armies in the final accord. After that conference, representatives had issued a statement urging Myanmar’s army to cease fighting with the MNDAA in Shan state’s Kokang region, the TNLA in northern Shan state, and the AA in eastern Myanmar’s Rakhine state, and called for an end to human rights violations committed by government troops in ethnic areas. Several ethnic armies have been fighting with the government since Myanmar gained independence from Britain in 1948, and the ongoing unrest is seen as hindering economic development in the impoverished country. Ethnic groups represent around 40 percent of Myanmar’s 52 million people, but say they suffer military abuses and discrimination.
Looking back - As election day approaches, it is worth remembering what happened 25 years ago, the last time Myanmar had a free and fair poll—and by regional standards, that election was astonishingly free and fair. But the euphoria of May 27, 1990, when the National League for Democracy (NLD) scored a landslide victory, turned into dismay and frustration when, exactly two months later, on July 27, 1990, the then ruling junta, the State Law and Order Restoration Council (SLORC), issued “Announcement 1/90” declaring that only the junta “has the right to legislative power”—and that “the representatives elected by the people” would merely be “responsible for drafting a new constitution for a future democratic state.” I and other journalists who covered events in Myanmar remember the disbelief we felt at the time. Could that really be true? Among the Burmese people inside the country who we contacted, there was outright anger. “1/90” contradicted earlier promises by the SLORC and what was a very clear election result. As early as on Sept. 22, 1988— four days after the military had formed SLORC and brutally put an end to more than a month of daily demonstrations for democracy—Myanmar’s powerful intelligence chief and Secretary-1 in the new junta, (then) Brig.-Gen. Khin Nyunt had pledged before a meeting with foreign military attachés in Yangon: “Elections will be held as soon as law and order has been restored and the Defence Services would then systematically hand over power to the party which wins.” (quoted from SWB, FE/0265 1, 24 Sep 1988) He did not say a word about the need to draft a new constitution. On May 31, 1989, so about a year before the election, the SLORC passed “Law 14/89” which, according to the announcement “shall be called the Pyithu Hluttaw Election Law.” A Pyithu Hluttaw in Burmese is a “people’s assembly”, in other words, a parliament. According to the 1974 Constitution, which had been promulgated by a previous military regime, “The Pyithu Hluttaw is the highest organ of state power. It exercises sovereign powers of the State on behalf of the people.” A constituent assembly, on the other hand, is not a Pyithu Hluttaw but a Thaing Pyi Pyu Hluttaw, as in the Myanma naing-ngan Thaing Pyi Pyu Hluttaw, the body that drafted Myanmar’s first constitution in 1947. That term was never used before the May 1990 election. But this has not prevented many foreign observers from claiming otherwise in more recent times, thus distorting the whole purpose of the 1990 election. Most recently, Geoffrey Goddard, an Australian journalist and a former editor at the Myanmar Times, wrote in the April 2015 issue of the Mizzima Weekly that the 1990 election was not for “a parliament. It was an election for a constituent assembly.” And who were the sources Goddard referred to? Derek Tonkin, a retired British diplomat who more than anybody else has been busy rewriting history, and Robert Taylor, a well-known defender of successive authoritarian regimes in Myanmar. An even more extreme view is held by Kristoffer Rønneberg, a Norwegian journalist, who stated in his recent book Veien to Mandalay: En reise fra Myanmar til Myanmar (“The Road to Mandalay: A Journey from Myanmar to Myanmar”) that “there are many people today who believe that the election was about a new government…this myth has been used by activists and oppositionists since 1990…the election was about a constituent assembly…this was known by everyone who took part in the election.” Michael Lidauer, a German academic, writes in Myanmar/Myanmar: Where Now?, a book published last year by the Nordic Institute of Asian Studies: “Immediately prior to the polls, SLORC announced that it would only hand over power to a civilian government after a new constitution had been written. This process lasted for two decades.” His source? Derek Tonkin. Hans-Berndt Zöllner, another German writer, states in his The Beast and the Beauty that “material” from the time “clearly supports Tonkin’s conclusion.” This falsified version of history has even found its way into Wikipedia: “The elections were not meant to form a parliamentary government, but rather to form a parliament sized constitutional committee to draft a new constitution.” The reference here is to pages 90-93 in Myanmar/Myanmar: What Everyone Needs to Know, a well-written book by American Myanmar scholar David Steinberg. But on those pages Steinberg writes only that “the junta had publicly stated almost a year before the election that those elected could not form a government until there was a new constitution.” Steinberg is not more precise than that and it is uncertain when and how the SLORC stated such a thing, which would be contrary to everything else that was said at the time. On Jan. 18, 1989, I and several other Bangkok-based journalists were flown to Myanmar on a trip organized by Myanmar’s military authorities, and on that day we had a meeting with Col. Ye Htut from the SLORC’s information committee (not to be confused with the current minister of information with the same name). He stated clearly and unambiguously that “as soon as elections have been held, we will hand over power to the party that wins and return to the barracks.” I asked him if they would do so even in the event of an NLD victory. The colonel replied: “Of course, we are soldiers and keep our word. We will return to the barracks.” Present at that time was, apart from myself, the regional bureau chief of the Associated Press and other foreign correspondents. Gen. Saw Maung, the SLORC chairman, said on Jan. 9, 1990 at a meeting between the central junta and its local divisions held “at the office of the Commander-in-Chief”: “We have spoken about the matter of State power. As soon as the election is held, form a government according to law and then take power. An election has to be held to bring forth a government. That is our responsibility. But the actual work of forming a legal government after the election is not the duty of the Tatmadaw [the military]. We are saying it very clearly and candidly right now.” That speech was reproduced in full in the Jan. 10, 1990 issue of the official organ, The Working People’s Daily. Drafting a new constitution was not an issue before the election. On the contrary, Gen. Saw Maung even lashed out against the NLD for raising the issue of a constitution—which some of its activists were doing at the time. In a speech on May 10, 1990—two weeks prior to the election—Gen. Saw Maung stated: “A dignitary who was once an Attorney-General talked about the importance of the constitution. As our current aim is to hold the election as scheduled we cannot as yet concern ourselves with the Constitution as mentioned by that person. Furthermore it is not our concern. A new Constitution can be drafted. An old Constitution can also be used after some amendments.” (sic., Working People’s Daily, May 11, 1990). “That person” was former Attorney-General U Hla Aung, who was close to the NLD and, at the time, researching constitutional issues for the pro-democracy movement. I met him in Yangon in February 1989 and spent a whole afternoon with him. He showed me how the 1947 Constitution could be used with certain amendments, and I remember the huge chart he put on the table in his home in a Yangon suburb. It was impressive—but the SLORC didn’t think so. They told him to shut up. So what statement could Steinberg possibly be referring to in his book, which was quoted by Wikipedia? Myanmar’s then powerful intelligence chief, Maj-Gen Khin Nyunt, made a curious statement, not “almost a year before the election”, but on April 13, 1990, so just over a month before the election. According to him: “The Cabinet cannot be formed just after the election…the Cabinet is to be formed in accordance with the constitution.” That day, Reuters quoted a diplomat in Yangon as describing the statement as “the first categorically saying that the military won’t hand over power until a constitution is in place…it is the fist showing through the velvet glove.” Khin Nyunt, as head of intelligence, probably knew more about public sentiments than any of the other members of SLORC. He had begun to realize that the NLD was going to win—and this was the way out of the looming predicament. Not much attention was paid to Khin Nyunt’s statement, which clearly contradicted what he had said in 1988. But we in the media who were following events in Myanmar concluded that this would be the excuse if the NLD won. Our suspicions, which we wrote about at the time, have in more recent years been used by Tonkin to “prove” that the election was for a constituent assembly and not a parliament. The diplomat quoted by Reuters remarked that drafting a new constitution could delay the process by “months, perhaps years,” and Suu Kyi had already expressed similar fears the previous year, in an interview with Asiaweek before she was placed under house arrest in July 1989. At the same time, it is worth remembering what Robert Taylor said before, as opposed to after, the 1990 election when he also began writing about a “constituent assembly”. In a lengthy article in the March 1990 issue of Current History, Taylor wrote: “The elections are to select a new national assembly (Pyithu Hluttaw) but it is not clear how and when the military will pass power to a government formed under the elected legislature…but no one familiar with Myanmar’s political history expects the military to abandon all its administrative and political functions after the formation of a new government.” So, according to Taylor, the elections was definitely for a Pyithu Hluttaw, a legislature”, and not a constituent assembly. The only question was when the new government would be formed. Taylor could safely write what he did because he also stated this about the military-backed National Unity Party, the successor to the Myanmar Socialist Program Party, the only legally permitted party from after the military takeover in 1962 until 1988: “Many observers feel that it will do well in the election.” The argument at the time was that the NLD may be strong in urban areas, whereas in the countryside people would vote for “the devil they know”. Taylor could not have been more wrong. When the votes were counted after the 1990 election, the NLD captured 392 out of 485 contested seats—all over the country, in urban as well as rural areas. By comparison, the NUP secured only 10 seats. It may be argued that the NUP, after all, got a bit over 20 per cent of the popular vote, but only a tiny fraction of the seats because Burmese elections are not proportional. But no matter how one looks at it, the NUP was routed—and the military had to create an entirely new political platform, that, in 1993, became the Union Solidarity and Development Association (USDA), which was renamed the Union Solidarity and Development Party (USDP) in 2010. The issue at stake, of course, is that Khin Nyunt was right: the NLD had massive support, the “wrong” party had won, so the rules had to change. Within days of his July 27, 1990 announcement, his military intelligence—which was more of secret police than an actual intelligence service—launched a massive campaign against elected NLD MPs. By the end of the year, 65 had been arrested, nearly a dozen had fled to neighboring countries such as Thailand and India, and many resigned voluntarily. Does anyone seriously believe that all this would have happened if the NUP had won the election? The elected Pyithu Hluttaw would no doubt have been convened within days and a new government formed, an interim one awaiting the drafting of a new constitution. But now, the elected Pyithu Hluttaw was never convened and, in the end, the elected assembly wasn’t even a Thaing Pyi Pyu Hluttaw. About 100 of the 485 MPs elected were to sit in a “National Convention” together with 600 other, non-elected representatives who had been handpicked by the military. And even if one accepts the notion that a new constitution would have to be drafted before the military could return to the barracks, the new legislature would have been vested with that task, not some obscure 700-person “National Convention”. Not even Tonkin and Taylor have the audacity to claim that anything like that was announced by Myanmar’s military authorities before the election. And contrary to what writers like Rønneberg believe, no one who took part in the 1990 election expected that to happen when they went to the polls 25 years ago. On his Network Myanmar website, Tonkin suggests that in October 1990, when “Daw Myint Myint Khin, a senior official of the NLD, signed on behalf of the NLD an undertaking to attend a National Convention to draft a new Constitution, the NLD had effectively surrendered its claim to have secured a mandate to govern at the May 1990 Elections.” But he fails to mention that Daw Myint Myint Khin, who had been a very principled pro-democracy activist during the 1988 uprising, had come under immense pressure to sign that statement, and that she subsequently resigned her position as member of the NLD’s Central Executive Committee. So what are the lessons we can draw from events before and after the 1990 election? The first would be that promises and pledges mean next to nothing when an election result is not to the liking of Myanmar’s military authorities. And if there are manipulations and threats, and the rules are changed at the whim of those in power, it is not unlikely that sometime in the future we will find the same or another cabal of assorted apologists and sycophants telling us that the 2015 election actually wasn’t about what we thought it was, but something totally different.
Partial Ceasefire Signed - The Myanmar government and eight rebel armies have signed a ceasefire agreement to end more than five years of conflict, but the largest insurgent forces were absent. The refusal of seven of the 15 rebel groups to appear means peace will remain elusive for the government, which wanted to clinch a comprehensive deal and boost its popularity ahead of the election. Thein Sein, the president, led the ceremony in the capital, Naypyitaw, aimed at ending conflicts with multiple ethnic factions demanding autonomy in northern, resource-rich areas of the country. He said: “The national ceasefire agreement is a historic gift from us to the generations of the future. Even though the agreement is not nationwide yet, we will try harder to gain the agreement with other groups.” Ethnic minorities in Myanmar complain of discrimination and a lack of services in border regions compared with the dominant Bamar population, who are mostly Buddhists. Although the country was named Burma after the main ethnic group, up to 40% of modern-day Myanmar consists of minority populations. When Myanmar gained independence from Britain in 1948, many of these groups took up arms. Parts of the country are still controlled by rebels, although active warfare ebbs and flows. The key rebel armies that control the most territory and arms – the Kachin Independence Army, Shan State Army and United Wa State Army – refused to sign the agreement. In Kachin state, more than 100,000 people have been displaced following the collapse of a 17-year peace deal in 2011. After half a century of military rule, Myanmar promised reforms in 2011 that were welcomed internationally. The army handed power to a civilian government, although it was still headed by military figures. Representatives from the United Nations, China and the US witnessed the signing. The deal is a major objective of Thein Sein’s five years in office and he will be depicted as a peacemaker ahead of the polls. The state-run newspaper the Global New Light of Myanmar ran the headline: “Peace Starts Now”. The opposition leader, Aung San Suu Kyi, and her National League for Democracy (NLD) party did not attend. In 1990, the army ignored a huge election victory by the NLD and put the party’s leaders in prison. A senior negotiator in the peace talks also accused China of trying to derail the deal. Min Zaw Oo said China’s special envoy pressed two key rebel groups – headed by ethnic Chinese – not to sign the peace accord. “China usually says they want stability. Of course they want stability, but at the same time they want to wield influence on the groups along the Chinese border,” Min Zaw Oo said. The groups that did sign will be taken off the country’s terrorism lists and allowed development and investment in areas desperately in need after years of isolation. It also means the rebel armies’ members can now move freely across the country and take part in politics.
Don’t Report Rank when Reporting about Ethnic Army Officers - The Office of the Commander-in-Chief (Army) has issued a directive through the Irrawaddy Division government requesting that local media refrain from stipulating the military ranks of ethnic leaders in their reporting. The letter instructs that the ranks, such as General and Lt-Gen, of ethnic armed group leaders should not be used in media reports.
Political Monks - Community leaders in eastern Myanmar’s Mon State say that monks are reaching too deeply into the political sphere as the election nears, claiming that the clergy has endorsed a number of ethnic candidates competing against the nation’s two dominant parties. In some cases influential monks have publicly backed independent candidates that are also competing against the state’s two main ethnic parties—the Mon National Party (MNP) and the All Mon Regions Democracy Party (AMRDP)—causing concern that their activities risk further splintering the state’s already fractious politics. A senior monk said that the clergy decided to canvass on behalf of its preferred candidates to ensure that the state’s votes are solidly supportive of ethnic candidates capable of winning over the opposition National League for Democracy (NLD) and the ruling Union Solidarity and Development Party (USDP). “Our votes will be scattered a lot on election day, which is why we need to do this,” explained May Htay Wi, an ethnic Mon monk from Ye Township. “Otherwise, our Mon candidates will lose to other parties. We need to get all our votes in one place in order to win.”
What Has Thein Sein Done For Us? - As Myanmar’s President Thein Sein nears the end of his term, and amid an apparent pitch to portray himself as the architect of a successful reform agenda, questions have been raised about his accomplishments. Since taking office in 2011 as the leader of a new government following decades of military rule, Thein Sein has repeatedly pledged his commitment to prioritizing economic reform. His first steps included a major overhaul of the key sectors of telecoms, car imports, finance and manufacturing. While it is clear that there have been enormous changes to these sectors in the past four years, experts say it’s misguided to give all credit to Thein Sein for a transformation that, frankly, had to happen. Just a few years ago, things couldn’t have gotten much worse; Myanmar was falling further and further behind its industrializing ASEAN neighbors. SIM cards, which were heavily controlled by the government’s communications enterprise, could cost up to US$1,500 at their peak. Since the introduction of two foreign telecoms providers—Norway’s Telenor and Ooredoo of Qatar—mobile access has spread like wildfire as SIM prices dropped to about $1.50 almost immediately. A similar influx can be seen on the streets of Yangon—much to the dismay of many residents—as the once vacant avenues are now packed with imported vehicles that used to be prohibitively expensive. After reworking Myanmar’s import policy nearly a dozen times, Thein Sein has made the country one of Japan’s biggest buyers in Asia. Myanmar has ATMs, foreign banks are slowly entering the market and a stock exchange is expected to commence anytime soon. Myanmar now manufactures garments for American, European, Korean and other international companies. Myanmar even brews a local brand of Heineken beer. But did the president do this, or was the Burmese economy so broken—and it’s people so poor and so keen to work—that it simply had nowhere to go but up? Maung Maung Lay, vice chairman of the Union of Myanmar Federation of Chambers of Commerce (UMFCCI), said the changes we see now don’t say much about the government’s performance. “We should have had these things years ago, like other countries,” Maung Maung Lay said. “Everything restarted under the current government. That’s why we understand that real change will take a long time; there are many things that still need to be done.” He said the government’s most effective move to speed things along has been the easing of trade restrictions and the removal of red tape for foreign partners. But despite the relative ease of entering Myanmar’s market, he warned, the country has yet to fully tackle corruption, crony capitalism and a mindset that is resistant to change. “The government’s main weakness is corruption and hesitance to take decisive action on certain reforms even when they have the will to change,” he said. Economic reform is a multifaceted task, and many factors in the overall reform process still need to be worked out to enable a stable economic environment that is investor friendly. “That’s one reason why some foreign investors are still saying ‘wait and see’,” he said, emphasizing that while there are many major development projects underway to usher in new jobs and upgrade Myanmar’s manufacturing sector, those projects remain riddled with problems. Despite an apparent cooling down among potential investors due to uncertainty and stagnant legislation, a report published by the Asian Development Bank (ADB) earlier this year predicted continued economic growth resulting from Thein Sein’s reform program. Though inflation is expected to accelerate due to higher wages and increased domestic demand, consumer prices should ease slightly the following fiscal year, the report said. That long-term vision is shared by many local businesspeople, who advocate for more government effort to promote value-added manufacturing as a key element of the economy. Whether those concerns will be taken into account in the future will depend largely on the outcome of the upcoming November general election. Thus far it seems that Thein Sein’s approach to economic reform dealt with immediate obstacles—bringing Myanmar up to date in terms of communications and banking. It is unclear, once those hurdles are fully cleared, what types of continued reform might be pursued by another Thein Sein administration. Economist Sean Turnell, who has advised the opposition party, the National League for Democracy (NLD), said the chief economic achievement of the current government has been the mere act of incorporating economics into the political agenda at all. “Hitherto economic considerations barely got a look in,” Turnell said. “So, the fact that government might now be judged according to how successful they are in improving the living standards of the Burmese people is itself a considerable advance.” He went on to say however, that “there is also much failure here,” particularly in the government’s failure to pass key legislation on issues such as investment, companies, mining, arbitration and financial institutions. If Thein Sein were to get a second term, he said, we can expect to see “more of the same.” Of the administration’s failures, Turnell said, “above all – there has been little to no reform in agriculture,” which could be an indicator of how his administration might act if it keeps power. “If the NLD and its allies were to win, I am very bullish about Myanmar’s economic future,” he added. “The country was a major player in global agricultural markets, and intellectually an extraordinary contributor to economic ideas. I think it can be so again, if only good policies were put in place, appropriate institutions established, and the Burmese people were allowed the freedom to be what they can.”
On The Road With The Lady - In various campaign speeches in recent weeks Aung San Suu Kyi, has demonstrated that she is the only politician in the country that can engage a large majority of Burmese voters. Her ability to tap into the hopes and desires of the electorate is a strength that should stand her National League for Democracy (NLD) party in good stead ahead of the Nov. 8 poll. In Myanmar’s recent history, no other political leader could so effortlessly command such popular support, whether in the boiling sun or the monsoon rain. Journalists are always listening intently to see whether the 70-year-old pro-democracy figure will say something new or unusual on the campaign trail. Some foreign observers tend to pay particular attention as to whether Suu Kyi will address controversial issues, such as the plight of the Rohingya. Indeed, the opposition leader has worn a great deal of flak for her perceived silence on this and other issues. However, what many overlook when analyzing Suu Kyi’s stump speeches is her ability to relate to mainstream voters and understand their concerns—a vital attribute for any politician. In recent months, Suu Kyi has embarked on whirlwind trips to Shan, Kachin and Karenni states as well as Irrawaddy Division and various locales in central Myanmar. Everywhere Suu Kyi goes, huge crowds follow. Her supporters appear drawn from all walks of life, from trishaw drivers to street vendors, labourers and civil servants; even former and serving soldiers have been spotted at Suu Kyi’s rallies. Large rallies were also convened by the Union Solidarity and Development Association, the forerunner to the Union Solidarity and Development Party, in the past, but with one major difference: attendees were often forced to join or induced to do so. In recent months, President Thein Sein has also traveled widely, as faithfully documented in state-run media. These trips, where the president is often portrayed as smoothing development projects or dispensing aid, lack the rapturous crowds familiar to Suu Kyi’s rallies. At an NLD rally in Hmawbi, a garrison town on the northern outskirts of Yangon, one elderly local woman said “I came here to listen to what she says and to support her party.” Her words were deceptively simple but contained a key truth: NLD supporters truly listen to The Lady. In her speech, Suu Kyi referred to a fundamental campaign message: the NLD is the only party that can change a political system that for decades left the country mired in poverty. She pledged to address rampant corruption, citing the NLD’s policy that every candidate must declare his/her moveable and property assets, as well as those of spouses and family members, accompanied with bank account disclosures. Suu Kyi, however, seemed at pains to temper unrealistic expectations, telling supporters no society was completely corruption-free but pledging a clean government—a constant party refrain. Corruption is an issue that strikes a chord with the majority of Burmese who are tired of the shady dealings that were and are the hallmark of successive regimes. Suu Kyi has also portrayed a vote for the NLD as a vote for personal, not merely political, change. “Please vote for the NLD in hoping that your life can be lead in peace, freedom and security,” Suu Kyi tells supporters. “We can’t give you money, chicken, pork and solar power like the others,” she added in jest, alluding to members of the ruling party and their allies accused of courting votes through handouts. NLD supporters laughed, smiled and cheered, but they also seemed receptive to constructive criticism from the opposition leader. “I think our people are lacking in self-confidence and are dispirited because you were totally oppressed over past decades,” Suu Kyi addressed the crowd, to another round of applause. Citing the poor collective record of past ruling regimes, Suu Kyi stands on a simple message of change. “We need to change a system where the government doesn’t dare to take responsibility,” she said. “We want to be in government because we dare to take responsibility. Only through the support and help of the people can we change that system.” Observers of Suu Kyi in recent years will note that while advocating for systemic change, her shrewd pragmatism is not left far behind. The NLD leader has sent a conciliatory message to the military establishment, pledging that her party would not seek retribution toward “those” that oppressed the party and its supporters in the past. The fact remains that whatever the result post-November, the opposition leader remains barred from assuming the presidency due to a controversial clause in the military-drafted 2008 Constitution. But this impediment to power has seemingly not dimmed the hopes of thousands of NLD supporters across the country heeding Suu Kyi’s message of change.
We’re Watching - The United States will not turn a blind eye to shortcomings in Myanmar’s election next month and US help to the future government and any more easing of sanctions will depend on the overall process, the top US diplomat for Asia has said. Assistant Secretary of State Daniel Russel told a congressional hearing Washington was “deeply, deeply concerned” by the treatment of Myanmar’s Rohingya Muslim minority and warned that the politicization of religion and the spread of hate speech could lead to election-day violence. “We will make our assessment based on what we hear and see,” Russel said, adding that this would include the views of the political opposition led by Aung San Suu Kyi, election observers and the media. “We will also look at the morning after,” he said. “It is critically important that all parties accept the results of the polling. “Our ability to assist the new Burmese government, let alone to look at relaxation of sanctions… will depend on our assessment of the integrity of the overall process,” Russel said. “The conduct and results of these elections will fundamentally shape our engagement with the Burmese government in 2016 and beyond,” he added. Russel said success was not guaranteed and significant problems remained. He pointed to the disenfranchisement of 750,000 Rohingya and disqualification of 75 parliamentary candidates for failing to meet citizenship and residency requirements. Russel said more than 100 political prisoners remained in detention and some 400 activists faced charges, including students and journalists. Hardliners from a radical Buddhist organization, Ma Ba Tha, have stoked religious tension ahead of the vote with anti-Muslim rallies supporting laws seen as targeting the Rohingya.
Shwe Mann Come Back? - Ousted ruling party chief Shwe Mann is mounting a comeback ahead of a historic election next month, setting the stage for a likely presidential bid that will add to the unpredictability of the country’s transition to democracy. Hundreds of campaign workers are blitzing Shwe Mann’s home district in an attempt to maintain the taciturn ex-general’s foothold in parliament. If he succeeds, some analysts predict a split that could help opposition leader Aung San Suu Kyi’s National League for Democracy (NLD). “There’s nobody like him,” croons a male vocalist as campaign trucks in the tumbledown town of Phyu blare a rock ballad lauding the area’s most famous son. “He’s the one the people should choose for democratization.” The campaign is underpinned by nearly US$2 million spent on local development projects by businessmen linked to the country’s old junta, according to interviews and a document obtained by Reuters. Just two months ago, Shwe Mann—once a presidential favourite—looked set for political oblivion. In scenes reminiscent of Burma’s half-century of military rule, armed police had stormed the headquarters of the ruling Union Solidarity and Development Party (USDP), removing him as its leader in a purge orchestrated by President Thein Sein. Now, two senior Shwe Mann allies say if he wins in Phyu, his next step will be a tilt at the presidency, which is set to be chosen by the newly elected members of parliament next year. “We hope our party members and the other parties will join and nominate him as the presidential candidate,” Win Oo, a pro-Shwe Mann USDP lawmaker, said. Shwe Mann’s supporters tout him as the ideal consensus candidate for a fragile country. An ex-soldier awarded the honorary title “Thura” for his battlefield exploits, he was widely considered the military regime’s number three prior to the advent of semi-civilian rule in 2011. But as lower house speaker, Shwe Mann cultivated ties with Suu Kyi, whose party is expected to win most seats in the Nov. 8 election. It was this that led to his ouster. Independent political analyst Sithu Aung Myint said if Shwe Mann returns to parliament he will almost certainly end up leading a renegade faction within the USDP, creating a split that in turn could help an NLD candidate win the presidency. Suu Kyi herself is barred from the job by the country’s military-drafted constitution. At a recent news conference, Shwe Mann responded obliquely when asked if he aspired to the presidency. “Time will tell,” he said. “For the benefit of the nation, I will negotiate or cooperate with any person or party.” In Phyu, a recent Shwe Mann campaign meeting was held in a gleaming assembly hall that opened in June and bears a plaque with his name. The structure cost about $420,000, raised mostly from more than half a dozen businessmen who prospered under military rule. A hospital was built with roughly $1.3 million secured by Shwe Mann from the Max Myanmar Group of US-sanctioned businessman Zaw Zaw, said Tun Aung, a member of the hospital’s board. “We owe thanks to him,” Tun Aung said. “Now it’s time to pay back our gratitude.” Suu Kyi has not visited Phyu, despite travelling around much of the country to rapturous receptions, leading several NLD supporters to grumble that she appeared to be letting Shwe Mann win. Local NLD candidate Than Nyunt, however, said the party was aiming for victory. “If we’re contesting, we have to win. This is politics,” he said. At an NLD campaign stop in one hamlet, farmer Tun Myint, 48, said he wanted Suu Kyi for president. “But if it’s not going to be her, Shwe Mann is the most suitable guy to change the country,” he said. “It’s time to prioritize what can be, rather than what we want.”
Growth Slowdown - A World Bank report released Monday estimated that Myanmar’s economic growth for the 2015-16 fiscal year would slow, due in part to recent flooding and a slowdown in new investment. According to the Bank’s latest “East Asia and Pacific Economic Update,” Myanmar’s economy grew at 8.5 percent in real terms for fiscal year 2014-15, but this growth is predicted to drop to 6.5 percent over the following year. The predicted slowdown was due in part to recent flooding which inundated whole swathes of the country. With more than a million acres of paddy fields destroyed, the government halted rice exports—one of the countries key export commodities. Although the full financial toll of the floods crisis is not yet clear, Dr Soe Tun, joint secretary of the Myanmar Rice Federation, echoed the World Bank’s findings, forecasting that the coming year will likely be a challenging one for Myanmar’s agricultural sector. The report estimated that inflation reached about 10 percent in the year to July and could reach 11.3 percent in the coming fiscal year “due to a combination of supply pressures caused by the floods and currency depreciation.” The depreciation of the Burmese kyat against the US dollar since early this year has also put a strain on Myanmar’s economy. The record $8 billion in foreign direct investment (FDI) received in 2014-15 was double that of 2013-14. Yet according to Myanmar Investment Commission (MIC) Secretary Aung Naing Oo, less than half—$3 billion—of this investment entered the country, despite the fact that the investment commission approved all $8 billion. Myanmar’s top foreign investment sectors are currently power, 33%, manufacturing 22%, oil and gas, 20%, telecommunications, 11%, and hotels and tourism, 5%, according to MIC estimates. The World Bank reports that Myanmar’s economic reforms have supported consumer and investor confidence, even in light of various business and sociopolitical challenges. But it predicted new investment would slow as continued economic reforms would “hit a hiatus over the election period.” The Bank said continued growth was contingent on sustaining progress with broader macro-structural reforms, including strengthening the business environment, modernizing the banking sector, bolstering public debt management, and, crucially, making access to finance a priority for private sector growth.
Back to Black - Banks in Myanmar bought hundreds of millions of dollars in the black market this year, banking sources said, in a resurgence of an unregulated trade that flourished under military rule and has raised fears among foreign investors of backsliding on reforms. Lenders say they were forced to turn to unlicensed brokers for scarce dollars to keep the wheels of trade turning, as the central bank’s efforts to prop up the local currency threatened to freeze up the nascent financial system. “We deliberately made our currency appreciate, while there was an actual depreciation happening,” said a senior central bank official. “The whole informal market re-emerged, no transactions were happening through the banks any more. That’s when we came to the brink of collapse.” The episode underscores the fragility of reforms introduced since a semi-civilian government took power in 2011 after decades of isolation from the international financial system. Sources said the main motive for rolling back on reforms that introduced a managed kyat float in 2012 was to avoid inflation becoming an issue that could damage the government’s standing ahead of a historic election on Nov. 8. Strains emerged in early 2015 as the central bank’s official exchange rate diverged further and further from the rate offered on the black market. International trade has grown quickly during the reform period, and as imports outpaced exports the trade deficit jumped to US$4.9 billion in the fiscal year ending March 31, from just under $92 million two years earlier, according to official data. That has tightened the supply of dollars, with rising foreign direct investment and tourism not enough to fully plug the gap. The chronic shortage of dollars worsened mid-year as exporters either held back dollars in the expectation of an eventual kyat devaluation or refused to sell at the official rate. Banks turned instead to the informal market, using well-established brokers with systems that were put in place to skirt sanctions when Myanmar was an international pariah. “They call it the black market but it’s the real market,” said Win Lwin, a senior manager at KBZ Bank. “It’s very difficult for the banks to follow the rules.” Executives and traders at three Burmese banks said they had bought dollars in the informal market for clients needing to make international trade payments. All declined to be named, but said the practice was widespread. “We have no choice,” said one foreign exchange trader at a local bank. “We have to go to the black market.” Banks bought as much as $15 million a day through brokers, traders and executives estimated. The informal market purchases peaked in June and July when a dollar would buy you as much as 16 percent more kyat on the informal market. Under pressure from the International Monetary Fund (IMF) and the World Bank, the central bank abandoned its defence of the currency after 10 months in July, allowing the kyat to devalue and increasing dollar supply. The kyat is now down more than 20 percent for the year, making it one of the worst-performing frontier market currencies in 2015. But without wider reforms to allow foreign banks to sell dollars in Myanmar, some traders and bankers believe it is only a matter of time before they are forced back into the informal dollar market. “We all know how limited the central bank is for dollar supplies. They could say overnight—the party’s over, we’ve run out of reserves.” The IMF estimates central bank reserves in dollar terms will reach around $5 billion at the end of this fiscal year, equivalent to around 2.5 percent of imports. The central bank declined to provide data on actual reserves. Offshore Network Myanmar’s banks hold offshore accounts in Singapore to settle international trade. To get dollars to those accounts, the banks paid brokers in Myanmar in kyat, the executives and traders said. Those brokers then used registered companies in Singapore to transfer dollars into the banks’ offshore accounts. Electoral calculation may have played a part in the crisis, with the ruling Union Solidarity and Development Party expected to fare poorly in what is being touted as Myanmar’s first free and fair election in 25 years. “The difficulty with the authorities was that they were of course concerned about inflation if the exchange rate depreciates,” said Yongzheng Yang, who oversees Myanmar for the IMF and led a mission to Myanmar in June. While banks are no longer buying black market dollars, many importers and exporters continue to do informal bilateral deals, said U Mya Than, chairman of Myanmar Oriental Bank and of the Yangon Foreign Exchange Market Committee. “There is no scrutiny of transactions and no enforcement,” he said. That is a red flag for international banks entering Myanmar on the first licences granted since the reforms. “The central bank should crack down on the black market,” said the head of the treasury department at a foreign bank that has recently launched in Myanmar. “It’s impossible to build a normal financial system if we have it here.”
The Murky World of Jade - Myanmar's illicit jade trade is controlled by networks of military officials and their business allies, according to a new report, which valued the industry at up to US$31 billion last year. The report, published by NGO Global Witness, argues that the elites who have the most to lose from an open, fair and peaceful future for the country “also have access to a multi-billion dollar jade ‘slush fund’”. Global Witness said the value of illegal jade in 2014 equates to almost half of Myanmar’s GDP, which the World Bank says was $64.33 billion. The jade figure is also 46 times national spending on health last fiscal year. “Myanmar’s jade business may be the biggest natural resource heist in modern history,” said Global Witness. “Since 2011, a rebranded government has told the world it is turning the page on the ruthless military rule, cronyism and human rights abuses of the past.” But the jade trade reveals a very different reality. If this vast wealth was fairly distributed among the residents of Kachin, where the mines are located, it could pull the region out of poverty and drive development of the entire country. The sector and its players have received very little attention, partly because a web of obscure companies and proxy owners make it difficult to work out who is making money. However, after extensive research Global Witness claims that “those involved in the jade trade today reads like a who’s who from the darkest days of junta rule in Myanmar”. The families of heavyweights in the former military regime are among the biggest beneficiaries, as well as at least one Union government minister, a Union Solidarity and Development Party powerbroker and serving parliamentarians. Companies including Asia World, Htoo Group and KBZ are among the other players in the jade industry – in some cases through front companies – the report said. A Htoo Group spokesperson said in an emailed statement said that the company focuses on development of the jade industry and finished products, rather than on extraction and sales in Hpakant. “While the other companies extracted thousands of tonnes of jade annually from this area, Htoo Group of Companies’ annual production is just about 20 tonnes at the most,” the spokesperson said. None of the other companies commented. The Tatmadaw too is “helping itself to a gigantic slice of the pie via its own conglomerates and an elaborate extortion racket run by officers in Kachin State”, Global Witness says. A number of Chinese individuals also reportedly play a role – either as backers for local companies, or by taking Myanmar identities – and much financing comes from within China, said the report. Chinese import data indicates gemstone imports from Myanmar were worth $12.3 billion last year, though Global Witness believes that 50 to 80 percent of jade is smuggled across the border. Myanmar official figures for 2013-14 put the trade at barely $1 billion. Sources interviewed by Global Witness describe bribery, tax evasion, market manipulation, money laundering and smuggling. This should sound alarm bells for those hoping to build a peaceful and prosperous future for Myanmar, said the report, this is not just a political issue, but should be a major consideration for international businesses operating in Myanmar. The report names the Coca-Cola Company, which reportedly spent more than $1 million on due diligence but failed to spot its local partner’s interests in the jade industry. Caterpillar, too, reportedly has business relations with the front man for a group of jade companies that Global Witness claims is controlled by drug lord Wei Hsueh Kang, a commander in the United Wa State Army who is wanted by US authorities. The negative impact on local communities also cannot be overstated, said the report, which cites fatally dangerous conditions around the jade mines, and endemic drugs and prostitution. The majority of the jade is excavated at Hpakant in Kachin State by migrant workers, with locals “systematically cut out of the business”. Elites on both sides continue to benefit from the industry since the war in Kachin State reignited in 2011 creating incentives for military commanders and hardliners to prolong the conflict. Furthermore extraction in Hpakant has intensified over the past year. “Now jade mountains disappear in just a few days,” one jade businessman is quoted as saying. Licences only last for three to five years, creating incentives for businesspeople to grab as much of the precious stone as they can, as quickly as possible. According to Global Witness, while the situation is dire, all is not lost. It argues that resource sharing must be addressed immediately “and built into a comprehensive peace agreement to end the conflict”. Reformers within the government have already signed Myanmar up to the Extractive Industries Transparency Initiative (EITI) – an international scheme aimed at halting corruption and abuse in the oil, gas and mining sectors. Peace negotiations are also a chance to increase transparency, greater involvement from local people is necessary for a new model of shared ownership, management and revenue distribution, it said. The jade industry is also an important test of US foreign policy in Myanmar. The US supports EITI and has sanctions on the jade sector “imposed during the Than Shwe dictatorship to deny money and power to abusive members of the military junta”. However, in many cases, these sanctioned individuals continue to rake in billions of dollars – as do others who are under US sanctions for their roles in the drugs trade. Global Witness has asked the US along with other international governments to benchmark sanctions against reforms in the jade sector. Priorities should include sharing control and benefits with people in Kachin State, and making businesses accountable to the public, it said. “The US is uniquely placed to help take the jade out of the hands of the military, cronies and drug lords. It must make this a priority for its partnership with the new government that emerges from November’s elections.” A US embassy spokesperson said he had read the report, and that remaining sanctions are carefully targeted, including investment with the military, as well as a general prohibition on importing jadeite and rubies mined or extracted from Myanmar into the US, including jewellery containing such gems. “The US government remains committed to breaking the link between conflict, violence and natural resources. The purpose of maintaining the current sanctions on jadeite and rubies is to encourage the government to make reforms that would address continuing concerns about management of the gem sector, including violations of land rights, corruption and lack of transparency,” he said. “We will continue to support those promoting reform and taking positive steps to operate in a transparent and accountable manner.”
Tower Sale - Axiata’s tower company edotco which manages 14,000 towers in countries like Malaysia, Bangladesh, Cambodia, Sri Lanka and Pakistan, will acquire a controlling stake of 75 per cent in Digicel’s Myanmar venture for $221 million in an attempt to “further solidify” itself as an infrastructure provider to the greater South East Asian telecom industry. The move will allow Axiata to create new revenue streams outside of its core mobile business, its president Dato’ Sri Jamaludin Ibrahim said. The move will also give edotco “strategic majority control providing a platform in a highly attractive tower industry within edotco’s geographic area of focus”, the company said. The Myanmar tower market is expected to be one of South East Asia’s largest and fastest growing telecommunication infrastructure service markets. Edotco wants to bring services it offers in the Asian region to Myanmar, such as towers, transmission, maintenance and potentially energy. According to Suresh Sidhu, CEO of edotco, “the Myanmar telecommunications industry with its low mobile penetration, favourable regulatory conditions and high reliance on tower and infrastructure sharing presents significant potential for the edotco business as it expands into the new market.” The deal is subject to relevant regulatory approvals.
Culture and Tourism
Can We Trust Tourism Numbers? - The government expects the number of tourists who come to Myanmar this year to reach 5 million, but some industry observers doubt that this figure will be met, and that it might be based on misleading numbers. Earlier this year Minister of Hotels and Tourism Htay Aung estimated tourist arrivals for this calendar year to fall between 4.5 and 5 million. Since Myanmar’s re-emergence in 2011 tourism arrivals have risen sharply according to official figures, which show that numbers climbed from 800,000 in 2011 to 3.08 million in 2014. As of late August this year that number was already nearly 3 million foreign visitors, according to the ministry, and numbers are likely to rise again once monsoon season ends in mid-October. The majority of foreign travelers come into Myanmar through two major Thai borders. Of the 3 million foreign visitors last year, more than 1.9 million of them came across the border. Between January and late August of this year, the number of tourist arrivals via airports reached less than one million, while the number of border entries reached almost 2 million. Thai visitors comprised 71.39 percent of total foreign visitors to Myanmar last year, followed, respectively, by visitors from EU countries and from the US and Canada. World Quest International, a travel and tour agency, are doubtful about the figures that have been released by the government. “It’s hard to calculate the figures for border entries. Figures for airports and seaports, however, are exact, and we can count those,” he said. Tachileik in Shan State and Myawaddy in Karen State are the two border points that, since the new government came to power in 2011 and eased border restrictions, have allowed tourists easy land access to Myanmar. “I don’t see anything supporting the estimate that we’ll receive 5 million tourists this year, as package tours have been falling. Government figures have been rising, but what we’re actually seeing is an increase in the number of backpackers, who don’t bring in as much money as package tours do,” World Quest said. Phyo Wai Yar Zar, chairman of the Myanmar Tourism Marketing board, expressed similar sentiments, saying that “while it’s good that FIT [free independent traveler] figures are higher, we should also improve our numbers for package and leisure tours.” The slowdown in Myanmar’s tourism growth can also be attributed to several other factors, including a dearth in the number of quality hotels and guesthouses, expensive room rates, weak infrastructures for transportation and communication, an underdeveloped air industry with a poor safety record, and less spending power for, in particular, European travelers in light of a strong US dollar exchange rate.
Burmese Artifacts Recognised - Myanmar is proud to have had two more artifacts included in the UN-established Memory of the World Register for 2015, Kyaw Oo Lwin, director general of the Ministry of Culture’s archeology department, has announced. The Myazedi Inscription and the Golden Parchment of King Alaungpaya were added to the register at the 12th meeting of the International Advisory Committee of the Memory of the World Register Program, which took place Oct. 4-6 in Abu Dhabi. The committee approved a total of 47 out of 88 nominations in 2015, including the Bagan-period Myazedi Inscription, believed to date back to 1113, and the Golden Parchment of King Alaungpaya, the founder of the Konbaung Dynasty, which was jointly nominated by Myanmar’s Ministry of Culture, the Gottfried Wilhelm Leibniz Library in Germany, and the British Library. “While some may not see this recognition as carrying the same prestige as being included on the World Heritage list, we still see it as worldwide recognition of Myanmar’s value,” Kyaw Oo Lwin said. The UN body previously accepted Mandalay’s Maha Lawkamarazein, also known as the Kuthodaw Inscriptions, to the register in June 2013. Considered the world’s largest book, the 729 stone slabs were placed at the foot of Mandalay Hill by King Mindon in the 19th Century. The Myazedi Inscription, also called the Yazakumar Inscription or the Gubyaukgyi Inscription, is named after the Myazedi Pagoda in Myinkaba, a village south of Bagan in Mandalay Division. Myazedi means “jade stupa” in Burmese. Engraved on stone and supposedly made by Prince Yazakumar in honor of his father, King Kyansittha (1030-1112), the inscription reflects the prince’s fondness for his father, despite the fact he was overlooked for the throne in favor of the king’s grandson. The inscription is written in four languages—Pali, Mon, Burmese and Pyu—and is important historical evidence of the diverse histories, cultures, and languages of Myanmar. There are two main stone inscriptions in Myanmar today, one at the Myazedi Pagoda and the other at the Bagan Archaeological Museum. Professor Pe Maung Tin of Yangon University translated the inscription from Mon to Burmese, and a doctor from London University translated it from Mon to English. Though the Myazedi Inscription is often referred to as the oldest intact stone inscription in Myanmar, anther stone inscription believed to have been made by King Sawlu (1050–1084) and found in Mandalay’s Myittha Township in November 2013, may prove to be of similar antiquity. The second nomination, the Golden Parchment, is a letter sent by King Alaungpaya to Britain’s King George in 1756. Made from pure gold, the parchment, which historians said conveys the Burmese king’s wish to build trade ties with Britain, arrived in London four years after it was sent. The Golden Parchment is currently housed at Gottfried Wilhelm Leibniz Library in Hanover, Germany, where it has been kept for over 250 years. Another 3D copy of the parchment is located at the National Museum in Yangon. Myanmar’s Ministry of Culture plans to make further submissions to the Unesco program in the coming years. “We’re preparing to submit another item for consideration in the register for 2017, King Bayinnaung’s 16th Century Bell located at Shwezigon Pagoda in Bagan,” Kyaw Oo Lwin said. King Bayinnaung donated the bell to the famous pagoda in the 1500s. The bell’s inscription is written in three languages: Mon, Burmese, and Pali.
Insights from Myanmar and South East Asia from Myanmar Capital Partners.