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Myanmar: Real reform or a nervous
junta?
By Alan Boyd
SYDNEY -
The military regime in Myanmar, prodded by close ally
China and fears of a social backlash from a crippled
economy, may be preparing to come in from the cold. The
reclusive junta has sent out a series of diplomatic
signals in recent weeks that appear to offer democratic
reforms in exchange for the lifting of economic
sanctions that are draining off badly needed foreign
investment.
In its latest statement, issued in
Yangon late last week, the junta offered to open a
dialogue with the United States on "making the
transition to a stable democracy".
"The
government invites the US to join us in open
constructive dialogue toward humanitarian, economic and
political development," an official spokesman said.
According to the US State Department, no formal
approach had been made as of Friday. However, some
European diplomats believe change may be in the air,
pointing to a more conciliatory tone in the junta's
stream of anti-Western vitriol.
How far the
junta might be willing to bend is not clear, as
Washington and its allies are unlikely to accept
anything less than an end to the military's harsh
three-decade hold on power. But the message coming out
of Yangon is that it wants a tradeoff: some form of
power-sharing agreement in return for the acceptance of
Myanmar back into the global community.
"We have
seen this pattern before of deflecting international
censure by means of limited concessions that can easily
be rolled back once attention has shifted somewhere
else," said a European envoy. "What we do detect is an
erosion of their comfort zone, and this is probably an
economic reaction. The sanctions are hurting, and [the
generals] evidently don't know which way to turn".
Imposed by the European Union and the United
States in 1996, the sanctions have succeeded in
diverting foreign investment elsewhere, with dozens of
multinationals opting to pull out to avoid retail
boycotts. Direct capital inflows from abroad fell by
14.7 percent in the first 10 months of 2002 compared
with the same period a year earlier, according to the
Central Statistical Organization, with only the oil and
gas sectors holding firm.
About US$7.4 billion
has been committed since Myanmar launched market reforms
in 1988 that ended 26 years of self-imposed isolation.
But a substantial portion of this capital never arrived.
One reason is that nationalists have gradually regained
the political ascendancy, even passing an edict last
March that restricts trade activities by wholly-owned
foreign firms.
However, the sanctions affect
only a relatively narrow band of resource and
manufacturing industries with links to the business and
political elite, and have had little impact on the
junta's siege mentality. It is more likely that the
reform overtures are a reaction to the social fallout
from economic privation, partly caused by inept public
policies, which has become a sensitive political issue.
Farmers rioted in some rural regions late last
year over the poor government response to severe
flooding that pushed up food prices and exposed the
inadequacy of the state's social-security system.
Agriculture contributes 40 percent of gross domestic
product (GDP) and employs three-quarters of the
population, but is hampered by a breakdown of transport
and distribution networks, and an obsessive interest in
costly mechanization processes.
Likewise, the
urban middle classes are incensed over the junta's
failure to arrest a steady currency devaluation, blamed
on the sanctions and a spiraling budget deficit, that
has wiped out scores of dollar fortunes. Last week the
government was forced to bail out ailing private banks
after a rush on Yangon deposits that was apparently
sparked by the collapse of shady investment schemes.
Inefficient state-owned enterprises are another
revenue drain, with most functioning as umbrellas for
cronyism and political loyalty. Privatization efforts
have foundered because the bulk are not considered worth
retaining.
Military self-interest is a prime
cause of public resentments. The budget deficit is
popularly believed to have resulted from a failure to
check rampant corruption and massive spending on
military hardware and infrastructure - the latter often
with a defense objective.
Undeterred, fiscal
chiefs have responded to the revenue shortfall by
imposing punitive tax measures that have merely added to
the economic burden and created fresh village tensions.
As social pressure builds, the junta is looking
for a way out that will not require too many political
sacrifices. But some observers doubt that this will be
possible in the prevailing economic conditions.
"Achieving a national consensus to resolve
Burma's economic crisis requires a national dialogue
that will also address the legitimacy deficit, the
political instability, and the social justice concerns
of the population," the pro-reform Burma Fund warned in
a recent report. "Without fundamental political reforms,
no government can hope to solve the economic crisis in
Burma."
Pressure has also come from some
unlikely external sources. Malaysia and Singapore, two
of the leading foreign investors in Myanmar, have both
urged the junta to open a dialogue, as have Japan and
China. The Chinese connection is viewed as crucial, as
Beijing has become Myanmar's most influential neighbor
by virtue of a generous program of development aid and a
growing defense relationship.
Anxious to secure
a route to the Indian Ocean for its landlocked western
provinces, China has said publicly that it wants the
leadership to make enough concessions to ensure a stable
and durable system of government. Junta leader General
Than Shwe met last month with Chinese President Jiang
Zemin and party leader Hu Jintao in what was seen partly
as an attempt by China to speed up the lagging reform
process.
China is also believed to have played a
role in the release from house detention of
pro-democracy leader Aung San Suu Kyi last May, and the
resumption of direct talks between the military and her
National League for Democracy (NLD).
However,
opposition remains strong in Yangon against any further
concessions to the NLD, which won a democratic election
after a bloody nationwide uprising in 1988, but has
never been allowed to take power.
"Frankly, the
talks are less a statement of intent than a convenient
shield against additional sanctions. They have not make
any appreciable progress and we don't expect this
position to alter until there is a collective political
will to change," said another diplomat.
Intelligence strongman Lieutenant-General Khin
Nyunt, the third-ranking member of the junta, indicated
in August that it had no intention of handing over power
to Aung San or anyone else. "The world is full of
examples where a hasty transition from one system to
another led to unrest, instability and even failed
states," he said.
But that was before the death
in December of influential former ruler Ne Win, whose
implacable opposition to a deal with the NLD had been
widely viewed as the biggest impediment to reform. It
was Ne Win who dragged Myanmar - then known as Burma -
into isolation in 1962 and played the central role in
the suppression of the failed 1974 and 1988
pro-democracy movements.
Although he stepped
aside in 1998 to reduce tensions, the former postal
clerk and army officer was believed to still be the
central junta figure until his family was implicated in
a farcical coup plot last March. Skeptical diplomats
believe that the "coup" was fabricated to discredit and
neutralize the 92-year-old Ne Win, who was hindering
efforts to establish a political formula that would ease
external pressures without loosening the junta's grip.
This is believed to be based on a 1990 concept
of allowing the NLD to operate openly as an opposition
grouping while guaranteeing the armed forces a
continuing role as power broker - probably by
transforming the junta into a political party.
There would probably be no role for Aung San Suu
Kyi, even though her late father is recognized as the
founder of modern Burma and is revered in military
circles for his role as a liberation fighter against the
Japanese and British colonizers. Suu Kyi, by comparison,
is despised and feared by the junta for her enormous
grassroots popularity. It appears likely she will be
forced into the background as part of any political
compromise.
"I don't think they can accept her
on any terms, and nor can she be seen to serve alongside
the architects of the NLD's downfall. What they will
want is people they can more easily control, the NLD
moderates," said the European diplomat.
"But we
are getting a little ahead of ourselves. Genuine change,
if indeed there is any, will come slowly and on the
junta's terms, when it feels sufficiently assured of its
own position in the new order to allow in newcomers."
(©2003 Asia Times Online Co, Ltd. All rights
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