The Lady Loses Her Sheen

Photo: Reuters/SCMP

It was a pivotal moment in Myanmar’s history, and one that was watched with full hearts across the globe. On November 13, 2010 democracy and human rights activist Aung San Suu Kyi was released after years under house arrest. Her political party, the Nation League for Democracy, won a resounding majority in legislative by-elections in 2012, and eventually came to power in 2015. Her release and subsequent election were highlights in the wave of democratic reforms carried about by Myanmar’s junta, which had imposed on the country a repressive, authoritarian regime. 

To the people of Myanmar, and to observers around the world, it appeared that these reforms indicated the inception of genuine, lasting democracy and economic growth in the country. The unforgiving march of reality has tempered the early idealism that surrounded outside observers’ impressions of the country. Myanmar remains in a promising condition, but the country is fraught with potentially destabilising political and economic circumstances. 

Aung San Suu Kyi was once “The Lady”, a universally adored beacon of democracy. She has proven to be shockingly shockingly dismissive and callous in her response to the ethnic cleansing of Rohingya by her country’s military force. This has disillusioned many in the international community who once stood strongly by her. The threat of foreign diplomatic and economics sanctions over the issue loom, and although economic growth remains strong, headwinds remain. Myanmar’s military also remains heavily involved in politics through its leadership of certain key institutions. 

Earnest reforms in Myanmar began in 2011 and steadily continued over the following years. Many in the West were surprised to see the country taking strong steps toward liberalisation, so it is worth analysing why the junta may have take such measures. Although its rule was heavily criticised abroad, the junta’s grip on power at home was secure; mass revolt is not what motivate its reforms. 

Instead, some theorise that a primary driving force was the government’s desire to bolster ties with the West. In the years prior, Myanmar had developed a strong dependence on China. Analysts observe that the economic domination of Chinese enterprises, particularly in Myanmar’s highly profitable extractive industries, fomented resentment in the country. Many saw Chinese firms reaping rewards from natural gas exports while local employment and wages remained abysmal. 

With Myanmar’s liberalising reforms, a whole host of Western countries became interested in participating in the economy, providing competition to Chinese firms—ultimately benefitting Myanmarese. Importantly, generals in the army were confident that they would not be prosecuted for past abuses and continued to exercise a degree of control over the government—this removed disincentives that could have impeded reform. 

General economic conditions in Myanmar are favourable to growth. The country is generously endowed with natural resources, a remarkably young population, and a blossoming industrial sector. Foreign direct investment (FDI) has been of particular importance to the government in ensuring sustained growth. Although starting from a low bar, the country has been able to attract growing and significant sums of investor capital. The government has also made a concerted push to attract foreign tourism, and GDP numbers have been buoyed by an uptick in the services sector. 

Unfortunately, the country’s strong trajectory threatens to be severely undermined by the military’s brutal treatment of the country’s Rohingya minority. The Rohingya are a Muslim minority group living in Myanmar’s Rakhine state, bordering Bangladesh. Most agree that the Rohingya have lived in Myanmar for hundreds of years, and historians say that in precolonial times—Myanmar was a British colony until 1948—they lived in relative peace with the country’s Buddhist majority.

Myanmar’s government, however, insists that the Rohingya are illegal immigrants, and has subjected them to unrelenting violence and disenfranchisement. The Rohingya are not granted any of the benefits of citizenship by the government, and Aung San Suu Kyi even refuses to recognise their existence as a legitimate ethnic group. Thousands of innocent Rohingya have been slaughtered, and hundreds of thousands have fled the country, seeking refuge in a reluctant Bangladesh. 

The country has long suffered from insurgency and separatism, largely because of ethnic conflict. Separatist movements in Kachin, the region bordering China, made headlines a few years ago. Recently, a small Rohingya militant group, the ARSA, targeted Myanmarese army outposts. The military’s retaliation was unforgiving and, according to the United Nations, both grossly disproportional and targeted at civilians. The Rohingya are hardly an insurgency threat. 

Sadly, cruel regimes often get away with human rights abuses; Myanmar itself has had copious experience. This is particularly likely in countries that produce valuable commodities—look at the Gulf states, for example—as worldwide demand prevents efforts to employ punitive measures. However, note that Myanmar seeks to brand itself as an international business and tourism destination. If Western countries sever ties, Myanmar could be left once again over-reliant on China and on fluctuating gas prices. Worryingly, polls have found that the campaign of violence against the Rohingya has elevated popular support for the military to an historic high. And it remains to be seen which countries will decisively punish Myanmar, and which will turn a blind eye to the violence.

Crony capitalism also remains a threat to economic efficiency in the country. There remains a tendency, one well documented in emerging economies, for well-connected individuals to obtain economic favours corrupt individuals in positions of power. Investigations have alleged egregious land grabs and resource misallocation in parts of the country, particularly by senior members of the military. 

Myanmar has undeniable promise. Years of economic mismanagement under military rule means that there is much room for swift “catch-up” growth as the country powers toward its full potential. But economic growth does not occur in a vacuum free from political circumstances.