Monday, October 25, 2004

Myanmar: Analysis - The Junta Inc


Khin Nyunt, believed to be under house arrest in Yangon, was permitted to retire for "health reasons", the junta said, blaming him for corruption within military intelligence. Analysts say the allegations stem from a showdown last month between military intelligence and army commanders vying for control of the lucrative border trade from China. General Thura Shwe Mann, the junta's third most powerful member, told leading businessmen over the weekend that Khin Nyunt had to pay the price for "disobedience, corruption and bribery" by his military intelligence cadre.


Myanmar shakeup offers glimpse of junta Inc
Darren Schuettler

BANGKOK (Reuters) - From karaoke bars to travel agents and newspapers, rivals are carving up the business empire of Myanmar's sacked prime minister and his once powerful clique.

Scores of firms linked to Khin Nyunt's military intelligence have been shut or temporarily suspended at the behest of junta strongman Than Shwe, who purged his former ally last week.

Khin Nyunt's demise has offered a rare glimpse into how the generals, their families and a handful of businessmen profit in one of the world's most corrupt economies, analysts say.

"It's about controlling access to money and Khin Nyunt's removal may have had as much to do with internal business interests as with politics," said Bradley Babson, a retired World Bank economist and Myanmar watcher.

Khin Nyunt, believed to be under house arrest in Yangon, was permitted to retire for "health reasons", the junta said, blaming him for corruption within military intelligence.

Analysts say the allegations stem from a showdown last month between military intelligence and army commanders vying for control of the lucrative border trade from China.

Since then, scores of businesses, including a Yangon travel agency and a plastics maker, have been closed or have had their assets seized. At least 17 newspapers and magazines were shut or suspended after Khin Nyunt associates lost control of the censorship bureau.

They included a magazine linked to Khin Nyunt's son, Ye Naing Win, who also runs Myanmar's sole Internet service provider.

"It looked like an act of revenge on the part of the new prime minister, Soe Win, towards media close to his predecessor," said media rights group Reporters Without Borders.

HAND IN HAND

Despite being blessed with natural wealth in oil and gas, timber and minerals, four decades of military rule and bizarre policies have left Myanmar's economy in a mess and its people among the world's most impoverished.

After the mysticism-obsessed General Ne Win, and his "Burmese Way to Socialism", was overthrown following a failed pro-democracy uprising in 1988, the junta slowly began market reforms that created a new business class tied to the generals.

"There is a symbiotic relationship between the military and business," said Sean Turnell, a professor at Australia's Macquarie University who co-authors the Burma Economic Watch.

"Business is tied to individuals they think can carve a path through corruption and regulations. The military need business for money to bribe and make their way up the system," he said.

The corruption watchdog Transparency International ranks Myanmar at 142 of 145 nations on its watchlist -- only slightly better than Nigeria, Bangladesh and Haiti.

The junta insists it is serious about fighting corruption.

General Thura Shwe Mann, the junta's third most powerful member, told leading businessmen over the weekend that Khin Nyunt had to pay the price for "disobedience, corruption and bribery" by his military intelligence cadre.

"In the military, everybody is liable for their failure to abide by the law. Nobody is above the law," Shwe Mann was quoted as saying by the New Light of Myanmar newspaper on Monday.

Khin Nyunt's circle was involved in everything from hotels to mining and cash crops to massage parlours.

"You name it they did it, as long as it was profitable. We couldn't do anything without their blessing," said one Yangon businessman, who declined to give his name.

"But they should not just point fingers at military intelligence. There are many other government departments where corruption is rampant," he said.

John Badgley, a retired Cornell University professor, says the junta accusing Khin Nyunt of corruption smacks of "the pot calling the kettle black".

He says competition between the generals and their families has intensified as investment pours in from China, India and southeast Asian neighbours such as Thailand and Singapore.

Much of that money is funneled into joint ventures with military-run companies or their business allies.

With Western companies under pressure to pull out over Yangon's dismal rights record and detention of democracy icon Aung San Suu Kyi, Asian firms are happily filling the void.

Yangon has also become adept at "resource diplomacy", analysts say, giving neighbours a bigger slice of its natural wealth in return for political, financial and military support.

The biggest player by far is China, which has denounced Western sanctions against the regime it props up with loans while Chinese firms build bridges, roads and factories, and dominate teak logging near the border.

But Yangon has sought to balance Beijing's influence by offering gas deals to India, which rolled out the red carpet for Than Shwe on Monday, the first visit by a Myanmar head of state in nearly a quarter century.

Reuters 25/10/2004