Thursday, October 28, 2004

Myanmar: Costless Shift to a Hard-Line'



Although an internal struggle for dominance in the junta and the spoils that go with it probably played a major role in Nyunt's replacement by Win, it is also reasonable to speculate that the hardliners were emboldened to make their move because they judged that in the current international environment they could proceed without threatening Yangon's vital interests. The partial vacuum created by the diminution of American power in the wake of Operation Iraqi Freedom has left all world and regional powers to fend for themselves, which means that pressure is reduced on regimes that do not cooperate fully with the globalization project. Yangon's hardliners have been able to take advantage of the more open global situation to try to preserve Myanmar's status as a relative hold out.

Myanmar's Costless Shift to a Hard-Line
Dr. Michael A. Weinstein

On October 20, Prime Minister Khin Nyunt of Myanmar was removed from his position and replaced by Soe Win after an apparent power struggle within the State Peace and Development Council, the military junta that has ruled the Southeast Asian country since 1988. Under military rule, Myanmar has had one of the most reclusive regimes in the world, limiting external contacts and refusing to participate fully in the globalization project, which involves free trade and investment, privatization, and democratic institutions. Nyunt, who assumed the post of prime minister in August, 2003, was seen by the international community as a figure who might move Myanmar -- if only tentatively -- toward greater participation in the globalization framework. Win, in contrast, is a hardliner who reportedly opposes any steps toward democratization and has little, if any, concern with satisfying foreign powers.

Given that Myanmar has been under diplomatic pressure to open up and undertake democratic reform from the United States and neighboring states in the Association of Southeast Asian Nations (A.S.E.A.N.), and has had economic sanctions imposed on it by the United States, the shift in leadership indicates that the military regime has decided that it does not have to submit to that pressure. Unlike other relatively isolated states, such as North Korea and Iran, Myanmar is not suspected of developing weapons of mass destruction, which places it outside the categories of "states of concern" or "rogue states."

The military regime, which has been fighting chronic wars with at least twenty insurgent ethnic groups and has been accused by human rights organizations of using prisoners as slave labor, has been able to persist without facing external military threats. Indeed, it has brisk trade relations with Thailand and China and has opened up its substantial oil resources (estimated at 3.2 billion barrels) to exploitation by British, Canadian, Australian, Malaysian, Indonesian and Chinese companies. Myanmar's experience exemplifies how a closed authoritarian regime that plays ball just enough can hold out against globalization.

Pragmatists and Hardliners

Nyunt's ouster was engineered by Senior General Than Shwe who has been Myanmar's strongman and chairman of the State Peace and Development Council since 1992. Shwe's rise to power followed parliamentary elections in 1990 that were canceled by the military after the reformist National League for Democracy (N.L.D.) won 396 seats, an assortment of minor parties took 79 seats and the pro-military National Unity Party won only ten.

Led by General Secretary Aung San Suu Kyi, the N.L.D. has gained broad international diplomatic support, but has been repressed by the military within Myanmar. Suu Kyi, a Nobel Peace Prize winner, has been under house arrest for nine of the past fifteen years. The tortuous relationship between the junta and the N.L.D. has been marked by brief periods of relaxed repression followed by clampdowns, the most recent of which followed an attack in May, 2003 mounted by supporters of the junta on an N.L.D. convoy that was touring northern Myanmar during the last period of relaxation. After the attack, reportedly organized by the new Prime Minister Win, Suu Kyi was again placed under house arrest.

International opposition to Suu Kyi's detention was reportedly responsible for the reformist gestures by Nyunt, which included in a seven-stage "road map" the convening of an assembly to restart work on a constitution for the country (the former constitution has been suspended by the junta), but did not make concessions to the N.L.D. The future of the assembly, which began work this year, is now in doubt.

The hopes of the pro-globalization sectors of the international community that Nyunt would inch Myanmar toward democratization were not only based on his road map, which was widely interpreted as in great part a symbolic move, but also on his success in negotiating cease-fire agreements with seventeen of Myanmar's approximately twenty dissident ethnic minorities, which are concentrated in the country's north. Those agreements, which are bound up with the success of the constitutional process, are also now in doubt. At present, Yangon seems to be poised to revert to its familiar pattern of military suppression of non-Burmese ethnic groups and intolerance of ethnic Burmese opposition, while attempting simultaneously to expand trade relations with its neighbors and procure aid from them for infrastructure development.

Although it is difficult to pin down the political maneuvering within Myanmar's secretive regime, analysts agree that Nyunt's downfall was the result of a power struggle between hard-line and pragmatist factions within the country's military establishment. Much narrower than the similar conflict between theocrats and reformers in Iran, the differences between Myanmar's factions hinge on tactics rather than strategy.

The pragmatists, centered in Yangon's intelligence apparatus and represented by Nyunt, believe that Myanmar's vital interests in economic development can only be met by prudent relaxation of repression and accords with ethnic minorities that in their judgment need not threaten the regime. The hardliners, concentrated in the regular army, believe that any loosening of repression will endanger the regime's hold on power and that economic development will not be threatened by the continuation of strong authoritarian measures.

Each faction represents an interpretation of the strategy of Myanmar's northern neighbor China, which pursues a policy of maintaining authoritarian rule as it pursues international economic relations, and rejects the market democracy formula of mainstream globalization. Both factions are eager for economic development -- if only to enrich the regime and blunt domestic opposition -- and both are committed to the regime's perpetuation.

The basic division between pragmatists and hardliners is complicated by their rivalry over control of border trade with Thailand and China, which provides opportunities for corruption. According to Transparency International's "Global Corruption Perceptions Index," released on October 20, Myanmar is the fourth most corrupt country on the list of 145 states, after Haiti, Bangladesh and Nigeria. Under Nyunt, the intelligence apparatus gained greater power over border security and it is not surprising that the former Prime Minister has reportedly been placed under house arrest on corruption charges.

Although an internal struggle for dominance in the junta and the spoils that go with it probably played a major role in Nyunt's replacement by Win, it is also reasonable to speculate that the hardliners were emboldened to make their move because they judged that in the current international environment they could proceed without threatening Yangon's vital interests. The partial vacuum created by the diminution of American power in the wake of Operation Iraqi Freedom has left all world and regional powers to fend for themselves, which means that pressure is reduced on regimes that do not cooperate fully with the globalization project. Yangon's hardliners have been able to take advantage of the more open global situation to try to preserve Myanmar's status as a relative hold out.

International Response to Yangon's Shift

Endowed with oil and gas reserves, yet impoverished and underdeveloped in great part because of regime-imposed isolation and a crony economy, Myanmar is embedded in an international force field in which the United Nations, the country's Southeast Asian neighbors (particularly Thailand), Japan and, most importantly, China are the major players. Each of these actors has interests or limitations that have prevented it from exerting sufficient pressure on Yangon to wring concessions from the junta or to threaten its existence. The responses to the political shake-up in Yangon by the organizations and states that are interested in Myanmar show the pattern that the junta counts on to make its hard-line policies successful.

Predictably, United Nations Secretary General Kofi Annan, representing the pro-globalization tendency, called for Yangon "to remain committed to the process of national reconciliation and democratization," and to release Suu Kyi from house arrest. U.S. State Department spokesman Richard Boucher echoed Annan, adding that the replacement of Nyunt by Win appeared to be a step in the wrong direction. The United Nations special envoy to Myanmar Razali Ismail, a Malaysian diplomat who was appointed in 2000 to mediate reconciliation between the regime and the N.L.D., also expressed regret at Nyunt's downfall. These responses simply continue a line of diplomatic pressure that is backed materially only by American sanctions and has not been successful in altering Yangon's behavior.

The case is more complex for the A.S.E.A.N. states, which have pursued a policy of "constructive engagement" with Yangon, in contrast and opposition to the U.S. sanctions policy. Sharing a long border with Myanmar, Thailand, along with Malaysia, has been the strongest advocate of constructive engagement, which involves intensive trade and investment relations with Yangon. In contrast with the U.N. and U.S. position, Thai Foreign Ministry spokesman Sihasak Phuangketkeow said that the Yangon power shift was "an internal affair of Myanmar" and expressed hope for "political stability" there.

Bangkok's economic relations with Yangon stand in the way of its pressuring the junta to embrace reform. Thai Finance Minister Somkid Jatusripitak said that the power shift in the junta would have only a small effect on border trade with Myanmar. Sataporn Jinachitra, president of Thailand's Export-Import Bank, added that the shift was unlikely to affect its credit line to Yangon for development projects, although disbursements might be delayed for a short time until the political situation stabilized. Similar statements were made by Thailand's oil and gas industry, and by the Thai satellite communications company that is helping to build Myanmar's telecommunications infrastructure. For Bangkok, Yangon's power shift means business as usual.

Japan, which is Myanmar's biggest aid donor, falls between the U.S./U.N. and Thai positions. Pursuing a security strategy of winning influence in Southeast Asia through economic aid and investment, while remaining an essential player in the globalization project, Tokyo adopted a measured approach of calling for democratization and a market economy in Myanmar, but taking a "wait and see" attitude toward the new political alignment there. Reflecting its dual interests, Tokyo announced that it would temporarily suspend all but humanitarian aid to Yangon.

Myanmar's northern neighbor China has given Yangon its strongest support. China's trade with Myanmar exceeded one billion dollars in 2003, with Myanmar importing 900 million dollars worth of Chinese goods and exporting 170 million dollars worth of goods to its neighbor. In 2004, Beijing signed thirty-three aid and trade agreements with Yangon, and in September finalized a production-sharing contract to cooperate in oil exploration. Than Shwe has repeatedly said that China is Myanmar's "most important friend" and that Yangon will side with Beijing on all issues concerning China's interests. Similarly, Beijing has promised to continue its "friendly" policy toward Yangon.

Following similar policies of what Shwe calls development "in accordance with the country's own characteristics" (rejecting the market democracy paradigm), Beijing and Yangon have a common interest in holding out against full participation in the globalization project and in continuing their drive to expand "all-round cooperation" with one another.

Conclusion

Given its oil resources and its attractiveness to regional investors, it is unlikely that Myanmar will be hurt in any serious way by a shift to a hard-line position in Yangon. The split between A.S.E.A.N. and the United States on the proper policy to encourage democratization in Myanmar leaves the United Nations without any clear direction for its reconciliation efforts. Bangkok will not surrender its economic relations with Yangon, as long as the latter honors agreements. Tokyo will not want to lose the foothold that it has in Yangon. Beijing has every interest in keeping the junta in power and preventing the emergence of a reform government in Yangon that would tilt toward mainstream globalization and would welcome American investment and influence.

It is likely that the hardliners will get away with their takeover without suffering any significant loss.

PINR 26/10/2004