Is Burma Ready For Foreign Investment?

In the span of two years, Burma, one of the world’s most brutal military junta-led regimes, has begun to rapidly change.  As a result, countries such as the United States have started to lift their imposed sanctions.  However, in easing sanctions and opening Burma — also known as Myanmar — up for foreign investment, most western powers are overlooking the country’s complex history wrought with corruption, suppression of rights and ethnic minority exploitation.

A local marketplace in Burma

Despite vast reforms, the current government structure still has elements of authoritarianism, which allow loopholes to directly limit the freedoms of ordinary Burmese citizens.  According to experts, the quick turnaround seen in the past two years is not indicative of future success, as there is no telling what the influx of foreign investment will do for the ordinary people of Burma.

The US government has taken the initiative to reward Burma for its continued reforms towards democracy and steps taken to promote human rights.  President Barack Obama lifted restrictions on US firms doing business in Burma in early July and Secretary of State Hillary Clinton announced on September 27 that the US would ease the import ban on Burmese goods — one of the last pieces of legislation sanctioning the country.  These nixed restrictions allow companies to invest in the untapped natural resources that so famously characterize Burma, such as its vast oil reserves, rubies, sapphires, teak forests, natural gas fields, hydroelectric capabilities and untouched tropical beaches.

If done properly, the slew of investments can give Burma the infrastructure needed to establish itself as a regional powerhouse strategically situated between China and India.  In a country plagued by erratic blackouts, decrepit roads, virtually non-existent industry and poor irrigation, an influx of foreign stimulus is indeed much needed. However, there are many internal problems that could prevent investment from benefiting the lives of ordinary citizens.

Nobel Peace Laureate Daw Aung San Suu Kyi, when speaking at a forum held at Yale University on September 24, 2012, agreed that investment is key to improving the lives of the Burmese people, if done transparently, but realized that development alone is not a substitute for democracy.  Daw Suu argued that international investment alone cannot solve the underlying problems that have plagued the country for decades.

For one, the structure of the Burmese government is still set up to support the military and their goals.  Civilians won just 65 seats in the 2012 parliamentary elections while the military and their political subsidiary, the Union Solidarity and Development Party (USDP) maintained control of 502 out of the 664 seats.  Although Daw Suu and her party, the National League for Democracy (NLD), won 42 seats, they have relatively little say in overall policy.  Laws can essentially be drafted and enacted that support the military’s agenda rather than the overall will of the people.

The judiciary suffers similar woes.  In theory, judges should interpret the laws enacted by the Pyidaungsu Hluttaw, the Burmese Congress.  More times than not, however, the judges are not able to actually do their job.  When the time comes for a ruling in a case, a white paper is dropped on the judge’s desk with the “suggested” sentencing that he or she is strongly recommended to take.

One can blame overreaching military influence in the legislative branch and in government matters on the corruption of the judicial system, but education — or the lack thereof — plays an even more significant role.

In her forum discussion at Yale, Daw Suu admitted that the most educated people in Burma are those that are 55 years and older.  With the average life expectancy at around 64 years, Burma’s only educated population is destined to die out in the next decade.

The history of intellectual discrimination — most notably the 1962 killings of Rangoon University students, the banning of the NLD in 1988, and the slaughter of monks during the Saffron Revolution in 2008 — shows the lengths the military junta has gone to ensure that freedom of expression and thought were suppressed.  According to Daw Suu, the military preferred a docile public it could take advantage of rather than an educated one.  The military used schools, especially elementary and high schools, to indoctrinate students with the notion of a disciplined Burmese citizen, which oftentimes meant not educating them at all.

Ethnic conflicts also continue to cause concern in the peripheries of the country.  The long history of ethnic conflict in Burma, especially between the larger ethnic groups such as the Kachin, Karen and Shan peoples, have yet to be fully resolved.  Although peace deals have been signed between the government and the Shan and the Karen peoples, there are still many resistance groups that see the Burmese government’s reforms as another way to extract resources from ethnic minorities without any regard to their rights.

Secretary OF State Hillary Clinton meets with Burmese President Thein Sein

The Kachin, for example, continues to battle Burma’s military for control of the jade mining industry in the country’s north.  Similarly, the Rohingya conflict in the eastern Rakhine State has exacerbated attempts at ethnic minority reconciliation.  (To make matters worse, the Burmese government doesn’t recognize the one million Rohingya living in Burma as legitimate citizens of the country.)  Burmese President Thein Sein has made statements suggesting that the group should be settled in a “third country” that is neither Burma nor neighboring Bangladesh.  This line of thinking, however, is obviously not conducive to reconciliation.

Corruption, an active and ubiquitous military presence, an uneducated public, as well as a President who does not see ethnic minority reconciliation as a priority are indicative of a disaster waiting to happen.

Foreign investment, however, could further exacerbate the problems that have plagued Burma for the past fifty years.  Many fear that the money coming in will only benefit the military and those few elites that own large shares of state-sponsored natural resource companies.  The stability of a country is key for investors to feel confident in their investment, but when internal strife and military overreaching is rampant, investors should be cautious about hasty Burmese investments.

Burma — often referred to as the last virgin market — offers great potential to investors, but the investments need to be conducted with caution and due diligence to ensure that everyone, not just the military, benefits.


Eli Rivkin is a sophomore in Trumbull College.


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