Brookings: Topics - Myanmar

China and the Changing Myanmar

Yun Sun — Fri, 29 Mar 2013 13:50:00 -0400

INTRODUCTION

Myanmar’s rapidly political reform dazzled and puzzled many watchers, Chinese included. Multiple internal and external factors contributed to the decision to adopt the reform. Internally, the political change is the result of a process designed and implemented by the military government, which was necessitated by the military’s lack of professional governance skills and made possible by its consent. Externally, Myanmar’s desire to mitigate its overdependence on China, to improve relations with U.S. and to repair its reputation at ASEAN motivated its reform at home.

The democratic reform in Myanmar unveiled a series of unpleasant uncertainties for China. Economically, the suspension of the Myitsone dam project has encouraged further scrutiny and criticism of Chinese investments, threatening the viability of strategic projects such as the oil and gas pipelines. The pressure on Chinese existing economic interests on the ground is strengthened by the increasing competition from the west. Politically, the preliminary success of Myanmar’s democratic reform has raised questions inside China about China’s political system and the long postponed political reform. Strategically, Myanmar’s changing foreign policy undercuts China’s original blueprint regarding the strategic utilities of Myanmar at ASEAN, in the Indian Ocean and more broadly in the region.

As a result, China has adjusted its posture and policy toward its southwest neighbour. Since the suspension of the Myitsone dam, China has dramatically reduced its economic investment in Myanmar, intentionally cooled down the bilateral political ties while established historical relations with the democratic oppositions. At the same time, China also launched massive public relations campaigns inside Myanmar that aimed at improving its image and relations with the local communities. The security of China’s energy investment, such as the oil and gas pipelines and the Myitsone dam, remain China’s priority. And the issues are substantially complicated by the conflict in the ethnic border areas.

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Authors

Yun Sun

Publication: Journal of Current Southeast Asian Affairs

Myanmar on the Move: An Overview of Recent Developments

Lex Rieffel — Thu, 28 Mar 2013 12:49:00 -0400

INTRODUCTION

You might call it a reverse coup. In March 2011, former general Thein Sein was sworn in as the president of Myanmar’s first elected government in almost 50 years. His inaugural address astonished experts both inside and outside the country by sketching out a vision of democratic rule and economic management that represented a 180-degree turn from the preceding decades of military rule.

President Thein Sein further confounded sceptics and critics by actually taking concrete steps toward achieving this vision. The two most dramatic steps in 2011 were initiating a dialogue in August with opposition leader Aung San Suu Kyi that led to her election to a seat in the legislature six months later, and suspending construction in September of a dam at the head of the Ayeyarwady River designed to supply electricity to Yunnan Province in China.

The most dramatic steps in 2012 are not as easy to select, but the one most likely to top the list of any economist is abandoning (on 1 April) the country’s grossly overvalued official exchange rate and adopting a marketbased exchange rate system. These policy reforms and many others produced a tsunami of foreign visitors to initiate aid programs and reap the early fruits of an improved investment climate.

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Authors

Lex Rieffel

Image Source: © Soe Zeya Tun / Reuters

Are Aid Donors Repeating Mistakes in Myanmar?

Lex Rieffel and James Fox — Sat, 16 Mar 2013 14:51:00 -0400

The transition in Myanmar that began two years ago — from a military to a quasi-civilian government — is the largest and most encouraging turnaround in the developing world in years.

Much credit goes to President Thein Sein and opposition leader Aung San Suu Kyi for deciding to collaborate in seeking to overcome three huge obstacles to progress in this impoverished and tragedy-prone country: ending the civil war that has been waged since independence, providing a policy and institutional framework that will enable the standard of living to rise rapidly, and exploiting the country’s abundant natural resources in a manner that benefits the whole population.

Responding to the unanticipated and remarkable changes taking place, the World Bank, USAID, and more than 100 other official aid agencies and international non-governmental organizations (NGOs) have flocked to Myanmar to help make the transition a success.

The rush of aid donors to Myanmar is not entirely positive. In the past twenty years, other countries have been “smothered by love.” So far, Myanmar’s aid donors have acknowledged these problems in the past and have committed themselves to adhere to the principles laid out in 2005 in the Paris Declaration on Aid Effectiveness, as well as the updates in Accra (2008) and Busan (2011).

The Myanmar government has also taken note of the problems elsewhere. At an all-donor meeting in January 2013, it got the donors to agree to a set of ground rules to enhance aid effectiveness.

Despite tho se encouraging steps, the makeup of the aid community is likely to produce behavior inconsistent with the Paris principles — thus further complicating Myanmar’s effort to escape its legacy of conflict and stagnation. Donor assistance to Myanmar can do more harm than good in at least four ways:

Senior government officials spend many hours every day meeting with delegations from donor countries, not just their aid agencies but also their parliaments, corporations, international NGOs, media, etc. This stream of visitors is diverting key officials in Myanmar from crucial work on policy formulation and implementation.
Each donor mission is under pressure to “make a difference,” to show its headquarters that it can bring about major improvements that will justify continued funding. USAID is no exception. It has signaled its intention to allocate millions of dollars for its own agriculture sector projects. By contrast, USAID has only committed $600,000 to the multi-donor LIFT Fund, which is a much less burdensome way of delivering aid.
Pressure to accelerate disbursement of project funds is ever-present, making success in this administrative function a major factor in staff promotions. Consequently, building capacity in host-country institutions usually takes a back seat to “moving the money.”
Competition among donors leads to a pattern of non-transparency as each donor seeks to position itself favorably particular sectors or regions. The pattern is reinforced by host country ministries that engage in “donor shopping” to get the most money for the least change.

In our assessment of foreign aid to Myanmar, we have pointed to three steps donors can take to make their aid more effective:

Slow down and do more joint operations. To ensure that senior officials are not overwhelmed by visitors, some host countries have adopted formal limits on the number of aid delegations they will receive. It would be better for Myanmar’s donors to act first to control the flow, including an effort to undertake more joint operations. It would be reasonable for donors to commit at least 30 percent of their funding to these types of operations.
Provide scholarships for foreign study. It will take years for Myanmar to raise the standard of education in its universities to the Association of Southeast Asian Nations (ASEAN) norm, let alone to the prominence it had in Asia when it gained its independence in 1948. To build the expertise Myanmar requires in the short term to meet its development objectives, the only solution is education abroad on a massive scale. One advantage of allocating aid resources to scholarships is that it has the least potential for doing harm.
Be more innovative. A number of techniques for making aid more effective have been proposed since the Paris Declaration was adopted. One of these is “cash on delivery aid.” This technique has the advantage of reinforcing good management within government ministries, minimizing the administrative burden of aid, and ensuring that every dollar of aid goes to support successful projects. None of Myanmar’s donors appear to be using approaches of this kind.

Authors

Lex Rieffel
James Fox

Publication: GlobalPost

Image Source: © Damir Sagolj / Reuters

Too Much, Too Soon? The Dilemma of Foreign Aid to Myanmar/Burma

Lex Rieffel and James W. Fox — Fri, 15 Mar 2013 14:09:00 -0400

INTRODUCTION

At the end of March 2011, Myanmar began an ambitious political transition led by newly elected President Thein Sein. Bold moves in his first year included opening a dialogue with opposition leader Aung San Suu Kyi, suspending construction of the Chinese-funded Myitsone Dam, and abandoning a grossly overvalued exchange rate in favor of a marketdetermined rate. These moves unleashed a swarm of visitors seeking to support the transition and “make a difference”: prime ministers, foreign ministers, heads of donor agencies and international NGOs, chief executives of multinational corporations, and many others.

The question posed in this report is whether the outpouring of foreign aid to Myanmar expected in the medium term (three to five years) will be more of a blessing than a curse. The question may seem unfriendly or ideological on the surface, but merits being taken seriously because of the experience of a handful of countries over the past 10 to 15 years that have suffered from large and rapid build-up of foreign aid.

As posed, however, the question is too stark. A gentler version is: what steps can be taken by aid donors and the Government of Myanmar to enhance the effectiveness of aid programs and projects, and mitigate possible adverse consequences?

Our report begins with a brief discussion of the dilemma of foreign aid to Myanmar: how it can be harmful despite the best intentions of the donors. We then present the policy implications of our findings, for the Government of Myanmar and for the donor community. The next two parts of the report describe the Government of Myanmar’s national planning process and the steps it is taking to manage foreign aid. We then assess donor performance against the principles of the Paris Declaration and the Busan Partnership. The last two parts describe donor activity in general terms and then individually for Myanmar’s major development partners.

We have included four appendices with different audiences in mind. Appendix A describes the historical, political, and economic context for readers who are not familiar with this background. Appendix B elaborates on the standards of aid effectiveness contained in the Paris Declaration and Busan Partnership. Appendix C highlights lessons learned from other countries that have been challenged by strong donor interest. Appendix D recounts newly independent Burma’s first experience with national development planning, featuring the work of the American economist Robert R. Nathan, and calls attention to a comparable Japansupported effort launched in 2001.

We should be clear about the limitations of our report on foreign aid for Myanmar. In particular, our knowledge of Myanmar is limited. Altogether we have spent less than six months inside the country over the past 45 years and we do not speak any of the local languages. Moreover, with our 50-year perspectives on economic development, we know that the world’s leading experts are still unsure how to explain China’s phenomenal progress or Argentina’s lack of progress. These experts are even more unsure about how to adapt lessons from global experience to a country like Myanmar that is undertaking a sweeping reform effort with a legacy of complex internal conflicts and poverty-inducing governance.p>

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Authors

Lex Rieffel
James W. Fox

Publication: Nathan Associates Inc.

An Early Assessment of Foreign Aid to Myanmar

Thu, 14 Mar 2013 15:30:00 -0400

Event Information

March 14, 2013
3:30 PM - 5:00 PM EDT

Saul/Zilkha Rooms
Brookings Institution
1775 Massachusetts Avenue NW
Washington, DC 20036

In the past two years, Myanmar has undergone a remarkable transformation: an unanticipated shift from military to quasi-civilian governance, the election of opposition leader Aung San Suu Kyi to the legislature, steps toward peace with ethnic minorities, and economic reforms designed to alleviate poverty. These developments prompted Western countries to suspend or lift wide-ranging political and economic sanctions, which were responses to the regime’s suppression of the democratic opposition and dismal human rights record after 1988. As sanctions were withdrawn, aid agencies and international NGOs rushed to Myanmar to support the Thein Sein government’s reform agenda. The interest in Myanmar among the donor community and the level of aid activity are extremely high, leading some observers to question whether Myanmar is receiving too much attention from the foreign aid community.

On March 14, Global Economy and Development at Brookings hosted a discussion on foreign aid to the new government of Myanmar. Brookings Nonresident Senior Fellow Lex Rieffel and former USAID Senior Economist James W. Fox presented their new report, “Too Much, Too Soon? The Dilemma of Foreign Aid to Myanmar/Burma,” which was published by Nathan Associates. Discussion about the report and broader issues followed the presentation and included: Joseph Yun, acting assistant secretary of State for East Asian and Pacific Affairs, and David Steinberg, distinguished professor in the School of Foreign Service at Georgetown University. Alex Shakow, former USAID assistant administrator for policy and program coordination and former executive secretary of the IMF-World Bank Development Committee, moderated the discussion.

Myanmar: Making the Reforms Count

Tue, 26 Feb 2013 10:00:00 -0500

Event Information

February 26, 2013
10:00 AM - 11:30 AM EST

Falk Auditorium
Brookings Institution
1775 Massachusetts Avenue, N.W.
Washington, DC 20036

Myanmar is rapidly emerging from half a century of isolation. Over the last two years, the government has made great strides in political and economic reforms and in improving its diplomatic relationship with the international community. Despite these changes, Myanmar faces many challenges in sustaining the momentum of reform and transformation. In addition, the international community has not developed a strategy for working together to assist the country's progress.

On February 26, Global Economy and Development at Brookings and the International Monetary Fund (IMF) hosted a discussion on the shifting landscape and new challenges in Myanmar as well as the IMF and international community’s role in addressing these. Panelists included: Priscilla Clapp, former U.S. mission chief to Myanmar; Brookings Nonresident Senior Fellow Lex Rieffel; Anoop Singh, director of the Asia and Pacific Department at the International Monetary Fund; and Frances Zwenig, president of the US-ASEAN Business Council Institute, Inc. Vikram Nehru, senior associate in the Asia Program and Bakrie Chair in Southeast Asian Studies at the Carnegie Endowment for International Peace, moderated the discussion.

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Myanmar: Making the Reforms Count

China's Intervention in the Myanmar-Kachin Peace Talks

Yun Sun — Wed, 20 Feb 2013 00:00:00 -0500

Editor's Note: The article first appeared in Asia Pacific Bulletin, No. 200, February 20, 2013, published by the East-West Center.

Peace talks between Myanmar's government and the rebel Kachin Independence Organization (KIO) in Ruili, China, on February 4, finally rendered a glimpse of hope after 17 months of bloody conflict. Although the two sides still need more time and further dialogue to reach a peace agreement, major breakthroughs were achieved on key issues such as strengthening communications, easing tensions and holding further talks before the end of February.

Peace talks are not unusual for the KIO and the Myanmar government. Since the most recent outbreak of the conflict in 2011, the two sides have engaged in multiple rounds of informal talks, including at least three rounds in Ruili. However, these latest talks set a new precedent because of the central role that China played in the process and signify a major intervention by Beijing that is unique.

China was instrumental in arranging the latest round of dialogue between the two parties. Due to the lack of trust between the KIO and the Myanmar government, both preferred a third party location rather than Laiza--headquarters of the Kachin Independence Army (KIA)--or Naypyidaw. During the talks, China not only provided the venue, but also explicitly guaranteed the security of all participants. On the substance of the talks, China played a quiet, behind-the-scenes role of coordinating and mediating under the guidelines of "persuading for peace and promoting dialogue" (劝和促谈). A Chinese expert on Myanmar's northern affairs commented publicly that China "carefully listened to the demands and conditions of both sides and actively mediated between them," according to the Global Times. China has never before played such a public role in an internal conflict between the central government and a local rebel group of another sovereign nation. Ambassador Luo Zhaohui, director general of the Department of Asian Affairs at the Ministry of Foreign Affairs, met with representatives of both sides and participated in the meetings as a "witness.

China's participation is perhaps the most important factor that led to the success of the talks. Given its distrust of Naypyidaw, the KIO has consistently called for a third party big power to mediate the dialogue, and China's intervention is also reportedly welcomed by Naypyidaw according to the Chinese Foreign Ministry. China has refused such a role in the past, fearing it would be perceived by Naypyidaw as interference in its internal affairs. But this time, Beijing's new policy completely changed the landscape, paving the way for peace talks. By acting as coordinator and "witness" between the KIO and the central government, China has positioned itself openly as a mediator and a tacit guarantor of any agreement reached between the parties. Privately, some analysts in Washington have expressed recognition and appreciation of China's stepping up to assume its "big power responsibility" in maintaining regional peace and stability.

Nevertheless, China's intervention is hardly altruistic but rather reflects multiple considerations of China's own national interests. First, the Kachin conflict has imposed tremendous pressure along China's border. Since the escalation of tensions in late 2012, several Burmese artillery shells have exploded inside China, resulting in economic disruption, political disturbances and rising dissatisfaction regarding Naypyidaw's careless military actions among Chinese citizens. In addition, thousands of Kachin refugees have fled into China. As Beijing strives to maintain a stable border, there has been mounting domestic pressure for authorities to take action and press for a ceasefire.

From China's perspective, the persistence of the Kachin conflict threatens the security and profitability of Chinese investments in the region. China's efforts to improve its energy security through diversification of transportation routes have created new strategic oil and gas pipelines that are scheduled to become operational before the end of May. As these pipelines transit areas immediately adjacent to the conflict zone, the ongoing conflict casts a shadow over the security of this expensive but vulnerable strategic investment. Other than the pipelines, China has also invested in hydropower projects in the area, including the suspended Myitsone dam and the Dapein dam, which was forced to shut down since the beginning of the conflict. Overall, the conflict has taken a heavy toll on Chinese investment projects throughout Northern Myanmar and China also has significant commercial interests in future natural resource projects in Kachin state.

China's decision to step up its intervention in the conflict was also partially motivated by a potential US role. As Washington grows increasingly wary about Myanmar's ethnic conflicts and their impact on the country's future, there were voices from within the United States and other ethnic groups calling for US intervention and mediation. This scenario was particularly troubling for Beijing. Such a move would further enhance the US role in Burmese politics; it could potentially insert a US presence right along China's border in an area critical for Chinese pipelines and other strategic interests in South and Southeast Asia. Beijing understood that had it declined to intervene, the United States could well have become involved, resulting in negative consequences for China's geopolitical interests. Therefore, soon after US Ambassador to Myanmar Derek Mitchell's visit to Kachin state in mid-December, China decided to act and offered to host the peace talks to preempt a similar move by Washington.

Finally, China also intervened partially out of fear of a complete defeat of the KIA and the consequences that could entail. Immediately before the peace talks, the Myanmar military was gaining ground against the KIA, taking control of Hka Ya Bum, a strategic mountain shield near Laiza. As a result, the KIA was forced to relocate its headquarters. Beijing is fully aware of the fact that the disintegration of the KIA is not in China's interests. Rogue Kachin guerrillas would no longer be restrained and might potentially attack any target they identify. Therefore, this most recent round of peace talks not only saves the KIA, but also potentially protects China.

Therefore, China's intervention in the Kachin dispute casts new light on China's traditional non-interference principle. As long as the intervention has the consent from both sides of a conflict in the host country and China has significant interests at stake, Beijing seems to be willing to demonstrate some flexibility, to experiment and to adapt. As China's national interests expand and diversify, so too will its foreign policy principles.

Authors

Yun Sun

Publication: Asia Pacific Bulletin (No. 200)

Governance, Rule of Law and Natural Resources in Indonesia and Lessons for Burma’s Transformation

Thu, 07 Feb 2013 10:00:00 -0500

Event Information

February 7, 2013
10:00 AM - 11:30 AM EST

Falk Auditorium
Brookings Institution
1775 Massachusetts Avenue NW
Washington, DC 20036

An authoritarian state merely a decade ago, Indonesia is now an open, pluralist democracy characterized by consistently high levels of economic growth, a growing middle class and booming foreign investment. Not only is Indonesia geostrategically important in the development of U.S. policy toward Asia, it is also a model for the coexistence of Islam and democracy and a key player in efforts to tackle global deforestation, biodiversity loss and climate change.

On February 7, Brookings hosted a discussion on Indonesia’s natural resources management in the context of the country’s political, economic and rule of law reform efforts, as well as its battle against terrorist groups. The panel also drew lessons for Burma’s political and economic transformation and its management of natural resources.

Brookings Senior Fellow Vanda Felbab-Brown provided insights from her recent fieldwork in Indonesia on illicit economies and organized crime; School of Advanced International Studies Associate Director William M. Wise analyzed the rise of terrorist activity in Indonesia; and Brookings Nonresident Senior Fellow Lex Rieffel discussed how Burma can learn from Indonesia’s economic reforms and management of foreign aid and foreign investment. Senior Fellow Richard Bush, director of the Center for Northeast Asian Policy Studies, provided introductory remarks and moderated the discussion.

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Governance, Rule of Law and Natural Resources in Indonesia and Lessons for Burma’s Transformation

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20130207_indonesia_burma_transcript

Has China Lost Myanmar?

Yun Sun — Tue, 15 Jan 2013 00:00:00 -0500

The rapid changes in Myanmar since President Thein Sein began democratic reforms in 2011 present China with a problem. For decades, China had a cozy relationship with its authoritarian neighbor, enjoying a near-monopoly on its natural resources and foreign policy. But now, Myanmar is a messy quasi-democracy, whose people resent Beijing for its past support of the junta and its economic exploitation of their country. And Myanmar's still a threat to regional stability: China sent troops to the two countries' border in early January because of fighting between the Myanmar government and rebel groups -- if things get worse it could spill into Chinese territory.

China can no longer count on Myanmar as its strategic corridor into the Indian Ocean, or as a loyal supporter at the Association of Southeast Asian Nations. Naypyidaw (Myanmar's new capital) has vastly improved its relations with Washington, increasing Beijing's anxiety about the U.S. rebalancing to Asia. And things are getting worse for Beijing. Monks and villagers in central Myanmar have protested for months against the expansion of the Mongywa copper mine, the country's largest, which is operated by a Chinese weapons company and a holding company controlled by the Burmese military. In 2011, Sein suspended construction by a Chinese company of the $3.6 billion Myitsone Dam, saying it went against "the will of the people." The protests against Mongywa have raised worries that all Chinese investments in Myanmar are in danger.

Beijing finds itself with little ability to prevent Naypyidaw from hurting its interests. An increasingly loud section of China's foreign policy community, including government analysts and Southeast Asia specialists, are now arguing that China should return to its old friends -- the border ethnic groups that are waging small-scale rebellions against Naypyidaw -- to enhance its leverage there. Liang Jinyun, a professor of political science at Yunnan Police College in southwest China, argued in an influential 2011 paper that these ethnic groups, if "used" well, "will become China's most loyal friend in the frontline of confrontation between the United States and China in Myanmar."

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Authors

Yun Sun

Publication: Foreign Policy

Image Source: © Jason Reed / Reuters

President Obama's Message to Myanmar: "We're With You and We're Watching You."

Jeffrey A. Bader — Fri, 16 Nov 2012 00:00:00 -0500

President Obama travels to Southeast Asia this month on a three day trip with stops slated for Thailand, Cambodia and Myanmar. The president will use this opportunity to build trade ties and strengthen relations in the region. Notably, President Obama will be the first sitting president to visit Myanmar, an emerging democratic nation. The president’s visit to Myanmar sends a strong signal of support and encouragement to the government and the people of that country, notes Senior Fellow Jeffrey Bader.

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President Obama's Message to Myanmar: "We're With You and We're Watching You."

Authors

Jeffrey A. Bader

Obama in Burma

Lex Rieffel and Yun Sun — Fri, 16 Nov 2012 13:44:00 -0500

Barack Obama will be the first sitting U.S. President to visit Burma/Myanmar since the country gained its independence in 1948. The visit has important implications for U.S. foreign policy toward China and for U.S. foreign assistance to countries in transition from authoritarian to democratic rule.

If anyone had said a year ago to the best foreign policy analysts in China that President Obama would be visiting Myanmar in November 2012, the reaction would have been total disbelief. The same reaction would have come from most Asian experts. Myanmar’s president, Thein Sein, in a near-miraculous collaboration with opposition leader Aung San Suu Kyi, has made the impossible into a reality.

For China, Obama’s imminent Southeast Asia visit is a signal that the “rebalancing toward Asia” strategy that was a hallmark of Obama’s first term will remain a top priority in his second. The countries Obama will visit—Thailand, Myanmar and Cambodia—are considered by Beijing to be “China-friendly” neighbors. Yingluck’s government has rejuvenated Thailand’s relations with Beijing after a period of turmoil. China was Myanmar’s “best friend” during the two decades Myanmar was ruled by General Than Shwe. Cambodia saved China from a major diplomatic embarrassment when it ardently defended China’s position on the South China Sea issue at the ASEAN foreign ministers’ meeting this past July. Regardless of what Washington claims to be its peaceful aims, Obama’s visit to these three countries as his first post-election foreign trip will inevitably fuel anxiety that America’s rebalancing toward Asia is at least partially, if not completely, about curtailing China’s regional influence.

Among the three countries, Obama’s visit to Myanmar will be the one watched most intently by China due to three distinct concerns. One is the evolution of U.S. policy toward Myanmar, especially how rapidly the U.S. moves to eliminate sanctions, ramp up aid to strengthen democratic institutions, and promote foreign direct investment by American companies. A second is any threat to the completion in 2013 of the dual gas and oil pipelines across Myanmar from the Indian Ocean to Yunnan Province in China. A third is the unresolved fate of the Myitsone dam, a large hydroelectric power dam that is under construction on the Irawaddy River in Myanmar. One of President Thein Sein’s early moves was to suspend construction of this Chinese financed and built project designed to export electricity to China. Pressure from the United States might persuade Thein Sein’s government—supported by Aung San Suu Kyi’s opposition party—to terminate not only this project but other hydroelectric dams that China wants Myanmar to build in order to supply China with the energy it needs to fuel its rapidly growing economy. Since President Thein Sein’s inauguration in March 2011, Myanmar has jumped from a pro-China tilt to an ostensibly non-aligned position vis-à-vis the world’s super powers. Any further movement by Myanmar away from China and toward the United States during Obama’s visit will ring alarm bells in Beijing with potentially serious consequences for U.S.-China relations.

The Obama visit to Southeast Asia does, however, complicate the policy challenge of keeping U.S.-China relations on an even keel as China’s economic and political power rises and the global role of the United States remains constrained by domestic problems.

This is not to say, of course, that the United States should prioritize China’s feelings over its own policy objectives in Myanmar. The Obama visit to Southeast Asia does, however, complicate the policy challenge of keeping U.S.-China relations on an even keel as China’s economic and political power rises and the global role of the United States remains constrained by domestic problems.

If President Obama could step beyond his “bubble” and beyond the main streets during his visit to Myanmar next Monday, he would find himself in neighborhoods much like those he ran through while growing up in Jakarta in the 1970s. In some ways, the democratic transition underway in Myanmar today represents a bigger leap than the transitions in East Europe and the former Soviet Union 20 years ago or the transitions in the Middle East that began two years ago. It certainly represents a much bigger leap than the democratic transition that began in Indonesia in 1998.

How the United States can best support Myanmar’s transition is no simple matter and its track record in supporting other transitions is mixed at best. In Indonesia, for example, millions of U.S. tax dollars have been spent since 1998 to strengthen Indonesia legislature and build a first class judicial system. Yet today Indonesia’s legislature is arguably the single biggest obstacle to progress in the country and its judicial system appears to be more corrupt than it was in 1998. Now Congress more than the Obama administration seems eager to allocate millions of U.S. tax dollars to fix Myanmar’s legislative and judicial systems, with the same kinds of assistance used in Indonesia.

Another example is the peace process in Myanmar, the country’s existential challenge. Norway has rushed in to be the lead donor in helping Thein Sein’s government end the insurgencies of a dozen ethnic minorities that started within days of the nation’s independence and have never been resolved. Despite its admirable expertise and its best intentions, some of Norway’s early moves have been ham-handed. Now the United States with a rather dubious record of peace building is starting to weigh in.

The main challenge for the United States in designing a sensible foreign aid program for Myanmar, however, is simply how to “do no harm” at a moment when Myanmar is drowning in offers of foreign aid. The best and brightest in every aid agency in the world are flocking to Myanmar determined to make a difference. With no experience in managing such a range of donors, including international NGOs, and an understandable reluctance to say no to visitors offering aid, senior officials in the Myanmar government are being diverted from the crucial tasks of making and implementing policies. In short, there is a risk that Obama’s visit will raise expectations that the Myanmar government will be unable to meet, which could contribute to some big bumps in the road ahead for the country.

Authors

Image Source: © Stringer . / Reuters

Prospects of Political Reforms in Myanmar

Jeffrey A. Bader — Fri, 09 Nov 2012 13:42:00 -0500

A recent trip I took to Myanmar (Burma) provided an occasion to reflect on some large and small issues in U.S. foreign policy, and to think about what works and what doesn’t. My trip came shortly before it was publicly revealed that President Obama will visit Myanmar in the second half of November, which will highlight Myanmar’s reform and opening to the West.

Questions, and tentative answers:

1) Is Myanmar seriously on the path to reform?

So it would seem. The signs were abundant on my trip. The senior officials I met spoke convincingly about their commitment to democratic reform. One Minister positively mentioned democracy heroine Aung San Suu Kyi’s participation in a recent government-sponsored workshop. Newspapers published lively debates, virtually free of the all-pervasive censorship of the last two decades. Pictures of Aung San Suu Kyi and her father Aung San, the founder of modern Burma, could be seen on the walls of village restaurants. A large U.S. official human rights delegation visited in October and met with top Myanmar officials. Ordinary people spoke of the profound change in atmosphere, and of their willingness to speak out on matters where there was fear and silence only recently. This change in mood follows a series of steps disassembling key foundations of the repressive structure of Myanmar’s military government – release of hundreds of political prisoners, legalization of the opposition political party National League for Democracy, legalization of peaceful demonstrations, and revival of talks with rebellious ethnic groups.

2) What is Aung San Suu Kyi’s role and what is she doing?

Aung San Suu Kyi remains unequivocally the most popular political figure in Myanmar. She and her party decisively won the by-elections in April 2012 after the end of her years of confinement. There is reason to believe she and her party will win national elections in 2015 and be in a position to form a government. In preparation, she is showing a strongly pragmatic streak, reaching out to officials in the government, bonding with President Thein Sein and speaking positively of them at her Congressional Gold Medal ceremony. There is grumbling in the overseas human rights community at her apparent embrace of the compromises of national politics. She is encountering the inevitable second-guessing that accompanies the decision to cease to become an icon and to become a political actor, just as Lech Walesa endured second-guessing when he worked with General Jaruzelski in Communist Poland in the early 1980’s.

3) Did anyone in the West see this coming?

Perhaps somewhere someone in the West foresaw Myanmar’s turn toward reform, but the conventional wisdom certainly did not. Asia analysts inside and outside the government, editorialists, and human rights advocates alike all scorned Myanmar’s installation of a civilian government in April 2011 and its elections last year as fraudulent, saw little political significance in Aung San Suu Kyi’s release, and projected a grim political future.

4) How did it happen?

There are many retrospective theories, none fully satisfactory. One important factor seems to have been a generalized desire to escape Myanmar’s growing dependence on China by establishing the basis for renewed relations with the West. Myanmar historically is a fiercely independent country, having for example quit the Nonaligned Movement because it felt it was too aligned. Resentment against the Chinese presence, and its enterprises dominating the extractive industries while providing little employment for Myanmar nationals, runs deep. Some Burmese experts, including Thant Myint-U, the grandson of former UN Secretary General U Thant, presciently wrote of a new mood among the younger Myanmar officer corps, who have played a central role in spurring reform. Human rights groups point to the effect of years of sanctions in persuading the leadership it needed to take a new course. Advocates of engagement credit ASEAN with helping to knock down the generals’ resistance to the international community. Within Myanmar, the aging senior generals seem to have confidence they will not be held accountable for past repressive behavior, and the officer corps generally is comfortable that its special role in Myanmar politics will be preserved under a constitution that gives them a privileged and outsized role. This sense of security among the military old guard may have made them more willing to accept the current political opening.

5) What was the role of the U.S. Government?

From 1990 to 2008, successive administrations, pushed by the Congress, piled sanction upon sanction on Myanmar – bans on new investment, bans on imports, and designation of people and companies for financial sanctions. Under George W. Bush, First Lady Laura Bush played a large role in identifying the regime as a target for further isolation. In his inauguration speech, President Obama offered to reach out a hand to adversaries “if (they) are willing to unclench (their) fist. “ That policy has produced little in the way of positive results around the world, except in the case of Myanmar. The Administration decided early to open a channel of diplomatic engagement with the Myanmar leadership, conducted on the U.S. side by Assistant Secretary of State Kurt Campbell, laying out the agenda for political reform and nonproliferation by Myanmar that would induce sanctions relaxation on the U.S. side. The expressed willingness of the U.S. government on an authoritative level to offer a road map to good relations gave the Myanmar government an incentive, and confidence, to proceed. The decision of the Obama administration, in coordination with allies in Europe and Australia, to significantly ease sanctions earlier this year should provide a further spur to both desperately needed economic development and political reform.

6) Are there broader lessons with regard to sanctions as a tool to change behavior of bad actors?

Sanctions are sometimes the only effective way for the U.S., and the international community, to signal the unacceptability of a regime’s behavior. Such was the case for a long time with Myanmar. So imposition of sanctions was appropriate.

But sanctions, it must be remembered, are not an end in themselves. As the popular song goes, you’ve got to know when to hold and when to fold. There is invariably an irresistible momentum in Washington to continue on the sanctions path whether or not it gives any indication of leading to positive outcome. Human rights groups sometimes see sanctions against malefactors as the measure of sound and moral government policy, and publicize the violations of dictatorial regimes to rally public support and funding around campaigns that have sanctions as their end product. The Congress wants to show that it is doing something, whether effective or not, and sanctioning dictatorial regimes becomes seen as a way to demonstrate its virtue. This dynamic is evident, for example, in the case of Cuba. We have now had sanctions in effect for over 50 years toward Cuba, and their support among American political actors has in no way been weakened by their manifest strengthening of the Castro brothers’ hold on power. Everyone – the U.S. political class, the private advocacy groups, the Castros – seems happy with this state of affairs, with the exception of the Cuban people who are its victims. Policy toward Myanmar was developing along the Cuban model, but happily it has now diverged from that path.

7) Is the U.S. Government well structured to deal with issues like Myanmar?

Since the Carter Presidency, there has been a growing infrastructure of offices and officials with responsibilities purely for human rights issues, divorced from broader matters of foreign policy and national security. These offices have evolved into the voice of the human rights NGO community within the U.S. government, frequently serving as a megaphone for the human rights NGOs, seeking their input to State Department human rights reports, and fighting for the specific measures proposed by the NGOs. In some ways, this is not radically different from the way in which other constituencies are represented in the foreign policy apparatus, e.g. business through the State Department’s Economic and Business Bureau. But the identification of the human rights offices with their constituency tends to be more single-minded (note: The current Assistant Secretary for Democracy, Human Rights, and Labor, Michael Posner, in fact has escaped this straitjacket and acted as a strong advocate for human rights but with a focus on practical, not symbolic, results and a nuanced awareness of broad foreign policy objectives).

When I served as Senior Director for Asian Affairs at the National Security Council during the transition of U.S. policy toward Myanmar between 2009 to 2011, I chaired a number of interagency meetings (called Interagency Policy Committees) on Myanmar. Normally, meetings of this kind are attended by one senior representative of each agency, accompanied by one more junior person. In the case of Myanmar, no less than seven offices from the State Department – the East Asia Bureau, the Human Rights Bureau, the US Mission to the UN, the State Department liaison to the US Mission to the UN, the US Mission to international organizations in Geneva, the US Ambassador for War Crimes, and the Refugees Bureau – attended. Agencies at such meetings are expected to speak with one voice. With seven offices attending, all seeking to have their voices heard, it was difficult to impossible for that to happen. Some of them were aggressively seeking creation of a Commission of Inquiry to look into Myanmar regime war crimes, at precisely the moment when Aung San Suu Kyi was released from captivity and there were hints of softening of repression. Only by empowering the Assistant Secretary for East Asia and the Pacific to speak for the State Department and to conduct diplomacy without a group from his building looking over his shoulder was the Administration able to pursue a coherent, and ultimately successful policy.

8) What is the best way to deal with issues involving bad actors like the Myanmar regime?

The human rights NGOs have an indispensable role in tracking human rights abuses, highlighting publicly the offenders and offenses, and mobilizing the international community to censure them. This is one of the proud features of a democratic society with a conscience, the activities of these groups of private actors with a strong commitment to justice even in obscure corners of the globe and their determination to make victims of injustice heard. Not only should we not ignore or marginalize such groups; we should celebrate them, and magnify and amplify their role.

The role of the U.S. government needs to be different. It should not ghettoize human rights issues. Nor should it encourage the creation and proliferation of offices that result in the drawing of lines between officials, all of whom should have as their top priority our national security and foreign policy success as well as a strong commitment to human rights. There should not be a small group of people anointed to express human rights concerns, acting as representatives of the NGO community, while officials with responsibility for national security and foreign policy fall into a reflexive response of marginalizing human rights in response. Our current structure frequently produces formalized battles over countries that are human rights bad actors. In such cases officials with broad national security responsibilities tend to roll over human rights when dealing with countries of major national security concern, like China, Saudi Arabia, and Pakistan, while deferring to the human rights offices on countries of lesser foreign policy importance, like Myanmar. This is not a framework built for success or sound policy development. Our government needs to sensitize our top national security officials to the need to build human rights issues more effectively into policy, while reminding the human rights offices that they too need to have a commitment to broad U.S. national security goals, not just the advancement of a virtuous NGO agenda.

Authors

Jeffrey A. Bader

Image Source: © Soe Zeya Tun / Reuters

Aung San Suu Kyi, the Rohingya of Burma and the Challenge of Faith

Akbar Ahmed and Harrison Akins — Wed, 24 Oct 2012 00:00:00 -0400

She came, she saw, she conquered. The photograph of Burmese opposition leader Aung San Suu Kyi standing proudly with America’s smiling political elite at her Congressional Gold Medal ceremony last month in Washington, D.C., provides a powerful image of this heroine of democracy. She has justifiably caught the world’s attention and earned its love. Arizona Sen. John McCain called her “his personal hero.

In Suu Kyi’s visit to American University where she received an honorary doctorate during her U.S. visit, we are provided with another powerful image of her, that of a supplicant Buddhist kneeling before a dozen monks to receive their blessing. She has not only become a voice for freedom and political leadership but a voice of Buddhist compassion for the Burmese people and the ethnic minority groups on the periphery who have long suffered under Burma’s oppressive government.

Suu Kyi, the daughter of Burmese founding father Aung San, was known to rely on her Buddhist faith for a sense of inner freedom during her 15 years of captivity after rising to power during the 1988 student uprising. After her release in 2010, she continued her work for democracy, stressing the “loving kindness” of Buddhist teachings for Burma’s democratic transition in place of feelings of hatred and revenge. She was elected to the Burmese Parliament representing the National League for Democracy, and in recent weeks, she has expressed her willingness to continue to serve her nation as the next president of Burma with elections scheduled for 2015.

With Suu Kyi’s near universal appeal and star power, she is in a unique position for both political leadership in Burma as well as a voice of Buddhist compassion and an ally for the oppressed. Buddha stressed that compassion lay at the heart of a Buddha nature and demonstrates one’s respect for the dignity of life.

Yet, Suu Kyi has remained curiously silent on one of the most urgent humanitarian issues facing Burma, the plight of the Rohingya people.

The Rohingya, whom the BBC and many NGOs call “one of the world’s most persecuted minority groups,” are the little known Muslim people of the coastal Arakan state of western Burma. Over the past three decades, the Rohingya have been systematically pushed out of their homes by Burma’s military government and subjected to widespread violence along with the complete negation of their rights and even identity. They have become a stateless minority.

Many hundreds of thousands have fled to neighboring countries. The Rohingya are surrounded by adherents of the great faiths - Buddhism, Islam, Hinduism, and Christianty - all of which emphasis compassion and charity for the needy. Despite these compulsions from their faiths, many Buddhists, Muslims, Hindus and Christians in South Asia have treated the Rohingya with nothing but outright hostility.

The current situation of the Rohingya is a challenge not only for all in the region to adhere to the demands of their faiths but a challenge for Aung San Suu Kyi and the Buddhists of Burma to treat the suffering Rohingya with “loving kindness,” of which they have seen little.

The widely reported violence in July 2012 against the Rohingya by the neighboring Buddhist Rakhine people in which over 1,000 Rohingya were killed and entire villages burned to the ground must be understood in the context of this sustained campaign of oppression against the Rohingya. The violent actions of the Rakhine were committed with the complicity and, at times, participation of the government security forces.

Even the new democratic reforms have not altered the perception of the Rohingya with President Thein Sein stating in July 2012 in the wake of this violence that he would not recognize the Rohingya or their rights and wished to turn over the entire ethnic group to the United Nations’ High Commissioner for Refugees. Buddhist monks, contrary to the teachings of Buddha, staged anti-Rohingya marches in September to declare their support for the president’s proposal. The Burmese government has blocked the Organization of Islamic Cooperation (OIC) from opening an aid office to assist displaced Rohingya due to the violence in Arakan state.

While many ethnic minorities in Burma, with non-Burmese peoples comprising over 30 percent of the population, have been the victims of the military junta’s oppressive measures, the Rohingya stand apart in that their very existence is threatened.

When General Ne Win and the military junta came to power in 1962, the central government began to shift away from the inclusive vision of Aung San and towards a nationalist ideology based on the Burmese ethnicity and the Buddhist faith. The Rohingya, as both non-Burmese and Muslim, were now stripped of any legitimacy and erroneously and incorrectly labeled “illegal Bengali immigrants.”

The initial push of the military’s ethnic cleansing campaign came in 1978 under Operation Naga Min with the purpose of scrutinizing everyone in the state as either a citizen or alleged “illegal immigrant.” For the Rohingya people, this resulted in widespread rape, arbitrary arrests, desecration of mosques, destruction of villages, and confiscation of lands. In the wake of this violence, nearly a quarter of a million Rohingya fled to neighboring Bangladesh, many of whom were later repatriated to Burma where they faced further rape, imprisonment, and torture.

In 1991, a second push, known as Operation Pyi Thaya, or Operation Clean and Beautiful Nation, was launched with the same purpose, resulting in another mass exodus of 200,000 Rohingya refugees into Bangladesh, with nearly 300,000 refugees remaining today, many without food or medical assistance from a Muslim population ignoring the demands for compassion in their faith towards their fellow Muslims.

With the passage of the 1982 Citizenship Law, the Rohingya were officially denied Burmese citizenship and effectively ceased to exist legally. With their loss of citizenship, the Rohingya found their lives difficult to lead. They were barred from travelling outside their villages, repairing their decaying places of worship, receiving an education in any language or even marrying and having children without rarely granted government permission, often procured through bribes which few are able to afford. The failure to receive permission for any of these innocuous acts lands the offenders in prison where men are beaten and women routinely raped.

Women who become illegally pregnant are forced to either flee the country or resort to dangerous back-alley abortions, where many die because of their inability to get adequate medical treatment due to the severe travel restrictions.

The Rohingya are also subjected to modern-day slavery, where they are forced to work on infrastructure projects, such as constructing “model villages” to house Burmese settlers intended to displace them. Women are susceptible to forced prostitution by the Burmese security forces.

While many efforts have been made by the Burmese government towards the creation of an open and democratic political system, there is still much more to be done. Suu Kyi, following the example of inclusive leaders like Nelson Mandela, should reach out to the Rohingya people and set a positive precedent for an all-embracing society which welcomes the participation of the Rohingya as well as all the ethnic minorities of Burma. In this way, she will also be living up to the ideals of her Buddhist faith to show compassion towards those who suffer. Where she leads, others will follow.

Only when the systematic violence against the Rohingya ends can a truly democratic Burma be legitimate in the eyes of its own people and the international community.

But the first step is for Aung San Suu Kyi and Burma to acknowledge the Rohingya exist.

Authors

Akbar Ahmed
Harrison Akins

Publication: The Washington Post

Myanmar’s Aung San Suu Kyi Visits the United States: What Next?

Lex Rieffel — Mon, 17 Sep 2012 12:15:00 -0400

Aung San Suu Kyi’s visit to the United States, beginning September 16, raises a host of interesting issues for U.S. foreign policy. Three in particular are: U.S. relations with China and the other Asian countries, the role of sanctions in promoting democracy and respect for human rights, and how to use foreign aid and foreign investment to advance U.S. interests.

Over the next two weeks, Aung San Suu Kyi will be received royally in in cities across the USA, including New York, Indiana, and California. During three days in Washington, her main appearances will be at the U.S. Institute of Peace on the 18th, the Capitol Rotunda to receive the Congressional Gold Medal on the 19th, and back to the Capitol on the 20th to receive an award from the National Endowment for Democracy.

One particularly delicate aspect of her visit is its impact on an overlapping visit by President Thein Sein who is coming at the end of September to address the U.N. General Assembly. He deserves considerable credit for his bold and forward-looking leadership over the past 18 months, but nothing can be done to prevent his trip being overshadowed by Suu Kyi’s visit. One can only hope that he will be received well enough so that his remarkable collaboration with Suu Kyi will actually be strengthened.

China was Myanmar’s best friend during the 23 years of military rule following the uprising in 1988 that catapulted Aung San Suu Kyi to worldwide fame as an icon of democracy. However, China seems not to have been prepared for the sharp course change since President Thein Sein took office in March 2011, and it has understandable concerns about seeing another thriving democracy on its borders. The U.S. State Department has worked hard to show that the United States wants China to continue having friendly relations with Myanmar, and now it will have to work harder to make this point. But this looks like a manageable issue. Myanmar’s other nine partners in the ASEAN community are generally pleased to see its transition to democracy, but mostly want its economy modernize rapidly.

Analysts and experts are divided over the utility of sanctions in the case of Myanmar and the implications for other governments committing gross human rights violations. Those who advocated tighter U.S. sanctions on Myanmar are convinced that these explain Myanmar’s sharp turn toward democracy. Those who supported the Obama administration’s policy of “principled engagement” (replacing the Bush administration’s hard line policy) are convinced that engagement helped or that the turn can be amply explained by internal factors unrelated to the sanctions. Aung San Suu Kyi’s visit is more likely to muddy the waters on this debate than to shed any light on it.

Responding to the favorable turn of events in Myamar last year, multilateral and bilateral donors, international NGOs and foreign investors are descending on the country in droves. It may not be an exaggeration to say that Myanmar is being smothered with love. The government is being overwhelmed with conflicting advice. Policy decisions essential to economic progress are being delayed by the chaos. Good decisions made are not being implemented effectively because of the limited capacity of the bureaucracy. It remains to be seen whether U.S. assistance will be part of the problem or part of the solution. Getting it right will not be easy because of the American tendency to “do it our way”.

Aung San Suu Kyi’s visit, scheduled during a recess in Myanmar’s House of Representatives where she was recently seated, comes at an awkward time for the United States. Although there is deep bipartisan support for her efforts to bring democracy to Myanmar, the visit could become politicized in the heat of our presidential election campaign. Another risk is that the adulation she will receive during her visit could make it harder for her to make the political compromises in Myanmar that will be required to keep the democratic transition on track.

Above all, Americans should listen carefully to what Aung San Suu Kyi says during her visit. Her suffering at the hands of a repressive regime has been great and her leadership of the fledgling democracy movement has been exceptional. She has ready access to leaders around the world, and she could become a force for resolving conflicts well beyond the borders of Myanmar.

Authors

Lex Rieffel

The Myanmar Economy: Tough Choices

Lex Rieffel — Thu, 06 Sep 2012 13:40:00 -0400

OVERVIEW

In its first 63 years as an independent nation, Myanmar (Burma) went from being Southeast Asia’s brightest hope (in 1948) to its biggest embarrassment, through three distinct periods of uninspired or misguided governance.

From 1948 to 1958, the country was a parliamentary democracy based on a U.K.-inspired constitution. From 1962 to 1988, the country was ruled by General Ne Win, who followed a socialist path featuring nationalization, isolation and repression.

From 1992 to 2011, the country was ruled by General Than Shwe, who restored a market-based economy, strengthened the balance of payments by exporting natural gas to Thailand and moved the country along a seven-step roadmap to a “discipline-flourishing democracy.” At the same time, he kept Aung San Suu Kyi under house arrest, drew global condemnation and sanctions from Western nations for gross human rights abuses and continued to wage war against the country’s ethnic minorities.

Pursuant to the 2008 constitution, approved in a national referendum that fell far short of global standards, the country’s first multiparty election in more than two generations was held in November 2010. Although this election was neither free nor fair, it produced a new government on March 30, 2011. Led by President Thein Sein, this government has ended many of the repressive policies of the past and has started to pursue broad-based and sustainable economic growth.

On the political front, the Thein Sein government initiated a dialogue with Aung San Suu Kyi that enabled her party, the National League for Democracy (NLD), to win 43 of the 45 seats filled in the by-elections held on April 1, 2012, including a seat for Aung San Suu Kyi in the lower chamber of the national legislature. The government has released hundreds of political prisoners, granted a high degree of press freedom, taken steps to find a peaceful resolution to the conflict with ethnic minorities and improved relations with other countries to the point where most sanctions have been dropped or suspended.

On the economic front, the Thein Sein government has abandoned the official exchange rate of the kyat fixed at 8.5057 to the SDR since 1977 in favor of a floating market rate. It is taking steps to build a sound banking system, has reduced some of the heavy transaction costs impeding international trade and has suspended construction of the Myitsone Dam in Kachin State because of its potentially adverse environmental and social impacts.

The pace of the ongoing transition to a democratic political system and market-based economy in the first year of President Thein Sein’s five-year term has been breathtaking. The current level of engagement with Myanmar by the diplomatic community, official aid agencies, international NGOs and private investors is already phenomenal and seems far from peaking.

Based on the country’s economic trends of the past year, Myanmar may achieve Vietnam’s current level of development in less than 10 years. My judgment, however, is that Thein Sein’s administration will not be able to maintain this pace. Until now, the administration has been harvesting low-hanging fruit.

Based on the country’s economic trends of the past year, Myanmar may achieve Vietnam’s current level of development in less than 10 years. My judgment, however, is that Thein Sein’s administration will not be able to maintain this pace. Until now, the administration has been harvesting low-hanging fruit. Rapid political, social and economic progress in the years ahead will depend on successfully resolving a large number of challenging policy issues. The aim in this paper is to highlight the main economic issues facing the administration.

Readers should not look for policy recommendations. Thein Sein’s government is being swamped with recommendations from outsiders, and I prefer not to add to the deluge. Instead, I aim to encourage a public debate within Myanmar that will lead to better policy choices and economic outcomes and to help observers outside Myanmar get a better understanding of the issues and options.

Another caveat is that many economists treat policy options in black and white terms: They are only right or wrong. In contrast, the approach taken here assumes that better outcomes can be achieved when policymakers and policytakers understand that every economic policy option has pros and cons, produces winners and losers, and yields unintended consequences. Instead of examining two or three issues in great detail, this paper examines 21 policy issues more broadly. But policy options are inherently complex: Alongside and within each of the 21 issues are a myriad of other fateful choices that are not addressed.

In addition, only a host of good policy measures working in tandem can create 5-6 percent sustainable economic growth for the Myanmar economy. Thus, if 50 good measures are required, as many as 35 or 40 may have to be implemented successfully before a “tipping point” is reached and impacts become mutually reinforcing.

While this paper focuses on policy issues, it is important not to overlook the huge impact the policymaking process has on the choices that are made. Throughout the first year of President Thein Sein’s administration, process has both enabled and hindered progress. On the positive side, the process has helped the government understand the central importance of the exchange rate and to move with impressive speed on this front. Also, a labor law has been passed that could help avoid labor problems as the economy becomes more industrialized. And no really bad decisions stand out in other economic policy areas. On the negative side, weaknesses in the policymaking process have delayed the adoption of measures in the agriculture sector to raise farmer incomes, an essential step in a country where 70 percent of the population is rural. Furthermore, natural resource extraction continues at an unsustainable and even counterproductive rate. For the most part, policy decisions are being made largely in a non-transparent, top-down, discretionary manner as was the practice in previous governments.

To its credit, the Thein Sein government has sponsored and supported a series of workshops and conferences on a wide range of economic issues. These events, which are strongly favored by the donor community, have been helpful in raising public awareness of the issues and moving toward a social consensus on how to approach them. There is some risk, however, that key decision makers are spending too much time in these public discussions. Recent “needs assessments” and “scoping missions” being undertaken by most donors individually are another distraction from the crucial functions of policy analysis, policy presentation and policy implementation.

Another positive step in identifying strong economic policy options was the Thein Sein administration’s creation of the Myanmar Development Resource Institute (MDRI) and its three separate centers: the Center for Economic and Social Development, the Center for Strategic and International Studies and the Center for Legal Affairs. The MDRI serves as an independent source of policy analysis for the government. The Institute is also expected to play an important role in informing the public about policy issues and in training policymakers and policy analysts.

In May 2012, President Thein also announced the formation of a National Economic and Social Advisory Council, which includes union-level and region-level ministers and prominent personalities from the private sector. Indicative of much of the confusion in Myanmar today, however, as of mid-August, no clear description of the mandate of the council or its membership was available in the English language. There is anecdotal evidence that this council will play an important role in reaching a broad social consensus on contentious issues, especially those related to foreign aid and foreign investment.

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Authors

Lex Rieffel

Image Source: Damir Sagolj / Reuters

Spring in Myanmar Leads to a Growing Democracy

Lex Rieffel — Wed, 07 Mar 2012 16:37:00 -0500

One of the most uplifting news stories of 2011 was “the Arab Spring”, but it diverted attention from an equally surprising democratic flowering in Myanmar.

A year later, approaching the spring of 2012, the transitions out of authoritarian rule in Egypt, Libya, Syria and other Middle Eastern countries are looking uncertain. Instead of the easy transitions to democratic rule anticipated by many in America and the West, we are seeing violence and anti-democratic religious fervor. By contrast, democratic rule seems to be advancing by leaps and bounds in Myanmar, and with little violence. Aung San Suu Kyi, the globally admired icon of democracy, is expected to win a seat in the legislature through the by-election to be held on April 1—barely 18 months after being released from more than seven unbroken years of house arrest.

Three differences between Myanmar and the Arab Spring countries help in understanding why—a year into their respective transitions—the prospects for success in Myanmar appear greater. First, the transition to democratic rule in Myanmar was orchestrated by its long-time military rulers instead of being triggered by mass uprisings. Second, Myanmar is located in the middle of the high-growth Asian region. Third, there is a remarkable absence of rancor and revenge in Myanmar. For example, when former Prime Minister Khin Nyunt was freed in January 2012 after eight years under house arrest, he was quoted in the press saying that he bore no grudge against those who took away his freedom.

Myanmar’s political and economic progress in the past year contrasts sharply with its historical legacy of decline, from the East Asian country with the brightest prospects at the end of World War II to one of the lowest ranking countries in the world today by most socio-economic indicators. Inept governance in the presence of longstanding ethnic divisions was at the root of this decline:

Burma became independent from Britain in 1948, six months after the assassination of General Aung San—the father of Aung San Suu Kyi—who led the fight for independence.
A succession of democratically elected governments failed to generate sustainable economic growth or resolve ethnic tensions. General Ne Win staged a coup in 1962, nationalized the economy, drove out the foreigners, and closed the borders.
Aung San Suu Kyi, married and living in England, returned to Burma in early 1988 to visit her ill mother. A few weeks into her visit, a popular uprising forced Ne Win to resign. The new military junta renamed the country Myanmar and held a multi-party election in 1990. Inexplicably, they allowed the party led by Daw Suu Kyi—the National League for Democracy—to win by a landslide. The junta promptly disavowed the results.
General Than Shwe emerged as the unchallenged leader of Myanmar in 1992, ruling whimsically and ruthlessly. He restored the market economy, but was unable to end the ethnic conflicts. The United States and other western nations progressively tightened political and economic sanctions.
In 2004, Than Shwe adopted a “Seven-Step Roadmap to a Discipline-Flourishing Democracy”. One key step was a rigged referendum in May 2008 to approve a new constitution. Another was the multiparty election in November 2010 that produced the present government led by President Thein Sein. But the economy continued to under perform.

After his inauguration, President Thein Sein launched a surprising series of initiatives designed to escape Myanmar’s legacy of conflict and poverty and normalize relations with the West. This outcome begs the question of who deserves the credit.

Supporters of the western sanctions are claiming credit for squeezing the country to a point where it could only save itself by becoming democratic. If the transition in Myanmar had begun after the latest tightening of sanctions in 2008, this claim might be credible but it began four years earlier.

An equally dubious claim is being made by Myanmar’s partners in the Association of Southeast Asian Nations (ASEAN) and by its other Asian neighbors, notably Japan, Korea, and India. They assert that their policies of “engagement” made the transition possible, but their engagement was more rhetorical than substantive.

A more compelling explanation lies in the spectacular economic progress Asian countries have made over the past 30-40 years. After seeing their country fall behind its neighbors when pursuing various unsuccessful development strategies, Myanmar’s military elite seems to have decided to embark on the same path to prosperity that these neighbors took. In effect, President Thein Sein—a former army general—decided in 2011 to make the kind of policy leap that Deng Xiaoping took in China in 1979.

Now the challenge for the United States is to avoid derailing the transition in Myanmar. One mistake could be smothering Myanmar in kindness. Already Myanmar is experiencing the leading edge of what looks like a tidal wave of aid. In these circumstances, it would be especially unwise for the United States to act on its impulse to ignore what Myanmar wants and deliver what the U.S. decides it needs. A smarter approach would be to respond carefully to specific requests from the government of Myanmar and work collaboratively with Myanmar’s Asian neighbors.

Already a victim of unintended consequences several times over, we cannot let the 50-plus million citizens of Myanmar experience another “winter” by overwhelming policy makers and attacking powerful vested interests too quickly.

Authors

Lex Rieffel

Understanding the U.S. Pivot to Asia

Tue, 31 Jan 2012 13:30:00 -0500

Event Information

January 31, 2012
1:30 PM - 4:30 PM EST

Falk Auditorium
The Brookings Institution
1775 Massachusetts Ave., NW
Washington, DC

The Obama administration has adopted a policy of rebalancing toward Asia and in recent months has detailed this in military, economic and trade, human rights and diplomatic initiatives. President Barack Obama has personally affirmed that the U.S. will play a leadership role in Asia for many years to come. While this set of policies is not entirely new, it is sufficiently distinctive as a package to warrant examination as to its feasibility and likely impact.

On January 31, the John L. Thornton China Center and the Center for Northeast Asian Policy Studies at Brookings hosted a discussion examining the announced rebalancing initiatives and their likely impact, especially on U.S.-China relations. Panelists also analyzed two key pillars of this effort, the evolution of U.S. force deployments in Asia, and the development of the Trans-Pacific Partnership (TPP) initiative on economic and trade issues.

After each panel, speakers took audience questions.

Read Richard Bush's remarks on the response of China's neighbors to the U.S. "Pivot" to Asia »

Video

Transcript

Event Materials

Participants

Panelists

Claude Barfield

Resident Scholar
American Enterprise Institute

Lt. General Wallace "Chip" Gregson, Jr. (Ret.)

Senior Director, China and the Pacific
Center for the National Interest

New Balance in China-Myanmar Ties

Yun Sun — Thu, 03 Nov 2011 16:48:00 -0400

Myanmar President Thein Sein's decision to suspend construction of the China-backed Myitsone dam project has surprised many observers and raised questions about the state of the two countries' bilateral ties. Civil society groups and other observers have celebrated the decision as a people power success under a new democratic regime and perhaps Myanmar's first overt rebuff of China's economic dominance.

Different analyses have emerged as to why Myanmar has turned its back on its powerful and wealthier northern neighbor. Many believe that Thein Sein's government responded to public opposition to the US$3.6 billion project, which threatened environmental degradation and the livelihoods of local communities in the area. Some think Naypyidaw is catering to the West to show it is genuinely different from the outgoing military junta and deserves a more positive and welcoming treatment.

Others have argued that the decision was the result of an internal power struggle among different factions inside the government. However, none seems to be asking the critical question: What happens next?

The suspension of the dam will not change immediately a basic hard fact. That is, China is currently Myanmar's biggest economic patron in regard to foreign direct investment and aid. As the new government of Myanmar eagerly seeks to reform and develop its national economy, China is and most likely will remain an indispensable player in that process.

Read the full op-ed on the Asia Times website »

Authors

Yun Sun

Publication: Asia Times Online