Asiamoney.com: The path to acceptance for Myanmar can start with the election

Asiamoney.com, October 27 2010

Asiamoney was in Myanmar this week, two weeks ahead of the country’s first elections for 20 years.

It’s not an election many people have much confidence in. The National League for Democracy, Aung San Suu Kyi’s party, is largely boycotting it; Suu Kyi herself is still under house arrest; the system reserves a quarter of the parliamentary seats for the military before a single vote has even been cast; journalists and election observers are banned; and the prospect of violence hangs heavy in the air. Certainly, nobody is expecting Suu Kyi to walk straight from house arrest into leadership, with the generals stepping obligingly aside.

But it’s possible that the election could be the first step of many towards a more open society that other governments find more tolerable – maybe leading to more momentous change in the next election four years from now. After all, Indonesia, for all that it is championed as a modern democracy, is still run by an ex-general; Singapore’s leader, Lee Hsien Loong, goes by the prefix “BG”, for brigadier general; and Vietnam has become a darling of foreign direct investment despite the fact that it is still a stridently communist and undemocratic society that has not always been kind to its citizens. And that’s before we even mention China. In short, the world may not need to see too much of a shift in Myanmar to decide it is suddenly OK to engage with the place and lift sanctions.

What if that happens? Well, plenty of people are looking at it already. Asiamoney has attended breakfast meetings recently, hosted by Burmese exiles, where foreign companies including western multinationals seek advice on how business works in Myanmar so they can position themselves for the opportunity when it comes. In Asia, of course, plenty of businesses are here already: Asean nations, and certainly China, have felt no inclination to withdraw trade or investment in order to effect change in Myanmar, a continuing source of fury in the US and EU whose sanctions are utterly undermined by this indifference.

In fact, FDI in Myanmar is already dramatically up. Those who have seen the second quarter FDI figures for 2010 – not widely circulated to date – claim that there is US$16 billion of FDI confirmed and committed, not counting the US$13 billion Dawei deep-sea port being built in cooperation with an Italian-Thai company and expected to be signed any day. If this is correct, it’s extraordinary: US$16 billion is more than the total FDI for the previous 22 years. 90% of this money comes from China and Thailand, and is chiefly involved in oil and gas, mining and power.

The moral position on engagement with Burma is a tricky one, and the range of attitudes exceptionally wide. Many NGOs and activists, and some western governments, believe there should be no engagement with Myanmar at all: that even a tourist visit legitimizes a repressive regime and helps it to retain power. At the far extreme, several Asian governments and businesses see it as completely Myanmar’s own business how it runs its country, and are as happy to trade with it as anywhere else. Another position is that investment into Myanmar, particularly if one avoids the joint-venture-with-the-military route, creates jobs and helps to develop a private sector; also that if the pantomime villains of Myanmar engagement today, like Total and Chevron, were to pull out they would simply be replaced by local or Chinese businesses who might behave less well in terms of treatment and payment of labour than the western companies do.

A fourth position is that while supporting joint ventures with the junta in gas and other extraction is morally questionable, tourism is a special case: Lonely Planet, for example, argues that careful planning makes it possible to put 80% of the tourist dollar into individual hands, improving the lives of ordinary people trying to support families while making an only negligible contribution to the government. (Lonely Planet and Qantas subsidiary Jetstar Asia, which flies to Yangon, appear on blacklists from Australian activists for this position.) Ask people on the ground, and they want tourists to come: they are baffled by the idea that keeping money away from them could in any way improve their welfare, and they also see tourism as a form of security when there are foreign eyes in the country to see what’s going on. The counterpoint to this argument is that one only meets people in the tourist sector, that many tourist facilities were built using forced labour, and that if you really want to know how Burmese feel, go find a political prisoner and ask them.

As one person who has worked in and around Myanmar for more than a decade observes: “When you first go there you think you have an understanding of the place. Those who have been there four or five times get confused. Those who live there are very confused. In fact the only people who think they have a very clear understanding of the place have never been there.”

When unfettered investment does come, the potential is great. The country’s gas and teak, with enormous potential for tourism development, are sufficient to imagine that it could experience Vietnam-like levels of economic growth, investment and tourism if sanctions were to go. But before any of that can happen Myanmar’s generals must break the habit of a lifetime and listen to the people they purport to represent. A peaceful election, with some modicum of representation by non-military parties, would not be the people’s revolution that the west would like to see, but it would be a step in the right direction.