Economics and Democracy: Myanmar’s Myriad Challenges

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Economics and Democracy: Myanmar’s Myriad Challenges

Nationalism and the crisis in Rakhine hide the economic roots of the NLD’s weakness.

Economics and Democracy: Myanmar’s Myriad Challenges

Myanmar State Counselor Aung San Suu Kyi walks off the stage after delivering a speech to the nation over Rakhine and Rohingya situation, in Naypyitaw, Myanmar September 19, 2017.

Credit: REUTERS/Soe Zeya Tun

The furor in the international community over the actions of the Myanmar armed forces in Rakhine state in recent weeks has led to widespread criticism of the civilian National League for Democracy (NLD) government, unofficially led by Daw Aung San Suu Kyi.

A central theme of the criticism has been that the Nobel Prize winner either agrees with the ethnic and sectarian bigotry of a large part of Myanmar’s electorate, or that she is afraid to confront it due to electoral concerns and a fear of being seen as bowing to foreigners. However, this analysis misses a key factor in the political landscape of modern Myanmar: the tie between the country’s experiment with a civilian-led semi-democracy and the rise in living standards for ordinary people this change in the political system is meant to bring about.

As the Myanmar armed forces have demonstrated so brutally against the minority Rohingya, for its legitimacy as an institution the military (the Tatmadaw) in Myanmar can still draw upon the idea of itself as the chief defender of Myanmar’s territorial integrity and guarantor of the majority Bamar elite’s continued dominance within it. The Tatmadaw also still control the ministries of defense, home affairs, and border affairs, and a quarter of the seats in Myanmar’s parliament. Meanwhile the NLD is responsible to a diverse electorate that seems, now, united only by its loathing of the Rohingya. Much of that electorate has grown up listening to Myanmar’s generals (and their successors) lambasting the practice of democratic civilian government in order to justify the Tatmadaw’s coups in 1962 and 1988 against the legitimate rulers of Myanmar. Despite 50 years of military misgovernment, charges that civilian rule is corrupt, inept at ruling the country, and unable to achieve peace and security still carry weight in a society which has been at war with itself since independence in 1947.

Some of the major priorities of that electorate can be seen from the responses to an opinion survey published in August by the International Republican Institute (IRI), a U.S.- based pro-democracy nonprofit. IRI interviewed 3,000 adult citizens (those eligible to vote) of Myanmar, who were weighed by state and region, on their views about “their socio-economic status, political and security situations of the country, the democratic transition and rights, and perceptions of government, legislature, political parties and the media” according to local media outlet The Irrawaddy. For supporters of Myanmar’s transition to democracy this survey of public opinion revealed some disturbing results. Eye-openingly for democracy activists, a large percentage of the electorate seemed ready to judge not the NLD, but the democratic system itself for Myanmar’s economic performance. According to the IRI, 40 percent of their respondents thought that the economy was more important than democracy, versus just 24 percent who rated democratic reform as being more important overall. Another 11 percent of those surveyed rated further democratic reform as “moderately” important.

The Irrawaddy added that the IRI’s report even showed ordinary people putting economic development ahead of the country’s complex peace process, a central plank of Aung Sang Su Kyi’s political program. The central thrust of the survey’s revelations was any government of Myanmar would only be broadly liked and accepted if it could solve local people’s livelihood difficulties. This would matter less for the NLD in it’s struggle with the Tatmadaw if Myanmar’s economic growth was still increasing.

However, growth fell from 7.3 percent in 2015-2016 to 6.4 percent in 2016-17, and while the current year’s forecast is a more cheerful 7.7 percent, (and 2018-19’s estimate is even higher) that sunny scenario is heavily dependent on getting billions more dollars-worth of Foreign Direct Investment (FDI) into the country’s economy. With foreign governments and businesses now mulling how to respond over the Tatmadaw’s unprecedented rampage across Rakhine state (which has now seen a record 480,000 Rohingya fleeing to unsafe and unhealthy refugee mega-camps Bangladesh) this hoped-for investment is now at risk.

So far investors have held their nerve but they are keenly aware of how Myanmar is perceived internationally. Businesses have come to invest in Myanmar’s economy because they believed it was going to be the next Asian high growth success story. With Myanmar’s military throwing its weight around and producing the largest flow of refugees in Southeast Asia since the 1970s, that narrative is suddenly at risk of turning into a story of how the international community moved prematurely to lift sanctions on an international pariah and then continued to reward it’s regionally destabilizing actions. Apart from China, which persecutes some of its own Muslim minorities at home, that is not a narrative foreign states or global businesses wish to be associated with.

There is now a clear danger that the military’s campaign of ethnic cleansing may drive away much of the FDI inflows with which the NLD is hoping to use to transform Myanmar and buy electoral support with. Any such economic slowdown would dent faith in the country’s democratic experiment and bolster support for authoritarian alternatives. The recent political histories of neighboring Thailand and Cambodia have certainly shown that Southeast Asian states are not immune to political backsliding once the opening to democracy has begun.

There were already international worries about the ability of Suu Kyi and her inexperienced party to handle the process of Myanmar’s economic transformation even before the current situation in Rakhine state erupted. Criticism focused on the fact that Suu Kyi’s leadership style saw her attempting to micro-manage multiple pressing issues, surrounded with loyalists who kept bad news away from their leader. Circling discussions on electricity investment, a weak top-down bureaucracy and terrible ease of doing business ratings were all combined with a leader who (in her first year of office) put a bigger priority on getting a durable national peace deal signed than with meeting business leaders’ concerns.

Now that Myanmar’s fledgling democratic leadership is further distracted by managing the PR disaster that is Rakhine state, it will have even less time and energy than before to settle upon a viable long term development strategy for its citizens. For now the best hope for the country’s political future is that Suu Kyi is persuaded to hand over responsibility for economic development to other (less damaged) hands, while she attempts to deal with Myanmar’s latest self-inflicted catastrophe.

Neil Thompson is a Contributing Analyst at geostrategic analysis and business consultancy Wikistrat and a blogger at the Foreign Policy Association. His work has appeared in The Diplomat, the Economist Intelligence Unit, the International Security Network, the Independent, and various other publications. He holds an MA in the international relations of East Asia and is presently based in London.