The Pulse | Economy | Southeast Asia

Indian Businesses Need to Take Action on the Myanmar Coup

Indian companies must suspend all commercial relationships with the Myanmar military.

By Angshuman Choudhury for
Indian Businesses Need to Take Action on the Myanmar Coup

Indian President Ram Nath Kovind inaugurates the 5th Enterprise India Exhibition in Yangon during his visit to Myanmar, Dec. 13, 2018.

Credit: Indian Ministry of External Affairs

On February 1, Myanmar’s military, the Tatmadaw, seized power from the civilian government in a coup nearly three months after the general election returned a landslide mandate for Aung San Suu Kyi’s National League for Democracy (NLD). The military justified the takeover on its unproven assumption that the election results were fraught with massive irregularities. It has also arrested Aung San Suu Kyi, President Win Myint, and dozens of other civilian leaders.

Since then, fierce protests have gripped almost all corners of Myanmar, with various segments of the population – from young students to industrial workers to Buddhist monks – joining a civil disobedience movement against the military coup. The scale and depth of the protests this time are truly unprecedented, surpassing even the 1988 and 2007 uprisings against the junta. On February 22, thousands, defying warnings by the military, thronged the streets in various cities and towns in a nationwide general strike dubbed as the “22222 Revolution” — a bittersweet throwback to the bloody 8888 Uprising of August 8, 1988.

Besides domestic opposition, there is also a surge in calls for the international community to act. This primarily entails imposing targeted sanctions on the Tatmadaw leadership (which the United States, United Kingdom, and Canada have already done) and choking its sources of funding. Analysts have argued that one of the main reasons the military took over from the elected government was so that it could protect its own financial interests and “unscrutinized economic domination.”

There is much truth in this, given that the Tatmadaw has long maintained an elaborate network of for-profit businesses through two main conglomerates: Myanmar Economic Cooperation (MEC) and Myanmar Economic Holdings Limited (MEHL). The bulk of the profits go directly into the military’s out-of-budget coffers as well as the senior leadership’s pockets. This has given the Tatmadaw the financial heft required to dominate politics in Myanmar and also sustain its totalitarian regimes without depending on foreign aid.

Moreover, the Tatmadaw, over the years, has forged commercial relationships with foreign companies seeking profitable returns in Myanmar’s gradually liberalizing economy. Such partnerships have only strengthened its financial clout. In fact, a report submitted to the U.N. Human Rights Council in September 2019 by a Fact-Finding Mission on Myanmar concluded that these foreign companies, through their commercial partnerships with the Tatmadaw, have contributed to “violations of international human rights law and international humanitarian law” in Myanmar.

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Indian companies, too, feature in this unenviable list of foreign entities doing business with the Tatmadaw. According to a “Dirty List” published by Burma Campaign UK (BCUK), eight Indian companies have (or had) commercial relations with the Tatmadaw and associated entities. These include both private and state-owned firms who have either sold military hardware to the Myanmar military or have business ties with military-owned firms.

Of these, three are state-owned: Hindustan Aeronautics Limited (HAL), Bharat Dynamics Limited (BDL), and Hindustan Shipyard Limited (HSL). All of them have manufactured (or refitted) military-wares for the Tatmadaw, including Shyena lightweight torpedoes, helicopters, and a submarine. Among the private companies, Tata Group and Larsen and Toubro (L&T) have built troop carrier vehicles and torpedoes for the Tatmadaw, respectively.

Of the other private Indian firms, Adani Group and Infosys currently have contractual commercial relationships with MEC and MEHL, as also noted by the U.N. Fact-Finding Mission. While Adani is developing the $290 million Ahlone International Port Terminal 2 along the Yangon River on land leased from the MEC, Infosys is doing business through its EdgeVerve Systems with Myawaddy Bank, a subsidiary of MEHL. According to a September 2020 Amnesty International report, the MEHL has financed “military units that are implicated in crimes under international law and other serious human rights violations.”

Following the coup, both Adani Group and Infosys have said that they are “watching the situation in Myanmar carefully” and “reviewing the international community’s response,” but are yet to take any concrete action. Notably, three major foreign companies – Japan’s Kirin Holdings and Suzuki Motors, as well as Thailand’s Amata – have already suspended their commercial relationships with Tatmadaw-linked entities after the takeover.

It is high time Indian companies follow suit and suspend their partnerships with the Tatmadaw and all its subsidiary commercial entities. This is something that they should have ideally done long age, given the Myanmar military’s well-documented record of human rights abuses and anti-democratic impulses. But now, with the latest coup giving the Tatmadaw unbridled power over public life and the authority to dilute all forms of civilian oversight, this becomes an urgent imperative.

Most importantly, Indian firms must note that the Tatmadaw leadership is currently being investigated for serious war crimes at the International Criminal Court (ICC). Additionally, its violent campaigns against the Rohingya and other ethnic minorities have landed at the International Court of Justice (ICJ), with The Gambia accusing Myanmar of violating the Genocide Convention. The ICC case might end with issuance of international arrest warrants for the same generals who currently head the business empire drawing profits from foreign businesses. On the other hand, Myanmar has already conceded before the ICJ that its security forces did commit “mass killings” against the Rohingya. These are certainly not the best credentials for an ideal business partner.

Further, over the past weeks, as anti-coup protests raged on, the new military government has violently cracked down on peaceful demonstrators using both local police and battle-hardened infantry units; struck down laws that protect individual privacy; and amended penal provisions to classify anti-military dissent as sedition and treason. One 19-year old and at least two others have already died by live fire so far. It has also imposed internet blackouts across the country during fixed hours at night. By continuing to do business with the Tatmadaw, Indian firms are, in less than tangential ways, financing these grossly anti-democratic actions.

According to Justice for Myanmar (JFM), an international pressure group working to dismantle the Tatmadaw’s business interests, “[Any] international business that continues to operate in Myanmar after Feb 1 is bankrolling the Myanmar military and enabling their criminal conduct.” JFM has categorically singled out Adani Group and Infosys for their links with the Tatmadaw conglomerates.

Alongside the private firms, Indian defense manufacturers must also suspend all ongoing and proposed arms sales contracts with the Tatmadaw. Their products have a far more direct bearing on civilian life in Myanmar than those of non-military companies. While strategic partnerships are critical in a competitive geopolitical landscape, they should not come at the cost of abetting war crimes.

Having said that, it is unlikely that Indian state-owned firms will stop arms sales to the Tatmadaw because of the coup. For New Delhi, Myanmar is still a regional asset under its Act East Policy and Neighborhood First Policy, not least because of China’s swelling footprint in the country. In fact, it has emerged as one of the few regional success stories for the Narendra Modi government in terms of diplomatic engagement and mutual trust-building. The mood in New Delhi continues to strongly favor bilateral engagement over isolation, coup or otherwise.

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Yet, there has never been a more opportune moment for international players to stand by the people of Myanmar and support democracy. No one, not even an India committed to realpolitik, benefits from a totalitarian junta ruling by decree next door. In the long run, only an elected civilian government can bring about the stability and transparency needed for sustainable regional progress. But the Tatmadaw will continue to cling to power till it enjoys unchecked financial and logistical capacity. By denying the generals a good chunk of their profits, Indian companies must do their part and step on to the right side of history before it’s too late.

Angshuman Choudhury is a senior researcher and coordinator of the Southeast Asia Research Programme at the Institute of Peace and Conflict Studies, New Delhi.