1. Background – Myanmar’s Self-Determined “Road to Reform”

Myanmar’s political reforms, as we know them, were essentially derived from the former military regime’s “7-Point Road Map” of August 2003, which was the orchestrated product of decade-long military plan for an orderly “transfer” of power. Its credibility was low because it was not a truly inclusive process at all, especially once the National League for Democracy (NLD) walked out of the military regime’s National Convention in 1995. It was, moreover, followed quite closely by what appeared to be a major set-back in the form of a purge of early military reformers led by Prime Minister (and General) Khin Nyunt in October 2004. This was in turn followed by the countervailing increase in popular opprobrium towards the military, evidenced by the popular mass unarmed protests and street marches of August-September 2007 (the so-called “Saffron Revolution”), and not long after this, by the countervailing civil disobedience after May 2008 Cyclone Nargis (when the people ignored the government’s attempts to block grass-roots assistance to the devastated areas of the Irrawaddy Delta to the south-west of Yangon). The international community never accepted the ‘7-Point Road map”, or the 2008 referendum process for the adoption of the constitution, and criticised the rigged results of the 2010 elections. However, the international community was unable to impose its wishes over these actions, has tended to welcome Myanmar’s reforms as they are announced, and has begun to calibrate its largely positive responses to these reforms.

2. Historical & Cultural Contexts

Current developments in Myanmar also need to be seen against the backdrop of the historical and cultural contexts, that have previously inhibited genuine reforming impulses in Myanmar. For example, there is only a limited history of unified country inside current geographical borders, although strong unified kingdoms at certain times in the past had been capable of destroying the former Thai capital of Ayuthaya. So cohesion of the state tends to assume importance for leaders, and national security often becomes an unduly predominant theme when changes are being considered. Related to this is ethnic diversity for which Myanmar is renowned. According to some data Myanmar has more than 135 different ethnic groups. Yet, on balance this diversity has not had much centrifugal effect, and has not undermined national unity nearly as much as could have been the case: certainly, the Karen National Union still seeks independence, but the Kachin Independence Organisation only aspires to autonomy, despite its name. Moreover, the majority of ethnic groups accept their place in the state of Myanmar, though most seek more autonomy than they currently enjoy, and some (but not all) still wish to negotiate a completely new constitution as a basis for their aspirations. However, many ethnic organisations are quite realistic and prepared to work towards pragmatic outcomes with the Thein Sein government.

Myanmar’s British colonial legacy contributes both positive and negative influences. British-directed physical infrastructure and social infrastructure (legal, health and education systems) not only remain in evidence, which have not been repudiated by Myanmar’s ruling elites, but which been adapted or attuned to local circumstances. This inevitably comprehends Myanmar’s modern history of authoritarian regimes, including the outright denial of parliamentary processes, and the persistent pattern of non-tolerance of dissent. These bequeath a mindset that is not naturally inclusive or questioning of authority, and could be seen as “anti-democratic”. While Myanmar people generally have positive attitudes towards the UK, including as the former colonial power, they are also proud of their own history, and have not discarded their own culture. Moreover, a strong sentiment persists that Myanmar should decide what policies and arrangements it should adopt, rather than having these dictated from outside. In essence, this is what Burma’s political struggle against colonialism from the 1930s was about, and it is also the main characteristic of Myanmar’s current reforms.

3. The Origins of Myanmar’s Unexpected Reform Agenda

The nature, extent and drive behind Myanmar’s reform agenda can almost entirely be attributed to the person of President Thein Sein whose key role as undisputed successor to the former Head of State, Senior General Than Shwe, and as leader of the new government allowed him to pursue a bold and far-reaching change program. Most of the inspiration for the specific changes can be traced to earlier attempts at change in Burma, meaning continuity is a strong feature, but interestingly there is also evidence of international opinion affecting many aspects of the reforms. Indeed, this “outside” influence on the military and regime leadership is much greater than many assumed to be the case.

Change in Myanmar eventually came from within rather than being imposed. Thus Myanmar’s reforms bear many signs of home-grown popular “pro-democratic” opposition views, which usually worked in close cooperation with the activists who left Myanmar after the 1988 uprising and called for change from exile. International pressure for reform received substantial funding from leading developed countries and from well-endowed non-government groups such as the George Soros Open Society Institutes. In a practical sense, the effectiveness of the impact of exiled democracy movement was enhanced by the adoption of new, outreach technology, namely the Internet, emails and mobile telephony which transcended distance and borders. Nevertheless, overall, it is likely that many Myanmar reforms will assume a different character compared with similar arrangements in other countries.

Not surprisingly, there is little direct contribution to reform from the sanctions regimes imposed unilaterally by OECD countries outside the United Nations. These regimes mostly contained no prescriptions as to what specific policies should be pursued.[1] The main exception to this would be the release of political prisoners, a desirable end in itself, which was occasionally to be the subject of political undertakings by President Thein Sein to counterparts such as UK Prime Minister David Cameron in June 2013, but which activists still criticised as being cynically aimed at the ending of sanctions. The reality has been that political prisoners once released, after around 2008, have been quickly able to resume political activity if they so wished. Now the situation is that both home-based activists and some notable returnees are participating actively in the reform process as advisors, or – as in the case of some of the former 1988 student leaders – playing significant leading political or facilitating roles. (One of President Thein Sein’s early initiatives as president was to publicly urge those in exile to return.) In the end, with the exception of the United States, most unilateral sanctions against Myanmar (including Australia’s) were dropped in 2012, and the International Labour Organisation lifted its last sanctions in June 2013. Indeed, Western countries trying to position themselves for potential commercial spin-offs in Myanmar were quite quick to drop their sanctions after the NLD victory in the April 2012 by-elections for the Myanmar parliament, which was a real turning point for international responses to Myanmar’s reforms.

4. Evaluating progress of reforms

A number of assessments on Myanmar’s reforms have been published, some of which are quite independent, while others argue from a particular political point of view.[2] Generally, observers allow that the self-prescribed reforms in Myanmar have happened more quickly and more extensively than expected; that they have also taken place on many fronts more or less simultaneously; and that they have had a genuine transforming impact. Key moves included the creation of an elected parliament with real power, initiatives to grant freedoms of press (although limited), of assembly (allowing public protests), and of association (permitting the formation of trade unions, previously banned, to protect workers rights). Importantly, all of these changes have been extremely well received by the Myanmar population at large, which moved quickly to seize the opportunities these freedoms offered, and to start organising to defend and advance their interests and rights. Liberalisation of the media, and tolerance of dissent, have played a key part in the creation of public space for policy debate for the first time in more than 50 years. Protection of workers rights was used by workers and their allies in mass production industries where low wages and poor conditions were widespread. The need to defend land rights against an outbreak of illegal “land grabs” swiftly resulted in lawyers campaigning on behalf of land-owners, including through the courts. Government decisions and actions by large corporate interests were contested, often with active media support, for the first time ever. In many other countries, such developments might be commonplace, but in Myanmar they were unprecedented.

5. Acknowledged shortcomings in reforms

Not surprisingly, many shortcomings in reforms have been acknowledged, and many popular expectations of the reforms have been disappointed.[3] Macro-economic reforms, for example – exchange rate unification, more consumer-oriented banking operations – have been taking time to deliver improvements in jobs, living conditions, etc. Sometimes it transpired that strings were attached to certain reforms; some “freedoms” were still qualified (for example, to stage a protest it was necessary to apply for permission). Another problem was that it was sometimes hard to overcome the old “mind-set” which saw many social actions as potentially causing risks and therefore to be actively discouraged rather than permitted. As a result, some new laws retain restrictions and significant non-liberal features, and there have been few noticeable improvements in the judiciary as the government, the parliament and ethnic groups struggle to advance the “rule of law”.

Some larger long-standing systemic problems in Myanmar have proved quite hard to anticipate, or to modify, or to redefine. For example, military impunity – enshrined in the 2008 constitution – remains, resulting in ongoing human rights abuses and complicating efforts to find peace and to enhance local political autonomy. Communal violence has erupted as deep-seated old tensions and hostilities have been uncovered, and racial vilification has spread in the absence of censorship or any other controls. At the moment, peace negotiations are progressing, but remain problematic in some situations, prompting observers to assert that in many cases “little has changed”. Yet in most ways, the government’s approach to peace negotiations is very different from the past; for example, peace negotiations are now being pursued for the first time on a nation-wide basis by the Myanmar Government, rather than one at a time, and some donor countries (such as Norway) are now supporting these efforts. However, not all ethnic groups have committed to substantive peace agreements, even if cease-fires have been signed. Some new coalitions of ethnic groups have emerged, and are seeking to contest the central government’s approach, but it is not clear how long these coalitions will survive and whether or not they will yield results. In the meantime, no end to insurgency is yet in sight. This could provide ready excuse to revert to military rule through a coup.

It is also becoming clearer that some key structural blockages to reform are decidedly hard to remove, both formally and practically. Sometimes, genuine changes will require much more work; in some cases, they will just take time to unfold. With few options other than encouraging reform efforts, donor countries are increasingly assisting these efforts where they are transparent and where such assistance is welcomed. It is also the case, for example, that many legal obstacles to reforms remain (for example, recognition of and protection of land rights) not yet being effectively resolved; in some cases they are not yet even being tackled seriously. Sometimes this is because the size of the task at hand is great and that it will take time to assemble an effective strategy to dismantle or modify what might have existed for decades and become quite ingrained in popular behaviour (the “mindset” problem). While the “rule of law” is frequently referred to as an ideal system to aspire to, implementing this in reality is proving more difficult to tackle effectively.

It is not at all clear that international involvement in the various conversations on topics ranging from “constitutional democracy” to land rights will necessarily translate easily into workable proposals for Myanmar in the near future. Constitutional amendment (for example, to allow Aung San Suu Kyi to stand as a candidate to be president after the 2015 elections) might be achieved anyway through some kind of political “deal” on the part of the current majority party, the pro-government Union Solidarity Development Party (USDP), and does not have to be demanded by the US Congress.[4]

Another area where substantive action has not yet been taken is to reduce the intrusive military role in economy. Current arrangements cause significant misallocation of resources to state-owned enterprises (SOEs) many of which are headed by retired military officers who may or may not possess relevant skills. not yet being reduced, would have positive and negative impacts. Threatening to remove economic benefits from the military might upset the precarious balance of interests that currently applies, and which has provided some (perhaps false?) political stability. This is surely an issue that the Myanmar stakeholders themselves need to settle, rather than have international fiats, however well-meaning. So far, international pressure for change has not focussed on progress on demilitarization in the economy, perhaps partly because not a lot is known about the nature and extent of these military economic interests, and also because this would be quite a confrontational approach which would probably be rejected by the Thein Sein government.

Educational and other social reforms are also taking time to show change, with little concrete progress evident to date. Clearly, lack of capacity and resources are serious problems affecting the prospects for badly needed advancement in this area. This is one area where popular expectations risk being disappointed sooner rather than later. Improved educational performance will also vitally affect immediate prospects for better employment and careers for younger people, improvements that NLD Leader Aung San Suu Kyi has long called for. Workshops and committee have been convened with the ensuing discussions sometimes productive and sometimes not, according to some participants. Here again a large part of the problem is systemic, but change almost certainly cannot be imposed from outside or from another system.

The process of devolving real authority and responsibility from the central government to the regions has also been quite slow, even though this is anticipated by the 2008 constitution. As some observers have noted, this means persuading the highly centralised government – and, importantly, the army – that such a move is safe and will not lead to fragmentation of “the Union”. Many commentators seem to ignore the steps in this direction that are already under way. This slowness is not surprising in some ways, given the obsession previous governments and the army had with threats to “national unity” (cohesion). One of President Thein Sein’s economic advisors has also argued that while momentum is growing for state and region governments to be given a greater share of the state budget, a cautious approach is needed, arguing that the lack of accurate data means the process cannot yet be undertaken in an equitable way.[5] Yet considerable movement towards decentralising power and authority has already occurred, in what seems to be a rather disorganised way.

A welcome sign is the fact that leaders are finally starting to talk openly about forms of “federalism”. Mizzima News recently reported a potentially important new development, noting that on 1 August 2013, during a radio speech, President U Thein Sein said “It seems we are moving closer to the advent of a genuine federal union that we have all been dreaming for, for six decades.”[6] The Thein Sein government is cooperating with several international agencies on electoral reform, and parliamentary processes, and is tolerating donor programs (including from Australia) for strengthening political parties and to some extent law reform. While some international experts have been encouraging different forms of federalism, it is doubtful whether Myanmar could transition quickly to a more radical form of federalism than the “soft”, mixed arrangements which with they are currently experimenting. The amorphous and incomplete measures now in place, or under way, for building up regional administrative capacities have been very thoroughly examined in the major research report published recently by the Asia Foundation and the Myanmar Resources Development Institute (MDRI), State and Region Governments in Myanmar.[7] So far, however, there is little direct international involvement is supporting decentralisation moves.

Progress on the decentralisation front is inextricably linked to satisfying the aspirations of ethnic minority groups for greater say in matters directly affecting them. Ethnic groups can be expected to organise specifically to assume much more responsibility for their own affairs. The much-promoted “multi-party democracy” concept is actually a very suitable vehicle to enhance regional political aspirations. The Asia Foundation report confirms this inter-twined relationship and notes that success or failure in this will prove critical.[8] However, changes in this area will take longer to achieve, and it is not clear to what extent international support can contribute effectively. At this stage many of the developments are not publicised or well understood, even within Myanmar.[9]

Reform in the economy is another large challenge where improvements will take time to take root, and where benefits for the Myanmar people may only be seen gradually. Here the concepts of corporate social responsibility, developed in the West since the 1990s, are influencing international responses.[10] Mechanisms to achieve better standards of international business behaviour – that were developed since the 1990s through the United Nations and the OECD – are being used to encourage ethical international business practices, and President Thein Sein has set up an anti-corruption commission, but how much impact any of these measures will have is not clear.[11] For the most part, the various codes of conduct remain voluntary in countries such as Australia[12] and Japan, and lack strong enforcement measures. Yet they are probably not affecting Chinese business with Myanmar at all.

Pressure to assert stricter rules on business with Myanmar has been felt most obviously in the United States and the UK, where it is no coincidence that pro-sanctions campaigns were most effective. In the cases of the United States, where pro-sanctions lobbies remain strong, laws now impose conditions on future business transactions with Myanmar whereby Myanmar or business counterparts would be required to comply with ethical and other standards and to submit regular reports on their activities.[13] In the case of the UK, a Responsible Business Centre, backed by the UK Board of Trade and the Foreign Office, has been established in the British Embassy to monitor and advise on UK business deals with Myanmar.[14] In other words, for the United States and the UK, neither Myanmar laws and practices nor various international codes of conduct seem to provide sufficient assurance on their own that ethical business can be carried out with Myanmar, and exceptional measures with extra-territorial reach appear attractive and are likely to be applied for some time. Yet these new obligations on US business are already proving irksome and are not being fully complied with.[15]

Another form of concerted international response has been through various institutional arrangements for standardised disclosure of international business practice in developing countries. The most effective such arrangement is the Extractive Industries Transparency Initiative (EITI) which Myanmar (and Australia) recently joined. A notable feature of the EITI is its universal, non-discriminatory provisions and standardised reporting and reviewing mechanisms, but most importantly its compliance obligations are mutual, and countries and corporations join of their own free will. So compliance is not imposed, but it is not clear whether the EITI or the UN’s Global Compact, which operates in a similar fashion, can really transform business environments as thoroughly as they claim. MIssing from their armoury are real teeth.

Against this background, as well as for objective reasons, it is not surprising that, internationally, international reactions to Myanmar’s reform mood are still marked by an over-riding sense of risk aversion. This is evidenced by the numerous very cautious assessments being published by the major international risk agencies such as McKinsey’s and Maplecroft.[16] Indeed, because of these understandably cautious risk assessments, while FDI flows have increased dramatically compared to the period of the military regime[17], there is not as much FDI coming into Myanmar yet as some of the earlier optimistic media reports implied.

6. Current popular attitudes and international responses

How is the process of reform travelling in Myanmar? In some areas there is considerable transparency and it can be said that things are moving forward more or less satisfactorily. But in some other areas, such as decentralisation, we mostly are forced to speculate about the overall future trajectory of reform or political change: new structures are taking shape, but the process is “messy” and not very transparent. Overall, there seems to be a growing view that the 2010 election was only the start of political reform process, which is now increasingly seen as likely to be consolidated by the next 2015 election (which almost everyone assumes will take place according to schedule). In other words, popular opinion seems to be discounting the possibility of a military coup against the reform agenda that has been laid out, but is acknowledging that reforms are somewhat incomplete and imperfect.[18]

Some domestic leaders in Myanmar are now urging a slightly more cautious approach to reform, as it is becoming increasingly obvious that achieving results will not be instantaneous and that complete reform may need to go through several iterations. Pyidaungsu Hluttaw Speaker Thura U Shwe Mann reportedly said during a tour of Shan State in early September 2013 that: “Myanmar needs to carefully consider the long-term impact of proposed reforms and ensure it does not make ‘reckless’ mistakes”.[19] Aung San Suu Kyi was also reported around the same time as urging countries who had applied sanctions not to be too optimistic about the prospects for reform in Myanmar.[20] There seems to be growing recognition that popular expectations are an important indicator of desirable policy directions and outcomes. This in itself suggests that “more of the same” is entirely feasible.

However, ethnic groups are now insisting on scrapping the present constitution and drafting a completely new constitution. This option stands very little hope of success, and ethnic leaders are not really negotiating from a strong position. Aung San Suu Kyi has also been reported recently as urging a more radical approach on her September 2013 visit to Eastern Europe. Democracy activist Ko Ko Gyi quotes her as criticising Myanmar flawed political process and calling for constitutional change as soon as possible.[21] This position is somewhat surprising, and seems at odds with the closer relationship she has been developing with the Thein Sein Government since she entered parliament in 2012.

[1] Administrative sanctions imposed by some multilateral bodies in a non-discriminatory way specifically to encourage behaviour change – such as ceasing forced labour (the ILO); ceasing narcotics production (UNODC); and stopping money laundering (the Asia Pacific Group) are a different matter. The Myanmar Government chose to participate in these organisations, accepted their disciplines and generally sought to comply with their norms.

[2] These include (a) the International Crisis Group’s Myanmar: The Politics of Economic Reform, Asia Report No. 231 of July 2012; (b) Human Rights Watch’s New Doubts about Pace of Reforms, May 2013.

[3] At the ANU’s Myanmar/Burma Update Conference in March 2013, the then Deputy Minister for National Planning an Economic Development, U Set Aung admitted that many of the outcomes were far from perfect. See his foreword in Debating Democratization in Myanmar, Institute of Southeast Asian Studies, Singapore (forthcoming).

[4] See report on Senator Mitch McConnell’s statement to the US Senate on 1 August 2013.

[5] See “Loosening Naypyitaw’s Grip” in Myanmar Times, 15 September 2013.

[6] Mizzima News

[7] State and Region Governments in Myanmar, The Asia Foundation and the Myanmar Resources Development Institute Centre for Economic & Social Development, Washington/Yangon: September 2013.

[8] State and Region Governments in Myanmar, “Conclusions and the Road Ahead” page 69.

[9] In a regular speech to senior government members on 15 August 2013, President Thein Sein said: “They also fail to decentralize the authority to regions and states and continue to adopt centralization. I would like to urge you to change your mind set to make the works being implemented by your ministries more effective.”

[10] Institute for Human Rights and Business “Responsible Investment in Myanmar: The Human Rights Dimension”, Occasional Paper No 1, September 2012.

[11] See William Boot “West Pushed on Conditional Trade to End Burma Rights Abuses”, in The Irrawaddy, 26 July 2013.

[12] In Australia’s case, responsibility for monitoring corporate compliance with a range of voluntary international codes lies in the National Contact Point in the Foreign Investment Review Board of the Treasury. But this office monitors Australian firms globally, has no specific Myanmar-related brief, and does not actively seek out (or penalize?) breaches of any of the codes.

[13] While lifting most of its previous sanctions, the United States denies firms permission to conduct business with proscribed firms. The UK Government has established an “Office for Responsible Business” inside the British Embassy in Yangon to guide UK firms in undertaking business in Myanmar.

[15] See “Major US Companies Slow to Report Burma Investments” by Simon Roughneen in The Irrawaddy, 19 September 2013..

[16] Maplecroft’s February 2013 report concluded: “At the same time, however, the country remains underdeveloped both politically, and in terms of infrastructure and institutions and business will have to monitor and manage risks in the country very carefully to take advantage of the significant opportunities that are on course to open up.’”

McKinsey Global Institute published a substantial report on Myanmar in June 2013, entitling it “Myanmar’s Moment: Unique Opportunities, Major Challenges”, which draws attention to Myanmar’s commercial potential. A less well-known firm, Control Risks, sums up its assessment as” ..it is far too late simply to reverse the country’s recent reforms,.. But nothing else is guaranteed, least of all profit”. (View from Yangon, published in February 2013.

[17] The Director-General of the Myanmar Investment Commission, Aung Naing Oo, is quoted as saying that from 1 April to 31 August 2013, Myanmar had approved US$1.8 billion worth of investment projects compared with US$1.4 billion for the previous 12 months. See “Foreign Investment in Burma Surges, Office Rents Sizzle” by Aung Hla Tun and James Ferrie in The Irrawaddy 20 September 2013.

[18] At the 2013 Myanmar/Burma Update at the Australian National University in Canberra in March 2013, the then Deputy Minister for National Planning and Economic Development, U (Winston) Set Aung argued that many of the policy changes and reforms being introduced were not perfect and needed to be refined.

[19] Myanmar Times, 9 September 2013.

[20] Aung San Suu Kyi’s comments, during her September 2013 trip to Poland and Eastern Europe, were reported by Eleven News Myanmar on 15 September 2013.

[21] See “An Undemocratic Transition” by Ko Ko Kyi and Mizzima staff writers, Mizzima News 28 September, 2013.