An old expression in Burmese comes to mind – too juicy to throw the meat away, covered in dirt to bite into it. Too many factors deterring potential foreign investors despite the attractions of this last resource rich untapped market (a shot in the arm for their own ailing economies), not least the political instability that the new British ambassador mentioned.
And I couldn’t agree more with the author that it’s the same old elephant adorning new gold festoons and jewellery. The West of course would be knowingly providing it with a new armour too. The bottom line is political influence and market share, through a mutual grooming process. Brave New Burma.
First of all, I don’t believe it’s too easy to stop communal fighting. Lots of poor people would say: “So now the military beats our heads and also protect muslim thugs from justice”. If it was so easy, they would have already done. No government wants this kind of turmoil.
Also, I like your idea about military showing their willingness to respect contracts. I agree that cronies are helping to make the bubble, that’s why the government must pressure them to get back to real business, making joint ventures with foreign enterprises. Maybe cutting one or two bad cronies could send a message.
Speaking of that, a lot of cronies still evade taxes, which is another major problem.
I still believe that the real concern is the powering bottleneck. How can any industry work in a city where blackouts are frequent, there’s no electricity 24h a day, etc? I read and article by Jared Bissinger about that.
Actually, I’m more worried about the “gold rush”. Myanmar is not read for stock market and free flow of capital. I believe hot money is coming soon and who knows what can happen. We must bear in mind that some in US always had a special desire to strike the military nationalists and the cheapest way could be economic collapse.
Finally, I recommend you to read my recent article here in NM, your suggestions can be valuable.
There’s actually been a lot of research about that and Aung Tun is probably right on the China point. Courts within China tend to become more professional/less corrupt when foreign investment increases (even accounting for general economic growth). Chinese provinces seem to realize that foreigners are reassured by better courts and will work harder to improve courts within the province. Check out Yuhua Wang’s work for more.
This is my latest piece, kind of technical one, and so for those who want to argue/counter-argue on this piece, you don’t necessarily need to address me directly, please read the following referenced books/articles, if you can find time.
1. Tamanaha, Brian. (2004). One The Rule of Law: History, Politics and Theory. Cambridge University Press.
2. Carothers, Thomas. Ed. (2006). Promoting Rule of Law Abroad: In Search of Knowledge. Carngie Endowment for International Peace.
3. Sornarajah, M. 1994. The International Law on Foreign Investment. Cambridge University Press
4. Published and Be Damned. Bangkok Post. http://www.bangkokpost.com/…/373211/publish-and-be-damned
Likewise, the accidental display of cute family photos and/or last night’s dodgy internet downloads, accidentally left on one’s desktop … (Come to think of it, maybe that explains Andrew’s first slide?)
“Weak rule of law is probably not a major factor in determining investment flows, and the more causal relationship may be in the reverse direction. For instance, it is true for China that the presence of at least certain foreign investors may contribute to the development of the rule of law through their demands for legal reform.”
Your first part is true, the second part I do not agree with. Investors in China as an impetus for legal reform ? Not likely..and the Chinese investors don’t want legal reform in Southeast Asia because it will hinder cronyism which is their bread and butter.
But I think most of your analysis is on target about Burma’s current situation and
future. Burma needs to get past the coffee-table ‘exotic’ stage and mature into a developed nation with laws, freedom, competent education and solid infrastructure.
Everything you said is true, but you need to look at Myanmar’s international situation after 1988. A country considered by US and Europe as a pariah only could maintain relations with Asian countries. The regime would fall apart without Chinese and Singaporean investment and it was the priority at that time.
You raised a very important question, the liberal hysteria was the only way until 2010 (or 2012), now it’s not.
The country doesn’t need anymore to give away its natural resources, they have some power to bargain between countries and investors.
Also, with the help mainly from Japan, investment in Myanmar is shifting slowly to industry and Thailand (for example) is already complaining about japanese investors moving to her neighbor.
Japan needs allies in Southeast Asia, looks at Myanmar as a possible new tiger and also believes they have a historical relation (I know historiography pictures Aung San and the Comrades as anti-japanese, but Colonel Suzuki and Minami Kikan were the only group outside Burma who wanted to truly liberate them).
I believe Myanmar’s economy have two ways from here (besides collapsing, which is also a possibility):
1) The military and business community (e.g. Zaw Zaw) engage in joint ventures with foreign companies (western companies only accept few cronies, but it’s easy to raise new ones). These national companies capitalize to invest in Myanmar’s projects and keep their money in local banks.
2) Myanmar government (executive, parliament) decides to open the economy incentived by the goodwill of international community. Myanmar opens a stock market, free flow of capital and receives a lot of foreign enterprises (also IMF and WB) with little national participation. This is the easy way, but what if another “market frontier” shows up? The 1997 Asian crisis showed that even bigger economies are vulnerable to speculation and bubbles.
Regarding the copper mine, I think you’re talking about Latpadaung. Of course, you’re right, they should have been more comprehensive and clear about the project. But it’s not exclusive of Myanmar, China does that a lot, Brasil has done this recently (e.g. Belo Monte dam) and I believe every modernizing country has eventually removed local people to open factories or exploit resources.
Myanmar is starving for energy, it has the will and the potential to urbanize and industrialize, but what about powering? Yangon is the only city which has electricity 24 hour/day.
I really think that Myitsone Dam would make a terrible impact (that could diminish with a better project), but look at the money, infrastructure and energy it would give to Myanmar (even if using only 5% of it).
I think we must bear in mind that the Myanmar regime is strong, but the state is really weak and militarily challenged by drug trafficking and guerrillas. The military spending could be cut, but the Tatmadaw also needs to modernize and defend itself against potential external threats (look at Europe and US in the Middle East).
The welfare state is only possible after convincing minorities that they are part of the union, should participate in the government and depoliticize ethnicity (everybody are myanmarese, respecting their regional cultures and appraising them as diversity).
But Myanmar needs first a national cease fire, needs to get rid of the druglords (and replace them with politicians), needs to replace opium for other viable crops, etc.
I think I answered to your questions, if you have any thoughts, feel free to discuss.
True the Rohingya is persecuted in Burma, and not just by the authorities. It is rightly or wrongly seen as a matter of letting them loose and impose their values on the rest of us given the chance. And not without a history of that, the local Rakhine getting it in the neck. To paraphrase E F Schumacher, it is easy to endure other people’s suffering, and that also goes for outsiders looking in from their high horses and seeing only one side suffering overlooking its historical evolution.
I know of someone who tried to buy Buddha images he saw in English shop windows until he came to his senses and his wallet empty. He had forgotten the Buddhist virtue of equanimity. The blowing up of the Buddhas of Bamiyan needn’t cause a Buddhist jihad or crusade, and it didn’t.
It’s a different matter altogether when it comes under deliberate attack by the alien other within your own borders, or by your own govt as we witnessed in 2007.
From a Muslim Rohingya point of view, the Tatmadaw already wage war on them. This
is subjective. But I do think they are mistreated in Burma. Buddhists in southern Thailand will then point out that some extremist Malay Muslims attack Buddhist shrines, temples and schools in Malay-dominated southern Thai provinces. Even the Buddhist Sinhalese clergy in Sri Lanka didn’t voice complaint when the Sinhalese-dominated Sri Lankan army attacked Tamils, some of whom were terrorists (the LTTE, which reminds me of the CPM) and some of whom were not. Not that I have any sympathy for the LTTE, who like Chin Peng (I know you are enamoured of him) killed many innocent people within and outside their respective terrorist organizations.
Buddhists are generally peaceful people, in Burma, Thailand, Nepal, Sri Lanka, Tibet, India and elsewhere. Where there have been
cases of Buddhist ‘extremism’ in Burma or
Sri Lanka it has been largely political (and ethnic) and not religious per se; I do think this is in contrast to Islamic extremism which is political, ethnic and religious in nature.
Ne Win isolated the country from the foreign aid etc but post-1988 the glorious Tatmawdaw certainly didn’t. They pretty much opened up their forests for Thai loggers to clear cut had foreign oil companies begging for leases, and had Singaporean businesses set up shop (gotta launder your drug money somewhere). And last time I checked the generals pretty much mortgaged the country to the Chinese for most of the 1990’s and the beginning of this century. If I’m not the mistaken this liberalization hysteria is triggered in part by the fact the Tatmawdaw was worried about their overdependence on China, so the military is responsible for the hysteria they supposed to prevent. I wonder how that is going to work. I think there are some farmers displaced by a large copper mine that wish the military might have been a bit more progressive with the welfare support of which you write.
Spare a thought for Buddha images used as ornaments in Western households… head only or whole, in the bathroom, on a mantelpiece, as a hat stand, like a garden gnome and so forth.
Should we Buddhists justifiably take offence, take it further and wage war on them? Just a thought.
In Penang, one can not help seeing every bigger Muslim owned house are being converted into Madrasahs and every available plot of land is being slated for construction of another Mosque.
Make one wonder is there that much more Muslim than Chinese and Hindus in Penang?
Competing with every other sky scrapper that are being built belonging either to Singaporean or China is indeed a challenge.
On the contrary, this is an important conversation. People around the world complain about American ‘exceptionalism’ but Malaysians are just as guilty of ‘Malaysian exceptionalism’. For some/many, everything going on in Malaysia is uniquely horrible and none of our problems can be solved because they are so unique and have never been experienced by anyone else at any time in history or anywhere else on earth. A little global and historical perspective in the nation’s chattering classes can’t hurt.
“This is Burma, and it will be quite unlike any land you know about”. Kipling’s description from 1889 still holds true I guess.
ASSK is only a high profile ‘opposition’ figure whereas the military remains the elephant in the room. Brave New Burma is a very apt title, as it is being welcomed to the New World Order. The picture gets more complex and complicated than ever before.
Please all of you refrain from foul language.
The King is a positive force in Thailand
and will be until he passes. He has not instigated any conflict-show me the proof.
Thaksin is a corrupt money launderer who
does not care about the Thai people. You
have your opinion and I have mine. And I
am hardly “reactionary”..
I also have spent time in Thailand and
the King (god bless HRH) is still very
popular and loved. Lese Majeste laws
can be debated, but that won’t remove the
King as some foreigners, and few Thai,
would like.
R.N. I like your expression ‘sacred mascot of the militarists’. The fellow in question is certainly no friend of representative politics. Indeed, the sucess of the institution in its present guise has surely been a key derminant in retarding the development of a more ‘democratic’ polity (although that particular project, I fear, is a big ask in such a hierachial society where patronage and the legacy of the sakdina past still underpin many aspects of contemporary life).
As for P.Cohen – of course Thaksin is a rancid piece of turd. He should be behind bars. As for the palaver about a ‘positive unifying force’ – that’s just more spruiking the tiresome official line which, it’s fairly obvious, is pretty threadbare nowadays. And yes, I have been to Thailand – a lot.
Facebook 
Twitter 
Soundcloud 
Youtube 
Rss
Challenges for foreign investors in Myanmar
An old expression in Burmese comes to mind – too juicy to throw the meat away, covered in dirt to bite into it. Too many factors deterring potential foreign investors despite the attractions of this last resource rich untapped market (a shot in the arm for their own ailing economies), not least the political instability that the new British ambassador mentioned.
Western govts nonetheless showed no hesitation in forging closer military ties much to the dismay of the ethnic groups. They get to grips with the elephant in the room since it’s not leaving any time soon.
And I couldn’t agree more with the author that it’s the same old elephant adorning new gold festoons and jewellery. The West of course would be knowingly providing it with a new armour too. The bottom line is political influence and market share, through a mutual grooming process. Brave New Burma.
Gentle reminder – thou shall not think
Presumably this has been verified. The English is not very good for a supposed public service announcement.
Challenges for foreign investors in Myanmar
Thanks for your contribution, Aung Tun.
First of all, I don’t believe it’s too easy to stop communal fighting. Lots of poor people would say: “So now the military beats our heads and also protect muslim thugs from justice”. If it was so easy, they would have already done. No government wants this kind of turmoil.
Also, I like your idea about military showing their willingness to respect contracts. I agree that cronies are helping to make the bubble, that’s why the government must pressure them to get back to real business, making joint ventures with foreign enterprises. Maybe cutting one or two bad cronies could send a message.
Speaking of that, a lot of cronies still evade taxes, which is another major problem.
I still believe that the real concern is the powering bottleneck. How can any industry work in a city where blackouts are frequent, there’s no electricity 24h a day, etc? I read and article by Jared Bissinger about that.
Actually, I’m more worried about the “gold rush”. Myanmar is not read for stock market and free flow of capital. I believe hot money is coming soon and who knows what can happen. We must bear in mind that some in US always had a special desire to strike the military nationalists and the cheapest way could be economic collapse.
Finally, I recommend you to read my recent article here in NM, your suggestions can be valuable.
Cheers, Erik.
Review of Brave New Burma
Thank you Mr A Selth. I might give Nic Dunlop another chance base on your review alone.
Challenges for foreign investors in Myanmar
There’s actually been a lot of research about that and Aung Tun is probably right on the China point. Courts within China tend to become more professional/less corrupt when foreign investment increases (even accounting for general economic growth). Chinese provinces seem to realize that foreigners are reassured by better courts and will work harder to improve courts within the province. Check out Yuhua Wang’s work for more.
Challenges for foreign investors in Myanmar
This is my latest piece, kind of technical one, and so for those who want to argue/counter-argue on this piece, you don’t necessarily need to address me directly, please read the following referenced books/articles, if you can find time.
1. Tamanaha, Brian. (2004). One The Rule of Law: History, Politics and Theory. Cambridge University Press.
2. Carothers, Thomas. Ed. (2006). Promoting Rule of Law Abroad: In Search of Knowledge. Carngie Endowment for International Peace.
3. Sornarajah, M. 1994. The International Law on Foreign Investment. Cambridge University Press
4. Published and Be Damned. Bangkok Post. http://www.bangkokpost.com/…/373211/publish-and-be-damned
Academics behaving badly
Likewise, the accidental display of cute family photos and/or last night’s dodgy internet downloads, accidentally left on one’s desktop … (Come to think of it, maybe that explains Andrew’s first slide?)
Challenges for foreign investors in Myanmar
Aung Tun,
“Weak rule of law is probably not a major factor in determining investment flows, and the more causal relationship may be in the reverse direction. For instance, it is true for China that the presence of at least certain foreign investors may contribute to the development of the rule of law through their demands for legal reform.”
Your first part is true, the second part I do not agree with. Investors in China as an impetus for legal reform ? Not likely..and the Chinese investors don’t want legal reform in Southeast Asia because it will hinder cronyism which is their bread and butter.
But I think most of your analysis is on target about Burma’s current situation and
future. Burma needs to get past the coffee-table ‘exotic’ stage and mature into a developed nation with laws, freedom, competent education and solid infrastructure.
Military can still be good state-builders for Myanmar
Thank you for your contribution, aiontay.
Everything you said is true, but you need to look at Myanmar’s international situation after 1988. A country considered by US and Europe as a pariah only could maintain relations with Asian countries. The regime would fall apart without Chinese and Singaporean investment and it was the priority at that time.
You raised a very important question, the liberal hysteria was the only way until 2010 (or 2012), now it’s not.
The country doesn’t need anymore to give away its natural resources, they have some power to bargain between countries and investors.
Also, with the help mainly from Japan, investment in Myanmar is shifting slowly to industry and Thailand (for example) is already complaining about japanese investors moving to her neighbor.
Japan needs allies in Southeast Asia, looks at Myanmar as a possible new tiger and also believes they have a historical relation (I know historiography pictures Aung San and the Comrades as anti-japanese, but Colonel Suzuki and Minami Kikan were the only group outside Burma who wanted to truly liberate them).
I believe Myanmar’s economy have two ways from here (besides collapsing, which is also a possibility):
1) The military and business community (e.g. Zaw Zaw) engage in joint ventures with foreign companies (western companies only accept few cronies, but it’s easy to raise new ones). These national companies capitalize to invest in Myanmar’s projects and keep their money in local banks.
2) Myanmar government (executive, parliament) decides to open the economy incentived by the goodwill of international community. Myanmar opens a stock market, free flow of capital and receives a lot of foreign enterprises (also IMF and WB) with little national participation. This is the easy way, but what if another “market frontier” shows up? The 1997 Asian crisis showed that even bigger economies are vulnerable to speculation and bubbles.
Regarding the copper mine, I think you’re talking about Latpadaung. Of course, you’re right, they should have been more comprehensive and clear about the project. But it’s not exclusive of Myanmar, China does that a lot, Brasil has done this recently (e.g. Belo Monte dam) and I believe every modernizing country has eventually removed local people to open factories or exploit resources.
Myanmar is starving for energy, it has the will and the potential to urbanize and industrialize, but what about powering? Yangon is the only city which has electricity 24 hour/day.
I really think that Myitsone Dam would make a terrible impact (that could diminish with a better project), but look at the money, infrastructure and energy it would give to Myanmar (even if using only 5% of it).
That’s because the government started the construction of dams alternatively in Salween River (http://www.mizzima.com/business/investment/item/9971-kunlone-hydropower-project-on-thanlwin-river-to-begin-in-2013).
I think we must bear in mind that the Myanmar regime is strong, but the state is really weak and militarily challenged by drug trafficking and guerrillas. The military spending could be cut, but the Tatmadaw also needs to modernize and defend itself against potential external threats (look at Europe and US in the Middle East).
The welfare state is only possible after convincing minorities that they are part of the union, should participate in the government and depoliticize ethnicity (everybody are myanmarese, respecting their regional cultures and appraising them as diversity).
But Myanmar needs first a national cease fire, needs to get rid of the druglords (and replace them with politicians), needs to replace opium for other viable crops, etc.
I think I answered to your questions, if you have any thoughts, feel free to discuss.
Far reaching implications….
True the Rohingya is persecuted in Burma, and not just by the authorities. It is rightly or wrongly seen as a matter of letting them loose and impose their values on the rest of us given the chance. And not without a history of that, the local Rakhine getting it in the neck. To paraphrase E F Schumacher, it is easy to endure other people’s suffering, and that also goes for outsiders looking in from their high horses and seeing only one side suffering overlooking its historical evolution.
I know of someone who tried to buy Buddha images he saw in English shop windows until he came to his senses and his wallet empty. He had forgotten the Buddhist virtue of equanimity. The blowing up of the Buddhas of Bamiyan needn’t cause a Buddhist jihad or crusade, and it didn’t.
It’s a different matter altogether when it comes under deliberate attack by the alien other within your own borders, or by your own govt as we witnessed in 2007.
Far reaching implications….
From a Muslim Rohingya point of view, the Tatmadaw already wage war on them. This
is subjective. But I do think they are mistreated in Burma. Buddhists in southern Thailand will then point out that some extremist Malay Muslims attack Buddhist shrines, temples and schools in Malay-dominated southern Thai provinces. Even the Buddhist Sinhalese clergy in Sri Lanka didn’t voice complaint when the Sinhalese-dominated Sri Lankan army attacked Tamils, some of whom were terrorists (the LTTE, which reminds me of the CPM) and some of whom were not. Not that I have any sympathy for the LTTE, who like Chin Peng (I know you are enamoured of him) killed many innocent people within and outside their respective terrorist organizations.
Buddhists are generally peaceful people, in Burma, Thailand, Nepal, Sri Lanka, Tibet, India and elsewhere. Where there have been
cases of Buddhist ‘extremism’ in Burma or
Sri Lanka it has been largely political (and ethnic) and not religious per se; I do think this is in contrast to Islamic extremism which is political, ethnic and religious in nature.
Military can still be good state-builders for Myanmar
Ne Win isolated the country from the foreign aid etc but post-1988 the glorious Tatmawdaw certainly didn’t. They pretty much opened up their forests for Thai loggers to clear cut had foreign oil companies begging for leases, and had Singaporean businesses set up shop (gotta launder your drug money somewhere). And last time I checked the generals pretty much mortgaged the country to the Chinese for most of the 1990’s and the beginning of this century. If I’m not the mistaken this liberalization hysteria is triggered in part by the fact the Tatmawdaw was worried about their overdependence on China, so the military is responsible for the hysteria they supposed to prevent. I wonder how that is going to work. I think there are some farmers displaced by a large copper mine that wish the military might have been a bit more progressive with the welfare support of which you write.
Far reaching implications….
Spare a thought for Buddha images used as ornaments in Western households… head only or whole, in the bathroom, on a mantelpiece, as a hat stand, like a garden gnome and so forth.
Should we Buddhists justifiably take offence, take it further and wage war on them? Just a thought.
Far reaching implications….
In Penang, one can not help seeing every bigger Muslim owned house are being converted into Madrasahs and every available plot of land is being slated for construction of another Mosque.
Make one wonder is there that much more Muslim than Chinese and Hindus in Penang?
Competing with every other sky scrapper that are being built belonging either to Singaporean or China is indeed a challenge.
UMNO and Nazi Germany
On the contrary, this is an important conversation. People around the world complain about American ‘exceptionalism’ but Malaysians are just as guilty of ‘Malaysian exceptionalism’. For some/many, everything going on in Malaysia is uniquely horrible and none of our problems can be solved because they are so unique and have never been experienced by anyone else at any time in history or anywhere else on earth. A little global and historical perspective in the nation’s chattering classes can’t hurt.
Academics behaving badly
The big slide of stats deserves its own special mention.
Review of Brave New Burma
“This is Burma, and it will be quite unlike any land you know about”. Kipling’s description from 1889 still holds true I guess.
ASSK is only a high profile ‘opposition’ figure whereas the military remains the elephant in the room. Brave New Burma is a very apt title, as it is being welcomed to the New World Order. The picture gets more complex and complicated than ever before.
Loyalty demands ambiguity
Please all of you refrain from foul language.
The King is a positive force in Thailand
and will be until he passes. He has not instigated any conflict-show me the proof.
Thaksin is a corrupt money launderer who
does not care about the Thai people. You
have your opinion and I have mine. And I
am hardly “reactionary”..
I also have spent time in Thailand and
the King (god bless HRH) is still very
popular and loved. Lese Majeste laws
can be debated, but that won’t remove the
King as some foreigners, and few Thai,
would like.
Loyalty demands ambiguity
R.N. I like your expression ‘sacred mascot of the militarists’. The fellow in question is certainly no friend of representative politics. Indeed, the sucess of the institution in its present guise has surely been a key derminant in retarding the development of a more ‘democratic’ polity (although that particular project, I fear, is a big ask in such a hierachial society where patronage and the legacy of the sakdina past still underpin many aspects of contemporary life).
As for P.Cohen – of course Thaksin is a rancid piece of turd. He should be behind bars. As for the palaver about a ‘positive unifying force’ – that’s just more spruiking the tiresome official line which, it’s fairly obvious, is pretty threadbare nowadays. And yes, I have been to Thailand – a lot.
Loyalty demands ambiguity
For those who want to participate in the debate about Thaksin, the king, elections etc, please see the comment policy available here:http://www.newmandala.org/2011/06/11/new-mandalas-new-comment-policy/