Questions and realities for a new Myanmar

Myanmar changed more than its government last week. For the first time in more than 50 years, a democratic and non-military President is in office. An historic new chapter begins for the country that some have dubbed Asia’s “last frontier economy”.

The focus is understandably on Ms Aung San Suu Kyi, the iconic leader of the National League of Democracy (NLD). Among the new ministers and in Parliament, there are NLD stalwarts who have served years or even decades in prison or detention for political reasons.

Many are hoping to see a Cinderella-type overnight transformation in Myanmar. This is especially as the strong electoral mandate for NLD shows a broad desire for change.

But even as celebrations continue and expectations rise, questions have surfaced about how much and how quickly things can change.

There are three main factors that must be considered.

1. LIVING WITH THE GENERALS

First, despite the NLD winning power, the generals remain powerful. The clearest evidence is their refusal to change the country’s Constitution to allow the Lady to be named directly as President. The military, or Tatmadaw, controls 25 per cent of all parliamentary seats.

More than just holding significant power to block change, the military controls key ministries for defence, home affairs and border affairs, as well as the appointments of Chief Ministers in a number of key border states. Military-backed companies also play significant roles in the economy.

Their presence would be felt most strongly in the National Defence and Security Council (NDSC) — an 11-member executive body in which the military still holds the majority. The council has the power to impose martial law and reinstate military rule. The Tatmadaw will continue to play a strong hand on security and political issues as they see themselves as the key national institution to keep the Union together. Issues such as the government’s peace negotiation process with ethnic groups is likely to be watched closely.

This does not mean that the military will always be opposed to the NLD government. After all, it was the military that initiated the country’s opening and set out a “road map to democracy”.

In the past five years, as the country opened up under the military-backed administration of former President Thein Sein, the military and the NLD have managed to co-exist. When the November 2015 election results moved sharply against them, military leaders also accepted the results.

The current challenge is to find new modes of accommodation between the NLD and the military, now that a new government is in place.

2. FROM OPPOSING TO GOVERNING

The second key factor is how well the NLD shifts from its role as the opposition to meet the challenges of actually governing Myanmar. The NLD has shown how strong of an opposition it can be and Ms Suu Kyi in particular has won much admiration both inside and outside the country. But governing will bring a new set of challenges.

Questions of capacity and capability have been raised. As the new Cabinet was announced, news broke about a candidate’s false university degree. This should not be a major issue in itself. But it does signify the close scrutiny that the NLD is under and the relative inexperience of the party.

The Myanmar people and the international community will be looking to the NLD government to prove that it can hit the ground running and deliver results. There are encouraging signs, including the NLD’s efforts to skill up its Members of Parliament with training and other courses, and the party leadership’s firm stance on discipline and humility among its newly elected lawmakers.

However, Ms Suu Kyi, her hand-picked President Htin Kyaw, and new ministers must begin to articulate their key policies more clearly, especially where economic issues connect to social policy and concern foreign investors.

3. CONTINUING TO OPEN

Foreign businesses will be a major constituency that the NLD government must engage. A first step will be to assure those investors who have already won licenses and concessions from the previous administration that these will be honoured. This is especially where processes were open, well administered and non-corrupt in their award.

The NLD must also begin to engage and court foreign investors. These include not only those from Europe and the United States. Many of the companies who will be keenest to invest are from other Asian and South-east Asian countries.

Myanmar must therefore continue to deepen its engagement with its neighbours, particularly fellow members of the Association of South-east Asian Nations (ASEAN).

The new NLD government has pledged to ensure that the fruits of economic growth will be better and more evenly shared. As such, it is expected to pursue policies to create opportunities for new players among small- and medium-sized enterprises (SMEs) and rural business owners, including farmers. The place and practices for Myanmar’s tycoons and military-backed companies will be under scrutiny for transparency and underhanded business deals.

Yet, many priority sectors for Myanmar, such as infrastructure, the financial sector and Special Economic Zones, will require big investors — both foreign and local — that have sufficient capital and capacity.

Balancing between its promise to new entrants and SMEs, and this need to bring in the more established names will be a considerable challenge for the NLD.

ASIA’S LAST FRONTIER STILL GLITTERS

The past five years have raced by for Myanmar. From an international pariah that was closed off from the world five years ago, the city of Yangon now bustles with activity and the honking of horns in traffic jams.

The country’s food and beverage industry is thriving, indicative of a young population with growing local purchasing power.

A boom in real-estate development has also resulted in new and shiny high-rise buildings that have been eagerly snapped up. Many of these modern buildings go beyond the basics and are of international scale and standards on a par with more developed ASEAN neighbours.

The first phase of Myanmar’s opening that proceeded under former President Thein Sein was not without blemish. But it was no doubt an important transition period that has created interest and a move among many to look again at the country and begin to invest in its future.

These months since the election have slowed but not killed that momentum. The new government under Ms Suu Kyi and the NLD faces many expectations but also enjoys immense goodwill among the people of Myanmar, as well as the international and regional community. There is not only much to be done but much that can be achieved.

ABOUT THE AUTHORS:

Simon Tay and Cheryl Tan are, respectively, chairman and deputy director (ASEAN) of the Singapore Institute of International Affairs.