Myanmar’s Political Economy 2020:Economic Reforms and Rohingyas

Myanmar’s Political Economy 2020:

Economic Reforms and Rohingyas

KB Teo

SYNOPSIS

Myanmar is focused on capitalist economic opening to achieve higher growth.  There are strong Western criticisms against its Rohingya policy. Yangon prioritises relations with ASEAN and China.

COMMENTARY

Myanmar State Counsellor Aung San Suu Kyi’s National League for Democracy (NLD) prioritises economic liberalisation. The military (Tatmadaw) retains very strong influence. Ongoing conflict in Rakhine state is hindering efforts to repatriate Rohingya refugees.  Yangon is seeking to strengthen relations with ASEAN, China, and Japan. Robust infrastructure investment ensures that Myanmar’s growth remains one of the fastest in ASEAN.

The Regional Comprehensive Economic Partnership (RCEP) moved closer to realisation following the ASEAN summit in November 2019. It will become the world's biggest FTA.

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Myanmar has taken the first step in planning for the 2020 implementation of 5G telecommunications services.  Mytel, a joint venture between the Tatmadaw and Vietnam's defence ministry, tested 5G technology provided by Chinese telecoms equipment manufacturer, Huawei, in August 2019. The state-owned Myanmar Posts and Telecommunications (MPT) has indicated its readiness to implement the technology in the near future.

With a potential customer base of more than 650m people, the ASEAN region holds great promise. Yangon views ASEAN as an expansion opportunity for global digital platform providers. Businesses can leverage established digital platforms to reach untapped ASEAN markets and expand their customer base. The region is an attractive destination for global companies, including digital platform providers that offer localised versions of their services. At the same time, ASEAN is increasingly producing its own set of innovative internet companies that aspire to enter new markets.

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Almost everyone in Myanmar has a mobile phone, but fast and reliable internet connections remain out of reach beyond the major cities.  It expects to need another two to three years for facility upgrades before 5G can be used in major cities.

The development of 5G services in Myanmar will lead to economic gains over the next five years. The government is committed to pushing through a modernisation agenda. When it comes to attracting foreign investment, such signalling may be as important as any actual policy changes that the government introduces.

Rohingyas

Buddhist-Myanmar want the Muslim Rohingyas out at almost any costs.  So far, an estimated 30,000 Rohingyas have been killed in extreme violence in the northern Rakhine state.  The UN has accused Myanmar of genocide against the Rohingyas. In December 2019, State Counsellor Aung San Suu Kyi stoutly defended Myanmar against the genocide charge at the Hague.

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ASEAN-Myanmar Relations

Myanmar was one of those new members, joining ASEAN together with Laos on 23 July 1997 at ASEAN’s 30th anniversary. Myanmar’s milestones of ASEAN membership each decade are thus linked with those of ASEAN. The 20-year mark of Myanmar’s ASEAN membership also coincides with the beginning of a new chapter in the country’s contemporary history.

Myanmar’s 10th ASEAN anniversary in 2007 had little cause for celebration. That year, the interactions between ASEAN the Association and Myanmar as a member of that Association had reached their lowest point over the military regime’s crackdown on the Saffron Revolution. ASEAN issued its strongest statement on Myanmar.  Yangon rejected ASEAN’s interest to have the United Nations Special Advisor brief the 13th ASEAN Summit on the situation in the country.

Myanmar celebrates August 8 as ASEAN Day. It is a sensitive matter. August 8 marks another anniversary in Myanmar: the nation-wide democracy movement that was put down by in a bloody coup in 1988. This year, however, is different. The August 8, 1988 memories are no longer behind closed doors.

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Myanmar is still a relative newcomer in terms of leading regional actions. Decades of military rule had put Myanmar in a passive, reactive position in ASEAN affairs.  Even when Myanmar held the rotational ASEAN Chair in 2014, the expectations were more of maintaining the existing regional momentum than initiating something new. Myanmar’s foreign policy orientation can help ASEAN’s balancing act. Daw Aung San Suu Kyi, in her debut attendance at the 49th ASEAN Ministerial Meeting in July 2016, had shared Myanmar’s hard experience in dealing with “bullies”. When taking office in April 2016 as State Counsellor, Daw Suu Kyi had affirmed continuation of the country’s neutralist and independent foreign policy. 

Myanmar worked with ASEAN in dealing with the humanitarian situation after the 2008 Cyclone Nargis, and to discuss the more recent situation in Rakhine.  ASEAN views its regional integration project as a “work-in-progress”. Myanmar’s ASEAN membership provides a platform for linking national interests with regional priorities. 

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China-Myanmar Relations

Beijing has a very strong influence in Myanmar. Myanmar established diplomatic relations with China in 1949—one of the first non-socialist countries to do so—and has relied heavily on Chinese investment and support since 1988, when a military junta seized government control. Myanmar was consequently placed under severe Western sanctions. 

Beijing views Myanmar as a highly strategic country.  They share a 2,200km border that has been plagued by ethnic conflict for decades. Myanmar is also vital to President Xi’s “One Belt One Road” project.  Access to the Indian Ocean through Myanmar would decrease Beijing’s heavy reliance on the narrow and vulnerable Straits of Malacca for imports. More specifically, the land holds the key to meeting China’s energy needs; massive Chinese infrastructure investments include the Sino-Myanmar oil pipeline, which began operating in 2013, and the USD 3.6 billion controversial Myitsone dam. 

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In early 2019, Myanmar reported bilateral trade with China from just the first eight months of fiscal year 2017-18 as worth USD 7.42 billion. This number projects a strong uniformity with last fiscal year’s trade (USD 10.8 billion) and demonstrates renewed ties between the two nations after an abrupt cooling off period since 2011, when Myanmar began the democratic reform process. 

In 2016, Singapore was Myanmar’s largest foreign investor.  For more than two decades, it was China. There is a growing rapprochement between Myanmar and the US. Myanmar was isolated from much of the global economy under military junta rule, making its government especially dependent on China. In response, China placed a strong emphasis on its powerful relationship with the Yangon government. 

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KB Teo is a former diplomat with the Singapore Ministry of Foreign Affairs. He attended the UN General Assembly as part of the MFA delegation.