*Kristian Stokke, Roman Vakulchuk, Indra Øverland *
Report commissioned by the Norwegian Ministry of Foreign Affairs 2018
After almost 50 years of military dictatorship, and following the 2010 general elections which were rigged in favour of the military Union Solidarity and Development Party (USDP), Myanmar underwent a series of political reforms from 2011 onwards. In November 2015, the first free general elections since the 1990 elections resulted in a victory for the National League for Democracy (NLD). The NLD formed a new government in 2016 with Htin Kyaw as the first non-military president since 1962, and with Aung San Suu Kyi in the newly-created position of State Counsellor.
However, continued military influence, persistent capacity problems in political parties and parliamentary politics, weak channels of political representation and problems of administrative capacity give rise to critical questions about the substance of democratization in Myanmar. The country’s political trajectory remains open-ended, although the most likely scenario remains a continued, if slow, democratization process, with the next general elections scheduled for 2020. This makes it important for international assistance to design and implement ‘politically smart’ strategies in support of substantive democracy and peace.
Politics Myanmar’s current political situation must be understood with reference to the country’s long history of military statebuilding. The primary interest of the military has been to protect national sovereignty, unity and stability. With the change of government in 2011 came a series of political reforms in support of basic civil rights, electoral democracy and economic growth. From 2011 onwards, these reforms also created an opening for Western states to suspend or lift sanctions and engage in state capacity building, and for UN agencies and international NGOs to strengthen their engagement with Myanmar. Myanmar is thus a country with long and continued attention to statebuilding – but the state has been dominated by the military, although some degree of power has been transferred to a civilian government headed by the NLD, and the authority, capacity and legitimacy of the state remain fragile.
State autonomy: The persistence of military state capture. In Myanmar, the military is the foremost economic and political force in society. In particular, the autonomy of the state is circumscribed by the economic and political influence of the military. Constitutional provisions and other laws ensure that the state still has limited autonomy vis-à-vis the military. This military ‘state capture’ is the primary explanation for the character of the state and the persisting challenges of contested state authority, limited state capacity and weak legitimacy. Transforming civil– military relations remains the core challenge for substantial conflict resolution, democratization and development. The core structure of military state power and the centralized nature of the state pose evident obstacles to the peace process. As civil–military relations are institutionalized through the 2008 Constitution, changing the constitution has become a requirement for substantive democratization.
State authority: The contested authority of the unitary state. Myanmar is formally designed as a unitary state, with modest decentralization to regions/states and self-administered zones and divisions. However, the sovereign authority of the state is contested by multiple ethnic armed organizations, resulting in a complex mosaic of territorial control and administration by state and non-state actors. Some non-state actors have de facto territorial control and provide public services, displaying a state-like character. This has an impact on state capacity in policy-making and public administration, and poses challenges for external engagement. Lack of authority or access may limit the effectiveness of political reforms and aid programmes. Building state authority has centred on the question of incorporation of ethnic minorities in the periphery: for Myanmar, resolving intrastate conflicts remains a pressing challenge.
State capacity: The challenges of policy-making and public administration. The shift to a democratically elected government has widened the space for more inclusive policy-making, but this appears to be hampered by an organizational culture of hierarchical decision-making within the ruling NLD, the government and the civil service. Moreover, there exists considerable mistrust between the NLD government and the civil service, due to the military background and loyalties of many bureaucrats. In addition, administrative departments are staffed by poorly-paid civil servants who must still rely on outdated technology and systems. All this means that the transformation towards democratic policymaking and bureaucratic professionalism may well seem slow. The 2008 Constitution and subsequent political reforms brought a degree of decentralization from the union level to the state/regional level. However, the devolved powers and responsibilities, as specified in the Region and State Hluttaw Legislative List, remain limited in scope. State/regional governments also have a constrained revenue base and continue to rely on transfers from the union level, even though many ethnic states are rich in valuable natural resources. While the Constitution grants state/region governments some authority concerning tax resource extraction, this is limited to less valuable resources.
State fragility and legitimacy. In the 2017 Fragile States Index compiled by the Fund for Peace, Myanmar is persistently placed in the red category of high-risk countries. Most Myanmar citizens support democracy, although their knowledge and conception of the idea may vary.
Many acknowledge that Myanmar’s democracy is flawed, and the level of trust in political institutions is low. The opportunities for popular participation are limited – a major challenge for the legitimacy of the state, despite the successful introduction of electoral democracy, with the 2015 electoral victory for NLD representing a strong show of support for democratization. People mainly engage in civil society organizations, and popular support is increasingly contingent on positive outcomes of democracy. When asked about what is most important now – democracy or economy – most Myanmar citizens opt for economy (Welsh & Huang 2016a).
The military (Tatmadaw). The Tatmadaw has long been the most influential political actor.
While its self-perception is that of a professional army that protects the sovereignty and unity of the Union of Myanmar, it is not under democratic political control. Rather, the Tatmadaw in its own right has become the basis for the formation of an economic elite, and has hence developed an economic self-interest in the continuation of military rule. Changing civil–military relations, i.e. strengthening the autonomy of the state vis-à-vis military economic and political movements, is a key challenge for political reform in Myanmar. After 2011 the Tatmadaw displayed some flexibility on issues not deemed to be its primary interests, but little flexibility on questions of the unity, sovereignty and stability of the Union. Matters of economic development seem to fall somewhere between these two poles.
Ethnic armed organizations (EAOs). Myanmar has many different types of EAOs, highly diverse in ethnic identity, military strength and engagement strategies towards the Myanmar army and the government. The key questions among EAOs, in the past and today, are how to build ethnic alliances and engage with the state in order to achieve self-determination and equality within a federal state.
Civil society organization (CSOs). Myanmar has a multi-layered civil society with a great many types of CSOs, ranging from grassroots movements to more organized and professionalized NGOs. These engage in various roles in the context of limited state presence and capacity and armed conflict (mutual self-help, humanitarian relief, public service delivery and political advocacy), and with complex relations between CSOs and the state. There has been considerable growth in CSOs, especially after Cyclone Nargis in 2008 and the expansion of political space since 2011, but most CSOs still have limited political access and influence.
Religious actors. Religious institutions have long traditions of providing important services in Myanmar society, especially in education, health services and welfare support, including humanitarian assistance to displaced persons. The strong and complex links between Buddhism and politics in Myanmar have underpinned the recent re-emergence of Buddhist nationalism. The period since 2011 has seen a wave of anti-Muslim rhetoric and violence, especially in northern Rakhine state.
External actors. Myanmar is heavily influenced by external actors, where ASEAN, Australia,
China, the EU, India, Japan, Norway, Singapore, South Korea, Vietnam, Thailand and the USA are especially important. With the 2017–2018 Rohingya crisis in Rakhine State, Muslim countries such as Indonesia, Malaysia, Pakistan and neighbouring Bangladesh have also contributed to shaping Myanmar’s international relations. The democratic opening has been driven largely by the military rulers’ interest in changing Myanmar’s relations with Western states (primarily the USA) and thereby gaining leverage vis-à-vis China. After the 2015 elections, China regained greater influence, not least through its active role in the Myanmar peace negotiations, accompanied by efforts at improving its image through corporate social responsibility programmes and engagement with a broad range of stakeholders. Large dams and infrastructure projects under China’s Belt and Road Initiative have served to strengthen Myanmar’s economic links with and dependence on China. Meanwhile, ASEAN has incrementally developed a policy of constructive engagement with Myanmar. The other ASEAN member countries are more developed than Myanmar, providing an impetus for the country’s reform-oriented path as it seeks to catch up.
Economic and social situation
Economy and society. Myanmar has one of the fastest-growing economies in Southeast Asia, with average economic growth of 7.5% during the period 2012–2016, and this is expected to continue for several years. One explanation of the rapid economic growth is the country’s young population, which helps ensure high growth in consumption and incomes during the period 2015–2025. Members of the urban middle class in areas dominated by the majority Bamar ethnic group have been the major beneficiaries of the new reforms, whereas the economic benefits for rural constituencies have been less noticeable, especially in conflict-affected ethnic states where land-grabbing has been widespread.
FDI and sources of growth. Myanmar has a pressing need for foreign direct investment (FDI).
Among other things, Myanmar has the greatest power-sector investment needs among the countries of Southeast Asia. In 2016–2017, investors became increasingly cautious and worried about the slow pace of economic reform (Vakulchuk et al. 2017). Limited infrastructure remains a major hurdle to economic growth – for instance, only 37% of the population have access to electricity (World Bank 2017a). Agriculture is the biggest contributor to GDP (more than 35% in 2014) and employs more than 65% of the population, but the petroleum sector is likely to play a leading role in generating economic growth.
Informal economy and corruption. Myanmar’s informal economy is one of the largest in the world. This economy is upheld by informal elite pacts that were solidified under the military era, involving many who are members of the military and crony companies. For example, half of the multi-billion USD jade trade is illegal. The informal sector is linked to corruption, drug trafficking, smuggling, illegal migration and cross-border trade. Although Myanmar has gradually improved its ranking in the Transparency International Corruption Perception Index, moving from 157th place in 2013 to 136th out of 176 countries in 2016 (Transparency International 2017), corruption remains widespread and pervasive. The lack of an efficient regulatory system and effective laws explains why the informal system has become so widespread. In addition, political instability and the Rakhine crisis create serious concerns for foreign investors.
Hydropower. Hydropower generation is controversial in Myanmar. It feeds ethnic tensions in various parts of the country, and is likely to remain a major source of domestic social and political tension in the near future. Large-scale dam construction projects often cause discontent among the local population due to lack of proper stakeholder consultation and coordination, often leading to displacement and environmental degradation. With the NLD government in place, Chinese and other foreign companies are increasingly attempting to involve civil society in consultations, but with limited success thus far.
Petroleum sector. Myanmar is rich in onshore and offshore hydrocarbon resources. The upstream petroleum business is open to foreign investors, whereas downstream is restricted. Due to limited local processing capacity, Myanmar continues to import a substantial share of its petrol and diesel, mainly from Singapore and Thailand. Gas reserves are more plentiful, with 283 billion cubic meters of proven natural gas, similar to the reserves of Thailand.
Fisheries. Fish farming plays an important role in ensuring food security, employment and SME growth. But the fisheries remain underprioritized by the government and suffer from poor management as well as the lack of infrastructure, modern technology and impact assessments. The potential of coastal and ocean fisheries remain largely unrealized. Poor coastal aquaculture management leads to overexploitation and illegal fishing in Myanmar’s territorial waters.
Forestry. Myanmar suffers from large-scale deforestation that has accelerated in recent decades.
The forest industry has been grossly mismanaged: at the present rate of deforestation, the forests will disappear by 2035. On 25 May 2017, the Forest Department (FD) announced that whereas there had been 39.2 million hectares of forests in 1990, the figure had dropped to 29 million hectares by 2015. There are two main drivers: unsustainable logging and extensive agricultural development.
Land rights and land disputes also complicate forest management. The incentives behind deforestation are rooted in the opportunity costs related to different land uses and land tenure rights. A peace agreement could put additional pressure on forests and accelerate deforestation: when the armed groups that previously controlled various forest areas lay down arms, these areas will be available for companies involved in illegal logging.
Mining. Control over natural resources has been a major driver of conflicts in ethnic areas. The government has shown a commitment to adopt international standards in governing the mining sector, for instance by joining the Extractive Industries Transparency Initiative in 2014. However, there is a long way to go before real progress in governing the mining sector is achieved. Military-owned companies and their cronies are heavily involved in resource extraction, often in conflict-affected areas. This strengthens the military’s interest in maintaining control, thereby increasing the risks of corruption, human rights violations and continued conflict. Some areas that are contested or controlled by ethnic armed groups have parallel systems of resource governance. Wealth sharing in natural resources is thus a key concern for democratic decentralization and conflict resolution.
Development cooperation. After opening up in 2012, Myanmar attracted numerous international organizations and donors. Aid soared by 788% within just a year, from USD 504 million in 2012 to USD 4.5 billion in 2013. However, Myanmar is still in a highly critical phase, and external support can be decisive for the NLD-government’s ability to carry out planned reforms. The increasing involvement of foreign donors also involves risks, as the state has limited capacity to absorb assistance. Also, some local actors feel that not all international consultants who work in Myanmar have sufficient country expertise. Myanmar needs smart development aid that can take the many local factors into account. Despite attempts to improve donor coordination after the NLD government came to power, much still remains to be done.
Conflict and stabilization
Causes of ethnic conflicts. Myanmar’s ethnic conflicts have deep historical roots and revolve around political grievances about state form, power-sharing and ethnic equality. According to the major EAOs, there can be no real peace without political negotiations on the questions of ethnic self-determination and federalism. Core causes of ethnic conflict are political grievances related to ethnic self-determination, representation and equality, war-related security and development grievances, and the mistrust and resentment fuelled by failed peace initiatives.
Peace initiatives. The various ethnic groups agree that only political negotiations on self-determination, federalism and ethnic equality can resolve the ethnic conflicts in Myanmar. The NLD government’s peace process revolves around ‘The Union Peace Conference’ (21st Century Panglong Conference). The key question on process design concerns sequencing: which should come first, political negotiations on arrangements for a federal union, or arms surrender in a nationwide ceasefire as a precondition for political talks?
Inclusivity in the process is essential. Without the participation and influence of the major EAOs, the political process is unlikely to yield substantive and lasting peace. Moreover, women have played only a limited role in the peace process, and there has been little progress in implementing UN Security Council Resolution 1325 (UNSCR 1325) on Women, Peace and Security.
Migration, climate change and humanitarian needs Migration. In Myanmar, there are three main general drivers of migration: poverty, violent ethnic conflict and natural disasters. The political transition has been accompanied by an increase in labour migration and Myanmar was also estimated to be the world’s eighth largest source country for refugees in 2016 (UNHCR 2016: 17). As regards forced migration, the situation between 2007 and 2017 was actually worse than before the political thaw (UNHCR 2017). For labour migrants, there could be some scope for return, and Myanmar needs people to fulfil the many new roles in its transitioning economy. However, net outbound labour migration from Myanmar seems likely to increase and diversify in the coming years, as neighbouring economies and Myanmar’s linkages with them continue to grow.
Climate change. Myanmar is one of the world’s countries most vulnerable to climate change (Kreft et al. 2017: 6). Government institutions need a better understanding of climate change and its effects – both direct impacts on Myanmar and indirect impacts via neighbouring countries such as Bangladesh (Overland et al. 2017). Myanmar state officials have limited technical capacity to participate in and handle international negotiations on climate change, or to implement environmental agreements. Myanmar therefore greatly needs support in strengthening its technical capacities. Climate change may appear to be an abstract and remote problem for a country with many more pressing concerns, but the impacts of climate change on Myanmar are proving more immediate than expected, and are likely to be even greater in the future.
Human rights challenges and women’s rights
During military rule, Myanmar was regarded as one of the most oppressive countries in the world. International human rights organizations confirm improvements since 2011, but also find that there has been little change in some important areas. The 2016/2017 annual reports from Human Rights Watch and Amnesty International highlight human rights abuses in the context of ethnic armed conflicts; discrimination and violence against the Rohingya minority; restrictions on freedom of expression; abuses of women’s rights and reduced international scrutiny.
Aung San Suu Kyi has been criticized by the international community for inaction and silence on the Rohingya crisis and for doing little to prevent grave human rights abuses by the military, against a stateless community that is recognized by neither Myanmar nor Bangladesh.
Defenders of the NLD government point to the real power of the military and the risk of a return to military rule, either through a coup or by electoral means. The local conflict in Rakhine has become politicized, both within Myanmar and internationally. It has the potential to destabilize the NLD government and further securitize politics in Myanmar. The conflict may also be used strategically for the dual purpose of destabilization and securitization, especially by actors within the military.
Regarding gender rights and women’s participation in the economy, the period 2006–2016 has seen some improvements. However, many challenges remain, such as 30% wage disparity between men and women and low rate of female participation in the national economy (DFAT 2016: 5). The civil rights and liberties of women are largely restricted; their freedom of movement is limited and there are no special legal provisions for female participation in political processes, at the local or national levels.