Out-of-step Myanmar faces ASEAN pressure to change
Out-of-step Myanmar faces ASEAN pressure to change
Dominic Whiting, Reuters, Yangon
Myanmar's military rulers, marching completely out of step with regional efforts to boost trade and investment, could soon face pressure from Southeast Asian allies to embrace political change, diplomats say.
Myanmar has been a troublesome partner in the Association of Southeast Asian Nations (ASEAN) ever since it joined in 1997, and its generals went a stage further last week by announcing a ban on all foreign trading firms, most of which are from ASEAN states.
The move, which Yangon said was aimed at protecting local businesses, has raised hackles in ASEAN, which is trying to ensure sustained growth by liberalizing trade and investment.
Thailand's Foreign Minister Surakiart Sathirathai brought up the issue with his counterpart Win Aung on Saturday and Thai officials said ASEAN would try to persuade Myanmar to reverse the decision.
They said Win Aung had replied that foreign trading firms would have to enter joint ventures with Myanmar companies if they wanted to continue operating.
Although ASEAN is still far from a collection of model open economies and sticks to a policy of non-interference in the affairs of member states, Myanmar's increasingly introspective line is testing its patience, diplomats in Yangon say.
"A number of the firms are from ASEAN, especially Singapore," said one. "It's going to be taken as a very unfriendly act...another in a long string of insults to investors and traders."
"It hurts ASEAN's investments -- they don't have a lot of spare money -- and ASEAN's reputation."
Foreign businesses in Myanmar already face pressure from human rights groups who say their presence props up the military regime, and are hampered by offbeat economic policies which blend mysticism and communist-style central planning.
"People have been pulling out for five years," said a Western diplomat. "You can make money on deals -- gems, petrochemicals, teak or drugs -- but fixed investment isn't worth it."
Foreign business people in Yangon warn the ban will cause imports of essentials such as medicines to dry up. Exports of Myanmar's main agricultural produce, grains and pulses, will also suffer and jobs will inevitably be lost, they say.
Myanmar is already slipping down the ranks of the world's poorest countries, but its ruling generals deny anything is wrong. They say frequent day-long power cuts are due to newly prosperous people buying electrical appliances. A slumping currency and near hyperinflation are blamed on speculators.
Shunned by the West, the generals value the legitimacy ASEAN membership confers, and clearly revelled in their role as hosts to a weekend meeting of the group's finance ministers, even if their uniforms and medals looked curiously out of place among the sober business suits of visiting delegates.
Escorted to the meeting by scores of machinegun-wielding soldiers, military intelligence chief Lt. Gen. Khin Nyunt told ministers Myanmar's economy was "vibrant" and should grow by more than 6 percent annually in the next five years.
But countries like Malaysia, Singapore and Thailand, which invested heavily when Myanmar began opening its economy in the early 1990s, are starting to see it as a burden which not only offers poor returns, but hurts ASEAN's ties with Western countries pressing for change.
"These countries have bigger fish to fry," said the Western diplomat. "Their relations with other countries -- the EU, Japan and United States -- are very important."
Western diplomats predict that as ASEAN patience with Myanmar wears thin, key members will start to put pressure on the regime to press ahead with political change.
The junta has been engaged for the last 18 months in United Nations-brokered talks with Nobel laureate Aung San Suu Kyi and her National League for Democracy (NLD), which swept democratic elections in 1990 by a landslide but was never allowed to rule.
Although the junta has released more than 250 political prisoners since the talks started and eased some restrictions on the NLD, progress has been painfully slow. Suu Kyi herself remains under house arrest and up to 1,600 political prisoners still languish in jail.
Diplomats say Malaysian Prime Minister Mahathir Mohamad is perhaps the only figure who could persuade Myanmar's generals to move forward in the talks.
He is thought to have much influence among Myanmar's top brass and is the main backer of compatriot and UN envoy Razali Ismail, who is due to visit Yangon again on April 23.
Diplomats say Mahathir could quietly encourage change without it appearing to be imposed from outside. "He's the elder statesman of ASEAN and he's combative as far as ASEAN's relations with the West are concerned," one said.
"And Malaysia should be an attractive model for them, as in many ways are China and Vietnam. The models there mean you preserve national unity and get development as well."