Myanmar | The Fund for Peace

Investing in Burma's Future

Published July 31, 2012 | By Krista Hendry

The recent move by the Obama Administration to suspend unilateral sanctions on Burma (Myanmar) led to a flurry of opinions. Many who oppose the move highlighted the specific request of Burmese Nobel laureate Aung San Suu Kyi for Western governments to not remove sanctions that prevented their companies from working with the state-owned Myanmar Oil and Gas Enterprise (MOGE). At the center of this argument is the notion that Western governments and private enterprise should hold back from diving in to the Burmese extractive sector until the country has adopted internationally accepted measures of transparency and accountability.

The Fund for Peace strongly agrees with that principle. However, in practice, the economies of countries newly opening or emerging from conflict are a vital component to putting the country on a path towards sustainable development and security and, ultimately, to good governance. The investment of responsible companies can be a catalyst for improved security, statebuilding and democratic reforms.

If the Obama Administration had heeded the arguments of Ms. Suu Kyi and her supporters and kept the sanctions on the Burmese extractive sector in place -- thereby preventing U.S. oil and gas companies from investing in that country -- it could have had resulted in unintended negative consequences, as we have seen in other conflict-sensitive places in the world. The truth is when a natural resource exists, it will be extracted. If American companies are prevented from competing to operate or invest in that extraction, then a non-US company will be selected. There is an inherent risk the selected company may not develop policies or programs that will benefit the local communities, ensure that human rights are respected, and promote improved governance.

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The Road Ahead for Myanmar

Published May 1, 2012 | By Raphaël Jaeger

The National League for Democracy’s landslide victory in the latest by-elections is a strong sign that Myanmar’s long-standing junta has finally outlived even its own perceptions of state health and functionality.

Nevertheless, after decades of ruling the country with an iron fist and allowing state institutions to become barely functional rubble, it is hard not to question the future viability of the country and its institutions.

Can Myanmar escape the trappings of a failed state and withstand the social, economic and political pressures it faces to avoid implosion?

A failed state cannot or will not fulfil its obligations under the social contract to provide essential services and security to the population, which can lead to instability and conflict. In the case of Myanmar, there is limited institutional and technical capacity to implement some of the reform measures being adopted.

Other symptoms of a vulnerable state are the loss of physical control of territory, or the loss of a monopoly on the legitimate use of force. Additionally, most weak and fragile states exhibit disharmonies between communities as there are no formal processes for the airing of grievances.

In spite of the ceasefires with most of Myanmar’s ethnic insurgencies, no peace agreements have been signed and many speculate that the recent ‘peace’ is only skin deep. Meanwhile, tens of thousands of Kachin people were reportedly displaced in recent months and some speculate that it is ‘business as usual’ within the country despite the purported governmental reforms.

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Myanmar

Raphaël Jaeger

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Profile 2011: Myanmar

Published November 30, 2011 | By Michael Berman and Raphaël Jaeger

After five decades of totalitarian military rule, the junta was dissolved in 2011 following a general election. Though the military continues to dominate politics, the civilian government has nevertheless rapidly implemented a series of reforms including the right to form trade unions, the release of some 6,000 political prisoners as well as easing media censorship and allowing the National League for Democracy party to participate the upcoming elections. The U.S. secretary of State’s visit to Naypyidaw in December 2011 was aimed to encourage President Thein Sein to deepen the reform process in Myanmar that has been approved to chair the ASEAN summit in 2014. Heavy government control of the state has arrested economic growth. Despite being resource rich, a lack of foreign investment, high inflation and deficits continue to restrict production. During 2010, Myanmar was devastated by Cyclone Nargis, which killed over 130,000 and displaced many more. Ethnic minorities continue to emigrate out of Myanmar and corruption pervades all levels of society, leading to a critical divide between elites, the working class, and minorities.

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