Myanmar

Anna Affranio published in Culture and society, Myanmar

Ghosts from the past return to Myanmar

Two years after the coup, the country also faces another problem on drugs

On February 1st, a silent protest pervaded the streets of Yangon. Many stores were closed and people stayed in their homes to send a signal to the government. This happened exactly two years after the coup that, in 2021, forced Aung Sang Suu Kyi under house arrest as the military junta regained power. Scenes, unfortunately, familiar to this Asian country that has been plagued by attacks on its democracy for decades. In the past two years, more than 3,000 people have lost their lives during protests and demonstrations of dissent against the military junta, and more than 1.5 million people have been forced to flee their homes, exacerbating endemic problems such as food insecurity and school dropouts as early as elementary school. 

The serious political crisis facing the country is in addition to an increasingly precarious economic situation, which began with the COVID-19 pandemic that severely affected the country, dependent on international tourism. The situation further worsened with the departure of many multinationals from Yangon, which significantly contracted jobs and thus economic opportunities. More recently, Russia`s invasion of Ukraine, which caused a sharp increase in fertilizer prices and thus the cost of living for a predominantly poor and rural population, has caused the situation to slide into the abyss. 

The impoverished economic conditions have, among other things, led Myanmar to resume and increase the cultivation of opium poppies, of which it is currently the second largest producer in the world after Afghanistan.

The so-called "Golden Triangle," or the region where Laos, Myanmar and Thailand meet, has historically been an important area of drug production, particularly heroin and methamphetamine. Decades of political instability have made Myanmar's border regions particularly porous, and therefore easily exploitable by drug producers and traffickers due to the limited border controls. Opium production and sales are in fact a major source of income for many families: the poppy grows easily, and its cultivation requires less effort than other agricultural products. However, before the coup the Country, benefitting from the political stability gained under the leadership of Aung San Suu Kyi, had gradually moved away from this illegal source of income, so much so that an all-time low in cultivated area was reached in 2020. But according to a recent UNDOC (United Nations Agency on Drugs and Crime) report, which used satellite imagery to monitor the area under opium cultivation, evidence has emerged that by 2022 opium production has almost doubled from 2020, indicating a U turn in the country’s plan to move away from drug production. 

The increase in production and cultivated areas is found across the entire country, particularly in the border areas with China and Thailand, but the most pronounced turnaround was in the Shan region, where field data confirmed organized land exploitation for poppy cultivation of up to 84 percent of the land, according to the report. 

But the chaos and instability rocking the country are not only increasing the opium trade: several raids conducted by Myanmar's army and police in recent years have led to the seizure of large quantities of chemical narcotics such as methamphetamine and methylfentanyl, much of which is destined for export to neighboring countries. For years in fact, the country had already become notorious for the production of "yaba," a synthetic drug containing caffeine. Proof that the illicit operations of local producers across the border have not been hampered by COVID-19 or the post-coup unrest in Myanmar; rather, as it turns out, the opposite is true.

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Lorenzo published in Myanmar, Politics and strategy

ASEAN stays united over Myanmar

The Burma issue continues to be a complicated challenge for Southeast Asian countries. The bloc tries to show commonality of purpose

Unity. This was the concept mentioned repeatedly at the summit of foreign ministers of the governments of ASEAN countries held in Jakarta last weekend. The summit represented the official launch of Indonesia's 2023 rotating presidency. And President Joko Widodo's administration was immediately resolute in its attempt to close ranks on the most politically and diplomatically thorny issue: the crisis in Myanmar. Two years after the military coup, the situation is still far from resolved. The Burmese military's recent decision to extend the nationwide state of emergency by six months has sparked controversy at home and condemnation abroad, as the move was perceived as a signal that general elections promised for next summer will be postponed. The country's transition to civilian rule appears to be receding, while the five-point consensus reached between the military junta and ASEAN remains largely unimplemented. At the end of the summit, Indonesian Foreign Minister Retno Marsudi said Jakarta had proposed to member countries a peace plan implementing the five-point consensus, which called first and foremost for an end to violence and dialogue between the military and rebels. According to Marsudi, all regional government representatives have accepted the proposal. This is a positive sign for Indonesia, whose rotating presidency promises to be very proactive on the issue. "This plan is very important as a guide to deal with the situation in Myanmar in a unified way," the Indonesian government claims. From outside and within the Southeast Asian region, moreover, come calls for ASEAN to adopt a more assertive posture and thus make a quantum leap in the face of one of the most complex challenges the bloc has faced in recent times. Indonesia seems willing to facilitate this process, but at the same time President Widodo has warned the major powers not to use Southeast Asia as their own field of challenge. Confirming that ASEAN is not willing to take part in contention or contribute to the return of an opposing bloc logic. 

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Agnese Ranaldi published in Cambodia, Economy and trade, Myanmar

Cambodia and Myanmar new manufacturing hubs in Southeast Asia

Some exogenous pressures on Beijing have encouraged the relocation of manufacturing production facilities from China to Southeast Asia. The primary beneficiaries of this transition in addition to Vietnam are Cambodia and Myanmar

Global value chains in manufacturing are shifting their production center of gravity from China to Southeast Asia. This is one of those phenomena that the spread of the pandemic has accelerated, triggered by rising Chinese labor costs and then confirmed by exogenous factors such as the trade war between Washington and Beijing in recent years. The exodus of the manufacturing sector thus seems to be rewarding some countries in the southern neighborhood: although Vietnam has always been a popular destination for export orders from China, it is now Cambodia and Myanmar that are the contenders for the role of manufacturing hub in East Asia.

The intra-regional offshoring dynamic had been ushered in by rising labor costs in China, prompting several companies in the manufacturing and textile sectors to explore other markets in the region. Given the restrictions caused by the Covid-19 pandemic, for example, Apple, Samsung, and Xiaomi recently moved their assembly lines to Vietnam as Beijing grappled with new variants of the virus. Hanoi offered those multinationals that had once built manufacturing plants in China with a view to minimizing costs and maximizing profits easier access to the promising Southeast Asian market, which has inherited from its northern neighbor the role of the new frontier of globalization.

But in addition to Vietnam, which has long been considered the locomotive of Southeast Asia, other countries in the ASEAN bloc are vying to serve as regional production hubs. According to Wang Huanan, a manufacturing expert, "Vietnam has been a very popular destination (...) but Myanmar and Cambodia have been catching up in recent years." Indeed, Naypyidaw and Pnom Penh have implemented shrewd economic policy strategies to attract as much foreign direct investment as possible, thereby boosting their own domestic growth. Between tax exemptions and policy incentives, they have made themselves attractive in the eyes of East Asian-based multinationals seeking new profit opportunities in the emerging markets of the Southeast.

In Cambodia, total trade volume reached $22.47 billion in the first five months of 2022, up 19.7 percent from the same period a year earlier. Total exports saw a 34.5 percent year-on-year increase, while the most exported goods were garments, leather goods and footwear. On the other hand, Myanmar is a popular destination for Chinese garment factories. The number of these companies, according to experts, has increased from less than 100 in 2012 to more than 500 in 2019. Between 2012 and 2019, the average annual growth of Myanmar's garment exports exceeded 18 percent and in some years exceeded 50 percent. The sector's development was slowed only by the pandemic in 2020 and last year's military coup.

As the Chinese economy recovers from the restrictions of the strict "Zero Covid" policy, multinationals that had benefited from China's low labor costs are now looking to the southern neighborhood for new profit opportunities. Among the emerging markets in the ASEAN bloc, Vietnam leads regional growth. But an eye must be kept on the incipient development of Cambodia and Myanmar, among the biggest beneficiaries of China's manufacturing exodus.

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Sabrina Moles published in Myanmar, Politics and strategy

The effects of the war in Ukraine on Myanmar

While Moscow is engaged in the conflict, Naypyidaw once again counts low on Russia's list of priorities. And China is preparing to fill this void despite mistrust on both sides

"Neither with Russia, nor with Ukraine" is a slogan that would sound unpleasant to the ears of the ruling military junta in Myanmar. The friends of the Burmese army, the Tatmadaw, can be counted on the fingers of one hand. And among these, Moscow and Kiev were the best partners on the arms market, the only means to legitimize their power by force after the coup of February 1, 2021. With the Ukrainian crisis, Myanmar has some inevitable points in common, the same as in all conflicts: poverty, destruction and chaos. As reported by the UN envoy to Myanmar Andrew Kirkwood, the number of Burmese in absolute poverty has reached three million, while basic public services have collapsed, especially in rural areas. What has not stopped is the violence of the clashes, which continue to cause civilian deaths. In this context of a profound economic and political crisis, it is no longer certain that the Tatmadaw will be able to (re)shape the country in its own image and likeness. Above all, it no longer has its back covered. With Russia distracted it may have to look elsewhere for a protector, looking towards China. A choice that the Burmese army has always tried to delay because of the historical distrust towards Beijing, which had deep relations with the government of Aung San Suu Kyi.

Since the armed forces have regained power, the unequal struggle between almost unarmed citizens and a Tatmadaw equipped with military means as well as tools for surveillance and tracking of rebel nuclei, the groups that identify themselves in the People's Defense Forces (PDA) or in the more structured ethnic armies, has immediately emerged. To them, too, the news of two fewer players on the market somehow adds further difficulties in a context of increasing scarcity. The Pdfs struggle to find full armed support from the democratic government-in-exile (the National Unity Government of Myanmar, or NUG), and even more elusive is support from Western countries. In recent weeks, the US State Department has officially defined the repression of the Rohingya as "genocide", but on a concrete level, Western pressure on the coup government has weakened, also due to the Ukrainian "distraction". The same applies to the armies of the ethnic groups, often in conflict with each other. The Russian-Ukrainian conflict could erode both traditional commercial networks and the more opaque trafficking of raw materials and drugs - often the basis of the informal armies' income. 

Meanwhile, the coup has severed most trade and diplomatic ties with the West, leaving little room for maneuver for the military junta's business. The threat of an increasingly self-focused Russia risks reducing not only the Tatmadaw's war potential, but also trade in drugs and other essential goods in favor - once again - of Beijing. The situation is aggravated by the fact that the Western powers are struggling to find the right channels (unrelated to the junta) to provide the necessary aid. Of the 350 million dollars requested by the UN envoy in 2021, for example, only a third has arrived and this does not remove the risk of repercussions from the army. The same natural resources that abound in Myanmar do not seem to represent an incentive attractive enough to draw the attention of Western partners beyond the sanctions issued in the past and the embargo on arms sales.

Prior to the Russian invasion of Ukraine, Myanmar seemed naturally headed for the emergence of new pseudo-democratic institutions. The Tatmadaw, in fact, is gearing up to take off its uniform and put on the clothes of politics. The current State Administrative Council (Sac), the governmental institution created ad hoc after the coup, is talking about calling new elections by August 2023: a pluralistic competition of façade, necessary to try to regain the trust of trade partners, investors and international donors. Among these, China is playing in advance: the NUG has disappeared from official statements and bilateral initiatives now involve the diplomatic arm of the Tatmadaw, former colonel Wunna Maung Lwin. 

He was invited in March 2022 as part of an Asean delegation visiting Beijing to talk about the "negative effects of the Ukrainian crisis in Southeast Asia." Chinese Foreign Minister Wang Yi then met with him in Anhui on April 1 to confirm China's "utmost support" for Myanmar's development "regardless of how the geopolitical situation changes." These statements, along with projects such as the construction of new infrastructure (e.g., a new gas pipeline) and the launch of industrial zones along the border, come at a crucial time. A moment in which a "no" becomes increasingly unthinkable, even in the face of the Tatmadaw's historical distrust of the People's Republic. In the meantime, the possibility of an unstable Myanmar for a long time to come with Russia's departure is bringing Beijing closer to ethnic groups. A strategy that keeps all possibilities open, but that the president of the NUG (criticizing Beijing for approaching a government it defines as "illegitimate") has defined as "dangerous" because it could "continue, and not cease, internal conflicts.

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Redazione published in Culture and society, Myanmar

The role of social media in post-coup Myanmar

By Agnese Loreta

From the Internet and social media boom in 2013 to their shutdown intermittently starting in 2021. How the Burmese military's coup has changed social media use

War and social media, a binomial founded on a mutual dependence and that has developed since the middle of the 19th century with the birth of modern information tools. Since then, this relationship, almost intrinsic, has not failed but, on the contrary, it has reinforced and led to a growth in the informative exposure of conflicts. Two elements of this relationship are interesting: the first is the attempt to control information traffic, the second is the intensive use of social media as weapons.

Both of these processes are known to the Military Junta and the Civil Disobedience Movement (CDM), respectively, two of the main actors in the situation in Myanmar.

After February 1, 2021, the date marking the third coup in the country's history, and following the arrest of Aung San Suu Kyi, the long-hidden discontent erupted on the streets of Burma making itself heard loudly through the CDM, with social media playing a key role in its creation and in its struggle. 

The history of Myanmar is sadly surrounded by conflicts, starting from the Anglo-Boer ones up to the invasion of Japan. This time, however, the role of social media has taken on a strong central role, thanks to the fact that it was only in 2013 that the state monopoly on telephone services came to an end, thus allowing a higher fruition of the Internet and associated services. Nevertheless, the policies of the Military Junta against freedom of opinion and expression, implemented since February 2021, have considerably modified the structure of social media users. In fact, while there were 23.65 million Internet users and 29 million social media users in January 2021; one year later, the number has risen to 25.68 million - an increase of +7.1% during 2021 - while there is a sharp collapse in social media users, which stood at 20.75 million in January 2022, practically ⅓ fewer users. According to Statcounter Global Stats in March 2022, the most used social media in Myanmar is Facebook (87.21%), followed by YouTube (5.48%), Pinterest (3.5%), Twitter (1.67%), VKontakte (1.21%), and Instagram (0.38%).

In addition to its predominance in the country, Facebook is also known to have played a complex role in Myanmar. In point of fact, if on the one hand it has succeeded in unifying Burmese citizens and creating direct communication between the people and the government in charge, on the other hand it has not been able to control the difficulties arising from the rapid spread of social media in a short period of time, such as hate speech and misinformation problems related to the absence of the so-called "critical digital literacy". Despite the fact that Facebook has adopted tools and policies aimed at solving the above-mentioned problems, they did not disappear but re-emerged with force on the occasion of the 2020 elections and, subsequently, after the coup d'état which was followed by the ban on the use of Facebook. The military junta believed that this move could stop the manifestations and activism of the CDM but, on the contrary, it led to an exponential increase in the use of Twitter which, however, was not able to solve the problems of misinformation and hate speech that plagued its brother-Facebook.

According to Freedom House's analysis, Internet freedom in Myanmar has suffered an acute setback since the coup and marked "the most serious decline ever documented by Freedom on the Net", as noted in the introduction to the Report, which gives the country an overall score of 17/100.

Although social and Internet platforms are obscured and blocked in Myanmar by the military government, protesters are capable of bypassing these bans through encrypted messaging - such as Signal, Viber, and Messenger - and VPNs; moreover, applications such as Bridgefy ensured that protesters could communicate with each other even during moments of total Internet blackout. This shows how limited and antiquated the practice of Internet shutdown is, but also how strong the resistance of citizens is.

In conclusion, even though social media is not without its flaws and headaches and the road to its conscious, effective use is still long, it must be acknowledged that it played a crucial role in the birth and survival of the CDM. They have been able to keep the attention on the issue alive at an international level, they have been capable of bringing among Burmese citizens the value of inclusiveness, since the main language used in social media was Burmese and they have been a place - albeit virtual - where the key words were resistance and solidarity. 

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Redazione published in Myanmar, Politics and strategy

Myanmar risks to split ASEAN

Myanmar promises to still be at the center of Southeast Asian dynamics during 2022. With internal rifts deepening and in the absence of a recognised national government, Cambodian Prime Minister Hun Sen's recent visit has set the dust on fire

By Tommaso Grisi

Myanmar continues to be at the center of attention. Following the coup that overthrew the government of Aung San Suu Kyi, the relationship with the military junta has created many problems for diplomats in South-East Asia and the rest of the world. While the stance taken by Western countries was predictable, with the United States and the European Union adopting economic sanctions against the country from the outset, it is on ASEAN that the biggest questions are now being asked. The South-East Asian organization seems to be the only actor capable of exerting serious pressure on the country, given the ineffectiveness of the economic measures adopted and the impossibility of intervention by the United Nations, where China and Russia have vetoed the Security Council. The US Secretary of State, Antony Blinken, is also aware of this, and last December he led a diplomatic mission to South-East Asia, expressing strong concerns to the leaders of partner countries about what is happening in Myanmar.

For their part, the ASEAN member states have already declared that they do not want to follow the path of economic sanctions and prefer a softer but constructive approach. It was with this in mind that a five-point plan was initially drawn up, aimed at providing humanitarian aid to the population and establishing a political dialogue between the parties.

However, the divisions among the member states and the lack of cooperation of the parties involved have led to a deadlock, with the region's chancelleries undecided on what to do. Despite the common will to bring the country to a more stable condition as soon as possible, in fact, several knots remain to be unraveled within the organization, starting from the recognition or not of the governing role assumed by the military junta, currently excluded from ASEAN meetings, and the need to review the traditional principle of non-interference that has so far guided the actions of Member States.

In this respect, the visit of Cambodian Prime Minister Hun Sen was significant and met with strong criticism. Opponents of the junta accuse him of trying to legitimize the established regime, especially in light of the fact that Hun Sen himself took power in Cambodia in a military coup in 1997. The issue is all the more important considering the fact that the Prime Minister has been visiting the junta in two capacities: as President of ASEAN and as the first head of government to visit the country since the military seized power. This is certainly nothing new for the Cambodian Prime Minister, as he had already been criticized in the past for taking an overly open stance towards the Burmese junta, especially after proposing to extend an invitation to attend ASEAN meetings to those responsible for the coup. Despite this, the Cambodian Prime Minister seems intent on continuing along this path, having appointed his Foreign Minister, Prak Sokhonn, as the new special envoy representing ASEAN to Myanmar.

Exclusion from ASEAN meetings could indeed be a point of leverage. The access to the meetings of the governments of South-East Asia would constitute a de facto recognition for the military junta, fundamental to be able to interface as equals with the other countries of the region. It is precisely on this point that the credibility of ASEAN seems to be at stake. If the organization were to give in to the junta's pressure, in fact, it would be impossible not to suffer a severe blow to its international image, given that in recent months there has been no lack of tension between the Member States with reference to the Burmese issue.

The governments of Malaysia and Indonesia, which have openly criticized Hun Sen's visit to the country, as well as Singapore, are in strong opposition to Cambodia's positions, while representatives of Laos, Thailand and Vietnam have lined up in support of him. In short, the cracks within the organization seem to be deepening.

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Sabrina Moles published in Myanmar, Politics and strategy

Myanmar, the future after the coup

On February 1, 2022, 365 days will have passed since the coup that brought Naypyidaw back under the control of the military junta. The outlook for the country that represents a dilemma for Southeast Asia. From the China Files mini e-book "In China and Asia 2022", realized in collaboration with Associazione Italia-ASEAN

It's any day in December 2021. Typing "Myanmar 2022" on the search bar, three of the results concern a possible reopening for tourism, while three others take up the UN alarm on the escalation of the humanitarian crisis. This schizophrenia of images reinforces the uncertainty about the future of Myanmar, which almost a year after the coup is crystallized in a social (and armed) conflict that seems destined to continue. On February 1, 2022, exactly 365 days will have passed since the deposition of the elected government by the Tatmadaw, the national army.

Humanitarian crisis

The United Nations Development Program (UNDP) has noted a sharp decline in the living conditions of Burmese citizens since the arrival of General Min Aung Hlaing in government. According to its survey, nearly half of Burmese citizens (46.3%) could end up below the poverty line by the end of next year. For the urban population, it would mean a spike in poor residents three times the 2019 figures (37.2% vs. the previous 11.3%). Of 1,200 households surveyed, nearly half say they are running out of savings. 68% are tightening their belts on food consumption, 65.5% have borrowed from loved ones, others from loan sharks or lenders. In a nutshell: the double Covid19-golpe emergency is taking the country back to 2005, wiping out the political and socio-economic achievements of the last 16 years.

Added to this situation is the serious situation of the health sector, which already before 2021 was not in good health. To date, the interests of the military leadership are far removed from services for the citizenry, with the result that many medical facilities remain unstaffed - a factor also due to the civil disobedience movement, which refuses to work for a government it does not recognize. To date, 74% of medical costs are still borne by the individual: Myanmar is the Asean country with the highest private spending on treatment per capita.

Finally, the continuity of internal violence between ethnic groups and the armed forces is no less worrying. On the one hand, youth have joined the civil disobedience movement; others have joined ethnic armies to receive military training. The Tatmadaw, in turn, has resurrected compulsory training for children of soldiers aged 14 and over, despite treaties signed with the UN to hinder the enlistment of child soldiers. Participation in training is now also extended to the wives of military personnel.

Economic and political stagnation

The economic situation is not good at the national level, although there were those who hoped for an initial phase of chaos followed by a slow reestablishment of business. GDP per capita is falling back to the levels before the first free elections in 2015. The local currency, the kyat, has lost more than 60% of its value against the US dollar. Meanwhile, prices are rising and gasoline shortages have already led to the temporary closure of many stations. The International Food Policy Research Institute predicts a drop in fertilizer purchases during the monsoon season, with serious consequences for agricultural production. Trade is slowing, and restrictions along the borders due to the health emergency are only contributing to the halt in activity. The junta has already restricted imports of goods considered "non-essential," while other goods such as pharmaceuticals are becoming increasingly expensive and difficult to source.

In a climate of serious lack of governance, economic power is likely to be concentrated in the hands of the Tatmadaw and ethnic militias in their areas of influence. The specter of illicit trafficking linked to the smuggling of drugs, precious stones, wood and metals returns. And of human trafficking: according to the Global Slavery Index in 2018 at least 575 thousand Burmese citizens were living in conditions of slavery, a figure that could rise again due to growing personal debts.

International relations

Myanmar today seems an increasingly isolated country, an image that resonates familiarly with that of just a few years ago. Foreign companies are slowly leaving the country, as in the case of Norwegian telecommunications giant Telenor, German wholesaler Metro, and British American Tobacco. Not all of the economy is frozen. Despite sanctions against individuals and organizations linked to the Tatmadaw, some large capital flows continue to bring weapons and funding to the Burmese military. As reported by the group Justice for Myanmar, there are still many companies that sell weapons and surveillance systems to the Burmese army (including Italy).

While the response of Western powers - especially the U.S., EU, Australia and Canada - remains on the ropes of economic restrictions, Asean is still struggling to find its position. Or rather, it remains open to negotiations. After an initial phase of dialogue with General Min Aung Hlaing, the group has also broken off contact: the junta has not kept its promise to adhere to the five points requested by the Association, and is therefore isolated even among its neighbors (including "immediately cease violence in the country"). Cambodia's arrival in the presidency, however, could normalize relations by increasing engagement with the military junta. Cambodian Prime Minister Hun Sen came out in defense of Naypyidaw: "According to the ASEAN charter, no one has the right to expel another member." More attempts at dialogue could follow after the early January visit. In the same days as Hun Sen's declarations came the official condemnation of Aung San Suu-Kyi to four years in prison. The road back to democracy, once again, is far away.

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Anna Affranio published in Economy and trade, Myanmar

The not so easy exodus of foreign companies from Myanmar

Foreign companies operating in Myanmar are struggling to continue their operations given the political and economic situation. But they are also reluctant to leave: let's see why.

Following the COVID-19 pandemic and the political and economic crisis triggered by the military coup last February, foreign companies present in Myanmar are in a very critical situation, as confirmed by the collapse of investments that these companies have made in the country, at their lowest since eight years. 

The Burmese economy, according to the Asian Development Bank, has contracted by 18.4% in the last year and the situation does not look set to improve in the near future, so much so that the International Monetary Fund has recently revised downwards its forecasts for the rate of economic growth in 2022. At the root of this, there is the collapse of the local currency, the kyat, and the significant increase in food prices, all factors contributing to the growing unease of the population.

Political uncertainty, slumping local demand and currency volatility have prompted many foreign companies to close or downsize local operations. Liquidity shortages and banking sector dysfunctions have also limited the ability of businesses to pay employees and suppliers. Internet access was also severely restricted in the three months following the coup. These shocks weakened consumption, investment and trade and also limited the operations of companies in the supply of labor and other inputs.

Already in the first months after the coup of the regime, large companies such as the energy giants EDF and Petronas, but also the Thai group Amata and the Singaporean engineering company Sembcorp ceased or suspended operations in Myanmar. In addition, British American Tobacco (BAT) announced last October that it would leave the Burmese market at the end of 2021, although its departure was officially motivated by purely commercial decisions. In fact, having started operations there in 2013 with an initial investment of $50 million, BAT's exit from Myanmar after less than a decade reflects the critical situation the country has plunged into. Also in the same month, the Kempinski Hotel, in the capital Naypyidaw, which had also hosted President Barack Obama during his state visit in 2014 and was an important symbol of the country's openness, ceased operations. 

But exiting Myanmar is not an easy step for all companies. Many, in fact, have invested in multi-year infrastructure, and an immediate exit strategy is impractical. This is the case, for example, of Australian natural gas giant Woodside Energy, which merely states that "all business decisions in Myanmar are under review."

Another company that is struggling to leave the country, albeit for other reasons, is Norwegian telecommunications giant Telenor. The latter is strongly motivated to cease operations in Myanmar not only because of the serious deterioration of the business environment, which has resulted in a loss of over 782 million US dollars, but also in order not to give up to government attempts to control the company's activities. More specifically, the military junta has tried several times, although in vain, to force Telenor to limit web traffic and intercept users in order to allow the authorities to spy on calls and messages.

However, the company is still waiting to obtain the approval for the sale of the activities to the Lebanese company M1. This comes in the wake of a confidential order, issued last June, requiring senior executives of both foreign and Burmese telecommunications companies to leave Naypyidaw only with special permission, which does not seem to be forthcoming. 

Moreover, it should not be underestimated that the problematic financial situation only complicates the possible exit of the companies. The banks, which were stormed by long queues at ATMs at the beginning of this year, are still under pressure and liquidity is scarce, making repatriation of the remaining capital extremely difficult. As if that were not enough, the pandemic has also arrived, imposing travel restrictions and onerous quarantine requirements for those crossing borders.

There remains a profound unpredictability about the political situation in the medium and long term, which increases the margin of uncertainty for foreign companies as to whether or not they should remain in the country. These companies, which have been investing in Myanmar since 2011, when it was hoped that the process of democratic transition would be irreversible, are now in doubt whether to pack their bags or ride out the storm. 

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Alberto Botto published in Myanmar, Politics and strategy

The dilemma for foreign companies in Myanmar

The products’ boycott, the opinion of the international community and the economic crisis are shaking the international companies in the country.

The coup in Myanmar has inflicted a severe blow to the country's economy, already weakened last year by the emergency of COVID-19. The massive protests of the last five months, the workers’ strikes and the violent actions perpetrated by the Burmese army have led workers to leave the major cities and their jobs, seeking refuge in small villages and forests.

With the interruption of public and banking services and with daily internet shutdowns, the economic crisis has expanded dramatically, and the data of the latest report drawn up by the World Bank are clear: Burma's industrial sector has suffered a contraction of 11 percentage points compared to 2020, while services sector lost over 13 points. Over the years both sectors have made an important contribution to the country's economic growth: from 2014 to 2019, 6% of Burmese annual GDP growth came from the secondary and tertiary sectors, but these numbers dropped to 1% in 2020, and with 2021 forecasting even more negative figures.

These signs had already been perceived at the beginning of March when, due to the coup, 13% of companies in Myanmar had had to close their offices, waiting for a return to normality. The instability of the banking system and the inability of making online payments has inflicted a notable blow to companies: according to research involving 372 firms operating in Myanmar, 77% said that it is precisely the fragile banking system that has led to a drop in turnover.

Furthermore, as there is not much liquid money, citizens have been forced in recent months to make essential purchases with the few kyats that could be withdrawn from Burmese banks.

Five months after the military coup, international companies have now two alternatives: close their offices or bite the bullet while waiting for a stable situation in Myanmar. Foodpanda, a leading company in the food-delivery sector owned by the German Delivery Hero, has decided to continue operating in Myanmar despite the difficulties encountered in recent months with the blocking of internet and online purchases. A different choice was taken by Telenor, the Norwegian telecommunications giant which was forced to cancel contracts and all operations in the country for an estimated loss of around 780 million dollars. With regard to companies, the Burmese Civil Disobedience Movement (CDM) is also playing an important role in boycotting those companies that collaborate and fund the military government of General Ming Aung Hlaing: in recent months has been created the application "Way Way Nay ” which allows people to know if a company is directly connected to the military junta, so you can boycott it and decide to not buy its products. This has led to the boycott of products created by Chinese companies, as retaliation against Beijing, which until now has never taken a clear stance and which has repeatedly voted against the economic sanctions provided by the United Nations against the military regime.

For the CDM boycotting companies linked to the military junta may be the best solution to undermine the military and their finances: an interesting case is the sale of Burmese beer, whose companies belong to the military junta, which have seen a decrease in sales of 90%. To further hit the finances of the military junta, last March the members of the National League for Democracy asked international investors in the field of oil and gas extraction not to pay taxes to the Myanmar Oil and Gas Enterprise, the main oil and gas extraction company controlled by the Burmese army.

Finally, the influence of the international community should not be underestimated: some international brands have decided to interrupt contacts with the military government driven by the fear of episodes that could damage the brand’s name (this is the case of international brands such as Nike and Adidas which recently announced that they no longer want to use the cotton produced in the Xinjiang region). In Myanmar, H&M - the leading company in the clothing sector - announced last March that it has for the time being interrupted the relationship with its suppliers in Myanmar due to the dramatic events regarding the violation of human rights by the Burmese army. Like H&M, other international companies such as McKinsey, Coca Cola and media agency Reuters have abandoned their offices in Sule Square, a giant shopping complex in Yangon owned by the Burmese army, so as not to fund the military junta.

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Francesco Brusaporco published in Myanmar, Politics and strategy

Min Aung Hlaing: The general who thought he understood "his" people (but he didn’t)

On 8th November, a day of semi-free elections in Myanmar’s ‘disciplined democracy’, Min Aung Hlaing, Commander-in-Chief of the Burmese Army, pledged to accept the will of the people and the results of the vote. However, less than three months later, a military coup led to the arrest of Aung San Suu Kyi, leader of the party that won the elections, the declaration of a state of emergency, and the appointment of the Commander as President of the newly formed State Administration Council. Nevertheless, the 64-year-old general is not someone who changes his mind easily.

Min Aung Hlaing was born in 1956 in Tavoy, now Dawei, the capital of Tenasserim, a region in the far south of the country, bordering on Thailand, formerly disputed by the Burmese and Siamese regimes. As Le Monde writes, the general is not homme du sérail (a courtier) but a provincial man, who moved to Yangon to follow his father’s job and with the dream of pursuing a military career. Thus, Min Aung Hlaing enrolled in law school at the University of Rangoon (now Yangon) while preparing for the entrance exam to the prestigious Defense Services Academy, where he eventually entered in 1974, on his third attempt.

His former classmates remember the young cadet as a “man of few words” who would always prefer to keep a low profile. Gradually, the future general started climbing up the hierarchy of the Tatmadaw. The year 2002 marked a turning point when he was promoted to Commander of the Triangle Region Command in Eastern Shan State, where 82% of Burmese opium is produced. There Min Aung Hlaing learned how to negotiate with the local ethnic groups and guerrillas which have been fighting each other and the Burmese army for decades. A 2009 offensive against the Burmese-Chinese rebels in Kokang, a self-administered region on the border with the People's Republic, earned him the trust of Than Shwe, the strongman of Myanmar from 1992 to 2011.

In that same year, somewhat surprisingly, the ‘old’ leader left the command of the army to the ‘young’ Min Aung Hlaing – "battle-hardened warrior of brutal Burmese Army" as well as a "serious scholar and gentleman" – at a time when Myanmar was preparing for a democratic transition. With the 2008 constitution, the Tatmadaw had secured its role as the guardian of national unity and the Commander-in-Chief was quite possibly "the most powerful man in Myanmar". As a matter of fact, Min Aung Hlaing was able to select the ministers of defence, interior, and border affairs ministers, appoint a quarter of parliamentarians, and prevent any attempt to curb his power.

Unsurprisingly, the National League for Democracy (NLD), which won the 2015 elections – the first ‘free’ elections since 1990 – had to reach an agreement with the general. In the years following, Min Aung Hlaing participates in official events alongside Aung San Suu Kyi and established personal relationships with foreign dignitaries. The violent repression of the Muslim Rohingya minority in 2016-2017, which the UN Human Rights Council dubbed as ‘genocide’, only increased his popularity among the country’s Buddhist majority. Before being blocked by Facebook Inc., his profile was attracting hundreds of thousands of likes and by then the General was persuaded that “If the people get the right information about the army they will understand" that the army was in fact defending their interests.

When the general elections in November 2019 resulted in a landslide victory for the League, despite several allegations of fraud mainly coming from the army, there was some speculation of a possible agreement that would lead Min Aung Hlaing to the presidency. When this outcome did not materialize and the NLD decided to shun all compromises, the General, who strongly believed that "the history of the country cannot be separated from the history of the Tatmadaw," decided to use his “right to take over and exercise State sovereign power”. During an interview with a Hong Kong-based Chinese language broadcaster, the first one after the coup, Min Aung Hlaing admitted that he was a little surprised by the resistance of the people: "I didn't think it would be so much."

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Lorenzo published in Myanmar, Politics and strategy

Myanmar, l’UE impone nuove sanzioni ai golpisti

Terzo ciclo di sanzioni imposto dal Consiglio Europeo a 8 individui, 3 entità economiche e un’organizzazione per il golpe e la repressione delle proteste

Fonte: consilium.europa.eu

L’Unione Europea batte un nuovo colpo in risposta al golpe militare birmano e alla successiva repressione violenta delle proteste. Il Consiglio Europeo ha infatti imposto nuove sanzioni a 8 persone, 3 entità economiche e all’Organizzazione dei veterani di guerra. Tra gli 8 individui sono inclusi ministri, viceministri e la procuratrice generale, che l’Ue ritiene responsabili di aver “compromesso la democrazia e lo Stato di diritto e commesso gravi violazioni dei diritti umani nel Paese”. Le quattro entità colpite sono invece di proprietà dello Stato o sono comunque controllate dalle forze armate e contribuiscono in maniera più o meno diretta alle attività del Tatmadaw.

Lo scopo delle misure, che si concentrano sui settori delle pietre preziose e del legname, è quello di limitare la capacità della giunta militare di trarre profitto dalle risorse naturali birmane e sono concepite in modo da “evitare danni indebiti alla popolazione”. Si aggiungono alle precedenti misure restrittive imposte dall’UE, che includono un embargo sulle armi e sulle attrezzature che possono essere utilizzate per reprimere le proteste, un divieto di esportazione di beni a duplice uso destinati ai militari e alla polizia di frontiera, restrizioni all’esportazione di apparecchi per il monitoraggio delle comunicazioni e un divieto di addestramento e cooperazione militare col Tatmadaw.

Allo stesso tempo, l’UE continua a fornire assistenza umanitaria alla popolazione birmana, nel 2021 ha stanziato 20,5 milioni di euro in aiuti per far fronte alle necessità immediate delle comunità sfollate e colpite dal conflitto in corso. Bruxelles, che si dice pronta a cooperare con il centro di coordinamento ASEAN per l’assistenza umanitaria, si contraddistingue per le azioni messe in atto in riferimento al golpe. Mentre, nel frattempo, il Giappone continua a non applicare sanzioni e il generale Min Aung Hlaing viene ricevuto in Russia.

Leggi il provvedimento integrale

 

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Annalisa Manzo published in Myanmar, Politics and strategy

Latest update from Myanmar

The death toll continues to rise and EU and US sanctions are not enough to stop the escalation of violence in Myanmar.

For the past two months Myanmar has been the scene of terrible violence. On February 1st, the armed forces carried out a coup, arresting de facto leader Aung San Suu Kyi and some leaders of the National League for Democracy, the majority government and winner of the the last election in November 2020. Power is now in the hands of General Min Aung Hlaing, while Suu Kyi is accused of fraud and irregularities. 

The Assistance Association for Political Prisoners said that since the start of the coup in Myanmar, at least 521 civilians have been killed during the protests, including 141 people only on Saturday 29 March, the most tragic day so far. The situation is getting worse and the use of lethal force against civilians by the army and security forces shows no sign of stopping.

The National Armed Forces Day became another bloodbath with over 100 deaths, including several children. The army continued to crack down on civilians with gunfire, while military parades were held in Naypyidaw to commemorate resistance against Japanese occupation during World War II. The unprecedented violence of the “day of shame” for the Myanmar rmy has in fact triggered various reactions from the international community. Tom Andrews, UN special rapporteur for human rights in Myanmar, called for the urgency of an international summit if the Security Council could not act. As member states, Russia and China could have the right of veto over any proposed intervention aimed at restoring democracy. Both nations featured in the military celebration, along with military representatives from Bangladesh, India, Laos, Pakistan, Thailand and Vietnam; Moscow was the only country which sent the Deputy Minister of Defense. The response of the Defence Chiefs from 12 countries, including Italy, was also timely. They signed a joint declaration condemning the use of lethal force by the Burmese army against unarmed people, urging an end to the attacks and the compliance with international standards of conduct.

In recent weeks heavy disapproval had already arrived from the Western front. On February 10, President Biden announced the imposition of sanctions to prevent Burmese generals from accessing the fund they hold in the United States, including freezing US assets that benefit the Burmese government, while maintaining support for health care and civil society groups. In coordination with the US, on March 22 the EU imposed sanctions on 11 people linked to the coup. The Council of Europe enacted a travel ban and an asset freeze, along with previous restrictions relating to the arms embargo and the export of communications monitoring equipment. EU sanctions hit Burmese junta chief Min Aung Hlain, nine other senior military officers and the head of the electoral commission. This was the most concrete and broadest act of Europe in underlining its unshakable support for the democratic transition in Myanmar. After the horrific violence of the last weekend, the US considered additional measures and ordered the suspension of trade agreements with Myanmar, as well as the withdrawal of non-essential embassy staff. The new actions target the personal assets of Min Aung Hlaing's family, including state-owned enterprises or their subsidiaries, and military-related conglomerates.

In relation to the economic sphere, many analysts believe that Myanmar may be able to face Western economic sanctions, given that most of the investments come from Asia, with Singapore, China and Hong Kong in the lead. However, a significant decline in FDI is expected over the next two years due to social unrest and political uncertainty and the impact of sanctions, but for now the impact on trade and exports may remain modest given the likely amortization from other markets, especially Thailand and China.

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