Myanmar

Elections in Myanmar, Suu Kyi proclaims the victory

The National League for Democracy wins and welcomes new challenges for the country’s renovation 

General elections were held in Myanmar on November the 8th and, as the counting of votes ended, the National League for Democracy (NLD), led by the popular leader and Nobel Prize winner Aung San Suu Kyi, has secured more than 80% of the available parliament seats.

Myanmar is still a country in its infancy when it comes to electoral democracy, indeed it is just the second time that citizens attend the polls, after fifty years of military dictatorship. November 8th vote aimed to renew 500 of the 664 seats in the two Houses of Parliament and the NLD, the ruling party in the previous legislature, was expected to get even more votes than those won in the 2015 elections. Expectations were confirmed by the counts, which have given to Suu Kyi 396 out of the 498 seats assigned. It is a landslide victory for the majority, which however will still have to deal with the veto power of the military forces, that according to the constitutional provisions hold 25% of the seats.

Elections came following a resurgence of Covid-19 cases in Myanmar, which since mid-August has documented more than 60.000 infections and 1.390 deaths. Due to the exponential increase of positive cases the opposing parties have asked for a postponement of the elections, nonetheless the NLD and the Electoral Commission insisted on bringing citizens to the polls. Elderly voters were allowed to vote early and the government provided adequate provisions, individual protection tools for the workers and measures guaranteeing social distancing in each polling station. 

The health emergency and security reasons related to ethnic tensions have made it difficult to access the vote in 51 electoral districts, corresponding to about 1.5 million people, according to the estimates calculated by the Electoral Commission. The most affected population by the voting restrictions is located in the Rakhine region, where currently there are hostilities between the minorities and the military forces. The western part of the country is also populated by the Rohingya minority group, who is not considered part of the national population as they are immigrants from Bangladesh, consequently they were unable to go to the polls.

The Union Solidarity Development Party (USDP) supported by the military forces was the main opponent of the NLD in the last elections. Myanmar’s commander-in-chief, High General Min Aung Hlaing, at first place refused to honour the general elections results, criticizing the controversial handling of electoral procedures. However, on Sunday, after casting his vote, the General declared that “he must accept the result, as an expression of the people’s will”.

Despite widespread criticism to the management of the elections, defined as "fundamentally imperfect", the feedback on the national level is absolutely favourable to Suu Kyi and the National League for Democracy. The general elections were seen as a real referendum on the work of the NLD in the previous legislature and the interviews outside the polling booths confirmed that most citizens were satisfied with the results of the party, thanks to which Myanmar seems to head towards a future of freedom. In the last pre-election rally, Suu Kyi promised to strengthen the country’s democratic structures if re-elected. Recognizing the complaints arising from the management of the vote, she said that "the important thing is to solve these problems by peaceful means within the limits of the law" and advised the voters to remain calm and preserve stability.

In conclusion, such a favourable result for the NLD could offer Suu Kyi's party the opportunity to emancipate itself to a greater extent from the military junta and even attempt to rewrite the constitutional provisions that give the army control over three key ministries: Interior, Defence and Foreign Affairs. On the other hand, the Burmese leader has already highlighted the priorities of her second term. First of all, the fight against the pandemic, which hit Myanmar with a second wave during the election period, but also the implementation of measures oriented to face the economic crisis and accelerate the peace process between the various ethnic minorities in disagreement with the central government.

By Emilia Leban 

Myanmar, a fragile stability at the electoral challenge

The shadow of Covid-19 on the 2020 general elections, between minority rights and ongoing conflicts

On November the 8th the general parliamentary elections will take place in Myanmar. Five years ago, in 2015, the country held its first democratic elections, after decades of military dictatorship, which determined the victory of the National League for Democracy (NLD), lead by Aung San Suu Kyi, Nobel prize and pro-democracy icon. 

However, despite the landslide success in 2015, the NLD hasn’t been able to make significant changes to the Burmese political system and has failed in its intent to amend the Constitution. Indeed, a qualified majority of 75% of parliamentarians is needed to modify the constitutional charter, and at the moment the military holds 25% of the seats and three key ministries (Foreign Affairs, Internal Affairs and Defence). As a consequence, Suu Kyi’s government has failed to achieve its reform goals. 

In addition, in order to deny Suu Kyi the Presidency, the military has included a provision in the Constitution according to which the President cannot have a spouse or children in possession of foreign citizenship. Unfortunately, this is precisely the case of the NLD leader. In the past years, Suu Kyi has partially avoided the obstacle by creating the role of State’s Councillor, which she has held so far, but the possibility of accessing the Presidency of Myanmar remains excluded for her. 

Almost certainly the next elections, which will take place in a tense context due to Covid-19 security measures, will again see the victory of Aung San Suu Kyi's NLD which, however, could lose the absolute majority that currently allows the party to govern alone. According to pre-election polls, smaller parties, representing specific minorities, should increase their seats in Parliament and force the NLD into a government coalition. Although Aung San Suu Kyi and her party still remain very popular among the Buddhist majority, known as Bamar, many analysts agree that their consensus has shrunk among the many and diverse minor ethnic groups scattered across the country and which cover over 40% of the population. Indeed, it should be pointed out that Myanmar is affected, perhaps more than other Southeast Asian nations, by the different geographical and cultural convergences that characterize the social fabric of the country. These elements have conditioned the formation of national unity, which is particularly difficult, both from an ethnic, political and social point of view.

Moreover, the spread of the new coronavirus, which could have unpredictable effects on the results, also hangs on the election of November 8th. According to some observers, the restrictions on rallies are likely to benefit large parties such as the NLD and the military-backed Union Solidarity and Development Party (USDP). However, much will depend on how Myanmar handles the spread of the virus in the weeks to come. Certainly, however, the combination of strict anti-Covid provisions, ethnic conflicts and poor monitoring by international observers presents questions about the regularity of the electoral process in Myanmar.

The current opposition and the military themselves are even trying to postpone the elections, but Suu Kyi worries that accepting this request would be perceived as a sign of weakness, an evidence of defeat towards the pandemic. Furthermore, part of the population cannot access voting procedures. Mostly suffering from this condition are the Rohingya, a Muslim group located in the north of the country, in addition to the thousands of citizens residing in conflict zones, who will hardly be able to go to the polling stations. A complex situation that nevertheless presumes the victory of the NDL, both for its past history and for the privileged use of national media.

What, then, are the prospects for Myanmar after the elections? The hostilities between ethnic groups are by no means over and a possible way forward to ensure greater stability in the country could be the administrative decentralization, in addition to a strengthening of the protection policies for the minorities and the cultural differences of the peoples residing in the national territory. In between the global pandemic and internal tensions, there is no shortage of difficulties, and certainly these elections will play a crucial role in determining Myanmar's near future. 

By Emilia Leban

Myanmar, towards progressive liberalization

In recent years, Myanmar has approved major liberalization reforms aimed at attracting foreign investments.

After 35 years, the first free general elections were held in Myanmar in 2015 with the victory of the National League for Democracy. Since then, a progressive liberalization and openness to internationalization began in the country, after years of isolation dictated by the military government.

The new liberalization policies aim at the access of foreign investors into the country, especially in the banking, insurance and trade sectors (retail and wholesale). The strategy of attracting new foreign direct investments focuses in particular on a simplification and standardization of bureaucratic procedures and a modernization of business law.

These measures were positively assessed by the World Bank, which - prior to the Covid-19 emergency - estimated GDP growth at 6.5% for both 2020 and 2021, despite a global economic slowdown.

As early as 2016, the Yangon Stock Exchange of Myanmar (YSX), a joint venture between the Myanmar Economic Bank, the Japanese Daiwa Institute of Research and Japan Exchange Group, was inaugurated, however the inflow of foreign direct investments was hampered by the rigorous controls established by the military government, gradually eased in 2018 with the reduction of restrictions on the entry of foreign capital in the retail and wholesale sector.

The new company law rules replace a 1914 law and allow foreign investors to be able to hold up to 35% of the shares of a local company. Analysts predict that the influx of foreign capital will spread a greater culture of transparency, best practices and know-how, important for the development of Myanmar's business landscape.

In addition, a bureaucratic simplification process was also started: in the autumn of 2018, the Myanmar Companies Online (MyCO) was set up, an online system for registering online companies, aimed at promoting transparency and reducing the number of documents needed to start an activity.

Since November 2019, the Central Bank of Myanmar has allowed insurance companies and foreign banks to access the local market, providing them with the necessary licenses. In the coming years, the government will support the opening and liberalization of new investment sectors.

Since March 2020, foreign investors have been admitted to trading on the Myanmar stock market. To participate in the negotiation, foreign investors (resident and non-resident) will have to open an account with national intermediaries specialized in holding investment funds.

For now, only five companies are listed on the YSX, three of which are open to foreign investment, for a total of approximately 9 million dollars of shares available for purchase. However, it is likely that requests will come from investors to further loosen certain aspects: for example, to date, a personal verification of identity is needed, which requires physical presence in Myanmar.

Liberalizations in the banking sector

Starting from early April 2020 and following the gradual process of liberalization in the financial sector, the Central Bank of Myanmar allowed seven banks from all over Asia to enter the country market, in which they will begin operating from 2021, after being issued of the necessary licenses.

This is important news for the banking sector, in which Aung San Suu Kyi’s governance has heavily invested, if we consider that, up to 2019, Myanmar granted "branch licenses", allowing foreign banks to only operate towards businesses, but forbidding them from accept deposits. Only since November 2019 there had been a first opening to the offering of services to families and consumers.

The new licenses will allow foreign banks to offer a full range of services such as lending to private customers and businesses, exchanging foreign currency, managing liquidity and withdrawing deposits from companies, banks and individuals in both foreign and local currency. This information was confirmed by Siam Commercial Bank, one of Thailand's largest banks, which is close to entering Myanmar

However, foreign banks still suffer from limitations, as they will only be able to open branches in the country, therefore with a separate legal entity and established as a Myanmar-based company.

A possible alternative for foreign banking companies will be to invest in local banks, up to the 35% of the shared social capital.

However, the legislation of the former military government continues to weigh on Myanmar's banking sector. Sean Turnell (economic adviser to Aung San Suu Kyi) said that the biggest obstacle lies in the rules that set the interest rates by law at 13% for loans with collateral and 16% for unsecured loans. This prevents customers in a low risk class from being adequately assessed and rewarded. The deposit rate is also set by law at 10%. According to Turnell’s words, the government aims to eliminate those limits in the near future.

A further obstacle is also represented by the cultural barriers that still exist in the country. Citizens have scarce confidence in the banking sector and prefer to store physical currency or store wealth in the form of gold and jade. In fact, 90% of Myanmar citizens do not have a bank account.

However, also in Myanmar as in the whole ASEAN, digital wallet services are beginning to spread (the first being Wawe Money in 2017), which could allow a rapid evolution of the mobile financial services market, despite the important regulatory barriers still in place.

Despite the steps forward, however, investors remain concerned about the stability of the country, the lack of transparency in the decision-making processes and the poor coordination between the various levels and institutional bodies which are responsible for issuing licenses and permits to operate in the Country.

However, the proactivity shown by the government in recent years seems to be going in the right direction. The country can also count on a great availability of workforce, low production costs and the wealth of natural resources, as well as commercial links with the dynamic economies of ASEAN.

Articole edited by Gabriel Zurlo Sconosciuto

Failed constitutional reform attempt in Myanmar

The Union, Solidarity and Development Party (USDP) and Tamtadaw militaries block Suu Kyi's reforms

On 10 March, Myanmar's parliament began voting on the constitutional revision law, strongly supported by the National League for Democracy, party of the State Counsellor Aung San Suu Kyi.

The parliamentary opposition of the Tamtadaw militaries and the USDP is tough but effective. The Burmese Constitutional Charter entered into force in 2008 and guarantees the military a quarter of the seats in parliament. It also guarantees them a majority in several state committees, one above all the National Defence and Security Council. The Charter itself provides for a three-quarters majority for the constitutional revision process, a majority which, de factowithout the military's vote is impossible to achieve.

Thus, the parliamentary opposition of the Tamtadaw militaries and the USDP was effective In the first days of voting, in fact, the two main proposals of the reform were rejected: the one concerning the reduction, gradually and over 15 years, of the seats assigned to the Armed Forces and the one finalized to amend Article 59 of the Constitution, which denies citizens with relatives of foreign nationality the possibility of competing for the Presidency of the Country. It is precisely the latter provision that represents the most important obstacle for Counsellor Suu Kyi, widow of the British Oxford University scholar, Michael Aris, and mother of two children with British citizenship. The two proposals reached respectively 404 and 393 "yes", therefore not enough to reach the 75% of votes in favour required by the Constitution.

Another fundamental aim of the constitutional reform is reducing the majority necessary for the revision of the Constitutional Charter from three quarters to two thirds.

The boycott by the military and the USDP had already begun a few months ago, when the members of the two sides had left the Amendment Committee, a body which was supposed to study and prepare the new institutional structure of Myanmar. Their aim is surely to arrive at the next elections with the current constitutional structure, limiting the power of the National League for Democracy.

The United States and the European Union have been waiting for years for a turning point in the country which, despite the great expectations placed in Aung San Suu Kyi, are struggling to arrive. Myanmar is 'under observation' on issues such as money laundering and human rights violations against ethnic minorities, one of which is that of the Rohingya, a Muslim majority group persecuted and, for this reason, forced to take refuge in Bangladesh. China and Japan are not of the same opinion and, in a continuous "regional dispute", do not miss any opportunity to strengthen relations with the country.

This attempt to reform the institutions, with the aim of definitively reducing the power of the army, seems to have foundered. For the moment, everything is postponed to the next national elections scheduled for Autumn 2020.

Article edited by Alessio Piazza