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While India and China bring in foreign investment from their export-oriented manufacturing industries that employ large numbers of unskilled laborers who are slowly moving them up the value chain, Myanmar’s economy benefits primarily from its natural resources. Despite being awash in foreign currency, Myanmar’s government has yet to invest heavily in manufacturing. Instead, Myanmar’s big-ticket industries are based on extracting natural resources. Last year, sales of natural gas brought in about $3 billion, sales of jade an estimated $400 million.
“[Myanmar] has got only one part of the equation—it’s got nothing to do with a broadly progressive economic program,” said economist Sean Turnell. “It’s about the extraction of valuable resources. The most prominent industries employ very few Burmese, so you don’t get those spillover effects.”
Operating with a siege mentality, Myanmar’s generals have been on a shopping spree in search of fresh arms and defense systems from Russia and China. According to a former Western diplomat, the defense attachés of these two countries are some of the only who have frequent and unhindered access to Myanmar’s top leadership. With nearly half a million soldiers, it has one of the largest standing armies in the world—the 10th largest according to some estimates. Roughly a third of its annual budget is allocated to defense—more than twice the amount for health and education combined.
And so power remains in the hands of those aligned with the ruling party. “Without having personal ties with high-ranking personnel in one way or another, no businesses could survive or expand,” explained Win Kyaw Oo.
AWASH IN CORRUPTION
Most major enterprises in Myanmar operate in deep secrecy. Transparency International once again listed Myanmar as one of the world’s most corrupt countries this year.
If a businessman wants to build a hotel or export teak wood or import cars in Myanmar, the most efficient and effective way is to go through an army general who can open the right doors and provide a guarantee. The country’s newfound wealth has also opened opportunities for mid-ranking officers who run local and regional extortion rackets. The message to the people is clear: Send your children to the military academy, and with a little luck and the right connections they might strike it rich too.
While the ruling elite would like to see the sanctions lifted, there is no urgency in the matter. According to a former Western diplomat, “They’d like to normalize relations if, for no other reason than to avoid being treated as a pariah nation. But they also don’t see normalized relations as absolutely necessary to their survival. Russia, China, India, and Burma’s ASEAN [Association of Southeast Asian Nations] enablers have shown them that sanctions, while they have interfered with their wealth-building, certainly haven’t weakened their regime.”
“The very presence of these companies in Burma is their vote of confidence in the political stability of the regime,” said Matthew Smith, a project coordinator with the Thailand-based environmental and human rights organization EarthRights International (ERI). “By virtue of them being there, we can assume that the regime has successfully convinced these companies that nothing will compromise its grip on political power, and this is a conviction the regime doesn’t hesitate to demonstrate, as we’ve seen through its political imprisonments and violent treatment of dissent.”
In September, ERI released a report detailing the investments of 69 Chinese multinationals invested in 90 hydropower, oil, natural gas, and mining projects, expressing concern at the secrecy and lack of transparency that shrouds most projects.
Indeed, after having snuck into the jade mining area of Hpakant—which is restricted to foreigners—I was not there for more than a few hours before the authorities found, detained, and frog-marched me back to Yangon. A few days after being returned to Yangon, just past dawn, four plainclothes police officers woke me to say that my trip to Myanmar was now over and I was being deported. Driving me through the empty streets, and kind enough though to let me stop and take some departing snaps of the ancient, golden Swedagon Pagoda, they took me to the gleaming new international airport terminal, which has all the charm of a military hospital waiting room. With a firm pat on the back, an immigration official dressed smartly in whites returned my passport as I set foot onto a Thai Airways plane bound for Bangkok.
If Yangon and Hpakant are anything to go by, Myanmar’s people and economy will continue to grow and flourish. More tolerant, diverse and dynamic than America’s gas guzzling and glitz-filled ally Saudi Arabia, Myanmar has over 300 ethnic groups, and in the 1920s Yangon received more immigrants than New York. It has a highly literate population that places a premium on education.