Myanmar's Long Road to National Reconciliation (53 page)

Mr Lee Kuan Yew, the former prime minister of Singapore, has observed that whenever he is faced with a problem he usually finds that some country has already faced the same problem and has dealt with it, and that useful lessons and insights can be drawn from that country’s experience.
⁹
What is more important, the people in that country will gladly give all the information needed, if someone just takes the trouble to ask them. They will tell you both the good and the bad — the success stories to emulate, as well as the failures, disasters, and pitfalls to avoid.

It is not difficult to think of areas of current concern for Myanmar where a dose of foreign aid and some sound advice from neighbours could be expected to do a lot of good. The following come readily to mind:

1.   Establishment of a stabilization fund to restore macroeconomic balance and stability in the country;

2.   Addressing the demand-pull, cost-push, and structural factors that contribute to rapid inflation;

3.   Unification of the exchange rate;

4.   Reform of the monetary, financial, and fiscal sectors;

5.   Civil service reforms, including addressing the adequacy of public sector salaries, and taking measures to change the mindset of bureaucrats so they act less like regulators and more like facilitators of business;

6.   Assistance in establishing the legal and institutional underpinnings necessary for a well-functioning market economy;

7.   Privatization of, and improving the performance of, public enterprises;

8.   Fighting corruption;

9.   Reform of agriculture and other sectoral reforms;

10. Facilitating the transfer, acquisition, adaptation, and assimilation of technology, including a critical re-examination of policy regarding the Internet and information technology;

11. Reform of the education sector, with special attention being given to what the students, teachers, parents, and education ministry staff are telling us (in private);

12. Consideration of what to do about the energy problem;

13. Trade liberalization and improving the balance of payments;

14. Improving access to health facilities and promoting more efficient delivery of public services;

15. Bringing underground economic activities into the legal fold;

16. Ensuring that safety nets are in place to take care of special needs that will arise for those that are likely to be left behind in establishing a market-oriented economic system, such as the poor, women,
youth, aged, ethnic minorities, physically handicapped, and the geographically disadvantaged;

17. Environmental protection.

I can go on adding to the above
dhobi
or laundry list. But what has already been listed will keep us busy for the next fifteen years, so we can stop here for the moment.

Through their enquiry into what works and what doesn’t with development assistance, the World Bank policy research group found out that aid works when the following conditions are satisfied:

•   First, the timing of aid is important. If donors come forward with aid at a time when a recipient is making a genuine and determined effort at economic reforms, then good results are achieved;

•   Second, although money is important, giving only money is not good. Giving aid as a mix of money and ideas or know-how is more effective;

•   Third, the recipient country must demonstrate that it has the capability to manage its affairs and that it can make effective use of aid.

In light of the above, the ball is in our court to revive and revitalize ODA flows into the country. To achieve this, we will have to do the following:

•   First, we will have to convince the donor community that we are not suffering from any self-delusion. On the contrary, we must show that we are realistic, practical, and hard-nosed, and that we want aid to be needs-driven rather than donor-driven. Hence, we will come forward with concrete proposals concerning our needs, give justification for the desirability of donor support for them, and will also provide convincing arguments why we believe they will contribute to our economic reform and restructuring process;

•   Second, we will inform the donor community that, in the halfcentury since we gained independence, it has not been lack of resources, but rather misconceived ideas and flawed policies that have been our undoing. Hence, although money is important, at this stage we are also interested in getting from them relevant ideas,
expertize and knowledge about better and more efficient ways of doing things that will help improve the well-being of all our people. We want not only ideas but also support that will enable us to translate these ideas into concrete action;

•   Third, we will also have to convince the donor community that we have got rid of the constraints, hang-ups, confused ideas, and misdirected policies that in the past have made us incompetent and ineffective, and that we are ready to demonstrate to them that we can put our house in order, manage our affairs, and deliver the goods.

If the above three conditions can be satisfactorily met — and this is a big IF — then foreign aid will come to Myanmar. And it will be effective.

¹
    All amounts are given in US dollars.

²
    UNCTAD,
The Least Developed Countries Report 1997
(New York: United Nations, 1997), Table 26, p. 180. Also,
Least Developed Countries Report 2004
(New York: United Nations, 2004), Table 27, p. 347.

³
    World Bank,
Assessing Aid: What Works, What Doesn’t, and Why
(New York: Oxford University Press, 1998).

⁴
    Dr Maung Maung,
The 1988 Uprising in Burma
(New Haven: Yale University Southeast Asia Studies, 1999), p. 134.

⁵
    Quoted by Deena Khatkhate in a review of Ashok V. Desai’s book,
My Economic Affair
(New Delhi: Wiley Eastern Limited, 1993). The book review appeared in IMF/World Bank,
Finance and Development,
March 1995, Vol. 32, No. 1.

⁶
    Kyaw Yin Hlaing, “Will Western Sanctions Bring down the House?”, in
Reconciling Burma/Myanmar: Essays on U.S. Relations with Burma,
edited by John H. Badgley, NBR Analysis, Vol. 15, No. 1 (Seattle, Washington: The National Bureau of Asian Research, March 2004), pp. 73–85.

⁷
    
New Light of Myanmar,
1 December 1996, p. 10.

⁸
    Some say there is a sensation of motion because the car is rolling downhill.

⁹
    Lee Kuan Yew,
From Third World to First, The Singapore Story: 1965–2000
(Singapore: The Straits Times Press, 2000).

Morten B. Pedersen

Recent developments in Burma/Myanmar underline the failure and counter-productivity of the “democracy paradigm” that has guided Western policy on the country since 1988, a paradigm that was based on misleading models from South Africa and Eastern Europe. The removal in late 2004 of Prime Minister Khin Nyunt and ministers loyal to him, together with a sweeping purge of military intelligence and related agencies, has significantly weakened the capacity of the military to manage the state and seen the government withdraw further into its shell. A resumption of armed conflict, rising crime rates, and a further fragmentation of the state, although perhaps not imminent, cannot be ruled out. These developments strongly suggest that there is a need to refocus current international efforts to effect change in Burma/Myanmar by working towards a more gradual and stable transition that maintains, and indeed strengthens, the capacity of the state and society to deal with the country’s broader development needs.

The core strategy of Western countries, which involves the use of censure and sanctions to isolate the military regime and force it to transfer power to a civilian, elected government, was developed in the late 1980s and early 1990s, when Burma/Myanmar seemed to many outside observers to have moved into a “democratic transition zone”. This strategy, however, is based on a number of fallacies or misleading notions about the situation both inside and outside the country that have become increasingly exposed over time.

The policies of the military regime, contrary to frequent claims by pro-democracy groups, are not based on pure opportunism. Many of the military leaders genuinely believe that the armed forces are the only institution that can keep the centrifugal forces in check and that democratic government would be bad for the country. When adding the obvious corporate and personal interests that they have in maintaining power, this mindset leaves very little room for negotiating political reform — at least, not in any form that might undermine the military’s ultimate control of the government. The regime does have a national agenda, however, and has taken some important — though insufficient — steps towards the goal of building a “modern, developed nation”, primarily in the form of ceasefires with more than a dozen armed groups, embryonic market-oriented economic reforms, and an unprecedented, nationwide infrastructure-development programme. Generally speaking, its failures in these regards are not due to ill will, but rather to fear, limited understanding of development processes, and the poverty of the state. There may, therefore, be more space for cooperation on a social and economic development agenda than is commonly acknowledged by both the opposition and Western governments alike.

International censure and sanctions may have helped induce some limited cooperation on the part of the government in relation to sensitive human rights issues. However, the potential benefits of this cooperation remain untapped due to the rigid policies of Western governments, which have consistently refused to reward, or even fully recognize, any positive steps made by the military regime. It is clear that since early
2003, if not before, the generals running the government of Burma/ Myanmar have decided simply to ignore the West and to rely on their growing links with countries in the region. Meanwhile, Western sanctions and overt Western support for Aung San Suu Kyi have only reinforced the military’s siege mentality and deepened the regime’s hostility to the pro-democracy opposition. They may also have contributed to the government’s abandonment since the mid-1990s of most of its original market-oriented, open-door economic reform agenda, which would have left the regime more vulnerable to foreign influences. Certainly, it was counter-productive to deny the government international technical and financial assistance to help implement and improve reforms that would not only have had significant social benefits but could also have led to greater pluralism.