Asia

Myanmar

  • China
    Lauren Dickey: China’s Myanmar Quandary
    Lauren Dickey is a research associate for U.S. foreign policy at the Council on Foreign Relations. Violence along the border between China and Myanmar, in the ethnically Chinese-populated Kokang region, has left Beijing with the dual challenges of refugee outflows and instability along its border.  For the last seven weeks, armed conflict between the Myanmar Army and Kokang rebels, under the banner of the Myanmar National Democratic Alliance Army (MNDAA), has sent at least thirty thousand people across the porous border between Myanmar and China’s Yunnan province. In response, Beijing has increased its military presence along the border with Myanmar, and has even been accused of supplying the rebel forces with weapons and supplies. While the cause of the initial outbreak in fighting between Kokang rebels and government troops is debated, official Chinese media have given the fighting little coverage. Social media and alternative news outlets, however, offer evidence of a robust Chinese military presence on the border. Pictures and video footage show a Chinese military with ground forces, fighter jets, air defense missiles, and anti-aircraft artillery batteries deployed along the China-Myanmar border, presumably ready to intervene should the Kokang conflict get out of hand. The Chinese already have ample reason to intensify their response to events in Kokang—several Chinese citizens were killed by a poorly directed Myanmar military, or Tatmadaw, air strike last month. However, a militarized response by the Chinese government risks sparking increased refugee flows into China and derailing current peace negotiations. Moreover, an armed incursion or other heavy-handed response would drag Beijing into a conflict on its periphery, a clash Chinese officials do not have the appetite for, in part because there are “no territorial issues” between China and Myanmar. Beijing is confronted by a tough decision: can it balance its commitment to protecting ethnic Chinese in Kokang while avoiding straining an already tense relationship with Myanmar? This is not the first time violence has flared between the MNDAA and the Myanmar military. In 2009, a 1989 ceasefire agreement faltered, and the MNDAA, led by Peng Jiasheng (who also inspired the current spate of fighting), were defeated by central government forces. Peng was once part of the Communist Party of Burma, which received broad support from Beijing. After the losses his forces suffered in 2009, Peng fled to Yunnan, along with a flood of refugees. In recent months, however, Peng has returned with anywhere from one thousand to five thousand troops and the goal of retaking Kokang. The Chinese leadership has few options to resolve the issue quickly. Using the People’s Liberation Army (PLA) ground forces currently in place to seal off the border and prevent further inflow of refugees to Yunnan province would check the spillover of fighting into Chinese territory. But it would suggest a Chinese complacency toward the challenges faced by the ethnic Chinese in Kokang. Those fleeing the conflict zone would be trapped in Myanmar. Those in Yunnan dependent upon business ties with Kokang would be hurt, as trade flows would come to a near halt. Even as Chinese support for the ceasefire is made clear, Beijing also has several, palatable short-term options to consider. Beijing should keep its borders open to Kokang refugees entering Yunnan while forgoing any subsequent actions that could be perceived as supporting the rebels. Similarly, Beijing has the option of granting citizenship to the Kokang refugees already on Chinese soil, or offering it to those fleeing the fighting. Even if the conflict ends soon, tens of thousands already displaced face an uncertain future. Both near-term options would preserve stability along the border and protect ethnic Chinese, while ameliorating the potential for increased conflict. These options allow for Beijing to keep a strong military presence on the border in such a way that the PLA’s presence does not distract from other objectives in resolving the current border challenge. Additionally, at the request of the Myanmar government, Chinese officials could openly encourage rebels from the active conflict in Kokang to set down their weapons in exchange for more active participation in ceasefire talks. The draft ceasefire agreement signed in late March between the central government and sixteen armed ethnic groups (but not including the MNDAA) was no small accomplishment, as only bilateral ceasefires have been signed in the past. But to be truly effective, the ceasefire must also include the armed Kokang rebels. If Chinese officials could help persuade the rebels from Kokang to commit to the terms of a ceasefire, such steps would help pave the way for both a formal ceasefire agreement and political dialogue between warring parties in the months ahead. Such diplomatic efforts must, necessarily, take place at the highest levels of both governments in order to preserve a Chinese intention of “non-interference” in the internal affairs of Myanmar. Whatever policy route Beijing chooses, there is neither an easy nor a fast resolution to the current conflict in Kokang. Despite warnings from top Chinese military officials of a possible armed response should fighting further “endanger Chinese territorial sovereignty and national security,” Beijing should remain focused on more pragmatic alternatives. A delicate balance between a proactive but firm response to incursions on Chinese airspace and territory is required. With armed conflict between the MNDAA and the Myanmar government on China’s doorstep, Beijing should seize the opportunity to play a leading role in resolving tensions between the two sides and encouraging the MNDAA to enter ceasefire talks. As presidential elections in Myanmar scheduled for later this fall approach, it is in the interests of the Myanmar and Chinese people to ensure that fighting ends, the newly minted ceasefire is upheld, and border stability is restored before voters take to the polls.
  • China
    Friday Asia Update: Top Five Stories for the Week of March 13, 2015
    Ashlyn Anderson, Lauren Dickey, Darcie Draudt, William Piekos, and Ariella Rotenberg look at the top stories in Asia today. 1. U.S. rebukes UK for joining Asian Infrastructure Investment Bank. The UK announced that it would become a founding member of the China-led Asia Infrastructure Investment Bank (AIIB), despite the urging of the United States. Washington has openly lobbied against the AIIB, influencing South Korea and Australia to eschew membership, but Britain’s decision opens the door for other Western countries to reconsider. One U.S. official warned of the UK’s “trend toward constant accommodation of China, which is not the best way to engage a rising power,” while another expressed “concerns about whether the AIIB will meet [the] high standards [of the World Bank and the regional development banks], particularly related to governance, and environmental and social safeguards.” The United States fears that the AIIB will undermine the impact of these organizations and serve as an extension of Chinese soft power. 2. Modi mounts a charm offensive aimed at Indian Ocean island nations. Accompanied by the national security advisor and foreign secretary, Indian Prime Minister Narendra Modi embarked on a five-day visit to Seychelles, Mauritius, and Sri Lanka on Tuesday. Since taking office, Modi has prioritized India’s neighborhood in his foreign policy, partially in response to growing Chinese influence in the region. By shoring up economic and defense assistance, Modi hopes to revitalize India’s relations with the island nations. In Seychelles, India gifted the small island nation an aircraft, and Seychelles leased India an island to boost security ties. Modi commissioned the Barracuda in Mauritius, the first naval ship built by India for a foreign country, and inked a number of agreements. Modi also pledged to deepen cooperation with Sri Lanka, which includes plans to partner on an oil storage project. Modi is the first Indian prime minister to visit Sri Lanka in almost three decades. 3. Police and students clash in Myanmar. After a weeklong standoff, police in Myanmar beat and detained students, monks, and journalists protesting an education bill that they say stifles academic independence. Several hundred protesters had planned to walk ninety miles from Mandalay to Yangon, but were blocked by police who refused to allow them to hoist flags, sing songs, or travel in convoy. While reports suggest the students attempted to break through police lines, protest leaders rejected the suggestion that they instigated the violence. The violent scenes are a reminder of Myanmar’s authoritarian military past, from which the country began to emerge four years ago under a nominally civilian government. 4. Sri Lanka vows domestic inquiry into war crimes within a month. Sri Lankan President Maithripala Sirisena announced that a domestic investigative committee will be established shortly to probe allegations of atrocities committed in the final stages of Sri Lanka’s twenty-six-year civil war. Dissatisfied with Sri Lanka’s efforts under former president Rajapaksa to examine its wartime abuses, the United Nations Human Right Council (UNHRC) attempted its own international inquiry into Sri Lanka’s wartime atrocities. A UNHRC report on Sri Lanka’s war crimes scheduled to be released earlier this month was postponed at the request of Sri Lanka until September, allowing time for President Sirisena’s to set up a domestic investigation. Sri Lanka continues to be insistent that international players remain outside of the investigative process, but is open to considering outside advice. 5. Chinese extremists from Xinjiang are joining the Islamic State, claim Chinese government officials. State officials in China have claimed that Chinese extremists from Xinjiang are going overseas to join the self-proclaimed Islamic State, also known as ISIS or ISIL. Officials claim that these extremists are abroad in order to train and return home to execute terror attacks in their own country. China’s westernmost province, Xinjiang, borders Pakistan and Afghanistan and is home to the Muslim, Turkic-speaking Uighurs. This region of China has long been a location of tension between the ethnic Uighur minority, and the majority Han Chinese. The state-sponsored Global Times claimed in December that three hundred Chinese are in Syria and Iraq to fight, though Beijing’s assertions of Uighur extremists taking up arms with the Islamic State are largely unproven. The Communist Party chief in Xinjiang, Zhang Chunxian, reported rising violence in the region, particularly in the context of a global violent extremist movements, and has vowed to crack down on extremist violence. BONUS: Bhutan, world’s worst soccer team, wins World Cup qualifying match. The 209th-ranked team defeated Sri Lanka in Colombo for its first victory since 2008; in between wins, Bhutan suffered eighteen defeats, including a 5-2 loss to Sri Lanka in 2013. Though Sri Lanka isn’t ranked too much higher at 174th, overconfidence contributed to the higher-seeded team’s downfall. The Bhutanese side still has work to do, however, as the two countries will meet again in Thimphu, the capital of Bhutan, on Tuesday for the second leg of the qualifier.
  • Human Rights
    Myanmar’s Rights Record Deteriorates in 2014
    This week, Amnesty International released its assessment of Myanmar’s 2014 human rights record. Although Myanmar’s bumpy road to reform had been well-documented, the report is even more negative than I had expected. Program toward improvement in political and civil rights in Myanmar “stalled” and went into reverse in 2014, Amnesty reported in the Myanmar chapter of its annual global assessment of freedom. According to the report, discrimination against Muslims, particularly in western Myanmar’s Rakhine State, worsened last year, the government prevented humanitarian aid from reaching refugees in areas where the army is still battling ethnic insurgencies, and Naypyidaw maintained what Amnesty called “severe restrictions” on freedom of assembly. These were just a few of the lowlights for Myanmar in 2014. In the first two months of 2015, which are not covered in the Amnesty 2014 report, human rights have apparently deteriorated further in Myanmar. The country is still more open, in terms of both political and civil rights, than it was during the decades of military junta rule, but already this year Myanmar has witnessed serious outbreaks of conflict in the northeast. There have been numerous reports of rights violations by both ethnic Kokang insurgents and by the military in the northeast conflict during the past two months. Aid workers trying to evacuate displaced people in the northeast have had their convoys, which were flying the symbol of the Red Cross, fired upon. There are also, unfortunately, few signs that the core problems revealed by Amnesty’s report will be addressed by President Thein Sein’s government---or by whatever government is formed after elections to be held later this year. As I noted earlier this week, the Myanmar military still operates without sufficient civilian control, fostering a culture of impunity for officers and generals that only abets rights abuses. The ethnic insurgencies in the north and northeast still fester due to a lack of trust-building between Naypyidaw and many of the ethnic militias. The ongoing insurgencies continue to cause refugee flows and facilitate rights abuses by both sides. Meanwhile, no prominent Myanmar political leaders, including National League for Democracy (NLD) leaders, are willing to take a public stance clearly denouncing the anti-Muslim hate-mongering propagated by Buddhist Burman nationalist groups. This hate-mongering has helped create an environment in which attacks on Muslims in western Myanmar go ignored by most Burmese or are even applauded in public discourse. The hateful environment further suggests to the nationalist paramilitary groups which have emerged in recent years that attacking Muslims has no consequences. In addition, although the media environment and the environment for public expression is far freer than it was under military rule, Myanmar’s leaders still seem unwilling to create the foundations of a truly free press, allowing for journalists to be routinely harassed by authorities and jailed for their reporting. Will the elections later this year resolve these ongoing challenges? A peaceful change in government would be a milestone for Myanmar, but just having a new, elected leadership will not do much to address these entrenched problems. In fact, although I wholly support Myanmar’s election process, an NLD government might frankly have a tougher time establishing civilian control of the armed forces, as well as reaching a permanent peace with the myriad armed insurgencies.
  • Myanmar
    Is Myanmar’s Peace Process Unraveling?
    Over the last three weeks, fighting has broken out in Myanmar’s northeast between the military and several ethnic minority militias, including the ethnic Kokang Myanmar National Democratic Alliance Army and, allegedly, the Kachin Independence Army (KIA). The KIA is one of the most powerful insurgent groups in Myanmar. At least 30,000 civilians have fled across the border into China, and the fighting has killed at least 130 people. The Myanmar military has attacked rebel groups with air strikes, and the fighting shows no sign of letting up. The fighting began on February 9, when Kokang rebels attacked government troops in the town of Laukkai and the Myanmar army launched a fierce counterattack. The exact reasons for the clash on February 9 remain somewhat unclear. The fighting may stem from a personal feud between the Kokang group’s leader and the Myanmar armed forces’ commander in chief, or it may have been sparked by a desire by the Kokang militia to take back control of Laukkai. Or, the attack may have been retaliation for previous unreported attacks on Kokang fighters by the Myanmar military. Or, it may have stemmed from a dispute over drug trafficking and its profits; the northeast of Myanmar is one of the biggest producers of opium and synthetic methamphetamine stimulants in Asia. Still, the broader security environment in Myanmar clearly has played a role in this recent outbreak of fighting. Indeed, the Kokang clashes with the Burmese army are reflective of several disturbing trends in Myanmar – trends that, if they continue, could undermine the country’s peace process and possibly lead to a wider outbreak of civil war. For one, it remains unclear whether the president has total control over the military. Did President Thein Sein order Commander-in-Chief Min Aung Hlaing to hit back so hard against the Kokang, or did the military move essentially on its own?  Any lack of civilian control of the military under a president who is a former general himself is hardly going to improve if the National League for Democracy (NLD) wins the 2015 elections and takes over the reins of government, since the NLD is even less trusted by senior military men. The lack of clear channels of control over the military remains a major impediment to a national peace deal that includes all insurgent groups. In addition, this fighting reveals that, although the government is pushing for a nationwide, long-term peace deal with all the remaining insurgent armies, it is still far from gaining the trust of many insurgent leaders. Such trust is a necessary predecessor for any permanent peace. Naypyidaw wanted to announce a nationwide cease-fire, a step toward a permanent peace, by Union Day, a national holiday that takes place on February 12. That date was missed. Yet many of the insurgents do not trust the government to follow through on any promises, and a nationwide cease-fire appears unlikely anytime soon. Naypyidaw has not helped the process of trust-building by repeatedly attacking the KIA in recent years and by demanding that insurgent groups make major concessions, such as disarming, before the government responds with reciprocal concessions. Although the Kokang insurgent group is relatively small, the KIA has been reported to have at least 8,000 fighters under arms. The KIA will be critical to any nationwide peace deal. Finally, the conflict in northeastern Myanmar is a reminder that narcotrafficking remains a major source of income for several insurgent groups, including the most powerful of them all, the United Wa State Army (UWSA), which reportedly has ties to the Kokang. Although it is unclear whether the Kokang battle is related to a dispute over drugs or drug profits, the leader of the Kokang insurgents, Peng Jiasheng, reportedly has a long history of involvement in the drug trade, according to journalist Bertil Lintner, the leading authority on narcotrafficking in northern and northeast Myanmar. The UWSA, meanwhile, has been cited by the State Department and many foreign diplomats in Myanmar as one of the world’s most heavily armed narcotrafficking organizations. How will Naypyidaw address narcotics production in the northeast as part of any long-term peace deal? Narcotics have allegedly become the essential ingredient in the survival of the UWSA and several other groups, and in previous ceasefires the government in Myanmar essentially allowed the UWSA to keep producing drugs, as long as it refrained from attacking government forces. But this is not a model for a long-term deal.
  • Human Rights
    The U.S.-Burma Human Rights Dialogue: Frank Criticism but No Action
    Last week, U.S. Assistant Secretary of State for Democracy, Human Rights, and Labor Tom Malinowski, U.S. Ambassador to Myanmar Derek Mitchell, and a group of other U.S. officials from State, Defense, and USAID were in Myanmar for the second U.S.-Burma Human Rights Dialogue. The dialogue came at a time when Myanmar’s rights record is backsliding, more than one-hundred thousand Rohingya Muslims remain internally displaced in Myanmar, and there are concerns, both within Myanmar and among outside countries, that this year’s critical national elections will be waylaid, not allowing the vote to go on freely and fairly. U.S. officials clearly understand these concerns—President Barack Obama very gently expressed his worry about the challenges in Myanmar during a trip to the country last fall—but before the dialogue, the Obama administration had continued to push forward its rapprochement with Naypyidaw. In part, as I argue in a new CFR working paper on the pivot and Southeast Asia, the White House has continued its rapprochement with Myanmar so as not to undermine what it considers a foreign policy success story of Obama’s presidency. I further argue in the paper that rapprochement has had yielded limited strategic benefits for the United States (and minimal quality opportunities, other than in oil and gas, for U.S. companies up to this point), while undermining U.S. credibility on democracy promotion in Southeast Asia. U.S. officials had previously been reluctant to offer significant public criticism of Myanmar’s faltering reforms. So it was refreshing to see Assistant Secretary Malinowski be quite blunt, in a press conference, about Myanmar’s problems. “There is a great deal of skepticism in some quarters about whether the reform process is continuing and fears about tensions and other problems that might arise in a year in which the election will be first and foremost in people’s minds,” Malinowski said. He also expressed concern that Myanmar’s government is “playing with fire” by not taking a tougher approach toward people using religion to create divides among Myanmar citizens—people like those leading the growing Buddhist paramilitary movement in Myanmar. In fact, the government has not only ignored the anti-Muslim violence but also has abetted it, allowing new legislation that would make it almost impossible for people in Myanmar to have interfaith marriages and conversions. However welcome Malinowski’s comments were, the Obama administration should not only offer frank criticism of Myanmar’s leadership, in public and in private. The United States has significant leverage in Myanmar. The Myanmar armed forces desire a much closer relationship with Washington, and while U.S. investment is not that significant in Myanmar at this point, it could become much greater if the bilateral relationship is completely normalized and it becomes easier for U.S. companies to invest in Myanmar. The White House should take steps, beyond offering public criticism of Naypyidaw, to freeze aspects of the bilateral relationship with Myanmar until after the 2015 elections are completed. This freeze should remain in place until the country has made a transition to a new, fairly elected government. Most importantly, the White House should halt further restoration of military-to-military ties until after the election. This halt would serve, in part, as a signal to the still-powerful Myanmar armed forces that they need to allow the election to go forward freely, even if the opposition National League for Democracy party clearly is going to triumph. The freeze on military-to-military relations also should be utilized to apply more pressure on Naypyidaw to investigate possible links between uniformed military and the Buddhist paramilitary groups, and to punish military officers involved with the paramilitaries.
  • Thailand
    Where the Pivot Went Wrong – And How To Fix It
    Since the start of President Barack Obama’s first term, the United States has pursued a policy of rebuilding ties with Southeast Asia. By 2011 this regional focus had become part of a broader strategy toward Asia called the “pivot,” or rebalance. This approach includes shifting economic, diplomatic, and military resources to the region from other parts of the world. In Southeast Asia, a central part of the pivot involves building relations with countries in mainland Southeast Asia once shunned by Washington because of their autocratic governments, and reviving close U.S. links to Thailand and Malaysia. The Obama administration has also upgraded defense partnerships throughout the region, followed through on promises to send high-level officials to Southeast Asian regional meetings, and increased port calls to and basing of combat ships in Southeast Asia. Yet despite this attention, the Obama administration’s Southeast Asia policy has been badly misguided. The policy has been wrong in two important ways. First, the White House has focused too much on the countries of mainland Southeast Asia, which—with the exception of Vietnam—have provided minimal strategic benefits in return. This focus on mainland Southeast Asia has distracted attention from the countries of peninsular Southeast Asia—Indonesia, the Philippines, and Singapore—that are of greater value strategically and economically. Indonesia, in particular, is a thriving democracy and an increasingly important stabilizing force in regional and international affairs. Second, increased U.S. ties with mainland Southeast Asia have facilitated political regression in the region by empowering brutal militaries, condoning authoritarian regimes, and alienating young Southeast Asian democrats. This regression is particularly apparent in Thailand. It seemed to have established a working democracy in the 1990s, but has regressed politically more than any other state in Southeast Asia over the past twenty years. In May 2014, Thailand was taken over by a military junta. Reform also has stalled in Myanmar, Vietnam, Cambodia, and Malaysia. This political regression has had and will have strategic downsides for the United States as well. In the long run, young Southeast Asians—the region’s future leaders—will become increasingly anti-American and an authoritarian and unstable mainland Southeast Asia will prove a poor partner on economic and strategic issues for the United States. Through the remainder of the Obama presidency, the United States should refocus its Southeast Asia policy in two ways: prioritize the countries of peninsular Southeast Asia and restore the emphasis on democracy and human rights in the region. In particular, the United States should slow and, in some cases, halt growing military-to-military ties with the countries of mainland Southeast Asia such as Myanmar. Washington also should refocus its aid on democracy promotion in Southeast Asia. Meanwhile, the United States should upgrade its relations with Singapore, Indonesia, the Philippines, and Vietnam by working to sign a treaty alliance with Singapore and expanding diplomatic, economic, and military ties with these four nations. Such a shift in Southeast Asia policy would allow the United States to better align Asia policy with democratic values and maximize the strategic benefits of U.S. interest in Southeast Asia. For more on how Obama’s Southeast Asia policy has gone wrong, and what the administration can still do to fix it, see my new CFR Working Paper, "The Pivot in Southeast Asia: Balancing Interests and Values."
  • Thailand
    New Year’s Predictions for Southeast Asia (Part 2)
    Following up from last week, I am now counting down my top five predictions for 2015. 5. Jokowi wins over majority of parliament Currently, Indonesian President Joko Widodo’s coalition still lacks a majority in parliament, which is hindering Jokowi’s ability to pass legislation. But by the end of 2015, I think Jokowi’s party, PDI-P, will be at the head of a coalition that includes of majority of members of parliament. Jokowi has for weeks been wooing former president Susilo Bambang Yudhoyono (SBY), whose Democrat Party lawmakers could, if they switched from the opposition to Jokowi’s coalition, give Jokowi a majority in parliament. Although Yudhoyono and PDI-P chief Megawati Sukarnoputri still reportedly detest each other, SBY and Jokowi have reportedly gotten along well at a series of private meetings since early December. In addition, SBY, who always saw himself as a major figure in Indonesian history, clearly is worried that people will remember only his behavior at the end of his second term, when he did nothing as the opposition in parliament passed legislation that would drastically reduce the number of direct elections for regional governors and other local offices. This is a strikingly anti-democratic piece of legislation, and one that, polls show, is not supported by most Indonesians. (SBY also probably still hopes to eventually find some sort of senior job at the United Nations or another global agency, for which his reputation matters as well.) Now, SBY may be trying to move the Democrat Party into Jokowi’s camp to show the public that Yudhoyono will fight to maintain direct elections, and to bask in some of the reflected Jokowi’s democratic glow. 4. The NLD dominates Myanmar elections In the run-up to next fall’s national elections in Myanmar, some analysts have begun suggesting that the National League for Democracy (NLD), the party led by Aung San Suu Kyi, might not win such an overwhelming victory as it did in 1990, or in by-elections held in 2012, when the NLD won nearly every seat contested. The military and its favored party, the Union Solidarity and Development Party (USDP), have allegedly already begun handing out money, and surely will provide more handouts as Election Day gets closer. In addition, the USDP is the party of President Thein Sein, who helped launch Myanmar’s reform process; many foreign analysts, still besotted with Thein Sein despite Myanmar’s backsliding in 2013 and 2014, believe the linkage to Thein Sein will help win the USDP seats next year. In addition, the NLD remains a party too dominated by Suu Kyi and lacking an effective apparatus for research, for developing policy positions, and potentially for governing. It won’t matter. The NLD is going to sweep the polls in late 2015, though Suu Kyi will remain barred from the presidency by the Myanmar constitution, and the Myanmar military will continue to wield excessive power through its allocation of 25 percent of seats in parliament and through its enormous network of various security forces throughout the country. Then, the NLD will have to govern. The party’s policy weaknesses will be exposed, it will have to work with a president other than Suu Kyi – perhaps current parliament speaker Shwe Mann – and it will face the tough task of trying to slowly reduce the military’s influence over politics. But the NLD will win the election, and win big. 3. Hillary Clinton walks back her embrace of Burma policy As she lays plans in 2015 to run for president, Hillary Clinton will have to grapple with the legacy of U.S. rapprochement with Myanmar, which Clinton helped launch as secretary of state in Barack Obama’s first term. Up to now, Clinton has continued to point to this rapprochement as a highlight of her time as secretary, a foreign policy victory in which the United States helped spark reform in one of the most isolated nations in the world. Clinton made Myanmar a central success story in Hard Choices, her book on her time as secretary. Yet since 2013, Myanmar’s political reforms have stalled, and though the NLD will win the 2015 election, its victory will hardly guarantee a return to democracy. Instead, the country is likely to face chaos, as the NLD fights the military and its allies to retain control of the government, civil strife continues in several parts of the country, and violence against Muslims rises. A consummate strategist, Clinton will find some way in 2015 to write herself out of the troubled story of U.S.-Myanmar rapprochement. 2. Southeast Asia survives (and even thrives on) low oil prices Low oil prices already have wreaked havoc on Russia, Venezuela, Mexico, Brazil, and other oil producers, particularly those whose state companies, like Gazprom or Petrobras, have issued large amounts of corporate debt. Cheap oil will hurt some Southeast Asian countries that are significant exporters, like Brunei, Malaysia, and, to some extent, Vietnam. Of all the large Southeast Asian economies, Malaysia, which has developed a range of sophisticated oil-related industries that together account for about 30 percent of GDP, will be hurt worst. Yet none of these countries’ state petroleum companies have issued as high the levels of debt as Gazprom or Petrobras. Despite Malaysia’s many economic challenges, its state oil company, Petronas, is well-managed, a far cry from Petrobras, which is now facing a massive corruption scandal. In addition, the drop in the price of oil will be a huge boon to Indonesia, significantly cushioning the impact of President Joko Widodo’s recent cut in fuel subsidies – and possibly allowing Indonesian consumers to spend more on other items, helping goose the economy. Cheaper oil also will be a boon to consuming nations like Thailand, the Philippines, and other oil consumers in the region. 1. Congress smacks down Barack Obama’s policies Granted, that could be a headline related to almost any foreign or domestic policy issue in 2015; you have an incoming Congress dominated by the GOP, with leaders angry that, after the November elections, President Obama issued several groundbreaking executive orders that will transform relations with Cuba, immigration, and climate change. But on Southeast Asia, Congress has always played a much larger role than it has played in many other areas of foreign policy. Congress has for two decades been central to policy-making on Myanmar, Vietnam, and other authoritarian states in mainland Southeast Asia, partly successive presidents mostly ignored these countries, partly because of the legacy of American wars in mainland Southeast Asia, and partly because of genuine concern in Congress that American presidents, of both parties, ignored human rights abuses throughout Southeast Asia. Seeing a void in policy-making, Congress imposed tough sanctions on Myanmar, injected human rights questions into U.S.-Vietnam rapprochement, restricted U.S. military sales to Vietnam, Indonesia, and other countries in the region, and took other measures over the past two decades to make human rights a centerpiece of U.S. policy toward Southeast Asia. Combine Congress’s historical interest in Southeast Asia with anger at Obama and you have a recipe for a Congress active on Southeast Asia issues, and possibly hostile to the administration’s efforts to build relations with Vietnam, Cambodia, Laos, Thailand, Myanmar, and Malaysia, all of which are authoritarian states of one kind or another. New Senate Majority Leader Mitch McConnell long has been a hawk on Myanmar, critical of the Myanmar military and skeptical of the chances of reform there. Though McConnell warily went along with the Obama administration’s plan for rapprochement with Myanmar, the slowdown in Myanmar’s reforms and a desire by the White House to continue moving forward with closer military to military ties with Myanmar are likely to lead to pushback from McConnell’s office, especially if the Myanmar constitution remains rigged so that Suu Kyi cannot become president. Other Republican senators also clearly see Myanmar as an issue on which they can stake their human rights bona fides, and question Obama’s commitment to rights as well.  As Roll Call noted earlier in the year: McConnell certainly isn’t alone in taking interest in the development of Myanmar’s political system. Fellow Republican Sens. Mark S. Kirk of Illinois and Marco Rubio of Florida fired off a joint letter to Kerry Thursday, asking him to address political issues while in the country. In addition to the specific problems with the constitution, Kirk and Rubio point to ongoing human rights abuses and what they term “the national phenomenon of anti-Muslim violence that is rooted in a narrative of Buddhist grievance. Expect similar congressional pushback on other human rights-related issues in Southeast Asia, including the administration’s rapprochement with Cambodia and Malaysia, the White House’s desire to move quickly toward significant arms sales to Vietnam, and many other issues.
  • Thailand
    New Year’s Predictions for Southeast Asia
    It’s that time of year again. Since I will be away between Christmas and the end of the year, this is the week for boldly making predictions about 2015 in Southeast Asia. At the end of 2015, just like this year, we can look back and see how many of my fearless predictions were right, and how many missed the mark. This post will offer five predictions; you will have to wait a few days for the other five. 10. Thailand’s ruling military regime pushes elections back farther The Thai regime already has put off planned elections from late 2015, the date mentioned shortly after the coup government took power, to 2016. But the process of drafting a new constitution is, even with a rigged drafting committee, going to be more complicated than the army initially thought. Thais are becoming more vocal about expressing their desire for directly elected leaders and about having some say over the final draft of the constitution. In addition, although the Thai media has mostly become quiescent, it has not completely given in to army rule, as would have happened in the past. Several prominent media outlets continue to criticize the military for maintaining martial law, detaining activists and journalists, and keeping the constitution drafting process opaque. In the face of mounting opposition, coup leader Prayuth Chan-ocha, whose intolerance of public debate is showing through more and more each day, is likely to postpone the final drafting and approval of the constitution even farther into the future. Indeed, elections might not be held in 2016, and could possibly wait until 2017. If the royal succession process remains plagued with uncertainty, such as continued instability in the Crown Prince’s household, this instability will only reinforce Prayuth’s desire to delay a handover back to civilian rule. 9. Tony Abbott confronts a test from within his party Australian Prime Minister Tony Abbott’s personal unpopularity is dragging down the Liberal Party. The Liberals’ coalition just lost state elections in Victoria, the first time in sixty years a government has been defeated in Victoria after just one term; polling showed that Abbott’s personal unpopularity spilled over into Victoria, influencing state voters to go against the Liberals in the state election. Abbott has often looked befuddled on foreign policy. He was taken by surprise by Barack Obama and Xi Jinping’s major climate deal, announced on the eve of the G-20 summit in Australia, and he has repeatedly stumbled on crafting an effective and humane Australian policy for dealing with refugees. Abbott frequently has appeared tone-deaf in dealing with members of his party, the media, and the public. Indeed, he has one of the lowest popularity ratings of any Australian prime minister in modern history. However, the Liberal Party retains decent ratings for now. In the cutthroat world of Australian politics, where prime ministers can be dumped a few weeks before an election, expect other leading Liberals to try to oust Abbott in an internal party vote in 2015. 8. Jokowi faces major challenges to his new maritime doctrine Indonesian President Joko “Jokowi” Widodo announced an ambitious new Indonesian foreign policy doctrine at the East Asia Summit in November. Jokowi declared that Indonesia was going to become a maritime power, playing a larger role in Indian and Pacific Ocean trade, upgrading its ports and infrastructure, and modernizing its navy to protect Indonesian territorial waters and exclusive economic zones. In the weeks since Jokowi’s speech, Indonesia has taken several tough actions designed, I think, to show that the president means business. The first week of December, Indonesia sank several Vietnamese fishing boats that were allegedly illegally fishing in Indonesian waters; after the sinking, one of Jokowi’s top advisors, Rizal Sukma, told reporters, “We sank Vietnamese boats last week…maybe we will sink Chinese boats after that.” (More details on Sukma’s speech can be found here.) Jokowi’s vision, though ambitious, is a long way from reality. In 2015, as Indonesia tries to translate this doctrine into actual policy, it will face multiple obstacles. For one, the doctrine will now be subjected to intense intra-bureaucratic fighting within Jokowi’s cabinet, and it remains unclear whether the coordinating minister responsible for the new maritime policy will have the clout to handle Indonesia’s notoriously challenging intra-bureacratic warfare. Secondly, Indonesia will face serious pushback from China, which up to now has mostly focused its South China Sea claims on areas disputed with the Philippines and with Vietnam. However, China’s claims to areas near Indonesia’s Riau islands are becoming a point of diplomatic friction between Beijing and Jakarta, and the not-so-subtle message sent by the sinking of the Vietnamese boats will not play well in Beijing. Although China has taken a relatively soft approach toward Indonesia, trying to cultivate Southeast Asia’s biggest power, a more emphatic Indonesian defense of its waters, including sinking Chinese vessels, will surely be met with a tough response from Beijing. 7. Aung San Suu Kyi will not become president of Myanmar In my next post, I will offer some projections of the likely results of Myanmar’s 2015 national elections, scheduled to be held next autumn. But whatever the result of the election, Aung San Suu Kyi is almost surely not going to become president of Myanmar. Suu Kyi’s party, the National League for Democracy, appears to be giving up its efforts to try to change the Myanmar constitution before the election, in the face of intense opposition to a constitutional change from the Burmese army. The constitution contains a clause barring Suu Kyi from becoming president because she was married to a foreigner. 6. Thailand’s 2015 growth rate will fall below 4 percent The World Bank currently predicts that Thailand will grow by 4.5 percent in 2015, year-on-year. Even this rate of growth would be among the slowest in Southeast Asia – the Bank predicts the Philippines will grow by nearly 7 percent, Indonesia will grow by 5.6 percent, and Vietnam will grow by 5.5 percent. But I am doubtful that Thailand will even reach 4 percent growth for 2015. Continuing political uncertainty will weigh heavily on Thai consumers, seriously depressing domestic consumer spending. In addition, political uncertainty – and the high-profile international coverage of several recent murders of foreign tourists in Thailand – will hurt tourism badly. Tourism revenues account for between six and seven percent of Thailand’s total annual GDP. Finally, Japanese companies, the most important investors in Thailand, will continue to slowly move some of their investments to Vietnam and other countries in the region, worried about Thailand’s political instability and the long-term competitiveness of Thai labor.
  • Thailand
    How the Pivot Is Adding to Democracy’s Woes in Southeast Asia
    Throughout much of the 1990s and early 2000s, Southeast Asia was one of the world’s bright spots for democracy. Even Myanmar, long one of the most repressive nations in the world, seemed to be changing. In 2010 and 2011, the xenophobic leadership of the Myanmar army, which had ruled the country since 1962, began a transition to civilian government by holding elections that ultimately helped create a partially civilian parliament. The country seemed poised for free elections in 2015 that would solidify its democratic change. Since the early 2010s, however, Southeast Asia’s democratization has stalled and, in some of the region’s most economically and strategically important nations, it has even reversed. Over the past decade, Thailand has undergone a rapid and severe democratic regression and Malaysia’s democratic institutions and culture have regressed as well. While less drastic, there have also been troubling developments in a number of other countries. In Malaysia, the long-ruling Barisan Nasional (BN) coalition has cracked down on dissent and tried to destroy what had been an emerging, and increasingly stable, two-party system. However, this has changed since Malaysia’s BN government won a narrow victory in the 2013 election in large part because of its strong support from the most conservative and anti-opposition ethnic Malays. Following the election, the government has “rewarded” these loyal constituents by proposing a raft of new legislation that aims to suppress the opposition and entrench economic and political preferences for ethnic Malays, disempowering ethnic Indians and Chinese, who together represent about one-third of the country’s population For example, the government essentially reinstated the despised Internal Security Act (ISA), which allows Malaysia’s government to detain people without trial indefinitely, often on vague charges. Things have been just as bleak in Thailand, which has been mired in political crisis since 2006, when the Thai military launched a coup while then-Prime Minister Thaksin Shinawatra was abroad. Since that time, Thailand has been plagued by repeated cycles of street protests and counterprotests, rising street violence and political instability, short-lived governments brought down through extra-constitutional means, and the return of harsh crackdowns on dissent. Thai institutions have become increasingly polarized and politicized, and few Thais now trust the integrity of the judiciary, the civil service, or other national institutions. Even the king, once so revered that Thais worshipped him like a god, has had his impartiality questioned by many Thais. For more on how Southeast Asia’ s democracy has regressed, and the role of U.S. policy in this regression, see my new piece for The Diplomat.
  • China
    Friday Asia Update: Top Five Stories for the Week of November 21, 2014
    Ashlyn Anderson, Lauren Dickey, Darcie Draudt, Andrew Hill, Will Piekos, and Sharone Tobias look at the top stories in Asia today. 1. Japan slips into recession, dissolves lower house. New economic data released Monday morning showed that Japan had lapsed into recession, striking yet another serious blow to Prime Minister Shinzo Abe’s vaunted economic recovery policy and leading some to ask if this is the end of Abenomics. In a bid to win popular mandate for his economic policies, Abe announced he would delay a planned increase to the national sales tax and dissolve the lower house of Japan’s parliament. On Friday afternoon, lawmakers in the house of representatives chanted “Banzai!” as they disbanded. Snap elections are expected to take place in mid-December, and while Abe’s ruling Liberal Democratic Party may lose a number of seats, they are overwhelmingly expected to maintain their majority and could potentially increase their power. 2.  In Hong Kong, confrontations lead to questions over the future of protests. Dozens of demonstrators, apparently frustrated with the nonviolent strategy that has guided the Hong Kong pro-democracy protests, used metal barricades to smash doors and windows of Hong Kong’s legislature in an attempt to break in. The police arrested six people for assault of police officers and criminal damage to property, and the leaders of pro-democracy and student groups joined the government in criticizing the violent demonstrators. The incident came hours after the city of Hong Kong cleared out a smaller protest camp with no resistance; thirty court bailiffs enforced an injunction against street barricades at the request of the landlords of neighboring buildings in the area called Admiralty, and a similar injunction was issued for the protest site in Mong Kok. 3. Economic growth and climate change top the agenda at G20 summit.  The 2014 Group of Twenty (G20) summit, the ninth such meeting for the G20 heads of government, was held in Brisbane last weekend. The world leaders laid out a plan comprised a plan of more than 800 measures to boost the global economy by more than $2 trillion. Climate change was also discussed at the meeting, despite Australian Prime Minister Tony Abbott’s resistance to its inclusion in the G20 summit agenda. Also of note, the heads of several member states, including the United States and Canada, threatened further sanctions against Russia if Moscow does not withdraw its troops from Ukraine. 4. Peace process in Myanmar complicated by deadly attack. A critical component of President Thein Sein’s vision of reform, the peace talks between minority groups in Myanmar and the government, have been burdened by the Myanmar army’s shelling of a rebel group’s training facilities in Kachin state near the Chinese border. At least twenty-three rebels from the Kachin Independence Army (KIA) were killed in the incident, casting doubt on the Myanmar military’s resolve for peace talks. The incident marks the deadliest attack since a ceasefire agreement broke down in 2011. The Myanmar army has claimed that the strike was only meant as a warning, but KIA has denied this assertion. 5. Xi Jinping makes official state visit to Australia and New Zealand. In the wake of Asia-Pacific Economic Cooperation (APEC) forum and G20 meetings, Chinese President Xi Jinping visited Canberra, signing a trade agreement with Australian Prime Minister Tony Abbott on Monday. The agreement gives Australia more access to Chinese capital markets, opens Chinese markets to Australian farm and service-sector exports, and eases limits on Chinese investment in resource-rich Australia. While the two sides cemented opportunities for bilateral economic cooperation, Australia failed to get a reduction in tariffs on key commodities—rice, wheat, cotton, sugar—and China was similarly unsuccessful in getting Australia to change its practice on investigating inbound foreign investment. President Xi then flew to Auckland to begin a series of official engagements showcasing the bilateral trade, economic, and cultural links between China and New Zealand. BONUS: The Hunger Games proves too threatening in China and Thailand. The release of the third installment of the franchise, “The Hunger Games: Mockingjay Part 1,” in China was postponed until January, reportedly to balance the 2014 foreign and domestic box office receipt totals. Some commentators have suggested that the move is more political, as the film depicts a dystopian world in which a revolutionary movement attempts to overthrow an authoritarian government. In Thailand, the connection between the film and revolution is much more overt—several student protesters have been detained for using a three-finger salute, a symbol of resistance in the movie. The students, in Thailand’s northeast, were protesting the May 22 military coup that removed the populist Prime Minister Thaksin Shinawatra from power.
  • Myanmar
    Obama’s Visit to Myanmar: A Mixed Result
    During President Obama’s visit to Myanmar last week, for the East Asia Summit, the president said some of the right things about Myanmar’s faltering political reform process. He noted the ongoing discrimination – some would say outright ethnic cleansing – against Rohingya in western Myanmar, as well as the precarious rule of law in much of the country. He expressed concern about the challenges of Myanmar’s elections next year, which will be held under a constitution designed to bar Aung San Suu Kyi from taking the presidency and which still reserves enormous powers for the military. The constitution, as it stands, will pose a danger to any future Myanmar civilian government, even if Suu Kyi’s party, as expected, wins control of Parliament next year. And much of the press coverage of the Myanmar visit focused on the president’s remarks about Myanmar’s political challenges. Indeed, Obama’s aides clearly briefed reporters covering the trip to emphasize that the visit was focused on pressuring the Myanmar leadership to reform, since several news articles picked up this theme. However, Obama also was far too optimistic about the path forward for Myanmar. His administration clearly is so wedded to its policy of rapprochement with Naypyidaw that it is hard for it to consider that Myanmar’s success story might not actually be such a success. After noting Myanmar’s problems, Obama repeatedly indicated that, despite bumps, he believes Myanmar is solidly on the path toward democratic change. As the New York Times noted, after Obama’s meeting with Aung San Suu Kyi, “In his meetings with government officials, opposition leaders and young people, Mr. Obama expressed confidence that the country would overcome its current troubles.” Or, as Bloomberg noted, the White House’s take is that “reform in Myanmar is bound to be difficult.” This is surely true, but just because reform is difficult does not mean the White House should ignore severe human rights problems and other serious gaps in the reform process. Obama also declined to offer any criticism of Suu Kyi or other government leaders for basically ignoring the violence against the Rohingya; on the Rohingya, Suu Kyi has done as little as the Myanmar government, squandering her moral authority. Obama also applied little rhetorical pressure on the Myanmar government to allow foreign NGOs greater access to populations of Rohingya and other internally displaced people, many of whom are living in camps described by rights groups as little more than open air prisons. More important, during the visit Obama offered no indication that the United States would halt growing military-to-military and diplomatic ties with Myanmar, at least until after the 2015 elections are held and declared free and fair. Slowing the pace of rapprochement with Myanmar is a path some human rights groups and some hawks in Congress may push the administration to take – including the new Senate Majority Leader, Mitch McConnell, who has long been known for his interest in Myanmar and in human rights in Myanmar. Obama’s unwillingness to match criticism of the Myanmar government with action is not surprising. The administration has touted the blossoming of U.S.-Myanmar relations as a major foreign policy victory, and likely 2016 presidential candidate Hillary Clinton made rapprochement with Myanmar a theme of her tenure as secretary of state. Admitting that Myanmar’s democratization process has huge flaws, and that perhaps the United States moved too quickly in normalizing ties with the country, would be admitting that the administration might not have won the victory in Myanmar that it claims.
  • China
    Friday Asia Update: Top Five Stories for the Week of November 14, 2014
    Ashlyn Anderson, Lauren Dickey, Darcie Draudt, Andrew Hill, Will Piekos, and Sharone Tobias look at the top stories in Asia today. 1. Obama and Xi strike deals at APEC summit. The Asia-Pacific Economic Cooperation (APEC) forum proved remarkably productive for U.S.-China relations this week. U.S. President Barack Obama and Chinese President Xi Jinping jointly announced commitments to cut carbon emissions, and agreed to a reduction in tariffs on a range of technology products, to greater communication between their militaries in the Pacific, and to extend the duration of visas. Though these agreements are certainly a welcome change from years of stagnating relations, underlying issues still remain. China and the United States have fundamentally different visions of Asia’s security and trade architecture that are not easily reconciled. 2. Abe tries to repair regional ties at APEC. After nearly two years in office, Japanese Prime Minister Shinzo Abe and President Xi finally met, speaking briefly on the sidelines of the APEC summit on Monday. While the meeting only lasted twenty-five minutes, many are hailing it as an important step in repairing Sino-Japanese ties and deescalating tensions in the East China Sea. The brief encounter comes in the wake of last week’s four-point understanding on improving relations. Later in the week at the East Asia Summit in Myanmar, Abe also expressed hopes for a Japan-China-South Korea trilateral meeting in the near future. 3. Obama attends East Asia Summit in Myanmar. President Obama met with Myanmar President Thein Sein in Naypyidaw on Thursday while visiting the country for the annual East Asia Summit. During the meeting, Obama encouraged Thein Sein to pursue greater political reforms and end persecution of Rohingya, a Muslim ethnic minority in western Myanmar facing violence from the majority Buddhist population. Myanmar leaders call the minority Bengali rather than the internationally preferred “Rohingya,” and have refused to grant members of the minority citizenship. Obama also met with opposition leader and fellow Nobel laureate Aung San Suu Kyi. 4. North Korea releases two American prisoners. U.S. Director of National Intelligence James Clapper traveled to North Korea to negotiate the releases of Matthew Miller and Kenneth Bae, arriving with a brief letter from President Obama to North Korean leader Kim Jong-un in hand. Mr. Bae said he spent an “amazing” two years in prison after he was detained on charges of using a Christian evangelical organization to preach against the North Korean government. Mr. Miller entered North Korea earlier this year, tearing up his visa and asking for asylum; he was instead charged with unruly behavior. After the release last month of Jeffrey Fowle, another American detained by North Korea, the releases could be evidence that Kim Jong-un is making initial overtures toward the Obama administration. 5. U.S.-India deal rejuvenates WTO Trade Facilitation Agreement. Ahead of the Group of Twenty meeting this weekend, the United States and India reached a breakthrough agreement allowing India to continue its food subsidy program without the fear of being challenged in the World Trade Organization (WTO) until a permanent solution to food stockpiling is reached. India has been under mounting pressure since it withdrew its support for the package of trade facilitation measures agreed upon at the WTO meeting in Bali last December. With the impasse broken over food stockpiling, the WTO has announced that there is a “high probability” of passing the Bali trade package within two weeks. The Bali agreement is expected to add $1 trillion to the global economy and create twenty-one million jobs. Bonus: APEC outfits take world leaders where no one has gone before. The APEC forum traditionally includes a photo op in which attending world leaders wear the traditional dress of the host country; this year’s outfit drew comparisons to the uniforms of Star Trek. APEC apparel have drawn a variety of reactions before—click here for a rundown of the top ten.
  • Myanmar
    How Obama’s Myanmar Policy Has Backfired
    U.S. President Barack Obama shakes hands with Myanmar’s President Thein Sein in the Oval Office at the White House in Washington, May 20, 2013. (Larry Downing/Courtesy Reuters) On Nov. 11, President Obama will travel to Myanmar for the ninth East Asia Summit, a meeting of leaders from across the Pacific Rim. It will be the president’s second trip to a country that, for decades, was seen as a pariah in Washington, run by a brutal and xenophobic military regime that gunned down protestors in the streets and jailed opposition leader Aung San Suu Kyi. In 1997, the Clinton administration signed a law barring new U.S. investment, and the George W. Bush administration made the sanctions even tougher. Coming into office, the Obama administration concluded that a hard-line policy toward Myanmar had failed—failed to advance political and economic change, and failed to serve U.S. strategic interests in Asia. Obama eased sanctions on Naypyidaw and encouraged U.S. companies to plunge into the country, among other steps. When Obama visited for the first time, in 2012, optimism about the future—of Myanmar politics, of Myanmar as a market, and of U.S.-Myanmar relations—was almost unbounded. The new government had scheduled elections for 2015 and released Suu Kyi from house arrest. Myanmar President Thein Sein had freed hundreds of political prisoners, signed cease-fire deals with the ethnic minority insurgencies that had fought the government for decades, and loosened restrictions on the domestic media environment. With an untapped consumer market of 50 million people, and sizable natural resources, Myanmar appeared to be one of the most promising emerging markets in the world. By launching closer relations, the United States also was, supposedly, denying China a greater foothold in Asia and gaining a partner in an important strategic location. As Obama declared in Myanmar in 2012, “I’ve come to keep my promise and extend the hand of friendship.” The president concluded by gushing that Myanmar’s reforms would “become a shining North Star for all [of Myanmar’s] people.” But only two years later, Obama arrives in a country where optimism—among Myanmar democrats, local and foreign companies, and even many in the U.S. government who are focused on Myanmar—has dimmed to black. Myanmar’s political and economic climate has gone sharply backward. The country’s infrastructure, courts, and permitting remain so disastrous that most U.S. investors, after making initial fact-finding visits to the country, are giving Myanmar a wide berth. Worst of all, Myanmar was never the strategic gem it appeared to be, and expending considerable U.S. diplomatic resources wooing the country took time and money away from other, more important places – a dangerous mistake at a time when the United States is stretched around the world. To read more of my assessment of the administration’s Myanmar’s policy, go to: http://www.businessweek.com/articles/2014-11-06/why-obamas-courtship-of-myanmar-backfired#r=hpt-ls
  • Myanmar
    Myanmar Not Yet Attracting U.S. Companies
    As President Barack Obama arrives in Myanmar next week for the East Asia Summit, he will find less optimism not only about the political situation but also about Myanmar’s economic future. As I noted last week, when Obama first visited Myanmar in 2012, it was at the height of the country’s political reform process. Since then, the process of political reform has deteriorated, so much so that President Thein Sein last week held a kind of emergency summit with top civilian and military leaders, including Aung San Suu Kyi. This meeting was held in an attempt, I think, to get all top Myanmar public figures to at least paper over their differences during the East Asia Summit. Still, it has become clear that the military does intend to just easily hand power over to a truly civilian government, freedom of expression and press has been curtailed once again, and western Myanmar has exploded into inter-religious conflict, leaving over 100,000 Rohingya living in squalid camps that have been described by the Arakan Project as open air prisons.  It will not be easy to paper over these serious problems. Myanmar’s economic progress has stalled as well. To be sure, the country’s offshore oil and gas deposits continue to attract significant interest, which is why the government in March awarded twenty tenders to foreign companies to explore different offshore blocks. Winners of tenders included ConocoPhillips, among other foreign companies. But these oil and gas multinationals have long experience operating in some of the most politically troubled and economically restrictive environments in the world, and the fact that they are exploring offshore makes them more insulated from Myanmar’s growing political instability than if they were exploring in Myanmar itself. In other industries, many U.S. companies that sent executives to Myanmar in 2012 and early 2013 on visits to assess the market’s potential have decided to do nothing for now. As the Wall Street Journal reported this past August,  although the Obama administration has eased sanctions on investment in Myanmar, U.S. companies have invested less than $250 million in the country, a tiny figure for a country with such low penetration of consumer goods and with a population of around 53 million people. Several prominent projects in Myanmar that were supposed to be hubs of investment have stalled, including the building of a new airport for Yangon and the Dawei Port project. In addition, as the Journal noted, a number of large foreign companies that had planned to invest in Myanmar’s aviation sector, which is badly under-served, or had been granted licenses to open bank branches in Myanmar, have shelved their plans. There are several reasons why U.S. investment into Myanmar has not reached the high expectations set in 2011 and 2012. The instability caused by violence in western Myanmar, which has led to Buddhist-Muslim violence in other parts of the country, clearly worries some foreign investors not used to this level of political risk. After traveling outside Yangon and Naypyidaw during second, third, and fourth trips to the country, many U.S. executives have come to better appreciate how poor Myanmar’s physical infrastructure is outside of the capital and Yangon, which makes even low-end manufacturing more expensive than in neighboring nations like Vietnam and Bangladesh. (Yangon isn’t exactly Singapore, either, but its infrastructure and workforce is better than in other parts of Myanmar.) And a series of recent court decisions have reminded foreign investors that Myanmar lacks any semblance of an impartial judiciary or any real protections for foreign investors. Meanwhile, U.S. companies still operate under restrictions in Myanmar that investors from most other countries do not, including being prohibited from dealing with certain companies that have links to Myanmar’s previous military regimes. Yet many of these blacklisted companies are among the most powerful potential partners in Myanmar. Given the potential of Myanmar’s consumer market and the quantity of its (onshore) natural resources, U.S. companies will continue to pay close attention to Myanmar. The Obama administration has sent a number of high-level missions to Myanmar to promote investment and improve overall economic ties—too many, in my opinion, given the potential of other markets in the region like Indonesia and Vietnam. Still, one cannot say that the White House has not tried to foster greater investment in Myanmar. But it will be many years before U.S. investment in Myanmar matches U.S. investment into other sizable countries in Southeast Asia.
  • Myanmar
    Obama Prepares to Travel to Myanmar at a Critical Time
    In November, President Obama will travel to Myanmar to attend the East Asia Summit, which brings together a broad range of nations from across the Pacific Rim. It will be the president’s second trip to Myanmar, following his landmark 2012 trip, which was the first by a sitting U.S. president to Myanmar since the country gained independence six decades ago. During the East Asia Summit, Obama almost surely will hold bilateral meetings with Myanmar President Thein Sein and other senior Myanmar leaders, including opposition leader Aung San Suu Kyi. The timing of the president’s visit to Myanmar will be important, but the rosy hue of U.S.-Myanmar relations that colored the president’s 2012 trip has dimmed significantly. This will be Obama’s only visit to Myanmar before the landmark 2015 national elections, the first truly contested national elections in Myanmar since 1990, when Suu Kyi’s party swept parliamentary elections and then the military essentially ignored the vote and kept control of the country. In the 2015 elections, Suu Kyi’s National League for Democracy is almost sure to win a sweeping majority of seats again. However, both foreign diplomats, Myanmar analysts, and some opposition politicians already are warning that the 2015 elections could be undermined or outright rigged by the military, to favor the military’s de facto party, the Union Solidarity and Development Party (USDP). Myanmar political scientists and many foreign diplomats in Yangon report that the USDP and the military are building up paramilitary squads that could be used for intimidation on election day. The potential intimidation could range from distributing cash to co-opt opposition supporters to purposefully instigating Buddhist-Muslim violence to show the public that an unstable Myanmar cannot be turned over to a political opposition with no experience in governing. In addition, since the high point of Myanmar’s reform process in 2012 and early 2013, the country’s political opening has stalled and, in my opinion, slid backwards. The recent murder of a Myanmar journalist while in army custody has highlighted the regression of the country’s media environment since 2012 and 2013. Although the online and print media in Myanmar remains far freer than it ever was under junta rule, journalists are once again being harassed, detained, tried—and apparently, murdered—by the military and police. In addition, journalists who dare the cover the conflict in western Myanmar’s Arakan State, where violence against Rohingya Muslims continues unabated, face severe threat from Buddhist paramilitary groups and their supporters. The deteriorating media environment is not the only sign of Myanmar’s backsliding. Cease-fires between the government and several ethnic minority insurgencies are collapsing, with the insurgents and the army preparing for war again. Arakan State remains a humanitarian emergency, and Thein Sein’s government has taken few constructive measures to help restore order and rights in Arakan State. The government initially simply denied the violence in Arakan State, pretending that massacres of Rohingya had not happened and tossing foreign aid groups out of Arakan State. Now, the Thein Sein government has come up with a plan for the Rohingya that is unworkable and simply racist: It wants the Rohingya to identify themselves as “Bengali” if they want to be granted Myanmar citizenship. If they do not accept this identification, the government plans to toss more Rohingya into detention camps. (A previous, military government stripped the Rohingya of their citizenship, though many of them had lived in Myanmar for generations.) But self-identifying as Bengali is akin to Rohingya marking themselves as foreigners, since to them—and to other Burmese—the term Bengali suggests that they are not indeed from Myanmar, came to Myanmar illegally, and thus can be discriminated against. Rohingya have few options. The NGO Arakan Project recently reported that over 100,000 Rohingya have fled Myanmar in the past two years, with many dying at sea or finding themselves at the mercy of pirates, the ruthless Thai navy, and a human slavery trade that runs through Thailand. Obama thus should use his time in Myanmar to highlight to Naypyidaw that, although the Obama administration has made rapprochement with Myanmar a major goal of its Asia policy, rapprochement increasingly depends on continued political reform in Myanmar. A rigged 2015 election, Obama should warn Naypyidaw, would immediately undermine U.S.-Myanmar relations, and a return to all-out war with ethnic insurgencies also should be a serious impediment to closer ties. Finally, Obama should make clear that the Thein Sein government’s proposed plan for the Rohingya is unsatisfactory and outright racist. In my next post, I will look at how, despite its rich natural resources and large, untapped consumer market, Myanmar has thus far proven relatively unattractive for U.S. companies. As an article in the Wall Street Journal noted, despite the relaxation of U.S. sanctions on Myanmar, as of August 2014 U.S. companies have committed less than $250 million to investments in the country of fifty million people, a minuscule amount for a market the size of Myanmar.