Where China Meets India: Burma and the New Crossroads of Asia (34 page)

The breakaway National Democratic Front, now in parliament, appealed for an end to Western sanctions, saying they were hurting ordinary people more than anything, and this appeal was echoed by all of the independent and ethnic-based parties that had run in the elections. Aung San Suu Kyi’s NLD, however, disagreed. They have argued that sanctions are the only card she has left to play in any future talks with the new government. They say that the new government was in any case little more than a façade for the continued rule of General Than Shwe, and that though there would be a new president and a parliament with some opposition parties represented, these new institutions would have little real authority. Others argue the opposite and say that the creation of a quasi-civilian government may still be the first step towards better government and better economic management. They argue as well that, in any case, the collateral damage wrought by sanctions on ordinary people has been tremendous, and far greater than any putative effect it has had on the regime itself. The new president, retired general Thein Sein, and his government were sworn into office in March 2011, and the president began by calling for urgent economic reforms, an end to corruption, and political reconciliation. This boosted the expectations of some. Others remained sceptical.

There was also much more talk about China, certainly more than two years before, a general uneasiness over China’s economic grip on the country, and an awareness that a watershed was quickly approaching. But the future is impossible to predict. One only has to remember the self-assured predictions in the 1950s about Soviet economic might or in the 1980s about Japanese global economic domination, or the equally confident predictions a century back that Argentina and Austria-Hungary were destined to be world powers. It’s not difficult to explain the present situation: Burma’s anxieties regarding China, the impact of its unfinished civil war, the reasons for China’s push southwest from Yunnan to the sea, India’s preoccupation with security in the Northeast and its worries over China’s presence in Burma. And it’s not difficult to see why it is China, via Yunnan, and not India, via its Northeast, that is the bigger influence over Burma today. What is far less certain is what exactly will happen over the coming decades, when India, Burma and China begin to weave much more closely together. There is no historical precedent for the epic moves that are now unfolding.

And in the middle of this drama, Burma’s rulers continue to play their balancing act, trying to secure the best possible deals from Beijing, whilst cultivating other potential partners and allies. But no one else can really compete with China, at least not for now. In addition to the new pipelines, roads and railway, Chinese government agencies and state firms have offered loans worth billions of dollars and help on everything from new IT and telecommunications infrastructure to a major expansion of the country’s electricity grid. As part of this balancing act there remains the desire, by at least some in the Burmese government, to improve relations with the West, but the United States, together with the United Kingdom, have both tied their policies very closely to Aung San Suu Kyi, and have stood firm on sanctions, denouncing the recent elections as a sham and demanding further but only vaguely defined political reforms before any relaxation of sanctions can even be considered. In late 2010, just prior to the elections, General Than Shwe retired nearly the entire top brass of the Burmese army, replacing them with much younger men in their late forties and early fifties. They will be the first generation of army leaders never to have been to the West. China will undoubtedly roll out the red carpet for them soon. In October 2010, US Senator Jim Webb said that the US shouldn’t allow Burma to become a ‘Chinese province’. But many Western politicians have been happy to view Burma as a simple morality play and a useful issue on which to appear ‘tough’ on human rights. The actual consequences of a policy that has long failed to deliver results are not important.

So what of the future? Burma will probably see some sort of economic growth, whether Western sanctions remain in place or not. Democratic government itself is almost certainly a long way away, but there could be an improvement in economic policies, increased aid and investment, and perhaps even some success at reducing poverty, creating jobs, and training a new generation of skilled workers. Burma is naturally very rich in the very commodities that will be most valued in the twenty-first century, including food and energy, and China will likely bankroll any efforts to exploit these resources. What’s unclear is whether the majority of Burmese people will benefit at all.

An even more important asset is the country’s strategic location, between China and India, and this more than anything could provide tremendous opportunities going forward, for the entire country. But using this opportunity, to the benefit of ordinary people, will require a basic reorientation: an end to decades of armed conflict and a willingness by elites to see the country’s ethnic and cultural diversity as an advantage, and not simply a problem to be managed; a new cosmopolitan spirit in place of the xenophobia that has dictated Burmese policy for generations; and perhaps more than anything, a strong and effective government that enjoys the trust and confidence of its people.

There are different scenarios for the future of Burma and the region. In one, Western sanctions stay in place, and they reduce the influence of Western democracies to near zero. Burma remains the only country in the region without access to Western markets and Western learning and grows economically, but mainly as a supplier of primary commodities to China and as China’s corridor to the Indian Ocean. Chinese interests are served in the short term but in the longer term anti-Chinese sentiment increases; the opportunity for a friendly and mutually beneficial relationship, so important to Burma, is lost. At the same time, China’s tightening hold over Burma alarms India and other states in the region, and this fuels new and old rivalries, even as trade increases. Conflicts in the area, in Northeast India and northern Burma, remain unresolved, and one or more of the Burmese ceasefires breaks down, leading to a new cycle of violent conflict, perhaps drawing in the big powers. Yunnan is not unaffected, and all cross-border problems, from gun-running to narcotics trafficking to the spread of infectious diseases, intensify. Burma is unable to manage its multiple political, economic and environmental challenges. A crossroads is established, but a dangerous one.

But there is another, happier scenario, one which sees real progress in Burma coupled with a quick end to Western sanctions. Development is more balanced, environmental destruction is minimized, efforts at reducing poverty win international support, and a rising middle class lays the foundations of more democratic government. The ceasefires are transformed into a sustainable peace and ethnic minority grievances are addressed. Peace comes to Northeast India as well, for the very first time since independence. Yunnan benefits from a more prosperous Burma, but as part of a more equal relationship, and this leads to a renewal of long-dormant cultural ties. Borders are opened and governments are able to cooperate and together address the challenges these open borders present. In Burma, where China meets India, a unique meeting place of cultures and peoples is created, at this new centre of the Asian world.

Progress in Burma would be a boon for the region. A peaceful, prosperous and democratic Burma would be a game-changer for all Asia.

During the early morning of 19 August 2011, Daw Aung San Suu Kyi, accompanied by an aide and officials from the ‘Special Branch’ of the police, departed by car from her lakeside villa in Rangoon, heading first across the city’s leafy and sprawling suburbs, then some 250 miles north along a concrete four-lane motorway, past endless dark green paddy fields, soaked in the monsoon rains. Her destination was the purpose-built capital Naypyitaw, and she had never been there before. Most probably she and her companions stopped about halfway, at the Feel Myanmar Food restaurant, which offers strong coffee and savoury Burmese snacks, before continuing on for a couple of more hours, and finally veering right towards the new city, just before a big sign informing drivers that the way onwards was the road to Mandalay.

Her ostensible reason for going was to attend a workshop on ‘Rural Development and Poverty Alleviation’. But the real motive was to see the new president, U Thein Sein, the meeting having been discreetly arranged over the preceding few days.

And so, after attending a session of the workshop and chatting over the coffee break with an assortment of business leaders, bureaucrats, and ex–army officers, she was ushered across town to the gargantuan President’s House, with its Corinthian columns and marble floors, for the first face-to-face meeting between a Burmese head of government and the world-renowned Nobel laureate in well over a decade.

The photograph provided to the press afterwards showed the two together, each with a half smile, she wearing the green ID card of the poverty workshop, and behind both a prominent portrait of Aung San Suu Kyi’s father, the nationalist hero General Aung San. After a long conversation, the two then walked together to the president’s private apartments, where she was warmly greeted by his wife.

It was a turning point. The meeting had come after a tense couple of months, when no one could say for sure which way the wind was blowing. She had been planning a tour around the country, without official permission, which would have risked arrest and perhaps a new round of anti-government protests and repression. But the discussion had been a success. Speaking later to journalists, she offered the president public praise. And he would subsequently allow her party to organize as it pleased.

Other measures soon followed. The party registration law was amended to the satisfaction of the National League for Democracy, and the party then duly registered. And in September and January, hundreds of political prisoners were released, including all prominent dissidents. This was all part of the understanding that President Thein Sein and Aung San Suu Kyi had reached. She repeated often in public that she felt he was ‘genuine’ in his commitment to a better future. More discreetly, she held back opposition activists who wanted to take to the streets.

The president was at the same time making one audacious move after another. All restrictions on a once heavily restricted internet were lifted. Media censorship was relaxed. Exiles were invited to return and a few even became advisers to the government. Perhaps most daringly, on 30 September, U Thein Sein sent a message to parliament, called the Hluttaw, after the old daily conference of the king’s ministers, to announce that he was suspending work on a multi-billion-dollar Chinese dam project at Myitsone, in the far north. For years the local Kachin people had been complaining about the dam, which had displaced thousands from their homes. And for months activists in Rangoon had been issuing dire warnings about the dam’s environmental impact. But few dared believe that the president would actually stop work on the dam and risk Beijing’s ire.

It turned out to be a masterstroke, at once confirming the president as a man who listened to the people, and perhaps as important, signaling to the West that this was a government no longer comfortable with China’s embrace. Not coincidentally, Burma’s chairmanship of ASEAN in 2015, until recently a very controversial thing, was confirmed at a summit of leaders in Bali, Indonesia, in mid-November. President Obama had recently declared that with the winding down of the US presence in Iraq and Afghanistan, Asia would become the new ‘top priority’. Less than a fortnight later, he dispatched Hillary Clinton, the first American secretary of state to visit Burma since John Foster Dulles in 1955, partly as a mark of Washington’s support for the reforms under way, but also as a sign of a heightening US engagement in China’s backyard.

Secretary Clinton’s trip was followed by an avalanche of other VIP visitors, from the billionaire philanthropist George Soros to British Prime Minister David Cameron and UN Secretary-General Ban Ki-Moon. Tourist numbers shot up as well, and Conde Nast pronounced the country ‘a destination to watch in 2012’.

There were important moves towards reforming the economy as well, such as a move in April to abolish the old and absurd exchange-rate system and begin a managed float of the currency. Hundreds of businessmen were soon arriving, anticipating an end to Western sanctions and scouting new opportunities. Flights and hotels were booked solid for weeks, and house rental prices soared to well over $10,000 a month.

And discussion of the economy dominated parliament, which, far from being a rubber stamp, emerged as a dynamic new institution. Laws were passed legalizing trade unions and permitting freedom of assembly. Other legislation was hotly debated, including on land rights and local administration. Some had feared that the quarter of seats held by military appointees would be used to stymie reform, but the men in uniform did nothing of the sort. The only bill they themselves introduced was one on orthography, the responsible member calling for more disciplined spelling in the media. Many supported a motion calling for the release of all political prisoners. Ministers were grilled, and the budget—the first national budget presented to a Burmese parliament in half a century—was carefully scrutinized, and then passed only after the government agreed to major amendments.

I remember that on the same day that week, a bespectacled old shopkeeper and a former general, now a government minister, both said to me the same thing: ‘Now there is no going back’.

The armed conflicts also received attention. The ceasefires, most in place since the late 1980s and early 1990s, had begun to unravel. President Thein Sein made clear that he wanted not only a new set of ceasefires but also a quick process towards a final peace settlement with all the ethnic armies. In the south, along the Thai border, there was considerable success. Not so, however, in the north, where the eighteen-year-old truce with the Kachin Independence Army crumbled and bloody clashes forced tens of thousands to flee from their homes.

All told, however, there had been remarkable progress, far exceeding expectations. It was a process of reform from the top, perhaps more reminiscent of democratic transitions in Latin America in the 1980s than the colour-coded uprisings of more recent times. Many Western observers seemed caught entirely by surprise. A year before, they had been dismissing the new constitutional setup as a ‘sham’ and railing against any notion that it might yet open the door to change. The new developments seemed to come out of the blue. Except, of course, they didn’t.

The constitution had been in the works for years, as had preparations for the army to take a step back from government. General Than Shwe’s decision to retire was well known, but so little were the inner workings of Napyitaw understood that few gave this any weight, or appreciated the vacuum it would create. Growing diplomatic engagement had helped. So had the growth of the aid community and local nongovernmental organizations since Cyclone Nargis, as well as the willingness of local media to constantly push the envelope of censorship.

There were new factors as well, not least the Arab Spring, which focused minds and taught two lessons: First was that reform had to be real. The second was that reform had to be properly managed and well paced.

President Thein Sein made an enormous difference too. A former regional commander, he had risen up through the ranks as a loyalist, a hard worker, a quiet man who had little personal ambition. He was also seen as utterly clean in a system not known for its lack of corruption. A different person facing the same set of strategic choices may well have taken the country in another direction. But he saw himself from the start as the architect of a unique political transition, one that would include reconciliation with the opposition.

The biggest reason, though, was the fact that Burma by 2011 was a far less isolated place, in spite of sanctions, than just twenty or even ten years before. Satellite television was present in nearly every village, and thousands of people were traveling each week to Bangkok or Singapore, for work or pleasure. The country’s lowly position and the possibility of a very different future were plain for everyone to see.

On 1 April 2012, by-elections were held for forty-five vacant seats in parliament. Aung San Suu Kyi campaigned hard, despite illness, and her star attraction was clear from the huge crowds that came out to hear her speak. The result was a landslide win. It was a testament to her personal popularity, as well as a vote of confidence in the process that was unfolding. And the willingness of the government to tolerate a major electoral loss was also seen as a further mark of its reformist credentials.

The rewards were not long in coming. The European Union announced an end to all sanctions other than the arms embargo. Norway and Australia did the same. The US administration was hamstrung by its web of sanctions-related legislation, but promised to begin peeling away a number of key restrictions, including on assistance from the World Bank and other international financial institutions.

It was Japan, though, that moved most aggressively. In late April, President Thein Sein was welcomed to Tokyo, the first Burmese leader to visit in a quarter century. The Japanese agreed to write off more than $4 billion in past debt and announced fresh multi-billion-dollar loans. Big Japanese companies like Marubeni, Honda, and Mitsubishi were quickly setting up shop in Burma, and Japan now schemed to build a giant industrial zone as a future home for their manufacturers, just to the southeast of Rangoon at the port of Syriam, where in the early seventeenth century the Portugese adventurer Filipe de Brito had briefly held sway, dominating trade along the Bay of Bengal littoral until being defeated by a rival Burmese prince and impaled on a nearby hill.

The happier scenario I sketched at the end of the last chapter is not now impossible. It is perhaps one critical step closer to reality. But it’s still far from assured, and if I am honest, I would say it’s still not likely.

There was now, at last, the political will to reform, but this revealed more clearly than ever what aid officials euphemistically termed the lack of ‘capacity’, meaning educated and experienced people. This was underlined at a conference I attended in February, where a guest of honor was the ninety-one-year-old economist Hla Myint, an erstwhile acquaintance of John Maynard Keynes, a rector of Rangoon University in the early 1950s (when it was one of the best in Asia), and for three decades a leading professor at the London School of Economics. Hla Myint had advocated export-led growth, long before it had become fashionable, and it must have been a cruel thing for him to see his country take an entirely different path and as a result become so impoverished. After the army takeover he had swore never to return, but then did, a few months ago, wearing a tweed jacket in a sea of Burmese silk and cotton-clad officials, egging on the reformers in government, and warning in a now frail voice that this lack of ‘capacity’ was an Achilles’ heel that could still do much damage.

In the coming months and years there will probably be a huge influx of aid and investment. But the ability to make good use of both these things may not exist. The Burmese economy is like a little plane, denied for decades any repair, that is now going to take off anyway. The key state institutions needed to manage development are critically weak. Rather than broad-based growth, there is the prospect of rising inequality, the displacement of small farmers from their land, and a new and more robust cronyism.

In a way, Burma has been denied the Asian model of a period of economic development preceding political liberalization, as happened in, say, South Korea and Indonesia. The situation was perhaps more comparable to the former communist countries of Eastern Europe in the early 1990s, except with a dozen ethnic insurgencies thrown in.

In the near term, Japan may become more important as an economic partner, as might Burma’s economic relations with several other Asian countries, like South Korea and Thailand, as well as with Europe and America (if sanctions are ever properly rolled back). And this comes at a time when China’s and especially India’s rise seem a little less meteoric, with growth rates in both places slowing down and signs in Beijing of possible political instability.

Over the long term, however, the big picture remains the same. China’s and India’s reemergence as first-rank global powers are as sure as anything in the future can be, as are the historic processes of urbanization and industrialization, and the growing connections unfolding across the region. The old Burma, isolated in its mountain fastness, has disappeared, forever, and Burma can no longer avoid its place at the strategic heart of Asia.

And for now, at least, there is a new optimism, a new energy. If the country can forge a new path, end the civil war once and for all, rebuild its shattered education system, and channel this energy towards creating jobs and raising incomes for all its people, it won’t be a moment too soon.

Rangoon, 25 April 2012