Is Myanmar's Reform Real?

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Recent elections in the long-time dictatorship went well, but the country has a long way to go.

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People in Yangon rally to hear election results announced. Reuters

This week's by-elections in Myanmar, in which roughly one-tenth of the seats in the national parliament were contested, have been hailed as the most important sign yet that Myanmar's nascent reform process is serious. The elections were marred by reports of voting irregularities; however, none were significant enough to spark immediate dispute on Election Day, which was dominated by candidates from Aung San Suu Kyi's National League for Democracy [NLD].

The NLD, which has been the main force for democracy in Myanmar for more than two decades, will now have a seat at the policymaking table for the first time in the country's history. Despite efforts by the military and the current civilian-military government to help the Union Solidarity and Development Party [USDP] win the by-elections (including reported harassment of NLD candidates and supporters, alleged attacks on some NLD backers, and denying the NLD the opportunity to hold rallies at major public sites), the USDP won only a small fraction of the forty-eight seats that were contested.

Indeed, with Suu Kyi herself winning a parliamentary seat, and possibly even taking a cabinet post alongside President Thein Sein, Myanmar can be said to have a real multi-party system for the first time since the military coup in 1962. The elections took place alongside many other political and economic reforms instituted by the government in the past eighteen months. Many developed democracies are boosting aid to Myanmar and considering dropping sanctions that have been in place for more than a decade due to the previous military government's serious human rights abuses. Western corporations, anticipating an end to sanctions, also are preparing to enter Myanmar, one of the largest untapped emerging markets left in the world and a major source of natural resources.

However, successful by-elections and the emergence of the NLD in parliament do not ensure that the reform process has been consolidated. The government allowed the election in part because the shift in seats does not yet threaten the power of the military and its civilian allies. What's more, Suu Kyi and Thein Sein do not hold enough sway over their supporters to ensure a successful reform path.

A Season of Rapid Change

Over the past year, after the military regime officially retired in November 2010, Myanmar has begun to change enormously. A new government, led by Thein Sein, a former military man but one who seems to have reformist instincts, launched a series of surprisingly swift changes. Suu Kyi has welcomed a partnership with Thein Sein, and has privately told supporters that she believes the president's motivations are genuine.

The Democracy Report

Meanwhile, the government has liberalized investment laws, planned to free the currency, launched plans to end the country's myriad civil wars with various ethnic minority insurgencies, invited back the IMF and other international financial institutions, and aggressively courted investments and relations from countries all over the world. Last month, Myanmar announced it would start letting in foreign banks, a major opening to financial reform. Many incoming investors and analysts are comparing its potential opening to the early days of reforms in China.

Meanwhile, even before the NLD's victory in the by-elections, the parliament, though dominated by former military men, has been active in questioning government policies. The government also has set up a national human rights commission, invited political exiles to return, and released many political prisoners.

With its election victory, the NLD will now take forty-three seats in the parliament. Opposition activists say that the party and Suu Kyi will prioritize increasing transparency of the government and help end the country's many ethnic insurgencies to create a truly federal state. Suu Kyi has spoken of the need for a second Panglong Conference agreement, a sequel to the 1947 event in Panglong, in which Suu Kyi's father, independence leader Aung San, agreed with ethnic minority groups to create a federal union with significant autonomy for minority areas. That agreement collapsed after Aung San was assassinated, and the country descended into decades of civil war that continues today.

The Significance of Elections

Several European nations have already resumed significant aid to Myanmar, as has Japan. The Obama administration is also considering resuming normal aid and, with the support of Congress, removing sanctions on trade and investment.

But the by-elections should be viewed as an event akin to Nelson Mandela being released from prison: a step toward permanent change, but only a step. The NLD will have the power to criticize the government and to propose changes, but it will be a small party in the parliament. The true test will come in three years, when Myanmar is supposed to hold national elections for all seats, potentially allowing the NLD or other opposition parties to actually control parliament. Before that time, the government will have to make good on other difficult promises, including opening up the media landscape after years of harsh press laws, creating a more level playing field for all political parties, and dealing with the largest and most difficult ethnic armies.

Myanmar's leadership scene in 2012 contrasts with that of China in the late 1970s, when Deng Xiaoping dominated politics, or that of South Africa in the post-apartheid era, when Nelson Mandela's voice was dominant. Neither Suu Kyi nor Thein Sein can ensure that reforms will stick. Within the democratic opposition, some activists worry that Suu Kyi already has moved too far to compromise with the government, potentially making it harder for her to criticize what it does.

In addition, though Suu Kyi clearly is the most popular figure in Myanmar, some ethnic minority leaders still worry that even the Nobel laureate, who has stated her commitment to greater autonomy for them, cannot be fully trusted since she is a member of the Burman ethnic majority group.

Meanwhile, though former leaders like Senior General Than Shwe and his number two, Maung Aye, appear to have formally retired, they have seeded the government with hardliners. Some of them are clearly trying to stand in Thein Sein's way to reserve power for the military, according to Burmese officials and analyses of the situation by military experts like Larry Jagan in Bangkok. The defense budget remains largely off the books, virtually unscrutinized in the parliament, and army commanders in the field clearly retain enormous power to wage war against remaining insurgencies.

According to a recent report by Human Rights Watch, fighting between the military and the Kachin Independence Army, one of the largest and most powerful ethnic armies, has escalated over the past two years, leading to widespread refugee displacement in northern Myanmar and serious abuses on both sides, including forced labor, torture, use of child soldiers, and summary executions.

What Should Washington Do?

Over the past five years, Myanmar has become more strategically important to the United States. It could be a major new market for U.S. companies, even though they will have to play catch-up to the Asian firms already established in Myanmar, and will have to deal with poor infrastructure and a lack of educated labor. In addition, cultivating Myanmar provides the United States with another potential partner on China's doorstep.

More worryingly, evidence has emerged in recent years of the regime importing nuclear and missile technology from North Korea. In such an opaque environment, it is not hard to imagine nuclear technology slipping out of Myanmar and into the hands of terrorist groups.

In the wake of the election, the United States and other leading democracies should continue to move slowly in engaging with Myanmar. They should continue to boost aid and ensure that it reaches the ethnic minority regions where some of the refugee flows have been largest and the need for emergency assistance is greatest. The United States, leading Southeast Asian nations, Australia, Japan, and the European Union also could work more closely with the World Bank and the IMF to better assess Myanmar's enormous needs, and, during a major aid conference planned for this summer in Myanmar, develop a plan for reforming the banking, financial, and educational sectors.

However, because the election is only a small step toward a truly free national vote, Washington and other actors should not lift sanctions on trade and investment with Myanmar now. Instead, they should wait at least until the end of 2012 or 2013 to see how the NLD and Suu Kyi are treated in parliament, what kind of freedom they have to criticize and push legislation, and whether the planned 2015 national elections are likely to go forward.

This article originally appeared at CFR.org, an Atlantic partner site.

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Joshua Kurlantzick is fellow for Southeast Asia at the Council on Foreign Relations. He blogs at “Asia Unbound.”

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