Myanmar’s Way Forward: Land, Labor and Capital Reforms

While economic reforms in Myanmar arrived more slowly than political reforms, foreign governments and investors are nipping at the government’s heals to gain access to the newest market in Asia. However, the Myanmar government must consider the implications of a more liberalized economy for the wellbeing of its vulnerable population.  Political reforms were necessary in order to gain legitimacy from the international community, stimulate foreign investment and have sanctions eased or removed.  Myanmar’s recent transformation from an almost pariah state that relied heavily on China’s financial support and backing in international arenas such as the United Nations to a state that the US now sees as a pet project for a democratic, market movement has affected more than the top government officials, military brass and opposition leaders.  Economic, labor and land reform will significantly alter processes of production and consumption in Myanmar given the country’s reliance on agriculture, lack of infrastructure and new foreign influences.   

Since military rule began in 1962, Myanmar (then Burma) has become one of the most impoverished and closed states in Asia.  Myanmar has had historical economic ties with several of its neighbors. But, to enable a wider field of influence and investment the government has begun implementing reforms on foreign investment. They have set the goal of reducing state control over education, energy, forestry, health care, finance and telecommunications sectors.

Over the past year, Myanmar has experienced an economic and political reemergence, with only (and it’s a big only) ethnic violence and abuses by the army in several regions still plaguing the government.  Additionally, strides have been made in correcting the problem of forced labor in Myanmar, leading to removal of trade barriers by the European Union.  The EU also reinstated the Generalised System of Preferences halted in 1997 due to national labor standards.  Over the summer American companies were allowed to start investing in the country. In step with President Obama’s visit to the region, the US government just last week began allowing the importation of products made in Myanmar excluding jadeite and rubies.  The removal of Western sanctions and continuous visits by business delegations to Myanmar over the past year gave Naypyidaw a renewed spirit toward achieving economic security.

Land reform in Myanmar will, according to Center for Strategic and International Studies Deputy Director Murray Hiebert “determine the role of farmers in the country’s reform process and lay the foundation for new realities between the government and the rural poor.” (2012)  With more than two-thirds of the population relying directly or indirectly on agriculture, how the government handles new legal frameworks (through Farmland Law and the Vacant, Fallow, and Virgin Land Management Law) will either give confidence to locals or to foreign investors seeking security for land use.  Currently the government of Myanmar is the “ultimate owner of all land,” and so is able to dictate land usage.  During military rule, the state confiscated land with meager or no compensation to farmers; new laws may now facilitate this expulsion of farmers and those who rely on subsistence agriculture, creating a landless working class simultaneously privatizing land and creating an easily exploitable labor force.

The US and other Western states see Myanmar as a country they can help build and shape in their image, while taking advantage of both lack of domestic private competition and the presence of government officials with ties to industries.  With foreign funding, new industry in Myanmar will create new consumers as well as producers.  The way people in Myanmar produce and exchange goods will change; and some industries will no longer be competitive due to cheaper imports and foreign-owned factories.  If Myanmar’s majority rural population is driven away from rural areas and subsistence agriculture, then it is likely that they will have to quickly convert to other sectors, for example, manufacturing textiles and finished goods.  We are yet to see if Myanmar will find a niche in particular industries.

The inability to freely sell precious gems, purchase weapons and halt the opium trade still haunt the leaders of Myanmar during the reform process.  Furthermore, human rights violations by the military, ethnic clashes and minority rights and concerns continue to hamper economic advancement.  Before Myanmar can become a fledgling capitalist economy – or even a controlled capitalist economy like several of its neighbors – there will likely be a protracted period of painful reforms.  The privatization of land and resources is not likely to be any more equitable than it has been under military rule over the past five decades. In their public appearance on November 19 in Rangoon, US President Barack Obama and Myanmar President Thein Sein warned against lingering in the past; rather, “We need to look forward to the future.” Hopefully the people of Myanmar will be able to define their own sense of progress and avoid some of the problems faced by their neighbors and eager business partners.   

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Australia Plans for Sustainable, Collective Security in the “Asian Century”

Sydney, Australia
Sydney, Australia. Photo credit: Genevieve Neilson

In October, the Australian Government released its much-anticipated white paper entitled Australia in the Asian Century.  A collaborative work with public input and stakeholder engagement, the white paper aims to describe the rise of Asia and offers a strategic framework to guide Australia through the ‘Asian Century’ (or least as far as 2025). While much of the paper focuses largely on prospects for improving economic gains, education and cultural ties, I will examine the lone chapter on security entitled “Building sustainable security in the region.”  Australia takes a refreshingly broad view of security which includes traditional as well as nontraditional threats to collective, national and human security.  From the outset, the white paper demonstrates the Australian government’s commitment to focus on more than just hard power, seeking collaborative solutions and understanding the interconnectedness of regional and national issues.  As a public document, the white paper is a way for Australia to clarify its position on the rise of China and India, the increasing competition for natural resources, and the strategic rebalancing of the US in Asia.  

 By taking a comprehensive approach to security, Canberra seeks to mitigate new challenges brought on by the rise of Asia including competition over resources, military modernization by China, India and other middle powers of Asia, and empowerment of non-state actors. The significant focus devoted to transnational threats such as territorial disputes, weapons proliferation as well as human trafficking, terrorism, water and food security, energy security and the effects of climate change shows the importance of regional issues to Australia over domestic security concerns.  Indeed, Australia imparts its knowledge from encounters with water scarcity and resource management, trafficking, irregular migration and terrorism, to assist its neighbors in Asia.  The South Pacific, much like other parts of the Asia-Pacific region, will be at the forefront of effects of climate change; Australia has already worked with Pacific Island states to provide funding for environmental and sustainable development projects.

 The government’s most common answer to current and future threats is international cooperation through a rules-based order.  The primary foreign policy goals established by the white paper include: supporting regional security mechanisms, including equal participation of China and the US in international institutions; and broadening and deepening bilateral relationships.  According to the white paper, “Australia’s longstanding commitment to active middle-power diplomacy, with its focus on practical problem solving, effective implementation and building coalitions with others, will continue to drive [the country’s] approach.” 

 As a newly-elected non-permanent member of the United Nations Security Council from 2013, Australia’s commitment to regional issues and a collective approach cannot be overstated.  In congruence with statements from US officials, Australia welcomes a rising China and hopes it will participate more fully in international institutions.  At the same time, Australia lobbied for the US and Russia to join the East Asia Summit, and sees the EAS as a “critical regional institution.”  The November meeting in Cambodia is likely to be a further launching pad for Australia’s goals.  Additionally, the white paper mentions Australia’s strong support of India’s desire for international engagement, particularly with Australia as a future chair of the Indian Ocean Rim Association for Regional Cooperation in 2014-15 and the country’s participation in the Indian Ocean Naval Symposium.

 Finally, Australia’s aid program is a central way that the country supports human development and human security in Asia. In 2010, 58 percent of Australia’s “aid budget was expended in Asia, the second-highest proportion among all OECD Development Assistance Committee donors, after South Korea.”  With a booming economy that relies increasingly on the purchasing power of the burgeoning middle classes and construction and energy projects throughout Asia, Australia has the financial stability to promote human security projects that also build bilateral trust.  In 2010, Australia signed a 5-year agreement with the International Labor Organization to support programs that “promote sustainable development and fair work, such as improving conditions for factory workers in the garment industry in several Southeast Asian countries.”  With a proclaimed high level of transparency, the Australian government aims to be the world leader in aid effectiveness.  East Asia and the Pacific are Australia’s primary aid focus, and over the next four years Australia plans to become the largest bilateral grant donor to East Asia by increasing assistance by around 48 percent (from $1.32b in 2012-13 to $1.95 by 2015-16).  Australia has as much to gain as China or the US in supporting such development projects; building relationships and supporting developing countries improves Australia’s soft power and the purchasing of Australian goods and services.

 Geopolitical changes and economic advancement in Asia are driving global attention to the region.  Before this white paper was launched, however, Australians had already begun their ‘engagement’ with Asia; former Labor Prime Minister Paul Keating even wrote a book on the subject.  With the US ‘rebalancing’ to the Pacific, and all eyes on China during their November leadership transition, Australia appears to be towing the line of both powers to promote a sustainable and prosperous Asia-Pacific.  With improved communication technologies bringing their populations closer than ever before, the collective approach by Australia that seeks improvements in economic and security relationships, cultural exchanges, and protection of human security in more ways than one “Australia is located in the right place at the right time.”