Saturday, December 6, 2014

The Irrawaddy Magazine

The Irrawaddy Magazine

Norwegian Minister Indulges in the Myth of a Democratizing Middle Class

Posted: 05 Dec 2014 05:00 PM PST

Burmese pro-democracy activists hold a photograph of opposition leader Aung San Suu Kyi and placards during a protest in New Delhi on June 19, 2009. (Photo: Reuters)

Burmese pro-democracy activists hold a photograph of opposition leader Aung San Suu Kyi and placards during a protest in New Delhi on June 19, 2009. (Photo: Reuters)

The relationship between Burma and Norway has transformed in recent years; one of the most devout supporters of Burma's democratic opposition movement has warmed considerably to the quasi-civilian government that assumed power in 2011, largely made up of members of a former military regime. The friendship has proven to be mutually beneficial, as Norway has enjoyed a number of coveted licenses in once-closed, largely unexplored, resource-rich Burma.

On the event of the first state visit by Norwegian King Harald V and his wife, Queen Sonja, we opened up The Irrawaddy Archives for a reflection on the changing relationship between the two governments. This opinion piece was originally published on June 17, 2009, under the headline "The Myth of the Democratizing Middle Class."

In an article published in The Irrawaddy on April 28, 2009 ("Why Boycott Just Makes Things Worse"), Norway's development minister, Erik Solheim, calls for a review of Norwegian Burma policy with more emphasis given to economic engagement and less to isolation. Sanctions in particular seem to be a thorn in the eye of the development minister. Solheim's recipe is based on a strong faith that economic growth and the emergence of a middle class will eventually bring about democracy in Burma.

There is little doubt that most Burmese would be better served by greater and more equally shared economic growth. Burma is rich in resources. The country was once considered one of the most promising in Asia. Instead, poor management of Burma's riches has brought the country to its knees.

At best, Solheim's description of the democratizing role of the middle class is an oversimplification of the truth. But at worst, it represents a capitulation to Burma's generals.

Economic growth and democracy tend to correlate, but correlation is not synonymous with simple causal effect. The belief that capitalists will necessarily demand democracy is a myth, not a law of social science. Freezing the bank accounts of Snr-Gen Than Shwe and his henchmen has no impact on Burma's larger economy.

There is nothing new about the assumption that the middle class has played a key role in the emergence of democracy in Asia. The middle class theory originally grew out of a fascination with Asia's new rich and their political potential. The new rich were credited with bringing about the democratic popular uprisings that changed South Korea, the Philippines, Thailand and Indonesia in the 1980s and 1990s.

However, this period was also noted for the debate about so-called "Asian values" and the superiority of the Asian development model as opposed to the Western emphasis on the individual, democracy and human rights. Representatives of an Asian middle class could be found on either side of the divide. Asia's many middle classes were not one entity at the time and did not act as one.

In other words, Solheim's approach has already failed the test of history. His selection of these very same countries as proof that economic growth will eventually bring about democracy in Burma this time around is therefore a paradox.

Solheim's use of the term middle class is confusing. Asia's middle classes span across a diverse group with different backgrounds, preferences and interests. To expect this class to gather around one common political platform and one common set of political goals is to play tricks with oneself.

Asia's economic middle class—identifiable by its income and its lifestyle—comprises farmers, entrepreneurs, white-collar workers, military personnel, bureaucrats and others. In several countries in the region, such as China, Singapore and Malaysia, such a middle class has emerged without bringing about democratic regime change so far.

Such an economic middle class also exists in Burma. But in this country, economic life is closely associated with the military power-holders. Many typical middle-class professions are to be found in the public sector. To succeed requires good relations with those in power. To engage with the opposition is to live with the constant risk of losing one's daily bread. There is little reason to expect that this middle class will take a lead in the struggle for a democratic Burma.

There is also an intellectual middle class in Asia, identifiable by its qualifications rather than its economic status. Professionals such as academics, teachers, students, artists, writers, and journalists have long traditions of challenging those in power in Asia, including Burma. Together with the monks, who are the keepers of the country's cultural heritage, the students in particular have frequently opposed military power and been among the strongest supporters of Aung San Suu Kyi. They have shown their ability to challenge the military's position.

As a result, the military controls the Buddhist monkhood with an iron fist, while the education sector is neglected and censored. Burma's universities and monasteries are no longer hotbeds of the struggle for democracy. As long as freedom of expression and academic and artistic freedoms are gagged, this middle class also remains unable to mobilize for rebellion. This is where Solheim ought to focus his attention.

The experience from several of Burma's neighboring countries is that the middle classes have rarely taken the lead when mass movements have developed. When popular movements have radically altered politics in countries in Southeast Asia, this has come about as a result of the mobilization of broad sections of the population.

Burma is no exception, as the demonstrations in 2007 indicate.

Solheim's analysis of the processes of democratization in Asia is superficial and does not provide a basis for drawing conclusions for Burma. The situation in Burma ought to be understood on its own terms.

On two occasions during the past 20 years—in 1988 and in 2007—increasing poverty and bad economic policies by the government have triggered large scale popular uprisings followed by a brutal crackdown on peaceful demonstrators that has tarnished the image of Burma's Tatmadaw.

Today, corruption is widespread. Respect for the most basic principles of the rule of law is lacking. Unlike Indonesia, where former President Suharto provided space for technocrats in shaping economic policy, Burma's military power-holders have a poor record when it comes to listening to civilians offering input on policies.

Under these conditions, and with the junta's record in economic policy-making, there is no assurance that economic growth will benefit the population or that it will lead to the emergence of an independent civil society.

Burma's military junta may desire economic growth for the country, but only insofar as it does not challenge their grip on power. Unfortunately, it is not in Solheim's power to be certain that Norway's contribution to economic growth in Burma will result in democracy.

This is not to say that a future economic middle class in Burma will not have political weight or that such a middle class will not make demands that will change Burmese politics. However, Solheim's expectation that such a middle class is in some way predestined to take a lead in the struggle for democracy is not grounded in reality.

Democratization is a slow process. A transition to democracy takes place as a combination of many factors, where structural conditions, the relationship between political players and coincidences all play a part.

Burma's democracy movement has already identified what is needed in order to begin a development toward democracy: the release of political prisoners, respect for fundamental human rights, notably civil and political rights, and space for broader political participation.

The people of Burma have paid a high price for decades of military misrule. They deserve better than a Norwegian development minister who seems to be outsourcing their struggle for basic rights to an uncertain future. Instead, Solheim and the government he represents ought to take a lead in developing a policy in support of Burma's struggle for human rights.

Norway's development minister is a strong proponent of dialogue. Is he prepared to enter a dialogue with Burma's military junta on issues that could actually make a difference?

Camilla Buzzi is the former project coordinator for PD Burma, an international network of parliamentarians promoting human rights and democracy in Burma.

The post Norwegian Minister Indulges in the Myth of a Democratizing Middle Class appeared first on The Irrawaddy Magazine.

Former Norway Envoy’s Telenor Move Raises Eyebrows

Posted: 05 Dec 2014 04:33 PM PST

Norway Myanmar ambassador

Katja Nordgaard, Norway's former ambassador to Burma, met with President Thein Sein in August 2013. (Photo: President's Office website)

The relationship between Burma and Norway has transformed in recent years; one of the most devout supporters of Burma's democratic opposition movement has warmed considerably to the quasi-civilian government that assumed power in 2011, largely comprising members of the former military regime. The friendship has proven to be mutually beneficial, as Norway has enjoyed a number of coveted business licenses in once-closed, largely unexplored, resource-rich Burma.

On the event of the first state visit by Norwegian King Harald V and his wife, Queen Sonja, we opened up The Irrawaddy Archives for a reflection on the changing relationship between the two governments.  This article by contributor Seamus Martov was first published in June, 2014. 

The May 16 announcement that Norway's former ambassador to Burma, Katja Nordgaard, will soon take a position with Telenor, the majority state-owned Norwegian telecommunications firm that signed a lucrative deal with Burma's government last year, has prompted concern from some quarters about the ethics of what they see as just the latest example of an economic agenda driving Oslo's foreign policy toward Burma.

Mark Farmaner, director of the Burma Campaign UK, a London-based advocacy group that has been one of the loudest critics of Norway's Burma policy, is concerned by the potential ethical implications of Nordgaard's jump from ambassador to telecoms executive and the message it sends to poorly paid Burmese bureaucrats looking to cash in on their government connections.

"The Norwegian government was one of the first to embrace [President] Thein Sein's government despite ongoing human rights abuses, and were rewarded with a lucrative telecoms contract for Telenor," Farmaner told The Irrawaddy. "Now we see an ambassador who played a key role in reversing Norway's policy of prioritizing human rights also reaping the financial benefits of cozying up to the Burmese government."

Nordgaard, who first introduced Telenor to Burmese government officials in 2012, was quick to deny any suggestion that she helped the firm beat out the other 89 competitors who also put in bids for one of two Burmese telecoms licenses up for grabs. Nordgaard told The Irrawaddy via email that although she participated in meetings between Telenor and the government, "I did not play a role in assisting Telenor to win its contract. I helped introduce Telenor, along with a range of other Norwegian companies, to Myanmar and to government officials—this is a totally normal and important task for any ambassador in any country."

Nordgaard also told The Irrawaddy that Telenor's winning bid was a result of the firm's hard work and commitment to Burma. "Telenor's successful bid for a national telecommunications license in Myanmar was based exclusively on the overall quality of the bid, underscored by Telenor's regional experience and commitment to being a long-term investor in Myanmar," she said, a sentiment apparently shared by Telenor spokesperson Glenn Mandelid, who responded with a near identical answer to The Irrawaddy's inquiries regarding Nordgaard's role in the Telenor bid.

"Telenor's successful bid for a national telecommunications license in Myanmar was based exclusively on the overall quality of our bid, underscored by Telenor's regional experience and commitment to being a long-term investor in Myanmar," Mandelid stated in his emailed response, which arrived some eight minutes before Nordgaard's reply.

Nordgaard, who served as Oslo's envoy to Burma from 2010 until last November, will take over as head of the firm's Corporate Affairs unit, a position that she will officially assume on Aug. 4.

Telenor's announcement of Nordgaard's hiring is somewhat unusual as she continues to serve as Norway's ambassador to Thailand and Cambodia. Many other Western governments discourage or forbid their diplomats from signing outside employment contracts until after they have officially left their foreign service posting. Norway does not appear to have such rules.

A spokeswoman with the Norwegian Ministry of Foreign Affairs told The Irrawaddy that Nordgaard's new position with Telenor complied with the ministry's ethics policy, adding that measures were in place to ensure that there would be no conflict of interest.

"The Ministry of Foreign Affairs, in collaboration with Nordgaard, have made an assessment on her liability in matters relating to Telenor in the remaining period of her service. It is obvious that she will step aside if such cases arise. The same will apply in the event of conflicts of interest in connection with matters affecting an area Telenor is engaged in," said ministry spokesperson Astrid Sehl via email.

Nordgaard's new role with Telenor will cover Burma, but not exclusively, the ambassador told The Irrawaddy. "I will not have any direct responsibility for Telenor's operations in Myanmar, but I will of course be engaged also with Myanmar on an overall level, as I will with the 12 other countries where Telenor is operating."

This will also include Thailand, where Telenor controls an effective majority stake in local cellular provider DTAC, Thailand's second largest.

The announcement of Nordgaard's new role with Telenor before she has even left the Norwegian foreign service is not likely to improve her standing among the Thai-Burma border-based community organizations with whom Nordgaard and her Foreign Ministry colleagues frequently butted heads.

Reached for comment, Tin Tin Nyo, general secretary of the Women's League of Burma, said she wasn't surprised by news of Nordgaard's Telenor move, given the Norwegian government's keen interest in advancing Norwegian firms in Burma. Tin Tin Nyo said she and many of her colleagues were "very disappointed" with how Norway's Ministry of Foreign Affairs, and Nordgaard in particular, handled Oslo's ambitious plans to support Burma's peace process.

"There wasn't enough consultation with the community" from the outset, Tin Tin Nyo told The Irrawaddy, adding that Norwegian officials appeared to prioritize pleasing Burma's government over the concerns of ethnic minority groups.

Much of this tension arose over the Myanmar Peace Support Initiative (MPSI), a Norwegian government-funded project that Nordgaard as ambassador played a central role in getting off the ground. Since 2012, the MPSI has spent more than US$2 million on aid projects in ethnic areas of eastern Burma, territory that was until very recently home to one of the world's longest running civil wars.

The MPSI, which began in 2012, was supposed to support projects "designed to build trust and confidence," but many civil society groups representing Burma's ethnic minorities on the Thai border did not take warmly to the initiative or its lofty goals. Much of the criticism stemmed from what these groups perceived as a deliberate attempt by the MPSI to sideline them and their long-standing cross-border aid networks in favor of Rangoon-based actors closely affiliated with the Burmese government. An internal review completed in March noted that "some ethnic stakeholders have viewed MPSI-supported projects as attempts to 'buy peace' in collusion with the Government's political, social and economic agenda."

Deputy Foreign Minister to Statoil

Nordgaard is not the only Norwegian foreign affairs official involved in Burma who has jumped shipped to a state-owned Norwegian firm with Burmese business interests. Shortly after his party was driven from office last September, Torgeir Larsen, Norway's deputy minister of foreign affairs, took a position with the majority state-owned oil firm Statoil, where he now serves as a specialist focusing on government relations and public affairs for international operations.

While with the Foreign Ministry, Larsen visited Burma frequently, including most recently in May of last year, when he traveled to Karen State to observe a Norwegian-funded aid project. On a previous trip to Burma in May 2012, Larsen dropped in on an MPSI-supported project that saw ethnic Karen internally displaced persons (IDPs) receive identity cards in Pegu Division.

At the time of Larsen's 2012 visit, critics blasted the ill-defined role of the MPSI and its involvement in what many said was a shameless attempt by Larsen and his Norwegian diplomatic colleagues to use IDPs as a prop for a photo op.

"The peace initiative's policy of using IDPs in order to test the strength of the peace process could put IDPs in danger," Karen environmentalist Paul Sein Twa told the Myanmar Times at the time of Larsen's visit. "Troops have not withdrawn, and we cannot clearly see any indicators that the current peace process is durable. There is no guarantee of IDPs' safety if the fighting begins again, or if the military harasses resettled IDPs."

During Larsen's tenure, the Norwegian Ministry of Foreign Affairs appeared to heavily promote Statoil in Burma, with Nordgaard as ambassador taking part in meetings between Statoil and officials from Burma's Ministry of Energy. These meetings on at least one occasion in February 2012 included former Energy Minister Than Htay, who was later removed from his cabinet post, reportedly for corruption.

The Norwegian government's efforts to promote Statoil appear to have paid off. In March of this year Statoil, which is 67 percent state-owned, and its American partner ConocoPhillips, jointly received the rights to operate a 9,000-square-kilometer offshore block. According to a Statoil spokesperson, "Larsen has no particular role with respect to Myanmar, and he has not been part of Statoil's communication with Government stakeholders in Myanmar."

While both Statoil and Telenor's respective bids were being considered, Nordgaard, Larsen and their colleagues at the Foreign Ministry appeared to go out of their way to avoid criticising Burmese government policy. Former Foreign Minister Espen Barth Eide, who like Larsen left his post last year, went so far as to publicly defend the Burmese government's right to bar stateless Rohingya Muslims from obtaining citizenship while giving credence to claims that they are outsiders from Bangladesh who don't belong in Burma.

Responding to a question from a Norwegian newspaper about the Rohingya in early 2013, Eide replied that nations are "not obligated to give citizenship to everybody who is living there."

"This is not something we are going to demand," he added. "Some critical voices talk as if all nations would have received people from neighboring nations and made them citizens. We think this is a conflict that can be resolved through economic development and local reconciliation processes."

The comments were no doubt well received in Naypyidaw, where government officials have been clearly annoyed at being lectured by the likes of US President Barack Obama and other Western leaders on the need to address long-standing persecution of the Rohingya minority.

Oslo's enthusiasm for Naypyidaw does not appear to have diminished under the leadership of the right-leaning government that took office at the end of last year. Norway continues to support the MPSI as well as the Burmese government-affiliated Myanmar Peace Center, and was a major funder of this year's controversial national census.

The post Former Norway Envoy's Telenor Move Raises Eyebrows appeared first on The Irrawaddy Magazine.

The Irrawaddy Business Roundup (Dec. 6, 2014)

Posted: 05 Dec 2014 04:00 PM PST

Crashing Oil Prices Make Burma's Offshore Block Winners Rethink Costs

With international crude oil and natural gas prices falling, global explorer Shell has admitted it is "clarifying" the terms of offshore development block licenses it won in Burma last March.

Nearly nine months after a group of foreign and local oil and gas companies won licenses for 20 offshore blocks in Burma's Bay of Bengal and Gulf of Martaban no final deals have yet been struck.

Shell won the exploration and production rights on three blocks in a consortium with MOECO of Japan. Other block winners include oil giants Chevron, ConocoPhillips and Total, and smaller foreign businesses such as Woodside Energy of Australia.

But in the wake of an oil slump which has seen global prices fall more than 40% in some cases, from $116 a barrel in June to under $68 a barrel this week, oil companies are hesitating about committing large investments in new and costly exploration.

"We have to be confident in our future investment. We are clarifying details within the models of production sharing contracts with the government, trying to understand some of the language," Shell vice president Graeme Smith told regional journalists in the Philippines, the Myanmar Times reported.

Under non-negotiable terms, the controversial Myanmar Oil and Gas Enterprise (MOGE) must be a partner in all 20 block production sharing contracts.

Surge in Visitors Obtaining Business Visas on Arrival in Rangoon

Almost 100,000 foreigners obtained business visas on arrival at Rangoon Airport between January and October, a travel trade report said.

The biggest nationality group obtaining the visas was Chinese followed by Japanese, said TTR Weekly, quoting Burma's immigration office.

"Business visas can only be obtained through embassies or on arrival at the airport," the trade paper said. "For the second option, they are pre-processed, based on an invitation letter and other documents. Once approved, the visa is stamped in the passport on arrival at [Rangoon's] airport."

Burma began issuing business visas on arrival in June 2012 but extended this system to tourist visitors in 2014.

Burma a Key Export Market Target for Russian Truck Manufacturer

Russian truck manufacturer Kamaz is targeting Burma for export sales, the company's chief executive said.

The heavy truck maker's plant is in Tamil Nadu in southern India and executives are eyeing both Burma and Bangladesh across the Bay of Bengal for sales, Sergey Kogogin was quoted by Myanmar Business Network saying.

Kamaz recently disclosed that it had bought out its Indian partner, the Vectra Group, ending a joint venture started in 2010.

Kogogin said Kamaz, 50% owned by a Russian state corporation, is also considering building agricultural tractors for export into Southeast Asia.

"The Asian market is indispensable to Kamaz since the Russian domestic market has not fared well over the last two years," Myanmar Business Network said.

The Tamil Nadu factory is to be expanded to achieve an annual production capacity of 10,000 vehicles.

EU Outsider Serbia Seeks Contracts with Naypyidaw Energy Ministry

Naypyidaw's energy ministry is negotiating with firms in Serbia to build gas or coal fuelled power plants and hydroelectric projects in Burma.

The talks follow meeting between energy minister Khin Maung Soe and Serbia's energy minister Aleksandar Antic, the Belgrade news agency Tanjug said.

The value of contracts being discussed was over US$100 million, Tanjug quoted Antic saying.

"[Burma] wishes to strengthen its cooperation with Serbia in the energy sector and we discussed the possibility of Serbian companies joining the construction of new hydro and thermal power capacities," Antic said without giving any details.

The Serbian firm Invest Import is at present building a 245 kilometer-long low voltage power line in Burma, Tanjug said.

Serbia is outside the European Union but has applied to become a full member.

Foreign Firms use Singapore to Piggyback Investments into Burma

A growing number of Western firms, notably from the United States, are investing in Burma via Singapore in order to benefit from Asean member agreements, a report said.

Asean—the Association of Southeast Asian Nations—is also preparing closer economic ties among the ten member countries from the end of 2015, including abolishing trade tariffs.

"They are choosing Singapore because, according to Asean agreements, we have to allow companies from any member of the association to come and invest in [Burma]," Eleven Media quoted the Myanmar Investment Commission (MIC) as saying.

MIC is referring to the Asean Comprehensive Investment Agreement.

Investing in Burma via a Singapore registered business also benefits American firms because Washington and Naypyidaw have not yet signed a bilateral free trade agreement, said MIC.

Burma Likely to Stay on UN Country Poverty List for 'Another 15 Years'

Burma is unlikely to move out of the United Nations' Least Developed Countries list before 2030, the UN Development Program said.

Despite rapid economic growth in the last three years, per capita income remains low, as does Burma's status on the United Nations' human asset index and the economic vulnerability index.

"Low incomes, poverty and economic vulnerability continue to keep [Burma] on the world list," Igor Bosc, senior program advisor for the United Nations Conference on Trade and Development, told a press conference on Monday.

The post The Irrawaddy Business Roundup (Dec. 6, 2014) appeared first on The Irrawaddy Magazine.
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