Saturday, May 14, 2016

The Irrawaddy Magazine

The Irrawaddy Magazine

The Irrawaddy Business Roundup (May 14, 2016)

Posted: 14 May 2016 12:41 AM PDT

Vehicles drive down a road leading to the Letpadaung copper mining project, as seen in this 2014 photo. (Photo: JPaing / The Irrawaddy)

Vehicles drive down a road leading to the Letpadaung copper mining project, as seen in this 2014 photo. (Photo: JPaing / The Irrawaddy)

China Begins 'Silk Road' Push at Burma Border Town

The Chinese government has begun offering tax breaks to companies that set up in an "experimental" trade zone on its side of the Sino-Burmese border as its flagship regional economic policy begins to play out.

The move, details of which are set out in newly published research by the Hong Kong Trade Development Council (HKTDC), is said to be part of Chinese President Xi Jinping's flagship regional economic policy known as the "Belt and Road Initiative."

Beijing wants to establish a "maritime silk road" and a "new silk road economic belt" connecting it to Central Asia and the Middle East, including by connecting southwestern China's Yunnan province with the Bay of Bengal via a proposed transport corridor cutting through Burmese territory.

An article credited to HKTDC principle economist Billy Wong for the council's research arm analyzed some of China's efforts so far to connect Yunnan's economy with Burma's. While for now relatively modest, these efforts have already attracted large companies, making cars and motorcycles, to the two set up operations on the countries' shared border.

The main development centers on the town of Ruili, known in Burmese as Shweli and connected by bridge to the northern Shan State town of Muse. A similar trade zone is also being set up on the less-developed Burmese side of the border, but as with all Chinese central government initiatives, new measures on the Chinese side have the potential to rapidly impact the facts on the ground.

China has already established a "Key Development and Opening-up Experimental Zone" in Ruili. The report said the role of this zone is to promote increased trade over the border, including by "strengthening and enhancing deep-processing industries involving such resources as jewelry and jade, quality timber, and natural rubber."

Jade from Kachin State and timber, mostly from Kachin or neighboring Sagaing Division, are often exported to China under arrangements of murky legality that often involve the Burmese military or non-state ethnic armed groups.

The Chinese policy is also about "placing an increased emphasis on developing export processing industries reaching out to the South Asia and Southeast Asia markets," the article said.

Chinese companies operating in the area have the benefit of a Burmese migrant workforce of between 60,000 and 70,000, who are each paid about US$150 per month—a low price for labor in China but a relatively high salary for Burma.

As long as their activities are not prohibited by the Chinese government, the report said, companies setting up in the zone have access to a "number of preferential tax policies." They will be exempted from the local portion of income tax payments on their business there for five years, with an additional 50 percent tax break for the following five years, it says.

Among the companies to take advantage of these breaks already are Chongqing Yinxiang Motorcycle Group and the Beijing Automotive Industry Corporation (BAIC), the latter being a massive state-run manufacturer of cars and trucks.

"According to a representative of BAIC's Ruili plant, negotiations on the project were successful thanks to the Belt and Road strategy, which allows the plant to target the Southeast Asia market," the HKTDC report said.

BAIC expects to make 50,000 vehicles a year by the end of this year in the zone, and 150,000 by 2018, targeting buyers in Burma.

"BAIC plans to produce such auto models as pickup trucks designed specifically to cater to the Myanmar market," the report said. "BAIC has now started to set up sales networks in Myanmar and, through the networks of its joint-venture partner in Yunnan, plans to open shops in Myanmar to sell vehicles and provide a maintenance service."

World Bank Finds Low Productivity, Low Profits on Burmese Farms

Burmese farmers are getting less from their labor and their land thanks to poor knowledge and a lack of support, a new donor-funded report has found.

The multi-donor Livelihoods and Food Security Trust Fund commissioned the report entitled Myanmar: Analysis of Farm Production Economics, which was conducted by experts at the World Bank.

Lead author Sergiy Zorya, a senior agricultural economist at the World Bank, wrote a blog post this week explaining the findings.

The country's farming system is well diversified, he wrote, but agricultural productivity, and resulting farm profits, are both among the lowest in Asia.

"In 2013/14, the net profit from producing monsoon paddy averaged USD 114/ha," he wrote. "This is ten times smaller than those in China for example."

By way of explaining these findings, Zorya wrote, "Farmers in Myanmar are less educated and less knowledgeable than their regional peers; they also access fewer public services than farmers in neighboring countries."

He pointed specifically to poor knowledge about the quality of seeds, the use of fertilizer and poor access to irrigation, proposing some actions policy makers could take to address these issues.

"The public seed production system, which is currently biased towards hybrid rice varieties, needs to broaden its scope to a diverse range of paddy and other crops," he wrote.

"Agricultural extension services are to be scaled up and strengthened to reach out to more farmers and cover more crops to accelerate adoption of productivity-increasing farm technologies.

"Irrigation systems can be made more flexible and provide on-demand irrigation services to enable farmers do produce different crops in different areas, and respond effectively to market opportunities."

Company Claims a 'Very Small Minority' of Residents Oppose Chinese-Backed Mine

With protests once again kicking off at the site of the Letpadaung copper mine in Sagaing Division, the mine's operator is complaining that a minority of residents have refused to engage with its outreach efforts.

The mine has for years drawn vociferous opposition from local residents, and activists from elsewhere in the country, with complaints including insufficient compensation for land, damage to the surrounding environment and the brutal suppression of previous protests by security forces.

Wanbao Mining, a subsidiary of the Chinese state-run weapons manufacturer Norinco, operates the mine alongside a Burmese military-owned company. The Burmese government also owns a stake, which was increased on the recommendation of a commission led by then opposition leader Aung San Suu Kyi.

With mining starting once more after a hiatus, about 300 local people held protests at the mine site beginning last week, according to locals.

The joint venture company Myanmar Wanbao hit back this week, however, insisting in a statement Tuesday that the protesting villagers represented "only a small minority [who are] still opposing this project, despite attempts at numerous rounds of engagement with them which they have rejected."

With the Chinese government saying it wants its companies to respect the law of the land in Burma, the company has repeatedly made public relations efforts to defend the highly controversial project, and touts the achievement of convincing many villagers to accept compensation.

Estimating that only 60 protesters came to the mine site, Myanmar Wanbao insisted that 71 percent of villagers who lost land to the project have now accepted a new compensation deal, and that 83 percent accepted the company's plan to contribute to the local community.

But residents told The Irrawaddy they did not believe enough had been done to address concerns over compensation and environmental safeguards.

"We encourage all parties to act responsibly and exercise restraint," Wanbao Myanmar's statement said, calling for "peaceful dialogue" with the protesting locals. "This mine is one major Myanmar national project and all of us together are its custodians to help build Myanmar to achieve its full potential."

Campaign Group Calls for Full Freeze on Land Investments

UK-based group Global Witness has called for a freeze on new investments on land in Burma until environmental and social safeguards are put in place to deal with the legacy of years of land grabbing under previous governments.

The group issued a statement Wednesday praising the new National League for Democracy-led government for forming a committee to investigate land conflicts. But it said a proposal by the new administration to freeze land sales by ministries, state-run companies and private firms should also specifically extend to the Burmese military—the source of many of the country's land disputes.

The group estimates that 5.3 million acres of land had been leased out for large-scale agriculture by 2013, much of it to companies with links to the military or officials in the previous government.

"For more than five decades Myanmar's military junta has seized land and sold it to investors at a huge personal profit, leaving rural communities landless and often destitute," Ali Hines, land campaigner for Global Witness, said in the statement.

"This is not simply a legacy issue—the military still wields considerable power on the ground and continues to grab yet more land from ethnic minority communities.

"The new government has set the right tone by encouraging a freeze on further land investments, but must ban all further land acquisitions—including by the military—if it is serious about preventing further conflict."

Malaysian Firm to Operate 'Press and Convenience' Stores

A Malaysian convenience store operator plans to set up two shops selling newspapers, magazines and other conveniences in Burma in a tie up with a Singapore-listed firm, according to Malaysian state media.

Newswire Bernama said that Bison Stores, a subsidiary of Bison Consolidated Bhd., had entered into a five-year management agreement with SMI Retail, part of Singapore Myanmar Investco.

"This exciting collaboration kicks start our first business venture outside of Malaysia," group managing director Dang Tai Luk was quoted saying.

Bison operates "press and convenience" outlets under the brand myNEWS.com in Malaysia, and will use the same branding in Burma, the story said.

SMI is a rebranded version of Singapore Windsor Holdings, an investment and management company that is developing interests in Burma in sectors including retail, automobiles, construction and mobile phone towers.

It signed a long-term agreement in December to operate a large chunk of retail space at the new Yangon International Airport, which is operated under a government concession by local conglomerate Asia World.

The post The Irrawaddy Business Roundup (May 14, 2016) appeared first on The Irrawaddy.

Dateline Irrawaddy: ‘The Constitution Has Made Two Lions Live Together in a Cave’

Posted: 13 May 2016 06:07 PM PDT

88 Generation leader Ko Ko Gyi and political analyst Min Zin join Irrawaddy English editor Kyaw Zwa Moe on this week's Dateline.

88 Generation leader Ko Ko Gyi and political analyst Min Zin join Irrawaddy English editor Kyaw Zwa Moe on this week's Dateline.

Kyaw Zwa Moe: Welcome to Dateline Irrawaddy! It has been 40 days since the first civilian government came to power in Myanmar, after enduring 54 years under a military regime and dictatorship. This week, we will discuss the current situation in Myanmar and opportunities and challenges facing the new government in the days to come. One of the 88 Generation group student leaders Ko Ko Gyi, and Ko Min Zin, who is doing a master's degree in political science at the University of California, Berkeley, will join me for the discussion. I'm Irrawaddy English editor Kyaw Zwa Moe.

Ko Ko Gyi, it has been 40 days since the new government assumed power. Because it was elected by a majority of the people, there are many opportunities. At the same time, there are also challenges. Can you identify the opportunities and challenges?

Ko Ko Gyi: Around 80 percent of voters supported the National League for Democracy [NLD] in the election. The NLD won about 80 percent of the elected seats in both houses. Winning the election meant the voters gave them the mandate. This is a great advantage.

Except for charter amendments—since the Constitution can't be amended without the approval of over 75 percent of lawmakers—all of the other ordinary laws can be changed, annulled and rewritten if more than 50 percent of the lawmakers agree. This allows the NLD to easily amend, annul and write laws that affect people's daily lives, for example—issues regarding land confiscation, labor disputes, wages, foreign investment laws and job creation. This is an opportunity. Since the NLD won the election, it was able to form the government and therefore, it is the NLD that will implement the laws that are amended and approved by Parliament. That the NLD has received the mandate to both enact and implement legislation is an advantage.

The challenge is constitutional restriction. Because of the restrictions imposed by the Constitution, important ministries are still held by the military. The relationship between the new government and the Home Affairs Ministry, Defense Ministry and Border Affairs Ministry, which are under the control of the military, has become a new serious challenge. How much will they be able to cooperate? The major challenges in our country are civil-military relations, and ensuring equality for ethnic groups or establishing a federal union. Because establishing a federal union is related to civil-military relations, the challenge to the new government and the Parliament is how much they will be able to reduce tensions with the military.

KZM: In the people's view, Suu Kyi's new government has done what it should do when it came to power; for example, it released political prisoners and proposed that Parliament appoint her to the position of state counselor. What advantages does this give the NLD? Suu Kyi has taken up an important position, even though she is not the president. As Ko Ko Gyi said, the NLD dominates both the Parliament and the government. What advantages will this give the NLD to serve the interests of the people in days to come?

Min Zin: Their advantage is legitimacy. One important thing to note is that Suu Kyi has become a leader who has both influence and power. Over the past 50 years, rulers had power but they did not have influence on the people. Suu Kyi has both. She was able to form the Ministry of the State Counselor, which is similar to the chief minister's office. People may or may not like it, but she has become a leader who has both influence and power.

On the other hand, the Constitution—there is a Burmese saying that two lions cannot live in one cave—and it seems that the Constitution has made two lions live together in a cave. The NLD government and the military have to live together in a cave whether they like it or not. With two lions in a cave, if a balance can't be struck or a middle way can't be sought, unnecessary tensions and confrontations may arise, or one side may overpower the other side. The main challenge to the current government is how to find that balance.

KZM: The military has ruled the country in successive periods. And it is not yet clear whether the military has a clear policy regarding its relationship with the civilian government. And I think the government, led by Suu Kyi and President Htin Kyaw, has adopted a policy of acting according to circumstance. Have you noticed this?

KKG: After the election, the NLD won the vote to form the government, and the people called for forming a government based on national reconciliation. There were criticisms against the NLD for various reasons, and there were cases in which military representatives objected collectively to proposals submitted by the NLD.

As far as we have seen, while there are efforts to get along with the military, there is also friction and tension. The relationship between the military, the new government and Parliament is crucial in relation to ethnic issues. Unless they are in agreement, talks with ethnic groups and non-signatories of the Nationwide Ceasefire Agreement [NCA] will face difficulties. It should be noted that the commander-in-chief has promised to cooperate with the new government. This could be viewed as a constructive attitude.

KZM: Suu Kyi has said she would organize a '21st century Panglong Conference' to achieve national reconciliation and internal peace. But taking a look at the recent parliamentary session, we can see problems in Arakan State. The military has objected to broadcaster MRTV-4's description of the Arakan Army [AA] as the defense services.  How much can we expect from the 21st century Panglong Conference?

MZ: The problems are so big that it would be difficult to solve them all at once. Whatever it is called, I'm afraid that a single discussion will not completely solve the problems for the next five or 10 years. While we are marching toward solutions, we should build understanding and trust and make ourselves stronger throughout the process.

I think process-oriented thinking is needed, on top of goal-oriented thinking. There should be a focus on the process. There are four major problems in Myanmar: democratization, ethnic issues, civil-military relations and poverty. It would be good if Burmese politicians understood that ethnic issues are the most important, because if these can't be settled, ethnic minorities will view themselves as second class citizens, which will hinder the democratization process.

KZM: That has been the case in previous times.

MZ: Yes, it has. Democracy will lack its essence if their citizenship is uncertain. Also, ethnic issues are related to geopolitics and the intervention of neighboring countries. Regarding civil-military relations, the military assumes that it will continue to exist until the ethnic issue is settled. Regarding poverty, resource sharing is a problem because most of the country's resources are located in ethnic regions. It is likely that these other problems can be solved if remedial measures center on ethnic issues.

The problem is that former President Thein Sein's government did work to handle this issue, but it took a top-down approach. The upper echelons handled the job; people from other walks of life, the media and other educated people could barely participate. If the government alone handles it, the result will just be a short-term solution and will not last.

KZM: Do you think the current government is taking the same approach or do you see changes?

MZ: Since the government has not made their policies clear to the public, it is still early for us to judge. Suu Kyi has said that although there are calls for all-inclusion, it is not possible. Instead, various stakeholders will be able to take part at different, opportune times.

What is important for the government is information. It governs the country based on the information it gets. The NLD needs to cooperate with the military to obtain information related to security. Regarding information about other sectors, it will rely on the General Administrative Department [GAD] under the Home Affairs Ministry, bureaucrats, or policies that will allow civil society organizations, the media, and scholars to hold public consultations and speak freely. This is a challenge that the NLD has to handle carefully.

KZM: Here, freedom of expression and independent media will be very important.

MZ: If the government restricts criticism and expression, or limits the flow of information because it is overly concerned, it will be the first to suffer a loss. If it gets incorrect information, its policies may be wrong.

KZM: Ko Ko Gyi, there is criticism against the new government because Suu Kyi has included former generals and officials from the previous government when considering national reconciliation. What is your assessment of the performance of the government in the first 40 days? And what are your suggestions?

KKG: In a political change, the new government should maintain its ties with allies that it has cooperated with for ages and also collaborate with the other side. It should strike a balance between the two.

KZM: Ko Min Zin, the current government is a civilian government, but the military still holds a certain degree of power, both in the government and Parliament. It also maintains its grip on the country's economy. What are your specific recommendations for the current government?

MZ: There are two points. One is to build power. In my view, the current government has built a certain degree of power and it should slow down its efforts. For the time being, it should find a balance and try to work together with the military.

Another suggestion is to support freedom of expression. The media have already shown their support for the NLD, and their criticism of respected leaders does not mean that they want to tarnish them. In my opinion, the more they criticize, the more information will flow in the form of news and the more constructively it will serve the government to enact policies based on the people.

KZM: Ko Ko Gyi, Ko Min Zin, thank you for your contributions.

The post Dateline Irrawaddy: 'The Constitution Has Made Two Lions Live Together in a Cave' appeared first on The Irrawaddy.

Have Ethnic Groups Lost Faith in the NLD?

Posted: 13 May 2016 05:59 PM PDT

Aung San Suu Kyi gives a speech on voter education at Hopong Township in Shan State on Sept. 6, 2015. (Photo: Soe Zeya Tun / Reuters)

Aung San Suu Kyi gives a speech on voter education at Hopong Township in Shan State on Sept. 6, 2015. (Photo: Soe Zeya Tun / Reuters)

The Shan Nationalities League for Democracy (SNLD) stood by Aung San Suu Kyi's National League for Democracy (NLD) for many years in its opposition to the military junta. But less than two months into the NLD's first term, that relationship has already hit the skids—a sign that the NLD's ethnic policy, or lack thereof, has disappointed many of Burma's minorities.

"[Ethnicities] voted [for the NLD] with high expectations, and the result is clearly shown in the Rakhine [Arakan] issue," said Khun Tun Oo, the chairman of the Shan Nationalities for League for Democracy. "We can no longer rely on the NLD."

He was speaking at a meeting of the United Nationalities Alliance (UNA), an organization made up of 12 major ethnic groups, held in Rangoon on May 7.

On Monday in the Lower House, Speaker Win Myint shot down a proposal from an Arakan National Party (ANP) lawmaker to provide government aid to the more than 2,000 displaced Arakanese.

Aye Maung, chairman of the ANP, said: "I would say it is time the NLD government paid more attention to the voices of the ethnicities. Every party in Parliament wants to stop the civil war. The majority has to listen to the voices of the minority."

No doubt, the Arakanese and Shan peoples are not happy with the actions of the new NLD government and the Parliament, despite pledges from Aung San Suu Kyi to promote peace and national reconciliation through what has been dubbed the 21st Century Panglong Conference.

The Panglong Conference was convened in southern Shan State in 1947 by Suu Kyi's father, Gen. Aung San, and leaders from some of Burma's ethnic nationalities, in preparation for independence from Britain. It led to the signing of a famed agreement by the same name, which has been widely praised for the spirit of inclusiveness and cooperation that it fostered between the dominant Burman majority and ethnic minorities.

However, ethnicities are disappointed with the failure of Suu Kyi and her party to meet with ethnic parties after it won the election and formed a government.

Though ethnic parties won in Shan and Arakan States in the 2015 election, the NLD did not reach out to the winners and instead appointed their members to the posts of chief minister of those states—a move that shook the ethnicities' trust in the NLD.

"The problem is that the NLD government does not hold talks with any party," said Maung Maung Soe, an ethnic affairs analyst. "The ANP won a majority of [elected] seats in the [Arakan] State legislature. If the NLD had met with them earlier, it would not have led to the problems we see now. The ANP would have accepted the appointment of [the NLD's Arakan State Chief Minister] U Nyi Pu. But, the NLD did not hold discussions with them at all and the ethnicities' trust in them has eroded."

Though Suu Kyi has said she would convene the Panglong Conference within one or two months, she has not yet met with the ethnic armed groups that have been clashing with the military, nor has she sent them a message of peace. This arouses the suspicion of all ethnic groups.

She did meet delegations from the eight non-state armed groups that signed the so-called Nationwide Ceasefire Agreement last October, along with members of the Burma Army, in April.

But when an NLD lawmaker met with the United Wa State Army (UWSA) without the party's imprimatur, he was suspended from a parliamentary committee—yet another move that has fed distrust in the NLD.

In April, a Lower House NLD lawmaker, Soe Htay, who is a member of a parliamentary committee on ethnic affairs and peace, along with two other NLD members, met leaders of the UWSA, the largest ethnic armed group in Burma, without party approval. The NLD was apparently unhappy that he did not inform the party in advance and suspended Soe Htay for one year from assuming important roles in the party.

Many have questioned the true reason behind his suspension.

"It is difficult to understand what [the NLD's] motivations are," said Maung Maung Soe. "U Soe Htay meeting with the [UWSA] is a good thing. Both he and the Wa group had good reasons for the meeting. That U Soe Htay was punished has raised questions, and deepened ethnicities' suspicions of the NLD."

If the NLD is to build a genuine democratic nation, problems of internal peace, ceasefires and a federal Union must be solved. And to solve these problems, it is imperative for the NLD to build trust with ethnicities by meeting and developing relationships with them, said Nai Hong Sar, vice chairman of United Nationalities Federal Council (UNFC), an alliance of ethnic armed groups.

The NLD should be open-minded when dealing with ethnic issues and should be aware that attempts to cozy up to the military will distance it from the ethnicities, ethnic leaders said at this week's UNA meeting.

The post Have Ethnic Groups Lost Faith in the NLD? appeared first on The Irrawaddy.
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