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Conducted in the manner of traditional Burmese monarchs, the moving of the capital from Yangon to Pyinmana on the 11th day of the 11th month and involving 11 ministries suggests that numerologists and astrologists had a hand in the process. (Astrology has deep roots in Burmese culture and religion.) One Burma expert has suggested that the founding of the new capital 'Nay Pyi Daw' (actually in Burmese it is Bu Mi Net Than Nay Pyi Daw meaning 'successful capital city') is linked with the drafting of the National Constitution and with the timing for the release of the country's most popular leader, Nobel Peace Laureate Daw Aung San Suu Kyi. However, many an expert has also called it a strategic retreat and a well-thought-out plan to sustain the Junta's longevity and maintain control of military power thereby enabling rule over civilians from a well-protected and physically guarded safe haven far away from the masses who may one day revolt.
The move might have been initiated as a result of the generals' paranoia about a US invasion, making Yangon an easy target for a sea borne invasion. In fact, laser guided missiles and bunker busting bombs dropped by B-2 Stealth bombers would make Pyinmana a much more practical target for it would not involve heavy losses amongst a civilian population. Perhaps the move also had to do with possible forthcoming United Nations Security Council (UNSC) debate, though it is highly unlikely that the UN would intervene militarily for the sake of democracy and human rights.
A further explanation could be that the main arteries of the proposed Trans-Asia super highways connecting India in the West, China in the Northeast, and Thailand in the South, would have to cross somewhere in central Myanmar. From this perspective, Pyinmana is much better located. It is also better positioned to enable control of the country, especially the rebellious ethnic group areas.
China and Russia, who are involved in installing military hardware and listening posts as well as electricity-generating dams near Pyinmana, are standing on the sidelines where international politics is concerned and this has made the Burmese Generals nervous. Furthermore, the Generals are afraid that they are losing their grip on power. Herein may be the real reason for the moving of the capital. In the past month there has been open defiance on the streets of Yangon, sparked by skyrocketing inflation. Law and order has deteriorated, with a massive increase in looting and burglaries. And to top it all off, the explosion near the Traders Hotel - one of the most secure areas in Yangon - has panicked the generals.
The top brass have known that the economy was their Achilles heel. But they had no option but to increase the price of petrol by more than eight fold in October. Myanmar is currently facing an acute shortage of oil, and with dwindling foreign exchange reserves, the country cannot pay for further imports. The government coffers are as empty as the people's stomachs; and even security around the embassies has been dramatically scaled down to save money.
The impact of the petrol price increase was felt almost immediately. Within hours of the price hike taxi fares doubled and traffic fell by more than sixty per cent. With fewer buses on the roads, thousands of workers and office staff began to walk. Tired and frustrated, many have begun to vent their anger and shout anti-government sentiments and the police have had to move in to disperse the crowds.
The price of consumer goods is spiralling out of control. Restaurants, bars and discos are also facing the squeeze as the usual clientele are staying away because they can no longer afford to go out. Petrol pumps have been set on fire and people are hoarding what little petrol they have for use later or to sell it at an enormous profit. The ruling generals are rattled. They are unsure what steps to take to revive the economy and to restore law and order.
At the core of their dilemma is a difference between the top two generals on how to handle the country's growing problems of corruption. The price of diesel soared after Maung Aye initiated a campaign to stop the smuggling of illicit diesel oil into the country. General Thura Shwe Mann's son is implicated in the illegal trade, which originates from Singapore. But Thura Shwe Mann has intervened and ordered the home minister to drop the investigation into the smuggling rings. This has angered Maung Aye, who is now biding his time. He has been trying to use the issue of corruption - especially involving Than Shwe's wife and daughters - to edge the senior general out of office. So far it has not worked, and Than Shwe is refusing to retire unless his number two joins him in retirement, leaving Thura Shwe Mann in control.
The economic crisis and deterioration in law and order has thrown the generals into a further quandary as they prepare to complete the draft of the new constitution and introduce political change in the coming years. In recent weeks it has become clear that Myanmar has decided to further isolate itself from the international community, with moves to distance itself from the ILO and the tightening of restrictions on other international agencies and NGOs. The regime's current strategy is to retreat further into isolation, under Beijing's protection. This will reduce the limited influence the other neighbours may have on the Junta and will make Burma's adoption of a one-party state all the more easy.
In true Orwellian fashion, the government has justified the move of the capital by saying that it is trying to develop a modern nation, in a centrally located area. But it seems that the current regime, led by Senior General Than Shwe, wants to divide the military from the civilian bureaucracy and hinder any attempt to seize power as it moves slowly towards pseudo-civilian rule under its almost universally criticized roadmap to democracy. Even Singapore, which has been sympathetic to the Junta, has described the move as puzzling.
Perhaps the most accurate explanation is the regime's bunker mentality - it has chosen to live in a fortress with the consequences of their own misrule. Like the proverbial ostrich, it is hiding from the storm.
WATCHPOINT: How will the Generals handle the current heavy weather as the new capital begins to take shape?
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AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
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