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The government's last-minute decision to forego the ASEAN chair in 2006, ostensibly because it needed to focus on national reconciliation and democratisation, has saved ASEAN some potential embarrassment, but has done nothing to improve the situation in Myanmar. The regime is off that particular hook, and is in no mood to make concessions to internal opposition or yield to external pressures. Reports of a secure new administrative capital and command centre being constructed near Pyinmana, to which Defence and other key Ministries and state bodies are to be transferred, reflect the leadership's fear of foreign intervention, and underline its determination to dig in for the long haul. The most likely challenge to its authority in the short term could come from a rift within the officer corps, some of whom may be uneasy about the widening purge of anyone connected with the ousted Khin Nyunt.
Despite the recent release of a number of political prisoners, many more are still detained and pressure on the surviving elements of the National League for Democracy is being intensified to eliminate it as a political force. The bomb blasts in Rangoon in May exacerbated the regime's normal paranoia and provided the excuse for tighter security measures and controls. United Nations agencies and NGOs are facing new restrictions on their activities, especially in the border areas. The UN Special Envoy Razali has not been allowed to visit since March 2004, and was snubbed by Foreign Minister Nyan Win at the ASEAN Foreign Ministers meeting in Vientiane in July. The UN Special Rapporteur on Human Rights, Pinheiro, has been excluded since 2003. Relations with the ILO are at a low ebb over the issue of forced labour and the threat of sanctions.
The government is also looking to bring the ethnic minorities more to heel. Those groups which signed ceasefire agreements with the government and are participants in the currently deferred National Convention are being pressured to surrender their arms under the slogan 'exchange arms for peace'. This has produced a backlash in the Shan state, where two armed groups have combined in opposition, and may find a similar response elsewhere.
While the political situation remains murky, the economy suffers from incompetent and excessively rigid management, which takes no account of the needs of a market economy. Inflation is running in double figures; the black-market rate for the kyat has risen to 1000 to the US dollar, against an official rate of 6. Official claims of a growth rate of 12.6 per cent for the 2004/5 financial year are frankly incredible, and some observers believe the economy went backwards during the year. Figures showing a trade surplus of USD954 million seem equally rubbery, and may well omit a large proportion of cross border trade. A more telling statistic is the statement by the Executive Director of the World Food Program after a four day visit to Myanmar at the beginning of August that one of every three young children in Myanmar was chronically malnourished, and 15 per cent of the population of 53 million was food-insecure. He said: 'The humanitarian issues are serious and getting worse'. It would seem difficult to bring about such a result in a country as potentially rich in agricultural and mineral resources as Myanmar, but 43 years of administration by successive doctrinaire regimes have managed it.
WATCHPOINT: Can the regime count indefinitely on the loyalty and cohesion of the army after the disintegration of the former effective intelligence service?
About our company:
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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