LOCAL GOVERNMENT, BUREAUCRACY, CRONIES AND CORRUPTION IN MYANMAR

LOCAL GOVERNMENT AND NGOs IN MYANMAR

Villages are linked by various agencies in a hierarchy that stretches from the village to the Prime Minister’s offices. The village has an elected headman and he is the link between the bureaucracy and the military regime’s party. There are agencies of the central government that have contact with villagers but mostly it is the military and its political wing that exert control on local government. Disputes are generally settled on the local level. Many government institutions face shortages of skilled civil servants. And many government buildings lack basic infrastructure, such as computers.

Hong Sar Channaibanya, a Burmese-born Australian, wrote: “There is little involvement for government in Burma in family issues. There is only a small non government sector in Burma and religious organisations fill some of the gap this leaves in Burmese society. The community welfare sector is weak and the government has no budget to fund such a sector. A few charity associations led by monks and devotees have addressed community problems for many years. The community maintains social harmony through festivals and spiritual blessings either at home or at the temples. Meditation courses are widely open to all public and Buddhist’s monks play a key role in building community harmony. Religion and faith are core aspects of daily life in Burma.” [Source: Hong Sar Channaibanya, Canberra, Australia May 2010]

Relying on NGOs for Health Care in Myanmar

Lucile Andre of AFP wrote, “Starved of funds and medicine during decades of military rule, doctors at a clinic in Yangon offer their usual advice to one of Myanmar's newest HIV patients -- come back when you're sicker. In a country with one of Southeast Asia's biggest armies but a healthcare system in tatters, scarce antiretroviral drugs are given only to those with the advanced form of the illness. "If I don't get the treatment, I'm worried the disease will get worse," a 47-year-old farmer told AFP at the clinic run by charity Medecins Sans Frontieres (Doctors Without Borders) after she was diagnosed with the virus. [Source: Lucile Andre, AFP, May 26, 2012 :::]

"Patients are upset, it is difficult to tell them... but we cannot refer them anywhere, the government doesn't have it (medicine) either," said Soe Yadanar, one of four doctors at the clinic in a poor Yangon neighbourhood, which has more than 2,000 registered patients."We tell them they can come back later. But they know the situation in Myanmar," she added. :::

“Under the junta NGOs were banned from public hospitals and in effect ran a parallel health service, but now they are calling for closer cooperation with the government to extend the reach of healthcare. "We need to start thinking about a long-term health system where we can all work together," argues de Groote.

In the meantime, many among Myanmar's impoverished population will continue to rely on foreign NGOs for help. Mying Maung Maung, a 37-year-old carpenter, says he had to turn to MSF when he needed treatment for tuberculosis and HIV.After several years of antiretroviral treatment, the father-of-four stopped responding to the medicine, in part because he did not stick to the strict timetable of taking his dose. "I don't have a watch, I had to find clocks... but they always have a different time," he said. :::

Charity and Buddhism in Myanmar

Giving charity to children or the needy according to Myanmar law is only acceptable through the established social welfare organizations and associations. Individual charity by the road side in public is not allowed but is widely practiced.

Buddhism emphasizes ideals of wisdom and compassion and sometimes gives as much weight to thoughts as actions. The Buddhist equivalent of the Golden Rule is that “all we are is the result of what we have thought.” There is a great emphasis on generosity and the giving of alms. Concepts such confession, forgiveness and restitution that are normally associated with Christianity are also emphasized in Buddhism.

Buddhists are taught to practice nonviolence, do good deeds, present gifts to monks, aspire to have gentle thoughts, meditate, and have respect for the sanctity of life. Mahayana Buddhists have debated the merits of charity. Scholars are clearly in agreement that charity is beneficial to the giver but how helpful and useful it is to the recipient is not such a clear cut matter. Some argue charity is merely a means for the well-off to relieve themselves of guilt and duty by giving a few scraps to the poor that ultimately humiliates them.

The great Tibetan saint Milarepa was once asked by his disciples “if they could engage in worldly duties, in a small way, for the benefit of others.” Milarepa replied: “If there be not the least self-interest attached to such duties, it is permissible. But such detachment is indeed rare; and works performed for the good of others seldom succeed, if not wholly freed from self-interest...One should not be over-anxious and hasty in setting out to serve others before onself has realized the Truth in its fullness; to do so, would be like the blind leading the blind....Til the opportunity come, I exhort each of you to attain Buddhahood for the good of all living beings.”

Doctors Without Borders Expelled from Myanmar

In February 2014, Doctors Without Borders was expelled from Myanmar. Margie Mason of Associated Press wrote: “Doctors Without Borders said it has been expelled from Myanmar and that tens of thousands of lives are at risk. The decision came after the humanitarian group reported it treated nearly two dozen Rohingya Muslim victims of communal violence in Rakhine state, which the government has denied. The humanitarian group said it was "deeply shocked" by Myanmar's decision to expel it after two decades of work in the country. "Today for the first time in MSF's history of operations in the country, HIV/AIDS clinics in Rakhine, Shan and Kachin states, as well as Yangon division, were closed and patients were unable to receive the treatment they needed," the Doctors Without Borders said in a statement. [Source: Margie Mason, Associated Press, February 28, 2014]

The United States said it was very concerned and urged the government to continue to provide "unfettered" access for humanitarian agencies. As Myanmar's main provider of HIV drugs, supplying treatment to 30,000 people, the group described the impact as devastating. Myanmar's presidential spokesman Ye Htut had criticized Doctors Without Borders in the Myanmar Freedom newspaper for hiring "Bengalis," the term the government uses for the Rohingya Muslim minority, and lacked transparency in its work. He also accused the group of misleading the world about an attack last month in the remote northern part of Rakhine. The United Nations says more than 40 Rohingya may have been killed, but the government has vehemently denied allegations that a Buddhist mob rampaged through a village, killing women and children. It says one policeman was killed by Rohingya and no other violence occurred. Doctors Without Borders said it treated 22 injured and traumatized Rohingya.

Since the violence erupted in June 2012, Doctors Without Borders has worked in 15 camps for the displaced people in Rakhine state. For many of the sickest patients, the organization offers the best and sometimes only care, because traveling outside the camps for treatment in local Buddhist-run hospitals can be dangerous and expensive. The aid group has worked to help smooth the referral process for emergency transport from some camps.

Due to increasing threats and intimidation from a group of Rakhine Buddhists who have been holding near daily protests against Doctors Without Borders, the organization has said its activities have been severely hampered and that it has not received enough government support. "We urge the government to continue to work with the international community to provide humanitarian assistance to communities in need and to unsure unfettered access for humanitarian agencies," U.S. State Department spokeswoman Jen Psaki told reporters in Washington.

NGO and Charity Activism in Myanmar

In August 2009, the Washington Post reported: “Call it the evolutionary school of revolution. After years of brutally suppressed street protests, many Burmese have adopted a new strategy that they say takes advantage of small political openings to push for greater freedoms. They are distributing aid, teaching courses on civic engagement and quietly learning to govern."We are trying to mobilize people by changing their thought process," said an entrepreneur in the city of Mandalay who is setting up classes on leadership. He added half in jest, "Civil society is a guerrilla movement." [Source: Washington Post, August 24, 2009 ||||]

“A"community-based organizations," finding outlets for entrepreneurship and room to maneuver politically in a country with one of the world's most repressive governments. At first light on a recent Sunday, a dozen doctors piled into two old vans, stopped for a hearty breakfast of fish stew and sticky rice, then headed out to dispatch free medicine and consult villagers an hour outside Rangoon. The group first came together to care for demonstrators beaten by security forces during monk-led protests in 2007 and joined countless Burmese in collecting emergency supplies for survivors when Tropical Cyclone Nargis hit in May 2008, killing an estimated 140,000 people. ||||

“Like many of those ad hoc groups, the doctors have since developed an informal nonprofit organization, meeting regularly and volunteering at an orphanage and in villages near Rangoon. The group's leader secured funding from a foreign nonprofit agency and named his team "Volunteers for the Vulnerable," or V4V. But to avoid having their activities labeled as activism, the leader negotiates weekly with the authorities for access to the villages under cover of an anodyne Burmese fixture -- the abbot of a local Buddhist monastery. For their own safety, the V4V founder said, "not even all our members know the name of the group." ||||

"There is still room to change at the small scale," said an AIDS activist, sipping juice in a teashop. "Many people say civil society is dead. But it never dies. Sometimes it takes different forms, under pretext of religion, under pretext of medicine." Some members of the groups reject any political motive in their activities, describing them as purely humanitarian. But others say that in Burma the two are intrinsically linked. ||||

"At every meeting of nonprofits, the solution is always, in the end, political," said a Rangoon scholar who works with a foreign development organization. The scholar is associated with a loose circle of influential academics, writers, negotiators between the junta and restive ethnic minorities, and businessmen at home and abroad who share a goal of finding a way through the political impasse. "It's not that we oppose the NLD, but at least we take advantage of the opening space. . . . The NLD can't set a course. We have to find an alternative," said the scholar, who served 15 years in prison for writing about human rights.” ||||

Learning about Community-Based Activism in Myanmar

The Washington Post reported: “A 32-year-old writer, whose father was involved in dissident politics, said his life was transformed after he took a three-month course at a Rangoon nonprofit agency called Myanmar Egress, which runs classes for Burmese interested in development. Like many of the people interviewed for this story, he spoke on condition of anonymity for fear of retribution. He then quit his job at a business journal to freelance opinion columns under a pseudonym and has co-founded a nonprofit with other Egress alumni.[Source: Washington Post, August 24, 2009 ||||]

"I came to realize my daily life is being involved in politics, in the political economy," he said, a resolve triggered by the scenes of poverty he witnessed along his daily commute on a creaking, overcrowded bus through Rangoon. "My belief is that without political knowledge . . . people will just go around town and get shot. I am doing what I can as an educator and a journalist." ||||

“Many people in Rangoon expressed feeling a similar sense of duty as they have watched their military rulers decimate the education system and deepen poverty through mismanagement of the economy. In the past 50 years, Burma has fallen from among the richest countries in Asia to the bottom of regional development rankings. "In Burma, the middle class is very thin," said a 38-year-old graphic designer who in 2004 helped found an undercover nonprofit group that recruits potential political leaders. "We need to grow, strengthen that. Most democratic countries have a broader middle class. It is the only way to go forward." Such groups have also allowed urbanites to network in ways previously inconceivable. ||||

“On a recent afternoon, students crowded into a musty hotel conference room for a three-hour lecture on civil society sponsored by Myanmar Egress. Ten minutes before the class was to begin, barely a seat was vacant and still the students poured in, laughing, chatting or rifling through notes that curled at the edges in the damp heat. "They have a thirst for knowledge. They want to know. . . . They don't even take a break," said a 28-year-old Egress teacher, observing the 105 young adults from the back of the room. "This place is quite free, the only place we can talk about these things." ||||

Bureaucracy in Myanmar

For decades Myanmar has been under the control of centralized bureaucracy run by the army and its mass organization. Even though many reforms and changes have taken place in recent years this apparatus is still largely in place.

The cabinet is appointed by the president and confirmed by the parliament. The junta had a cabinet but it had now power to make key policy decisions. The majority of ministry and cabinet posts are held by military officers, with the exceptions being the Ministry of Health, the Ministry of Education, the Ministry of Labour, and the Ministry of National Planning and Economic Development, posts which are held by civilians.

There are a total of 32 ministries in the Myanmar bureaucracy. The information ministry oversees local and foreign media and the film industry, and has supervised the approval of visas for foreign correspondents.

Citizens and permanent residents are required to carry government-issued National Registration Cards (NRCs), also known as Citizenship Scrutiny Cards, which permit holders to access services and prove citizenship. These identification cards often indicate religious affiliation and ethnicity. There appeared to be no consistent criteria governing whether a person’s religion was indicated on the card. Citizens also are required to indicate their religion on certain official application forms for documents such as passports, although passports themselves do not indicate the bearer’s religion. Members of many ethnic and religious minorities, particularly Muslims, faced problems obtaining NRCs. [Source: U.S. Department of State, Bureau of Democracy, Human Rights and Labor International Religious Freedom Report for 2011]

Bureaucracy in Myanmar’s New Capital

All of the Myanmar government’s 32 ministries, along with other government organizations, were suddenly moved to the new capital of Naypyidaw in 2005. Only central government employees aged 57 and older and local government officials were not required to relocate to the new seat of government.

Alan Sipress wrote in the Washington Post: “Military trucks rumble up in front of Rangoon's ministries several times a week and workers lug ancient desks, chairs and filing cabinets to the waiting vehicles. The convoys depart at daybreak on a 12-hour journey along roads badly rutted and pocked, then return for another load. Distraught civil servants, among the thousands scheduled to relocate, have wept in front of foreign officials. Some government employees have asked to quit, including many at the Irrigation Ministry who tried to resign en masse, but have been told that is forbidden, according to their family members. [Source: Alan Sipress, Washington Post, December 28, 2005 <<]

Senior Burmese ministers were given just two days' notice of the relocation. On hearing the news about the move, one government worker told Reuters.“We couldn’t believe our ears. The room fell completely silent. Some of us were close to tears.” He and his colleagues were given a few hours to gather some food and belongings before being loaded onto Chinese-made trucks. “We left at 6:37am sharp. It was a very long convoy, as long as they eye could see.” He said the timing seems to have been chosen by astrologers. He said when they arrived at the mosquito infested capital, the buildings were half finished. “We had to sleep on the floor and others slept on tables.” According to the Washington Post In one ministry building, about 90 people slept on the floor. Higher-ranking officials camped out atop desks and tables. There were few signs of the schools, hospitals, shopping mall and luxury hotels the government has promised.

There are 40 buildings for each ministry–each which can accommodate 500 people. Anuj Chopra wrote in U.S. News & World Report, “The Stalinist feel of the new capital is heightened by the behemoth statues of bygone Burmese kings and the monumental scale of the buildings, which include government offices, diplomatic quarters with blue and yellow metal roofs, a parliamentary building, and a large military complex with luxurious mansions, an area out of bounds for anyone not in uniform. [Source: Anuj Chopra, U.S. News & World Report, October 12, 2007]

Kenneth Denby wrote in The Times: “The city hall has high white walls and curving tiled roofs, like the palace of Ming the Merciless. North of here are the identical ministry buildings. The one I entered had manual typewriters instead of computers and the silvery-blue glass at the front was already showing cracks. [Source: Kenneth Denby, The Times, October 16, 2007 ^]

Civil Servants in Myanmar

Myanmar is thought to have from 1 million to 2 million public servants, including 400,000 military soldiers and officials in local governments.

Low salaries invite corruption. Naoji Shibata wrote in the Asahi Shimbun, “The monthly salary of a government bureau chief is a low 15,000 kyat ($15). Among the lower ranks, wages don't even amount to 10,000 kyat. On the other hand, a driver for a private company earns about 100,000 kyat a month. In Yangon, officials have survived by taking side jobs. Some officials supplement their incomes with bribes. Together, the side jobs and under-the-table income could total several times more than the government salaries. [Source: Naoji Shibata, Asahi Shimbun, December 28, 2005 <<]

Wouldn't it make sense to quit the government job, and remain in Yangon? By law, government officials cannot resign without permission--which is not often granted. One brave man, an Industry Ministry official, quit to take a job with a foreign company. In retaliation, the government has refused to issue his passport or official papers.

See Corruption.

Budget in Myanmar

Budget: revenues: $2.234 billion; expenditures: $4.414 billion (2012 est.). Debt: external: $6.967 billion (2005 est.). Taxes and other revenues: 4.1 percent of GDP (2012 est.), country comparison to the world: 215. Budget surplus (+) or deficit (-): -4 percent of GDP (2012 est.), country comparison to the world: 137 . [Source: CIA World Factbook]

Corporate tax rate: reduced from 30 percent to 25 percent in 2012, , compared to 17 percent in Singapore and 35.6 percent in Japan. [Source: Yomiuri Shimbun]

Only a sliver of Myanmar's budget goes to healthcare, education. Myanmar spends five times more on the military than it does on education and health care combined. In a country where nearly 90 percent of the population lives at or near the poverty line, the junta, obsessed with safeguarding its own interests, spends 40 percent of the budget on the upkeep of its 450,000-strong Army—the biggest army in Southeast Asia. [Source: Anuj Chopra, U.S. News &World Report, October 12, 2007 ++]

Corruption in Myanmar

Myanmar has a high level of corruption. It ranks 178th out of 180 countries worldwide according to Transparency International, which publishes its own Corruption Perceptions Index. Richard Paddock wrote in Los Angeles Times, “Corruption has reportedly invaded nearly every aspect of commerce. At the post office, people mailing a letter tip the clerk so she will mark the stamp instead of peeling it off and selling it. At hospitals, patients pay orderlies so they can see a doctor. "Even if blood is pumping from your artery, unless you tip the gurney operator, you will die on the stretcher," a diplomat said.” [Source: Richard Paddock, Los Angeles Times, June 18, 2005 *]

Doing business in Myanmar requires "tea money" as the generals call it. "Yes, they're getting a piece of the pie, and some are hungrier than others," an American consultant in Yangon told the Los Angeles Times. "But these guys are children compared to the politicians in Thailand. Here, you can get what you want for one set fee. It's agreed upon and honored. these guys actually have the interests of the country at heart."

Corruption is common throughout the state education system; good exam results can be acquired with money and influence. Consequently, state-accredited education has lost much of its credibility in society. Ordinary citizen generally have to pay off government official if they want anything done. One shop owner had to make a $2,000 donation to get the street in front of his shop paved. Ordinary citizens have pay bribes to get a car permit. Aid money from Japan has been spent on VCRs and satellite dishes for government employees.

Hannah Beech wrote in Time: Myanmar “military leaders are enjoying ever more ostentatious lives, their wallets fattened by gas-pipeline deals with neighbors China, India and Thailand. A samizdat video circulating in Rangoon shows junta chief Than Shwe's daughter getting married in a lavish ceremony. The couple reportedly received millions of dollars in wedding gifts--in a nation where the average annual per capita income is just $225. More appalling, the junta spent hundreds of millions of dollars in 2005 to build a brand-new capital city. Yet today Naypyidaw is an eerie landscape of broad, empty streets framed by behemoth government ministries. [Source: Hannah Beech, Time, September 17, 2007]

Myanmar Military and Business

The military has a stake in nearly all the profitable enterprises in Myanmar. For Burmese to get a job they must a good friend or relative "with the rank of sergeant or above." Hundreds of state-owned companies and private firms are controlled by senior military generals. Cross-border business deals must be approved by the military. The generals often take bribes. They have been involved in border casino businesses.

To do business on a high level you need to make a deal with a general. On the lower level you have pay a 5 percent commission to a uniformed officer. A British firm advised businesses to "align yourself with individual members” of the military regime. A Burmese businessman told National Geographic, " Go day by day. What is true today could be false tomorrow. Do not look forward or back. Accept the risks. Accept the way things are or go crazy. Then you ca make big money." [Source: Joel Swerdlow, National Geographic, July 1995]

In the 1990s, the generals reduced red tape and made the licensing process easier for local and foreign businesses they favored. They were especially accommodating after sanctions were imposed. One son of a hotel owner told Newsweek, "If they like you, they'll give you so many facilities. If they don't like you, they'll send you to jail.”

Fighting Corruption in Myanmar

In early 2012, Myanmar President Thein Sein said The government aimed to cut the poverty rate from 26 percent to 16 percent by 2015 and use "all means possible" to fight graft, which he said was one of the biggest threats to the country's progress. [Source: Aung Hla Tun, Reuters, March 1, 2012]

Preap Kol, executive director of the Cambodian Chapter for Transparency International, said: What do you think of Burma being more corrupt than Cambodia and now being one of the “sexiest” country for international donors? The Burmese transition to democracy is very attractive and there is more investment. It is just like Cambodia in the 90s. The difference is however that in the 90s, Cambodia focused on rehabilitation and humanitarian aid. Money was pouring in. It is only in the last decade that the relief assistance declined in favor of promoting human rights and governance. In Burma, the context is different as respect for human rights is a condition for the foreign investments. The country will have to develop scrutiny and make sure the money benefits people. Foreign investments have their own laws about not paying bribes. I hope these donors and investors can learn from the experience they have had in Cambodia.”Getting to the root of corruption. [Source: Clothilde Le Coz, Asian Correspondent, December 21, 2012]

Cronies in Myanmar

Simon Denyer wrote in the Washington Post, “A new English word has entered colloquial Burmese, a word that could not even be uttered in public until recently. The word is “crony,” and it describes the business elite who exploited their closeness to the country’s military rulers to amass vast wealth in the past two decades. These well-connected elite made their money in industries such as construction, rubber and logging, as well as in arms dealing and drug smuggling. Their gains have only increased in the past two years, a result of changes that have privatized many state-owned assets and enterprises — and allowed the rich to buy them up at bargain prices. [Source: Simon Denyer, Washington Post, March 26, 2013>>]

“Burma’s business elite have been investing some of their wealth by erecting hotels and office buildings in Rangoon and other cities. But outside these gleaming new buildings, cycle rickshaws still ply the streets, and there are few signs of a more general boom. Small-business owners and shopkeepers say consumer demand remains tepid. The business elite, say critics such as Zaw Aung, a former political prisoner who is a research fellow at Thailand’s Chulalongkorn University, have the power to crush potential competitors, corner the benefits of Burma’s reform process and prevent a new, more diverse middle class from emerging. >>

Aung Zaw wrote in The Irrawaddy, “Indeed, there are many questions that need to be asked. Can cronies become builders of industry and national economic power? How can they contribute back to society by building philanthropic foundations and provide life-long assistance to society? Many showy tycoons and cronies in Burma are not interested in helping society. In fact, critics have charged that contributions from cronies are tiny compared to the money they spend on their posh Italian sports cars.” At same time some “cronies have quietly supported Suu Kyi and the opposition movement and donated to the Burmese community. [Source: Aung Zaw, The Irrawaddy, January 28, 2013 ////]

“Sean Turnell, an expert on Burma’s economy at Macquarie University in Sydney, Australia, thinks the cronies are destructive and resistant to reform. “I think the majority are cronies of the destructive sort—but some might turn out for the better.” “They are rent-seekers pure and simple rather than builders of genuine enterprise,” he added. “[They are] living off government regulatory largesse, the recipients of monopoly and quasi-monopoly profits and so on. As such, they are political animals as much as economic ones. But certainly there are some too who may emerge as something else. On this front, I guess we have to hope so, since they are amongst the few with sufficient capital to do transformative things, if this is what their desire is.” ////

Jill Drew wrote in the Washington Post, “"All they know is stealing," seethed one taxi driver as he took a passenger on a circuitous route to the airport, slowing in front of the house of Tay Za, the owner of a local airline who is close to Senior Gen. Than Shwe, leader of the junta. The villa had an open garage, with two Ferraris inside, one red and one yellow. "They want money, money, money. And we have nothing," he said. The driver keeps a notebook hidden under newspapers on his dashboard. In it he writes, in Japanese characters, how the government controls gasoline sales to siphon money for themselves. He wants to smuggle the notebook out of the country so foreign media can report on the system. The government limits official gas sales to two gallons a day. To buy more, drivers must purchase black-market gasoline -- obtained by sellers who pay kickbacks to government-appointed filling station managers -- at nearly double the official rate.[Source: Jill Drew, Washington Post, October 24, 2007 \\\]

Former Imprisoned Crony Still Looking for Ways to Make Money

The Washington Post reported in 2008: “The climate of nepotism and capricious junta policies means that uncertainty pervades even among the most seemingly successful. In his sparsely furnished living room, an avowed former "crony" of senior generals recounted how he grew a small logging firm that traded rosewood and teak to China into a sprawling foreign investment firm that eventually bankrolled three ministers and a mayor, all of them senior military officers. In return for supplying licenses and contracts, the four received large deposits in private Singapore bank accounts, he said. [Source: Washington Post, August 16, 2008 /|\]

“Profits, however, one day started to slip, the deposits to those bank accounts slimmed, and the businessman was thrown in jail, charged with the very thing that swelled the officers' accounts, he said -- using a local company as a front for illicit foreign dealings. But nearly eight years behind bars hasn't dissuaded him from attempting another trek down Burma's twisted path to prosperity. Only six months since he was released, gray-haired and frail, from Insein prison, he says he searches the Internet daily for information on how to tap the booming emigrant industry -- funneling unskilled Burmese workers to jobs outside the country. "This is not a legal way. It is a form of trafficking," he said. For help, he said, he would be turning to old friends in the Home Ministry. As for his clients, he added, they don't really know what they're getting into. But "if they have a chance to go abroad, they can make money." /|\

Zaw Zaw: One of Myanmar’s Premier Cronies

Simon Denyer wrote in the Washington Post, “Zaw Zaw, the head of the giant Max Myanmar conglomerate, is one of Burma’s richest men, having made his fortune through lucrative government contracts, helping to build the country’s new capital, Naypyidaw, in the past decade, and constructing roads and extracting tolls. He profited handsomely when state-owned assets were sold off in 2011 in the largest privatization push in Burma’s history, picking up a banking license and cement factory. He runs roadside gas stations, controls the auto import trade, owns a jade mine and rubber plantations, and is fast expanding into luxury resorts. Zaw Zaw insists that he pays taxes and creates jobs, and he says Burma will not prosper if everyone in the business community is vilified as being cronies. “At this time, we all have to cooperate together to build the country,” he said. [Source: Simon Denyer, Washington Post, March 26, 2013>>]

Aung Zaw wrote in The Irrawaddy, “Zaw Zaw—who is still in his mid-forties— is media savvy and friendly. He will proudly tell visitors and the media that he once washed dishes in Japan before coming back to Burma to run his own business selling used cars and later getting involved in the jade mining business in Kachin State. “I have nothing to hide,” he told me. He was a university student during the 1988 uprising in Rangoon and he witnessed the crackdown and his fellow students being gunned down. [Source: Aung Zaw, The Irrawaddy, January 28, 2013 ////]

“Since his early days, Zaw Zaw’s business empire has expanded considerably. In addition to his mining interests, he now has his own bank (Ayeyarwady Bank, one of the largest in Burma), a cement factory, gas stations and a major construction company. The latter company was awarded numerous lucrative contracts in Naypyidaw, the new capital, including a stadium for the 2013 Southeast Asian Games. ////

“Zaw Zaw may be rich, but he also know that he needs to contribute to society. In 2010, he set up the Ayeyarwady Foundation, a charitable organization. Since then, he has been building schools across Mon and Karen states and Irrawaddy and Mandalay divisions. Recently, the chairman of the Max Myanmar also attended the wedding of a former student leader and member of the 88 Generation Students group.////

Tay Za: Another One of Myanmar’s Premier Cronies

Makoto Ota wrote in the Yomiuri Shimbun: “A mysterious tycoon lurks behind Myanmar's military government. Tay Za, said to be 43 years old, is known for his close relationship with the junta leadership. The United States earlier this month imposed fresh sanctions on Myanmar, freezing bank accounts of businesses close to the junta, apparently targeting Tay Za. But observers have said the sanctions will not sway the tycoon, who is said to be cunning enough to help the junta in skirting most U.S. and EU sanctions. [Source: Makoto Ota, Yomiuri Shimbun, October 30, 2007 ||||]

“Tay Za built his fortune since 1990 through logging, teak log exports, hotels and tourism. The exact size of his fortune and personal details are not known, but his close proximity to the junta and its help in his success is well reported. He is the owner of Air Pagan--in which the wife of the junta's leader, Senior Gen. Than Shwe, is an investor. Tay Za also is the only authorized import agent for the Russian military industry. He, together with Vice Senior Gen. Maung Aye, the junta's No. 2, clinched a deal to purchase MiG-29 fighter-bombers from Russia in 2002. It also is rumored that Tay Za helped, through Air Pagan, Than Shwe's wife and others leave the country for locations such as Vientiane and Dubai during the peak of September's antigovernment demonstrations. ||||

“Tay Za is said to have numerous subsidiaries, bank accounts and luxurious condominiums in Singapore, and he has "no trouble lending his money out," according to a source in Yangon. This diversification means the U.S. sanctions, which only freeze assets in the United States, probably will have little impact on the tycoon. ||||

Aung Zaw wrote in The Irrawaddy, “Tay Za is known to be close to Burma’s senior military leaders, including ex-dictator Snr-Gen Than Shwe....However, he told me that he never met the reclusive former strongman until after his helicopter crashed on a snow-capped mountain in the far north of Kachin State in February 2011. Than Shwe—who refused for a full month to allow foreign aid workers into Myanmar after Cyclone Nargis claimed more than 140,000 lives—immediately ordered hundreds of troops to conduct a search-and-rescue mission for Tay Za and his crew, all of whom survived. Tay Za told me he later went to the residence of the recently retired junta supremo to express his heartfelt gratitude. Tay Za also quietly met Suu Kyi soon after her release in November 2010. He had reportedly offered to assist the NLD. Party sources told me Suu Kyi did not reject his offer. [Source: Aung Zaw, The Irrawaddy, January 28, 2013 ////]

Cronies and Land Grabs in Myanmar

Land disputes are a growing problem in Myanmar. Protests were suppressed quickly under the junta in place until 2011 but have become more common as President Thein Sein has opened up the country and pushed through reforms.

Simon Denyer wrote in the Washington Post, “But Burma’s growing openness under President Thein Sein, a former general, has also meant a loosening of restrictions on free speech — allowing rickshaw drivers, farmers and others to complain about the cronies and their connections. “We are just beginning to realize all the bad things about cronyism,” said Nay Myo Wai, the leader of a pro-farmers political party, sitting on the floor of his party headquarters in the countryside on the outskirts of Rangoon. The chief resentment against the elite centers on land: Huge swaths of it were confiscated by the army and given to its business allies during the darkest days of the country’s military dictatorship. Little or no compensation was offered, and farmers were so cowed that they dared not complain. [Source: Simon Denyer, Washington Post, March 26, 2013>>]

Nay Myo Wai has compiled a thick dossier of land-grab cases and is helping to coordinate nationwide protests by farmers seeking the return of confiscated land. “This would have been totally unimaginable before the changes came,” he said. Until recently, anyone criticizing the military or its allies risked arrest, torture and years of imprisonment, and informers were everywhere.

Thant Zin, 49, is one of a group of angry farmers who have reoccupied land near his ancestral village outside Rangoon, land that was confiscated by the army two decades before and given to Khin Shwe, one of the business elite, to build an industrial park. Thant Zin says he was paid just 15,000 kyat, less than $20 at today’s exchange rate, for 50 acres, leaving him no money to pay for his children’s education. He is demanding better compensation. “I didn’t know that I should have been angry at the time,” he said ruefully. “Fear and ignorance kept me silent.”

Cronies and U.S. Sanctions on Myanmar

Simon Denyer wrote in the Washington Post, “The growing tensions are creating a predicament for foreign investors and for opposition leaders, given how deeply the role of the elite permeates a fast-growing economy. Under U.S. sanctions imposed in 1998 after the suppression of pro- democracy demonstrations, several members of Burma’s business elite were targeted in a way that prevented any American company or citizen from working with them. [Source: Simon Denyer, Washington Post, March 26, 2013>>]

The United States has gradually lifted some sanctions. Some sanctions remain in place against individual businessmen, including one who may be the richest of them all, 48-year-old Tay Za, a man the U.S. Treasury Department described as “an arms dealer and financial henchman of Burma’s repressive junta.” But last month, Washington relaxed sanctions on Burma’s largest banks, including two owned by Tay Za and Zaw Zaw, who maintain close ties with the country’s senior military leaders. The action came just days before a visit by a U.S. business delegation, with the Treasury arguing that increased access to Burma’s banking system would support the country’s “continuing social and economic development.”

Aung Zaw wrote in The Irrawaddy, “From the point of view of the US, which was long the staunchest critic of Burma’s former military rulers, the cronies must make fundamental changes in the way they operate if they want to be removed from the sanctions list. There has been wild speculation in Rangoon recently that the US is looking into potential waivers of entities, particularly banks, to allow foreign businesses to do business in Burma. This would open up some opportunities for some cronies, but it is unlikely that those involved in drugs or who helped purchase arms for the regime will be removed from the list anytime soon. [Source: Aung Zaw, The Irrawaddy, January 28, 2013 ////]

Zaw Zawa admitted that sanctions were a big hindrance in making business as the country is opening up to the outside world. He said he cares about his image and his company, but added that if he can’t shed the label of crony, he wants to at least try to be a “a good crony.”

A young tycoon told the Irrawaddy: “We have been helping opposition groups for many years,” he said. He also warned the US not to overlook the fact that several big-time businessmen who were arms smugglers and involved in the opium trade and other shady business are still not on the US sanction list. Moreover, there are several tycoons who have provided profit shares to the generals’ family members.

Myanmar of Cronies Try to Improve Their Image

Simon Denyer wrote in the Washington Post, “Faced with a lot of bad publicity, the cronies have been fighting back. Some have warned of legal action to try to silence critics; Khin Shwe has threatened to attack the farmers who have occupied his land. But most have been trying to improve their images — to make themselves more acceptable business partners in the new Burma, because they fear retaliation and losing their wealth, or simply because they don’t like criticism. “It gives me so much pain, I often cannot sleep at night,” Zaw Zaw, the head of the giant Max Myanmar conglomerate, said in a rare interview last month while watching a soccer match in Rangoon, the former capital, also known as Yangon. [Source: Simon Denyer, Washington Post, March 26, 2013>>]

Aung Zaw wrote in The Irrawaddy, “One Rangoon–based observer said that Zaw Zaw and other cronies need to show not only that they support current political reforms, but also that they are willing to make a long-term commitment to the development of civil society. They should also return land that they acquired under the former regime, he said. “The cronies must show that they are part of the solution, not part of the problem,” the observer added. [Source: Aung Zaw, The Irrawaddy, January 28, 2013 ////]

Providing cash and building schools and hospitals here and there isn’t enough, one Rangoon-based diplomat said firmly. Some cronies now realize that strong recommendations from Suu Kyi and prominent activists such as Min Ko Naing and Ko Ko Gyi and other actors in the civil society movement are important, as the US is closely monitoring them.

Aung San Suu Kyi and Myanmar’s Cronies

Aung Zaw wrote in The Irrawaddy, “Burma’s richest tycoons are back in the news again—not for their shady ties to Burma’s former ruling generals, but because of their recent efforts to cozy up to the National League for Democracy (NLD), led by democracy icon Aung San Suu Kyi. Tay Za, Zaw Zaw and several other notorious figures who came to prominence during the bad old days of military rule have been making headlines recently for donating generously to NLD causes. This, in turn, has led to criticism of the NLD, which has been accused of defending cronies whose names are virtually synonymous with corruption. [Source: Aung Zaw, The Irrawaddy, January 28, 2013 ////]

In December 2012, “the NLD held a fundraiser in Rangoon to mark the second anniversary of the party’s Education Network. The event netted around 500 million kyat (US $580,000), including a sizable portion from some of Burma’s richest men. During the event, Sky Net, a television operator and a subsidiary of Shwe Than Lwin Company owned by Kyaw Win, donated 135 million kyat ($155,000), while the Htoo Company, owned by Tay Za, donated 70 million kyat ($81,000). ////

“Suu Kyi has also recently been seen visiting a children’s hospital that Burmese tycoon Zaw Zaw of the Max Myanmar Group helped to renovate. Like Tay Za, Zaw Zaw wasted no time finding an opportunity to meet with the Noble Peace Prize laureate. Soon after she was freed from house arrest, Zaw Zaw, who is the chairman of the Myanmar Football Federation, invited her to watch a match together with him. This reportedly earned him a scolding from some senior generals, but that hasn’t stopped him from meeting her again. ////

“Suu Kyi surprised many by saying that those who became wealthy during military rule should be given another chance to reform themselves. They should be considered innocent until proven guilty, she said, before adding that cronies of the former ruling generals should be investigated for any alleged wrongdoing. “People may have become rich in different ways. But whether they were involved in any illegal action to make themselves rich must be investigated,” said the opposition leader. ////

“Now, many in Burma are asking whether the tycoons are trying buy off Suu Kyi. In early January, senior NLD leaders held a press conference to explain the activities of the party’s education network. The press conference was held at the Kandawgyi Palace Hotel—owned by none other than Tay Za. At the reception, Soe Win, a senior leader of the NLD, told me that he welcomed tycoons’ contribution to education and health. When I asked if the tycoons approached Suu Kyi, he smiled and nodded. ////

“Aides to Tay Za have told me that it was the NLD that approached him first; leaders of the party tell that that is not the case. Zaw Zaw said that people should support Suu Kyi. Indeed, many businessmen who are on the US sanctions list know that Suu Kyi holds the key to their future. She is the one who can recommend the US government to remove some tycoons from the list. It’s no wonder why some tycoons have been seen making public donations to the NLD and Suu Kyi. ////

Image Sources:

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Lonely Planet Guides, The Irrawaddy, Myanmar Travel Information Compton’s Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Global Viewpoint (Christian Science Monitor), Foreign Policy, burmalibrary.org, burmanet.org, Wikipedia, BBC, CNN, NBC News, Fox News and various books and other publications.

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© 2008 Jeffrey Hays

Last updated May 2014

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