The past few days have been filled with casualties, as moguls hoping to re-take their seats in Nay Pyi Taw are expelled in favour of new faces.
Some of the biggest names in business under the former regime – Yuzana Company’s U Htay Myint, Zaykabar’s U Khin Shwe, U Yan Win of A1 Group of Companies and U Tint Hsan of ACE Construction – to name a few – appear to have found themselves on the losing end of the vote.
They had risen to the top on the coattails of concessions from the military, dominating sectors such as real estate, agriculture and mining. As a result, many found themselves in conflict with villagers in their constituencies over the past few years, which may have lost them some support.
However, despite this recent setback, many businesspeople will have no intention of giving up their power, said Mike Davis of Global Witness.
“Being out of parliament will certainly be a blow to these tycoons’ prestige. But they did not depend on their parliamentary seats to obtain concessions and kick people off their land,” he said.
“It is now likely that they will work overtime to curry favour with the new rulers and make sure that when the dust has settled, they are still very much in the game.”
In the meantime, savvy businesspeople such as U Tay Za and U Zaw Zaw have been quietly hedging their bets, reportedly donating large sums to the opposition party’s humanitarian programs.
NLD spokesperson U Han Tha Myint confirmed the party has received financial contributions from individuals, though declined to name names.
“We plan to announce a list of our donors at some point, but for now we are keeping the names quite confidential,” he said, adding that most of the biggest contributors are not high-profile businesspeople.
Others have spoken out to distance themselves from government – spokespeople for Kanbawza Group and Asia World said last week they were politically neutral – though the odd slip-up shows not everyone is as impartial as they claim.
The question now is whether democracy – or something close to one – means a new set of rules for the top businesses. Mr Davis believes it does.
“Some may experience the new political climate much as the dinosaurs did the Ice Age. Those that snaffled plum contracts based entirely on old connections may not be able to evolve,” he said.
“But those that are more adept at presenting a polished public persona could well thrive. The new government – whoever leads it – will not want to alienate the entire business community and some cronies could successfully adapt.”
For U Maung Maung Lay, vice chair of the UMFCCI, the country’s top businesses had expected the NLD to win the election and had prepared themselves. “The paradigm will definitely change – expect a level playing field that will depart from crony capitalism,” he said.
However, he warned of the scope of the challenges. “High expectations befall the NLD. Hopefully the boat will not capsize.”
Assuming the NLD wins the election outright, the real test is how its leaders deal with corruption and cronyism, said Mark Farmaner of Burma Campaign UK.
“In opposition, a culture of secrecy within the NLD and democracy movement developed for perfectly good reasons, it was vital for security and staying out of prison,” he said.
“But if that culture continues into government, it could be very dangerous and allow the kind of corrupt practices of the past to continue.”
The NLD has not yet put forward specific policies to regulate companies and the management of natural resources, he said.
In its election manifesto, the party promises that if voted into power it will take “effective action as necessary to establish a society free of corruption”.
It pledges to eradicate what it terms the monopolistic management and unfair distribution and usage of natural resources. “We will work to ensure that extractive projects are planned transparently and that the public is informed,” it says.
“We will [also] establish a dedicated fund to ensure that the profits of such projects are used for the long-term development of the country.”
If the new government really wants to change its political economic course away from “a monopolistic predatory business environment”, it will need to take to the law books and summon all its political will, said Kevin Woods, PhD candidate at University of California, Berkeley and an expert on resource politics in Myanmar.
A balance will be hard to strike. The people of Myanmar this week are not just celebrating the NLD winning so many seats, he said. The celebration is symbolic of the changes that the people are expecting.
“For one, kicking cronies out of the economy and bringing in investments that benefits the country and its people,” he said.
For Mr Woods, an NLD-led government may well associate with old and new cronies. The hardest hurdle to surmount, he said, will be finding clean capital to invest that does not just run to foreign investors.
“The military created a playing field where only cronies got the chance to play, which has now left little other choices for domestic ‘clean capital’ sources,” he said.
“Perhaps the NLD will be confronted with this conundrum: take crony capital or have few other options to jump start the domestic economy.”
Foreign investors still largely want to exploit natural resources or cheap labour, he said.
“There is much concern that while the NLD may usher in welcomed political changes in the country, foreign investment from every corner of the globe will get the green light to rush into Myanmar,” he said.
“That will spell a different type of doom to the country.”
The manifesto deals with this briefly. “In order to encourage greater foreign investment in line with the highest international standards, we will lay down paths for economic cooperation that can bring sustainable long term mutual benefits for both parties,” it says.
Yet Mr Woods remains concerned that natural resources are predominantly located in ethnic conflict areas, some of which are still at war against the Myanmar military.
“A renewed rush of extraction, on the heels of the national ceasefire agreement could spark renewed violent conflict, as resource rights is one of the ingredients the armed conflict has been about in the first place,” he said.
“We have every reason to be very cautious about how economic reforms should proceed.”
Source: Myanmar Times