Myanmar Has Huge Problems, and Private Corporations Can Help Fix Them

How do you perceive Myanmar? If you’re a backpacker you might see a beautiful country brimming with centuries of Buddhist culture, white sand beaches, and virgin rainforest. If you’re the CEO of Coca Cola, you might see 60 million people who could happily develop a taste for syrupy fizz. If you’re the British government, perhaps an old colony and now frontier market, thirsty for investment, infrastructure, and services. If you are a Muslim you might see an intimidating place beset with violent mobs where the military government is complicit in the ethnic cleansing of its citizens. Myanmar may be all of these things. But those who suggest governments and global corporates keen to take advantage of the New Foreign Investment Law cannot do so with a clear conscience while sectarian violence spreads through the country are wrong.

The companies taking first-mover risk in the Myanmar market should be applauded and encouraged. Testing and developing the efficacy of the country's new legal and regulatory framework by actually doing business and putting down routes in this newest of democracies will make the system more robust and pave the way for more reform and openness. That is a better way to shed light on the human-rights abuses that blight the country's otherwise impressive progress and pressure the government to act more decisively in addressing them. 

For many years a Muslim population in Rahkine State in the east of the country has been persecuted. Imported from Bengali regions during the period of the British Raj, these Rohingya Muslims are still denied citizenship and have been targeted in increasingly violent attacks by native Buddhists. Over the last year, 250 people have died and 140,000 have been displaced after violence, which began in Rahkine state and has spread to the central towns of Meikthila and Okkan and even the outskirts of Yangon, the capital. Most recently Meikhtila saw 36 Muslims beaten to death with machetes in front of police and local officials who, witnesses suggest, did very little to intervene. The grimly inevitable grainy video footage was up on YouTube in no time. Commentators have been eager to draw comparisons with the Rwandan genocide of 1994.

Western governments do recognize the problem. Thein Sein, the president of Myanmar, visited London last week, meeting with David Cameron and using a speech at Chatham House to announce his intention to release all remaining political prisoners in Myanmar's jails. Heartening as it was to see him engaging in typical international diplomatic activity, the conspicuous presence of protestors in Parliament Square reminded us of the danger of embracing this nascent democracy too readily. The prime minster made sure to mention the human rights problem during his discussions with Thein Sein, and indeed, Britain has offered military training and assistance to help diffuse the internal conflict. Hugo Swire, the foreign office minister of state, suggests, “The right way to proceed is to have the Burmese here [to the UK] and to send our officials over there to help them through their difficulties.” That seems a fair approach and the policy of engagement is one echoed by the U.S. government, which has forged strong ties with the new government. President Obama visited Myanmar as early as last year and welcomed Thein Sein to the White House in May, also making sure the issue of sectarian violence was on the agenda.


Image - Associated Press

There is huge optimism about Myanmar's potential. Corporations are salivating at the promise of a country endowed with vast oil, gas, agricultural, and timber reserves which is home to 60 million people, most of whom are young. It is the gateway to Southeast Asia, located between China and India, offering a shortcut for trade routing into Asia. Coca Cola has set up shop in Yangon, along with a host of telecom operators keen to increase the number of people with mobile phones from 1%, a queue of banks hoping to offer banking services and credit, and law firms to help these companies interpret the new foreign investment provisions. The corporate social-responsibility obligations of these global corporations might restrict them from jumping too fervently into a country with such a troubling ongoing human rights record. But in reality the presence of these companies will hasten the development of the legal and regulatory environment that might house them and ultimately raise the standard of living for these, the poorest people in South East Asia. There are already plenty of hurdles for these companies to overcome — poor infrastructure, lack of legal precedents, intermittent power supplies, scant internet coverage, non-existent capital markets, and a military led government for a start — but moral objections to investing in a troubled state shouldn’t be one of them.

Western diplomatic efforts must pressure Thein Sein's government to better deal with human rights abuses but corporations should not be discouraged from developing their presence in Myanmar.