Myanmar's ruling Junta on a privitisation spree

The sell-off of assets is so sweeping that its akin to privatisations in Russia after the Communist era

The sell-off, analysts say, appears to be part of a political transition as the government introduces elections for the first time in 20 years and a new constitution under which the military seems likely to perpetuate its rule, though more from behind the scenes.

Diplomats and businessmen say that the sales may allow ruling generals to build up cash for election campaigns to the new parliament, where they will hold 25 per cent of seats, or to pay for salary increases for civil servants and other populist measures. Many of the assets are being sold to businessmen allied with the military, reinforcing the strength of a class of oligarchs and military cronies.

But the privatisations could also have the effect of injecting some competition into what is an almost Soviet-style economic system, and some analysts here say they may herald a shift in direction. Reformers in the government, they say, may be hoping to follow a path similar to that of China or Vietnam, where the economies have been liberalised but the ruling party has remained firmly in charge and has tolerated little dissent.

Myanmar’s military junta nationalised most industries when it took power in a 1962 coup and has controlled the lion’s share of the economy since.For years, Myanmar shunned the path of its thriving neighbours. Most major industries, like the telecommunications business, power plants, fuel distribution and health care, remained in the hands of the state.

But today the sell-off of assets is so sweeping that some analysts compare it to the widespread privatisations in Russia after the Communist era. “There’s something of a grab going on,” said one diplomat who declined to be identified because he wanted to avoid publicly criticising the junta. “There’s a sense that it may not be done for the right reasons, but it could have a beneficial effect.”

The assets being sold include the country’s fuel import and distribution network, gem and tin mines, farmland, and factories, according to businessmen who have seen announcements of the sales. Most of the announcements have been made to small groups of businessmen and then spread by word of mouth.

The government has put out word that it is selling factories producing soft drinks, cigarettes and bicycles, among other commercial goods, according to U Phone Win, the head of a nonprofit organisation that assists people in rural areas.

It is also opening the health care and education sectors to private enterprise, Phone Win said, issuing licenses for the first time for private hospitals and schools. “There are opportunities here for the international business community,” he said.

For a people accustomed to more gradual change under military rule, the scale of the sales is raising apprehension that it will strengthen the hand of military cronies. One businessman in particular, U Tay Za, owns an airline and a soccer team and has interests in the teak, tourism, telecommunications and construction businesses. He has now been appointed the head of a new petroleum association and appears to be expanding his holdings.

Showcasing
In recent days, the country’s Privatisation Commission produced a list of 176 assets in Yangon, the main city, to be auctioned off sometime over the next few weeks. The 18-page list, which was shown to prospective buyers, includes a wide-ranging roster of buildings in Yangon worth hundreds of millions of dollars.

The list, which covers only part of the privatisation plan, features many former government offices, notably the lakeside office of the attorney general, the national archives, the auditor general’s headquarters, the archaeology department and the ministry of industry.

The buildings were abandoned when the capital was moved to the more remote location of Naypyidaw in 2005, and their sale would seem to ensure that the move was irreversible.

The businessman said it was likely that dozens of colonial-era buildings would be torn down. “I feel like I’m bleeding,” he said.

The businessman said the military had compiled a separate list of assets for auction that he had not seen; other buildings may also be auctioned independently, he said.
Although most of the major sales have not been mentioned in the state-run media, residents are already feeling the effects of some of the changes.

Over the past six months, the government has sold tens of thousands of cars it seized in recent years because they had been imported illegally. Car prices, which for years were highly inflated because of tight import restrictions, have now fallen by as much as 50 per cent, though they are still higher than in neighbouring countries.

A ban on motorcycle imports has also been lifted, a move that is likely to transform the lives of thousands of people in towns and cities. Motorcycles remain barred from Yangon.
The mastermind of the privatisation is widely believed to be the junta leader, Senior Gen Than Shwe. Despite the changes, the military seems likely to retain its place of power, even if behind a semblance of civilian governance.

In addition to the 25 per cent of seats reserved for the military in the new parliament, amending the constitution will require more than 75 per cent of representatives’ votes.
With the leader of the opposition, Daw Aung San Suu Kyi, under house arrest and 2,100 political prisoners in jails scattered around the country, the elections are being criticised as a sham by many Burmese exile groups.

“For these elections to be considered credible and legitimate, it’s absolutely essential that the government release the prisoners of conscience currently being held and allow those who wish to participate in the elections to do so,” said Andrew Heyn, the British ambassador.

But the changes are nonetheless seen as important. The last time parliament met in Myanmar was 1962. Laws that today are passed by military orders would be replaced by legislation in parliament.

In recent weeks, the local news media have been allowed to publish articles condemning child labour and forced labour, both of which are illegal but persistent, especially in rural areas. The government is working with the International Labour Organisation to crack down on the practice by local commanders of hiring child soldiers.

“It’s a completely different environment from a few years ago,” said Steve Marshall, the head of the ILO office here. “There is very much more acceptance for the need to work together. They want to be seen as a professional military.”