Global Political Economy and International Governance Analysts
Economic Performance and Democratic Consolidation Failure in Myanmar: a Case Study for Comparative Democratisation
Myanmar was plagued by civil war and internal turmoil since its independence in 1948. The recent rise of the National League for Democracy (NLD) and the leadership of Aung San Suu Kyi gave hope to the Burmese people and the international community that Myanmar started its transition from a military dictatorship to full democracy.
However, the international community’s hopes never came to fruition – Myanmar never became anything more than a hybrid regime, certainly not a free society many have expected. The article will open up with the discussion of the military leverage in Myanmar after NLD’s rise to power, as well as Myanmar’s failures to consolidate democratic power and move from being a hybrid regime to a full democracy. The discussion on the role of military conglomerates and the threat that privatisation posed to them will follow.
To understand why Myanmar’s democratic ambitions never realised, it is important to analyse the relationships between key stakeholders in Myanmar society. The most powerful stakeholder has always been the military. Even after 50 years of military dictatorship, Tatmadaw, Myanmar’s military, has controlled the transition process in the late-1990s and early-2000s (Nilsen, 2013). Controlling the transition process meant that the military was able to leave considerable leverage for itself, even if the nominal power was transferred to a civilian government. Traces of such leverage are seen in the 2008 Myanmar constitution. Article 109b of the Constitution reserves 110 seats in Pyuithu Hluttaw, the lower chamber of the Parliament, to appointed members of the military; Article 141b of the Constitution reserves 56 seats in Amyotha Hluttaw, the upper chamber, to appointed members of the military (2008 Constitution). This gives the military a quarter of unelected members of the parliament that have the same mandate as those who were elected by the people.
The military may have considerably scaled down but it continues to yield enormous power. The 2008 constitution gives the military a dominant role, and the armed forces are keen to use it for their advantage and influences policies within Myanmar. The constitution gives the military broad powers to act in situations that they consider to be a major constitutional crisis, as well as compromises the system of checks and balances, as the President has the authority to appoint the Chief Justice of the Supreme Court (Singh, 2013). Article 299b sections i-ii state that, while the President must submit the nomination to Pyuithu Hluttaw, the lower chamber has no right to reject the nomination unless it does not meet age limits or lacks sufficient experience in law (2008 Constitution).
Myanmar insofar has failed to complete crucial steps of the democratisation process outlined in Rustow’s “Transitions to Democracy: Toward a Dynamic Model”. First of all, the Background Condition was rather weak. Rustow describes national unity as the single most important background condition for launching the genesis of democracy (Rustow, 1970). However, Myanmar is a country of several ethnic groups with several secessionists and local nationalist movement entangling the country in decades-long processes. Such unconscious nationalism, which Rustow claims to be essential, is therefore virtually impossible. The second, the Preparatory Phase, had its difficulties, as well. As Rustow says, “a country is likely to attain democracy not by copying constitutional laws (…) but rather by honestly facing up to its particular conflicts and by devising or adapting effective procedures for their accommodation” (Rustow, 1970, p. 354). During this phase in Myanmar, several local crises have re-erupted, particularly the Kachin conflict and the Rohingya crisis. The crucial failure of Myanmar’s democratisation, however, occurred during the Habituation Phase. Rustow argues that democracy is a competition, and in such competition, those who can rationalise their commitment to democracy, or especially those who wholeheartedly believe in democracy would win (Rustow,1970). By leaving non-democratic leverage inside Myanmar’s politics for themselves, the military showed that they have no regard for democracy and are not planning to genuinely assimilate with it. This absence of commitment did not serve them well in Myanmar’s democratic elections, in which the military has consistently scored abysmal results. This meant that the military was on the verge of having their power diminished, even though the constitution provided the last resort for the military’s foothold within the country.
Such leverage of the military, as well as failures during key steps of the democratisation process, meant that Myanmar’s transition to a full democracy was jeopardised from its inception and would never be completed. The uprising of the military and the military coup that happened in 2021 was simply a question of time.
One must notice that one of the domino effects after modernisation is the role of the military drastically side-lined in the governance of the state. It is clear that the democratic transition engaged by the National League for Democracy (NLD) was not to the liking of the military clan, especially after the 2020 November general elections. Aung San Suu Ki’s party tried to compensate decades of military authoritarianism by opening up its economy to privatisation and foreign investments. It also re-adjusted the government’s budget by reducing public rents to the defence sector. Despite no official documents stating the part of the GDP’s allocations to the defence sector, cross-checking several sources have shown that the percentage evolved from 40% of the annual budget in 1988, at the beginning of the military rule, to 26.2% in 2018 (World Bank, 2020). The reduction of rents allocated to the military has undeniably modified their incentive in sharing power with more democratic institutions. The NLD has taken serious actions that thwarted the military. For the first time, in 2020, the parliament refused an additional budget request from the military of up to 7 million US dollars. This was taken as a confrontation by the military power which undoubtedly left them with a bitter taste. Thus, in a democratic transition, bodies need to distribute power proportionally to ensure stability and install an effective rule of law that would protect the emerging democracy and its citizens (Hartzell and Hoddie, 2020).
The hybrid regime that has characterised Myanmar for the past ten years has slowly split the trust deal signed by the pro-democratic movement and the military power.
As Bell et al. suggest in their much-acclaimed 2018 report ‘’Military Power-Sharing and Inclusion in Peace Processes’’, ‘military power-sharing also often means that militaries are expanded at a point where they should be downsized, and their central control can become more diffuse as the price of a formal state monopoly on the use of force, creating risks if the peace process breaks down’ (Bell et al., 2018).
Without a doubt, the economic interests of the Tatmadaw have paid the price of the democratic transition. Even though democracy reallocates de jure power to poorer agents, richer segments of society, in other words, the military that ruled Myanmar for decades, can take other actions to offset this by increasing their de facto power (Acemoglu et al., 2015). To do so, the rich elite has the advantage of already being empowered by the distribution of income in the democratic transition, contrary to the majority of the population. Therefore, the elite can capture the political system by pursuing investments, increasing their de facto power (Acemoglu et al., 2008). Indeed, the military, or namely the Tatmadaw have been and are key players in the Burmese economy. It governs large business interests in textiles, medical supplies, beer breweries, telecommunications or hotels.
The two main military conglomerates that rule over Myanmar’s economy are the Myanmar Economic Corporation (MEC) and the Myanmar Economic Holdings Limited (MEHL), both held mainly by Senior general Min Aung Hlaing and his family. This private military-owned duopoly detains the most profitable parts of the economy. ‘They benefited greatly from privatisation efforts in the 1990s and 2000s by picking up entities at fire sale prices’ (Meyer, 2021). It is under which that Min Aung Hlaing installed its leadership by erecting these two firms with the theft of public assets and corruption. These businesses have expanded their expertise by controlling a large panel of construction projects, claiming contracts and dealing directly with foreign investments, making it a cornerstone of Myanmar’s economy. The following figure proves that the two conglomerates operate directly with foreign companies in joint ventures on all sorts of businesses to control the local market without taking the risk of seeing competition infiltrating Myanmar’s market.
One of the examples that strikes the most is the beer business. In 2015, the MEHL tried to acquire the 55% of shares missing for total control of Myanmar Brewery Limited, responsible at the time of 2/3 of the national beer market. Eventually, the MEHL could only conserve their 45% in a joint venture with the Japanese group Kirin Company. This familial empire absorbed shares and the power that goes with it. In that case, the search for expansion comes at a pivotal time for the economic health of MEHL. Many multinationals such as Heineken International and Carlsberg Group have been able to enter the Burmese market in recent years due to the pro-democracy government’s free trade and competition policy. The Tatmadaw felt that its monopoly was being threatened by economic openness, capitalisation and competition, a direct consequence of the democratic transition launched by the NLD. In fact, it was not in their interest to accept fair rivalries from foreign or local businesses.
The economic openness of Myanmar can be illustrated by the import-export rate below, showing rapid and exponential growth of external trades.
Combining the failures of Myanmar’s democratic consolidation during Rustow’s key steps of the democratisation process with some personal business interests that have been threatened by the NLD’s wish to economically open Myanmar, it is certain that it pushed the Tatmadaw to act and try to re-establish an authoritarian regime.
Acemoglu, D. Johnson, S. Robinson, J. A. Yared, P. ‘Income and Democracy’. American Economic Review. Vol. 98, no. 3, pp. 808-842. 2008.
Acemoglu, D. Naidu, S. Restrepo, P. Robinson, J. A. ‘Chapter 21 : Democracy, Redistribution, and Inequality’ in Handbook of Income Distribution. Volume 2B. North Holland. 2015.
Bell, C. Gluckstein, S. Forster, R. Pospisil, J. ‘PA-X Report : Power-Sharing Series. Military Power-Sharing and Inclusion in Peace Processes’. Political Settlements Research Programme, University of Edinburgh. 2018.
Constitution of the Republic of the Union of Myanmar, 2008.
Hartzell, C.A. Hoddie, M. ‘4 – Art of the Possible: Power Sharing, Democratic Transition, and Democratization in Post-Civil War States’ in Power Sharing and Democracy in Post-Civil War States : The Art of Possible. pp. 74-92. Cambridge University Press. 2020.
Meyer, C. ‘Coup puts Myanmar’s crippling military capitalism in the spotlight’. Arab News. April 14, 2021. Available at https://arab.news/z2w9s
Nilsen, M. 2013. “Will democracy bring peace to Myanmar?” International Area Studies Review 16 (2): 115-141.
Rustow, D. 1970 ” Transitions to Democracy: Toward a Dynamic Model.” Comparative Politics 2 (3): 337-363.
Singh, Udai Bhanu. 2013. “Do the Changes in Myanmar Signify a Real Transition?” Strategic Analysis 37 (1): 101-104.
Stokke K., Soe Myint Aung. 2020. “Transition to Democracy or Hybrid Regime? The Dynamics and Outcomes of Democratization in Myanmar.” The European Journal of Development Research 32: 274–293.
World Bank ‘The Republic of the Union of Myanmar Public Expenditure and Financial Accountability (PEFA) Assessment Report 2020. PEFA Secretariat, World Bank Group. March 6, 2020.
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