Analysis: Foreign investment a blessing and a curse for Burma

Burma will further open its doors to inward investment when President Thein Sein meets U.S. President Barack Obama at the White House later today. Whether that investment will benefit the people of Burma remains very much in doubt…

It's been a red letter year so far for Burma President Thein Sein, at least in some regards. In April, he received a controversial peace award from the International Crisis Group, bolstering his image of a democratizing and peace-seeking leader, despite vocal criticisms from human rights advocates. And now, the United States and the European Union seem to be in a race for who can flatter Thein Sein and his government and invest in Burma faster.

Burma President Thein Sein. Pic: AP.

The European Union recently dropped all sanctions except for an arms embargo, paving the way for potential investment and development projects in the country. The United States has suspended, but not officially ended, sanctions and President Barack Obama and his administration have demonstrated an eagerness to establish a presence in the Burmese market, as well as those in other developing Southeast Asian countries. Furthermore, Thein Sein will meet Barack Obama at the White House later today, the first visit by a Burma head of state in nearly 47 years.

A Bloomberg piece on American interests in Burma cited human rights' groups concerns that increased investment and trade will pave the way for continued abuses against Muslim communities in Burma. The Muslim Rohingya people have faced a slew of horrors since Buddhist-Muslim violence broke out in Rakhine state in June 2012.

But that does not even touch on the violence seen in the ethnic minority areas, such as Shan and Kachin states, where government troops are notoriously brutal in their aggression against civilians there.

Khin Omar, coordinator at Burma Partnership, spoke to both sides of the investment coin. Omar said that "there definitely is the potential for this to be a positive influence on Burma."

"To date, reforms that have taken place have benefitted the people, such as the currency stabilization, the release of some political prisoners, some loosening of press restrictions, and a lessening of conflict in some ethnic states," she said. "Hopefully with increased foreign investment and associated scrutiny, these reforms will continue."

Omar added, however, that investment maneuvers such as resource extraction projects have not only not benefitted the people who live in the areas where most of the goods are found, their lives are made worse by these agreements. Omar explained that oftentimes when an international company or government contracts for a project, part of the agreement is that the Burmese government will ensure security in the region.

"In general, the presence of the Burma Army in most cases correlates to an increase in human rights violations," she said.

Smoke billows from a burning mosque following ethnic unrest between Buddhists and Muslims in Meikhtila in March. Pic: AP.

Bloomberg reported that overtures have been made from the Office of the United States Trade Representative to give special access to the U.S. markets to Burma and Laos, two of the poorest countries in Asia.

It's difficult to not take a cynical view of this, especially after spending any amount of time in Southeast Asia. Countries such as Laos and Burma are exceptionally poor, and by a certain view, ripe for the exploiting. China has already made inroads into both, and we all know that the United States doesn't like to be seen as falling behind China in any regard.

Nonetheless, foreign investment and development projects undoubtedly present opportunities for the local communities, if the governments will let them. A faster and more reliable Internet infrastructure could be a game changer in Burma, a fact I wrote about recently for the Democratic Voice of Burma. The distribution via lottery of SIM cards at an affordable $2 per card, as opposed to the outrageous $200 it has been in the past – will makes using mobile services more accessible for the average person in Burma. There are still obstacles, however – Omar points out that locals have told her that even if they were chosen to purchase a SIM card, they likely could not afford a phone.

But increased access to information and communication technologies, jobs, and educational opportunities provided by the opening up of this once hermetic country offer some reasons for cautious optimism.

"Investment… has the obvious potential, if done correctly, to lift millions of people out of poverty," Omar said. "Hopefully there is an emphasis on putting the new money into things like health care and education, as opposed to military hardware or the offshore accounts of military and government officials."

As seems to be the norm in Burma in recent years, reform and development always seem to have two faces. Increased availability of services may be futile for a time in the face of abject poverty; and political reform is not quite the triumph it's made out to be. It's true that political prisoners have been released, but still others continue to be jailed. Omar noted that four days before Thein Sein received the ICR peace award, a group of villagers in Arakan state were arrested for protesting the Shwe Gas Pipeline, and a few days after that, six people – a human rights activist among them – were arrested for protesting the Letpadung copper mine. To date, the activist and two farmers are still in custody, and are not permitted to see their lawyers or families.

Burma is ripe for progress, but it's difficult to not see the sinister at work there as well. The tide of investment is unlikely to turn back, which should be a boon to the people of Burma. And perhaps it will be over time, especially if human rights watchers and social activists continue to sound the alarm on the abuses still happening there.

Source: http://www.news.myanmaronlinecentre.com/2013/05/20/analysis-foreign-investment-a-blessing-and-a-curse-for-burma-3/