Crony sponsorship is a political trap
Published on Tuesday, 01 April 2014 20:02
Former military dictator Ne Win was an expert at betting on horse races. He developed a strategy he called 'four cuts' which he then applied ruthlessly to eradicate his enemies.
Former military dictator Ne Win was an expert at betting on horse races. He developed a strategy he called 'four cuts' which he then applied ruthlessly to eradicate his enemies.
In short, the strategy involved cutting off provisions, finances, information and public relations to his political enemies. It was a form of psychological warfare that the military used to stamp out the Burma Communist Party and the Karen National Union from 1965 to 1983, once the two strongest insurgencies in Burma. It was effective, ruthless and it worked.
Today political activists and parties are also subjected to these tactics, albeit in a more indirect way. Despite the government's democratic transition, different versions of Ne Win's four cuts can be witnessed under the current administration.
Crony companies play a leading role in using this strategy. The idea that money talks was indoctrinated among politicians who are in need of money and finances to win public support.
Many politicians and parties in financial difficulties turn to crony companies who are looking to finance or help parties in return for support or a blind eye on their business dealings. Those who do not want to be influenced by cronies, must turn to asking for aid from international organisations.
Those privileged companies, many with connections to the former military junta, appear to be buying public support by sponsoring political parties and individuals as well as buying into private media companies.
While this is not the same hard-handed approach experienced under the dictatorship, it is a new form of indirect control that is much more pervasive and dangerous.
SHWE THAN LWIN COMPANY
Crony ompanies such as Shwe Than Lwin keep on taking advantage of the current reform climate to control politicians and influence the media. As well as owning Sky Net, the company has now bought Democracy Today, which it publishes at a subsidised rate making it hard for independent outlets to compete.
Kyaw Win, the owner of Shwe Than Lwin, has friendly ties with senior figures in the previous military regime and has received many favours. Under the present government, SkyNet broadcasting often enjoys the same status with as state-run broadcasting.
He is also a friend to Soe Thein, a Minister at the President's Office, during whose term in the Ministry of Industry (and as a chairman of Myanmar Investment Commission) Kyaw Win got his license to produce 'restricted goods' such as beer and cigarettes.
He was also exempted from paying Ks 18 million (US$ 18,750) in monthly rent for the 926-acre Sittaung paper factory when it did not turn a profit. He was also given a lease on a sugar factory of over 105 acres paying an insignificant Ks 2.5 million (US$ 2,604) in rental fees.
On the other hand Shwe Than Lwin has built a media empire comprising of SkyNet and Shwe FM with tax exemptions from the Ministry of Information for just three years. In sharing the profits during the early years, the state received only four percent of interest while Shwe Than Lwin enjoyed 96 percent. The majority of employees engaged in Sky Net are retired army officers.
The worst part is Shwe Than Lwin's tax avoidance. A total of 20 companies under single ownership (as far as we know) including the company bearing the name 'Shwe Than Lwin' are not included in the list of top 500 income tax payers announced in 2012-13 by Internal Revenue Department.
POLITICAL COMPROMISES
Three years ago, Shwe Than Lwin Company approached various political groups and politicians, including the National League for Democracy (NLD) and the 88 Generation Peace and Open Society.
Shwe Than Lwin — who owns SkyNet and Shwe FM — donated Ks 130 million (US$ 135,000) to the NLD's Education Network for 2012. The company also bought a sweater of Aung San Suu Kyi at an auction costing Ks 42.5 million (US$ 44,200).
The NLD also held its fund-raising music show at Shwe Htut Tin Ground owned by Shwe Than Lwin and the company paid Ks 58.8 million (US$ 61,000) for the painting of a guitar drawn by ex-political prisoners Min Ko Naing, Pyone Cho and Htay Kywe at a fund-raising music show.
One news source said that Shwe Than Lwin paid for refreshments for 5,000 people during three consecutive days at the silver jubilee of 1988 student protests, held in 2013.
While these contributions may be just a coincidence, such donations do not go unnoticed.
As for the 88 Generation Peace and Open Society, it becomes apparent that the ex-student group is strapped for finances as has to rely on foreign aid and charity from crony companies.
Zaw Win, a former politician, recently wrote an article entitled "politician for sale" for the News Watch journal. In that article, he unveiled financial problems in the 88's Generation Peace and Open society.
When billionaire George Soros, founder of the Open Society Foundation, came to Myanmar, he handed US$ 25,000 to Ko Ko Gyi, the ex-political prisoner and leader of the 88 student group. After accepting the money, Ko Ko Gyi kept quiet about it to other 88 Generation members. Questions surfaced whether the money had been accepted or not and he was forced to make an explanation. According to Zaw Win, under the excuse of 'unity' everyone has kept quiet about this incident.
The news of this deal did reach the media, but there were people who questioned the renaming of 88 Generation Peace and Open Society which is similar to the George Soros's Open Society Foundation (OSF).
To add fuel to suspicions, the wedding reception of Ko Ko Gyi will be held at the Sky Star hotel which is owned by Shwe Than Lwin Company. The question is why a politician chooses a Sky Star hotel, owned by a crony company, to celebrate his wedding. Those close to Ko Ko Gyi said that because it was cheap. But as far as I know, Sky Star Hotel is not among the list of cheap hotels. Was he offered a bargain? If so, giving special privileges, directly or indirectly, only means bribery.
That crony companies with connections to the most powerful and influential people in Myanmar are now approaching pro-democracy activists and politicians is not a good sign.
Some serve powerful people on one side and give bribes and stay close to the politicians on the other side.
THE CRONY TRAP
We can now say that some crony businesspersons have started making changes. They have been preparing to pay taxes and carry out corporate social responsibility. They are no longer enjoying special privileges. They have been trying to make their businesses become more transparent.
Shwe Than Lwin does not seem to be doing such kind of things. If Shwe Than Lwin Company says our information is wrong, we may have to debate with the company and the Internal Revenue Department. The best way is for Shwe Than Lwin and the Internal Revenue Department to hold a joint press conference like the one held by AGD Bank and reveal themselves to the public.
Political parties and politicians need to know about the crony trap. They also need to know that there are people in power still manipulating these companies for their own political and private interests.
The money given to political parties and politicians is incomparable to the money they are willing to waste like spending US$ 70 million at the casino or giving Ks 200 million to sleep with a prostitute.
The money they have obtained by stepping on the lives of people and enjoying special privileges under the military dictatorship is not clean. Their money cannot become clean by giving it to politicians.
Which 'Four Wrong Courses' will the politicians use to decide against the cronies after they get into power after accepting money, special bargains, funds and sponsorship? Will those who have directly or indirectly accepted bribes remain impartial?
FAR REMOVED
If we look at the speech delivered by President Thein Sein at parliament and the speech delivered by the Commander-in-Chief on Armed Forces Day, we can see how distant they are from the country's actual situation.
In effect, the army chief seemed to be saying that the military coups in 1962 and 1988 were right decisions. The country is deep in poverty and Myanmar became the poorest and lowest country in Southeast Asia as a result of the military coups. The speech ignored all past mistakes and appeared to hide the truth without. It also raised the possibility of Myanmar returning under military rule anytime.
Political parties and politicians have sailed through a difficult path. But we cannot say that they have arrived. The government is still a quasi-civilian government. We still do not have democracy or rights. The possibility of returning under military rule is very real.
The public must warn politicians — including the NLD leaders — not to join hands with the cronies or risk forever falling into the kind of traps used by the authoritarian regimes of the past.
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