Daw Aung San Suu Kyi’s Gov­ern­ment in Myan­mar has reached its first an­niver­sary.

Norway-Asia Business Review - - Contents - LARRY JAGAN

This month marks the first an­niver­sary of Aung San Suu Kyi’s gov­ern­ment com­ing to power. The eu­pho­ria that greeted her Na­tional League for Democ­racy’s over­whelm­ing elec­toral vic­tory in Novem­ber 2015 has waned sub­stan­tially, but the grass­roots sup­port for the gov­ern­ment has not dis­si­pated – at least not yet.

“Ex­pec­ta­tions were too high, partly be­cause the ex­tent of the vic­tory sur­passed even the best pre­dic­tions,” said Zeya Thu a po­lit­i­cal com­men­ta­tor with the Voice mag­a­zine in Yan­gon. And while the hoped for changed has not even­tu­ated, no one wants a re­turn to au­thor­i­tar­ian rule – not even the army it­self, he added.

When the new NLD gov­ern­ment as­sumed of­fice at the end of March last year their backs were up against the wall – with the mil­i­tary and former rulers in the Union Sol­i­dar­ity Devel­op­ment party ex­pect­ing the Lady – as she is com­monly re­ferred to here – to fail. “I give her six months, a year at the out­side,” said sev­eral min­is­ters in the pre­vi­ous regime. And their ob­struc­tion­ist ap­proach to the hand-over of power did not help. “We didn’t know whether we would be al­lowed [by the mil­i­tary] to take power right up un­til the day be­fore the new pres­i­dent was sworn in,” a gov­ern­ment insider told me at the time.

The tran­si­tion pe­riod – the six months be­tween Novem­ber and March – was fraught, with the out-go­ing team de­lib­er­ately pre­vent­ing gov­ern­ment of­fi­cials from hand­ing over files and pol­icy pa­pers to the NLD team. They even banned top gov­ern­ment civil ser­vants from talk­ing to mem­bers of the in­com­ing tran­si­tion team. In the mid­dle of March hun­dreds of boxes of files and doc­u­ments were sud­denly re­leased, giv­ing the NLD no time to read them and try to pre­pare poli­cies for the new gov­ern­ment. Some files and in­for­ma­tion have still not been re­leased, a gov­ern­ment insider told me re­cently.

Twelve months on, the gov­ern­ment is still there. But there seems lit­tle to show for the last year of angst and ef­fort. But that is a su­per­fi­cial as­sess­ment of what Aung San Suu Kyi and her gov­ern­ment has achieved. De­spite the limited re­sources at their dis­posal, when the NLD took of­fice, the ma­chin­ery of gov­ern­ment has kept moving. It has been a strug­gle for the gov­ern­ment to keep the coun­try sol­vent – de­spite some sub­stan­tial aid pack­ages – from for­eign donors, the ADB, IMF and World Bank. And made all the more dif­fi­cult by the enor­mous drop in for­eign di­rect in­vest­ment.

In the last few months of his regime, Thein Sein’s ad­min­is­tra­tion’s spending vir­tu­ally bankrupted the gov­ern­ment, min­is­ters over­spent the budget by three fold, es­pe­cially as a re­sult af­ter the gov­ern­ment’s un­seemly spending spree in March. The budget deficit rose as­tro­nom­i­cally to 4.6% of GDP (from 1%). They blew out the cur­rent ac­count. And left the new gov­ern­ment with a crip­pling li­a­bil­ity – a hastily ar­ranged and agreed loan from China for $ US 300 mil­lion at 4.5% in­ter­est: with the ex­change rate fall­ing over the last year the value of this loan has ap­pre­ci­ated enor­mously.

So to keep the gov­ern­ment on track alone was a her­culean task. But at the same time Aung San Suu Kyi had a strate­gic vi­sion for the fu­ture, un­like her pre­de­ces­sors. She was con­cerned to make the in­sti­tu­tions of gov­ern­ment trans­par­ent and sta­ble. Much time was spent be­hind the scenes on pub­lic ser­vice re­form. Though this was some­thing ini­ti­ated by the pre­vi­ous gov­ern­ment, the NLD plans are much more ex­ten­sive and far reach­ing. Al­ready hun­dreds of new civil ser­vants have been re­cruited from amongst the univer­sity grad­u­ates to fill lower man­age­ment po­si­tions. This ‘new blood’ will move up the bu­reau­cracy bring­ing a fresh mind­set and a much­needed prob­lem solv­ing ap­proach to gov­ern­ment ad­min­is­tra­tion.

“The top lay­ers of the bu­reau­cracy are the prob­lem,” said Han­thar Myint a lead­ing mem­ber of the NLD, and head of the party’s eco­nomic com­mit­tee. When Aung San Suu Kyi first took of­fice she opted to pur­sue a pol­icy of sta­bil­ity and con­ti­nu­ity for the sake of the coun­try. “The Lady knows the prob­lems in the pub­lic ser­vice and the bottle necks in the bu­reau­cracy, but de­cided not to challenge them too soon,” Han­thar Myint ex­plained to me months af­ter the NLD gov­ern­ment took of­fice.

But “let­ting sleep­ing dogs lie” maybe about to end. The top brass in the pub­lic ser­vice are likely to be axed in the com­ing year – many will be al­lowed to re­tire and oth­ers made re­dun­dant. “A ma­jor shake-up is in the pipe­line for these guys,” said a se­nior mem­ber of the

gov­ern­ment on con­di­tion of anonymity. “But ev­ery­thing will be done ac­cord­ing to the law,” he stressed – there will be no ar­bi­trary dis­missals.

One of Aung San Suu Kyi’s top pri­or­i­ties since tak­ing of­fice has been how to or­ga­nize the gov­ern­ment while build­ing trust. “She is very strate­gic; plac­ing trusted peo­ple in key po­si­tions,” said Tin Maung Than, an aca­demic, work­ing on pub­lic ser­vice re­form and ad­vis­ing the Man­dalay Chief Min­is­ter, Dr Zaw Myint Maung. “Na­tional unity is the new ban­ner. It’s a di­vided so­ci­ety so stress­ing hu­man rights and democ­racy will only heighten dis­unity and lead to greater in­sta­bil­ity,” he added. So much of the Lady’s ef­forts and strat­egy have been in­tended to lay the foun­da­tions for sta­bil­ity that will help en­sure that fu­ture demo­cratic change will be grounded and ir­re­versible.

The big­gest prob­lem fac­ing the gov­ern­ment, when Aung San Suu Kyi took of­fice was the army. The mil­i­tary’s attitude to civil­ian, pro-democ­racy lead­ers was clear – they would de­fend the con­sti­tu­tion to the end. So for the time be­ing the NLD had to put con­sti­tu­tional change on the back burner. This was made clear to the Lady in meet­ings with the Com­man­der-in-Chief, Se­nior Gen­eral Min Aung Hlaing be­fore she took of­fice, and the party – with a few notable ex­cep­tions – have ad­hered to this pol­icy.

But with the mil­i­tary con­tin­u­ing to play a ma­jor role in run­ning the coun­try, Aung San Suu Kyi had to find a way to work with them. The mil­i­tary con­trols three min­istries – home af­fairs, de­fense and border af­fairs – and through that con­trols much of the coun­try’s grass­roots gov­ern­ment ad­min­is­tra­tion – this is the re­spon­si­bil­ity of the Gov­ern­ment Ad­min­is­tra­tion De­part­ment (GAD), which is un­der the in­te­rior min­istry. The mil­i­tary MPs, who make up 25 per­cent of the par­lia­ment, are a con­stant re­minder to the NLD, that the army is watch­ing the gov­ern­ment closely. Be­cause the NLD’s vic­tory was so over­whelm­ing, the army is ef­fec­tively the main op­po­si­tion in par­lia­ment.

With the tense re­la­tions be­tween the coun­try’s top two lead­ers – the civil­ian and mil­i­tary com­man­ders -- at the start of the new gov­ern­ment a year ago, build­ing trust be­tween them was a key is­sue. While their re­la­tion­ship since then has been far from smooth, they have de­vel­oped a work­ing re­la­tion­ship. They may not like each, and they may not fully trust each other, but they un­der­stand that they need each other, said a former se­nior mil­i­tary of­fi­cer. Al­though ar­eas of ten­sion re­main – the peace process, se­cu­rity op­er­a­tions in Rakhine and for­eign re­la­tions, es­pe­cially with China and the US – there seems to be a func­tion­ing re­la­tion­ship be­tween them now, that was not the case a year ago. “Co­hab­i­ta­tion be­tween Aung San Suu Kyi and Min Aung Hlaing is the only way to move the coun­try for­ward,” said Zeya Thu of Voice mag­a­zine.

The big­gest do­mes­tic crit­i­cism lev­eled at Aung San Suu Kyi and her gov­ern­ment has been the fail­ure to push eco­nomic devel­op­ment and re­forms. Busi­ness­men are in­creas­ingly frus­trated by the gov­ern­ment’s ap­par­ent lack of con­cern about the econ­omy and fail­ure to of­fer di­rec­tion. “We have been wait­ing a year for some signs that the gov­ern­ment ap­pre­ci­ate the im­por­tance of the busi­ness sec­tor, are lis­ten­ing to our con­cerns, and have poli­cies, plans and a strat­egy,” said K.K. Hlaing, a prom­i­nent Myan­mar busi­ness­man and po­lit­i­cal com­men­ta­tor.

Re­cently dur­ing cel­e­bra­tions to mark in­ter­na­tional women’s day, Aung San Suu Kyi ap­pealed for pa­tience – as one year in of­fice is a short time. Un­der the cir­cum­stances, it is in fact too brief a pe­riod for the gov­ern­ment to boast great suc­cesses, as the Lady’s pri­mary con­cern was to lay the foun­da­tions for sus­tain­able devel­op­ment and de­moc­ra­ti­za­tion. “The gov­ern­ment is com­mit­ted to eco­nomic re­form,” Sean Tur­nell an Aus­tralian aca­demic and ad­vi­sor to the fi­nance min­istry told NABR. “That means lib­er­al­iza­tion, a free mar­ket, open trade and good gov­er­nance.”

The foun­da­tions for this and de­tailed poli­cies are in the pipe­line and likely to be an­nounced in the next few months. “We des­per­ately need to hear the gov­ern­ment’s de­tailed eco­nomic pol­icy, its fail­ure to an­nounce it has limited eco­nomic ac­tiv­ity in the last twelve months,” said Sy Win a prom­i­nent Myan­mar busi­ness­man. “But nev­er­the­less the fu­ture is very bright.”

At the start of the sec­ond year of Aung San Suu Kyi’s gov­ern­ment, there are mixed feel­ings about the achieve­ments of the past twelve months. What is cer­tain is that the foun­da­tions were laid for an eco­nomic take off in the com­ing year. “For­eign in­vest­ment and eco­nomic devel­op­ment will boom in the next six months,” the fi­nance min­is­ter Kyaw Win as­sured busi­ness­men re­cently. More trans­parency and ac­count­abil­ity have been es­tab­lished.

“There’s been a re­mark­able de­cline in cor­rup­tion, as a re­sult of the Lady’s lead,” said Luc de Waegh, se­nior ad­vi­sor with Roland Berger in Myan­mar. But while ex­pec­ta­tions may have been tem­pered, the gov­ern­ment is go­ing to have to de­liver more sub­stan­tial and con­crete re­sults in the next twelve months. The bye-elec­tions in April will be the first test of the gov­ern­ment’s con­tin­ued pop­u­lar­ity. Al­though there only 19 seats be­ing con­tested, the re­sult will have an im­pact on the NLD, said a se­nior mem­ber of the party and a busi­ness­man, Ye Min Oo. “What­ever the re­sult, it will send sig­nals that the party lead­er­ship will not be able to ig­nore.”

PHOTO: ISTOCKPHOTO

First An­niver­sary of Daw Aung San Suu Kyi’s Gov­ern­ment

PHOTO: MYAN­MAR MIN­ISTRY OF DE­FENCE

Above left: Daw Aung San Suu Kyi be­fore the 2015 elec­tions. Above: Daw Aung San Suu Kyi with eth­nic lead­ers at the Pan­g­long peace sum­mit in Fe­bru­ary 2017.

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