Understanding Myanmar

CFR Backgrounders, 12.06.2015
Beina Xu


After decades of political and economic isolation, in 2011, Myanmar's military government began to introduce gradual political, economic, and foreign policy reforms. The release of nearly two thousand political prisoners and the National League for Democracy's reengagement with the formal political process led to an easing of international pressure and a thawing relations with the United States, but concerns remain about the government's treatment of ethnic minorities, particularly that of its Rohingya Muslims, and the pace of constitutional reform.

Political History

A British colony for more than a century, Burma declared independence in 1948, a year after General Aung San, father of Daw Aung San Suu Kyi, was assassinated. The Union of Burma began as a parliamentary democracy like most of its other newly independent neighbors on the Indian subcontinent. Yet it was beset by ethnic strife from the start. Ethnic Burmans formed roughly two-thirds of its population; the remainder comprised more than a hundred ethnic groups, with Shan, Karen, Rakhine, and Mon among the largest, as well as significant Indian and Chinese populations.

Representative democracy lasted until the military coup of 1962, led by General U Ne Win. His party established a ruling council whose members were almost entirely drawn from the armed forces, and held power for the next twenty-six years. Ne Win instituted a new constitution in 1974 based on an isolationist policy with a socialist economic program that nationalized Burma's major enterprises.

The country's economic situation deteriorated rapidly as a result of Ne Win's policies, and a black-market economy soon took hold. By 1988, widespread corruption and food shortages led to mass protests, spearheaded by students. On August 8, 1988, the army cracked down on protestors, opening fire on dissidents and killing at least three thousand and displacing thousands more. Ne Win consequently resigned as chairman of his party, although he remained active behind the scenes until an even more repressive military junta took power in a coup in September 1988.

The United States imposed sanctions (PDF) in response to the junta's suppression of protests and detention of political prisoners in 1988. A year later, the new military regime changed the country's name from the Union of Burma to the Union of Myanmar, and the capital Rangoon was renamed Yangon. In 2005, the military government moved the administrative capital to the newly built city Naypyidaw. The junta argued that the name "Burma" was a vestige of the colonial era and favored the Burman ethnic majority, while "Myanmar" was more inclusive. Although official U.S. policy still refers to the country as Burma, President Barack Obama has on occasion called it Myanmar during state visits, and the distinction between names has often become a political issue.

During the 1988 protests, Daw Aung San Suu Kyi rose to prominence as the leader of the main opposition party, the National League for Democracy (NLD). She was detained in 1989, and spent more than fifteen years in detention until being released for the last time in 2010. In 1990, the junta held elections in which the NLD won 392 of 485 parliamentary seats, despite Suu Kyi's house arrest. The military government refused to acknowledge the results, imprisoned many NLD politicians, forced others into exile, and continued to clamp down on dissent. In 1991, Suu Kyi was awarded the Nobel Peace Prize while still under house arrest.

Saffron Revolution, Cyclone Nargis, and the 2010 Elections

In September 2007, widespread protests erupted after the military government unexpectedly removed fuel subsidies, triggering massive price hikes. The Saffron Revolution posed a challenge for the junta, as the participating monks—venerated in Myanmar's majority-Buddhist society—lent a degree of moral authority to the movement.

The regime's legitimacy suffered a further blow when its slow response and initial blockade of international aid efforts for the victims of Cyclone Nargis, which killed more than 140,000 people in 2008, led some Western leaders and rights groups to call for humanitarian intervention.

In part driven by international pressure and its own "seven-step roadmap," the junta announced that a referendum on a new constitution would take place in May 2008, followed by multiparty elections in 2010. According to the junta, the constitutional referendum won an overwhelming majority, but rights groups called the vote a fraud.

The military-backed Union Solidarity and Development Party declared a wide margin of victory in the 2010 general elections, though Suu Kyi and her NLD party boycotted the elections. In 2011, the military junta officially dissolved and established a civilian parliament, which appointed former army bureaucrat and then-prime minister Thein Sein as president. Many top officials in the new administration—including the president, two vice presidents, and speaker of the lower and upper houses of parliament—were former military officers, leading to concerns about continued military dominance.

Democratic and Economic Reforms

The new Thein Sein administration marked a period of reform and saw the return of international engagement. His government spearheaded a series of reforms, including the amnesty of most political prisoners, relaxation of censorship, establishment of the National Human Rights Commission, and efforts toward peace with ethnic rebel groups. In April 2012, Suu Kyi’s party agreed to compete in by-elections, held to fill vacancies between general elections; the NLD dominated, winning forty-four out of forty-six seats.

However, this election only filled a small percentage of seats in parliament: The NLD would control less than one-tenth of them. Under the 2008 Constitution, 25 percent of the parliament's seats are reserved for the military, and the military-backed USDP continues to control the vast number of elected seats, as well as the powerful defense, home affairs, and border affairs ministries. "By allowing the NLD to win a few seats—while ensuring that the military's favored party still controls parliament—the government is betting that it has done just enough to normalize relations with the West, get aid and investment, and still remain essentially in control," CFR's JoshuaKurlantzick writes.

President Thein Sein announced a second wave of economic reforms in mid-2012, vowing to reduce the government's role in sectors including energy, forestry, health care, finance, and telecommunications. A few months later, parliament passed a new foreign investment law that opened up overseas ownership of business ventures and offered tax breaks in a bid to improve its long-beleaguered economy. Myanmar's net inflow of foreign direct investment (FDI) increased from $900 million in 2010 to $2.3 billion in 2013, according to the World Bank. More recently, the government announced that FDI hit more than $8 billion in the first five months of fiscal year 2015.

As a result of these reforms, global powers began reengaging with Myanmar. The United States, European Union, Australia, and Japan dropped some economic sanctions, andmultinational companies began showing interest in investment in the country. In April 2012, British Prime Minister David Cameron became the first major Western leader to visit Myanmar in twenty years. The World Bank subsequently earmarked $245 million in credit and grant funding for the country, marking the first international lending to the nation in twenty-five years.

Evolution of U.S. Policy

The United States imposed initial sanctions on Myanmar after the 1988 military crackdown on protests, banning the export of financial services and freezing assets of certain institutions. Successive administrations intensified sanctions, including bans on investment and imports. In 2009, President Obama ushered in a new approach to U.S. relations with the country: Washington maintained sanctions, but indicated a willingness to engage in high-level dialogue with the ruling State Peace and Development Council (SPDC), including cooperation on international security issues such as nuclear nonproliferation and North Korean arms sales, according to a Congressional Research Service report (PDF).

Then Secretary of State Hillary Clinton made a 2011 visit to Myanmar on a goodwill mission, during which she met with President Thein Sein and Suu Kyi, boosted humanitarian aid, and announced that the United States would no longer block assistance from the International Monetary Fund and World Bank. In 2012, Washington announced further steps for cooperation, including the reestablishment of a USAID mission at its embassy in Yangon and easing the bans on the exportation of U.S. financial services and new investment. The administration also named its first U.S. ambassador to the country in twenty-two years.

U.S. relations with Myanmar further warmed with landmark visits by both President Obama to the former capital of Yangon in November 2012—the first time a sitting U.S. president visited the country—and by President Thein Sein to Washington in May 2013.

Thawing ties with Washington, along with the Obama's administration's pivot to Asia, has challenged Yangon's long-standing strategic and economic partnership with Beijing, and there is growing resistance within Myanmar to Chinese infrastructure investment, which remains the country's largest investor.  "China was taking over Myanmar economically and exploiting the country's rich natural resources—creating a 'national emergency,' that threatens the country's independence," writes Myanmar expert Bertil Lintner. "This—more than any high-minded ideological epiphany—appears to be what led Myanmar to reach out to the West, and, especially, China's main critic in the international community, the United States."

Continued Ethnic Strife

Myanmar's path toward democracy remains fraught by ethnic violence. In 2011, the Myanmar army launched a major offensive against the Kachin Independence Army, which is fighting for autonomy for ethnic Kachins, a predominantly Christian minority of roughly one million, or around 2 percent of the country's population, in Myanmar's north. The prolonged fighting has led to widespread displacements, and human rights groups have accused Myanmar's army of carrying out various human rights abuses in the region, including forced labor, rape, torture, use of child soldiers, and summary executions. In early 2015, fighting broke out in the northeast between the military and several minority militias, including the ethnic Kokang's Myanmar National Democratic Alliance Army, the Ta'ang National Liberation Army, and Arakan Army.

Muslim Rohingyas in the Rakhine State, situated on the western coast of the country, have also faced extensive persecution. In June 2012, at least two hundred people were killed and hundreds of thousands driven from their homes as a spate of violence erupted between ethnic Rakhine Buddhists and the Muslim Rohingya, who had been rendered stateless by the 1982 Citizenship Law. In a 2013 report, Human Rights Watch accused Burmese authorities of committing crimes against humanity in a campaign of ethnic cleansing against the Rohingya, whose population in Myanmar stands at around one million. The state continues to deny Rohingyas citizenship, considering them illegal immigrants from Bangladesh. Tens of thousands have fled Myanmar, seeking shelter in Bangladesh or save passage via human-smuggling boats to neighboring countries. Many of these countries directed their navies to refuse the refugees, leaving thousands stranded at sea. Myanmar refused to accept blame for the Rohingya's flight, threatening to boycott a summit in Thailand aimed at easing the crisis. Amid international pressure, Indonesia and Malaysia agreed in May 2015 to take in thousands of stranded migrants until they could be repatriated or resettled in a third country.

Suu Kyi has remained conspicuously silent throughout the violence. Some experts contend that addressing the plight of the Rohingya would not be politically expedient for Suu Kyi, as the country approaches national elections in November 2015. However, a spokesperson for Suu Kyi's party told reporters in June 2015 that the rights of the Rohingya should be protected, and that Naypyidaw should consider granting them citizenship. "Although this statement does not make up for Suu Kyi's continued silence, and it does not change the situation on the ground in Arakan State, it is a small step forward for the NLD," writes Kurlantzick.

The Troubled Way Forward

Despite Myanmar's encouraging reforms in recent years, experts point to setbacks as it approaches multiparty elections in 2015. In its 2015 World Report, Human Rights Watch said the country's reform process "experienced significant slowdowns and in some cases reversals of basic freedoms and democratic progress in 2014." The government continues to deflect calls for constitutional reform, and in February 2015, revoked temporary voting rights from the Rohingya following an outcry from Buddhist nationalists.

Analysts say the next year will stand as a critical test for Myanmar. The government faces cease-fire negotiations with armed ethnic groups and the first nationwide, multiparty elections since parliament first convened in 2010. President Obama, on a late2014 visit to the country, underscored continued U.S. engagement and urged President Thein Sein to pursue reforms. CFR's Kurlantzick says that a peaceful change in government would be a milestone for Myanmar, but new leadership alone will not be enough to address deeply entrenched problems.

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