Business interests of Myanmar’s rogue army are why it is loath to allow civilian control and democracy

There is a saying in Myanmar that you “can touch the hair bun on top of my head, but don’t you dare touch the wallet tucked away at my waist”. When the country's all-powerful military controls a vast business empire, 'touching the wallet' can lead to a military coup.

In Myanmar, the two big business conglomerates - namely - Myanmar Economic Corporation (MEC) and Myanmar Economic Holding Ltd (MEHL) are military-owned. They in turn used the privatisation process to grab publicly-owned enterprises at fire-sale prices, in the decades leading up to 2011's political reforms. Military leaders and the associates of military leaders have also grabbed licenses, land and economic concessions.

Myanmar's military-owned conglomerates control businesses and investments in sectors ranging from beer, tobacco and consumables to mines, mills, tourism, property development and telecommunications. From SIM cards to beer, from skydiving to jade mining, there are few areas of Myanmar’s economy that escape the long arm of the country's military, the Tatmadaw.

The United Nations Fact-Finding Mission, set up in the wake of the Rohingya crackdown, detailed the military’s business interests in a 110-page report that was published in August 2019. The report laid bare the extent of the armed forces’ involvement in the economy – exposing 106 MEHL and MEC-owned businesses as well as 27 close affiliates to the military. The Tatmadaw’s web of commercial interests enabled it to “insulate itself from accountability and oversight,” the UN said. “Through controlling its own business empire, the Tatmadaw can evade the accountability and oversight that normally arise from civilian oversight of military budgets.”

“It’s quite unique when you have a battalion that’s on the front lines and they are shareholders of MEHL,” Montse Ferrer, the business and human rights adviser at Amnesty International, told an international publication. The military is able to use funds from business to support military units, including those committing genocide, and it meant they were not reliant on the defence budget allocation from parliament. Amnesty International published a report last year which estimated that the military enjoyed dividends of some $18 billion from MEHL alone during the 20 years until 2011.

The first National League for Democracy (NLD) government (2015-2020) was reluctant to directly or decisively target the interests of the military, although its opening of key sectors to competition and investment acted as a counterweight. However, in November 2018 a NLD spokesperson pointed to the military domination of key parts of the economy and stated that the government bureaucracy - historically dominated by retired military personnel - was a major stumbling block to progress and would be an important target for reform after the 2020 election. That could not happen - to clip the business interests of military - as the second NLD government was overthrown in a military coup on Feb. 1, just before the first meeting of the newly elected parliament.

Peaceful activists demanding the restoration of the elected government confronted a ruthless military crackdown. “Today it was the bloodiest day since the coup happened on Feb. 1. We have today — only today — 38 people died. We have now more than over 50 people died since the coup started and more have been wounded" the U.N. special envoy for Myanmar, Christine Schraner Burgener, told reporters at U.N. headquarters on Wednesday (March 3).

The United Nations Security Council (UNSC) issued a statement on Feb. 4, condemning Myanmar’s coup d'état and expressing support for the country’s “democratic transition.” The statement also called for the release of State Counselor Aung San Suu Kyi, President Win Myint, and all others arrested during the military’s seizure of power on February 1.

“The hope they have placed in the United Nations and its membership is waning and I have heard directly the desperate pleas – from mothers, students and the elderly. I receive every day around 2,000 messages, for international action to reverse a clear assault on the will of the people of Myanmar and democratic principles” Burgener warned on Friday, just before the UNSC is set to meet for the second time behind closed doors. She is hinting at the veto power of China and Russia to stymie any possible UNSC action against the military regime.

The US had meanwhile condemned the Wednesday's violence and said it was 'appalled and revulsed' by it. Myanmar’s military rulers attempted to move about $1 billion held at the Federal Reserve Bank of New York days after seizing power on Feb. 1, prompting U.S. officials to put a freeze on the funds, according to people familiar with the matter. On February 11, 2021, in one of its inaugural foreign policy actions since taking office, the Biden Administration authorized new sanctions and export-control restrictions on Myanmar in response to the military’s coup.

India, the world's largest democracy and a neighbouring country, was nuanced in its response, presumably to protect its own security interests in the North-East. For example, Myanmar helped India conduct joint operations inside its sovereign territory to contain insurgency in the North-East in June 2015 against insurgents belonging to the National Socialist Council of Nagaland-Khaplang (NSCN-K). Therefore, India’s relationship with Myanmar is unique insofar as India has demonstrated its capacity to work with both a military regime and as well as a democratically-elected leader.

Another Asian giant and a neighbouring country, China has a growing economic clout and geopolitical interests in Myanmar. Beijing is also a supplier of arms and military equipment to several insurgent groups in the country, some of which carry out activities inside India also. Even though the Tatmadaw has a 'blow hot and cold' relationship with Beijing, China is likely to veto any UNSC actions against the military regime.

Ironically, many business groups - for whom profits is the only bottom line - have donned the role of defenders of human rights, a role abandoned by many sovereigns. Major western business groups, namely European, American, British, Italian, and French chambers of commerce, rejected the military regime’s invitation to a meet on March 4. However, some Asian business groups from countries like Thailand, Hong Kong, and China have not expressed any such concerns.

Australian business group AustCham Myanmar said on Wednesday it has “serious concern over the increasing use of violence against the people campaigning for a return to democratic Government in Myanmar.” Japanese beer giant Kirin has exited its tie-up with MEC since the coup. More than 160 companies, 115 local and 47 international including multinational firms such as Coca-Cola, Facebook, Telenor and Heineken, signed a joint statement to express “growing and deep concern over the developments in Myanmar since the declaration of a state of emergency on 1st February.”

( V Venkateswara Rao is an alumnus of IIM, Ahmedabad, and a retired corporate professional.)