A taste of what’s ahead?

The other day, I watched a fascinating documentary, No place like home, on Al Jazeera’s 101 East about Cambodia’s growing pains, as development speeds up, often at the expense of the people.

Odds are, this is simply a taste of what Burma will face as investment in the country accelerates. News of land confiscation by huge conglomerates (Yuzana, Zaykabar, just to name a few) are (and have been) a dime a dozen for a long time. In fact, Zaykabar’s CEO, Khin Shwe, is sitting as a member of parliament.

Burma’s huge conglomerates remind me of the chaebols in South Korea (like Samsung and LG), because they curried privileges in the formative years to consolidate power and influence. Except in South Korea’s case, chaebols focused on intense manufacturing, whereas Burma’s ‘crony companies’ are focused on extractive industries (gas and gems). But all the same, they’re extending their reach to become jacks of all trades. For instance, 7-Eleven is partnering with Zaykabar to open stores throughout Burma.

Burma can learn from the mistakes of its peers in Southeast Asia, but it will be an uphill battle given the circumstances and conditions on the ground.

Burma simply doesn’t have the capacity or transparency to resolve many of these development issues. The government is focused on PR and cosmetic changes instead of addressing the causes. The national government has little power at the local level, meaning whatever lofty ideas it iterates to press and at parliament never see light. Any laws that attempt to address land usage and land ownership will fail because courts aren’t adequately buffered from influence that weakens their legitimacy. And accountability is just a buzzword.

It’s a sad and vicious cycle that I predict will pan out in more painful ways than one, as Burma gears up for the 2015 election.

A plan of the proposed Hanthawaddy Intl. Airport

In similar news, government officials announced plans to resurrect a project to construct an international airport midway between Pegu (Bago) and Rangoon, in anticipation of growing tourist numbers:

The Hanthawaddy International Airport project, located on a 9000-acre (3642-hectare) site about 77 kilometres (48 miles) north of Yangon near Bago, was first slated for development in the early 1990s. Work began in March 1994 but ceased in October 2003.

All this makes me question the government’s priorities. With an education system in shambles, mass underemployment, continued ethnic conflicts, and deep poverty, the government seems to be preparing itself for a cosmetic change to welcome tourist pockets, well-lined with cash.

This piece, comparing Burma’s and China’s approach to foreign investment, does give me the impression that some policymakers are trying to take a slow growth approach, to allow the country’s civilian institutions to mature before foreign investment picks up pace:

…the current steps show an extreme level of caution. This can be seen in two ways. First, unlike the current situation in China, foreign invested enterprises are treated dramatically differently than domestic enterprises. For example, a foreign invested enterprise cannot lease a building for a period greater than one year. For longer periods, foreign invested enterprises must rent land and build the related buildings at their own expense. The resulting lease is limited to an overall term of 60 years, at which time the building and land revert back to the government. Second, all foreign investment projects must be approved by the central government. Local governments are not permitted to grant such approvals. Many business terms such as the price of leased land must be approved by the central government, preventing private business people from negotiating their own terms.

However, it seems like a leap to say that this is to benefit the country’s people:

The central theme is that the government desires to increase GDP and to allow the benefits of such increase to accrue to the people rather than to government officials. Though FDI will be a part of such GDP growth, the government is still concerned about preventing foreign investors from obtaining an unfair advantage over the local people. For this reason, the government still insists on restrictive terms for foreign investment and still insists on remaining actively involved in investment decisions to “protect” the people and the assets of the country.

Protecting which subset of people? The poor masses or a select elite of cronies to allow them to secure a place in the country’s new order since they cannot compete with international firms?