YANGON: Myanmar’s military rulers, marching completely out of step with regional efforts to boost trade and investment, could soon face pressure from Southeast Asian allies to embrace political change, diplomats say.
Myanmar has been a troublesome partner in the Association of South East Asian Nations (ASEAN) ever since it joined in 1997, and its generals went a stage further last week by announcing a ban on all foreign trading firms, most of which are from ASEAN states.
The move, which Yangon said was aimed at protecting local businesses, has raised hackles in ASEAN, which is trying to ensure sustained growth by liberalising trade and investment.
Thailand’s Foreign Minister Surakiart Sathirathai brought up the issue with his counterpart Win Aung on Saturday and Thai officials said ASEAN would try to persuade Myanmar to reverse the decision.
They said Win Aung had replied that foreign trading firms would have to enter joint ventures with Myanmar companies if they wanted to continue operating.
Although ASEAN is still far from a collection of model open economies and sticks to a policy of non-interference in the affairs of member states, Myanmar’s increasingly introspective line is testing its patience, diplomats in Yangon say.
“A number of the firms are from ASEAN, especially Singapore,” said one. “It’s going to be taken as a very unfriendly act...another in a long string of insults to investors and traders. It hurts ASEAN’s investments — they don’t have a lot of spare money — and ASEAN’s reputation.”
Foreign businesses in Myanmar already face pressure from human rights groups who say their presence props up the military regime, and are hampered by offbeat economic policies which blend mysticism and communist-style central planning.
Foreign business people in Yangon warn the ban will cause imports of essentials such as medicines to dry up. Exports of Myanmar’s main agricultural produce, grains and pulses, will also suffer and jobs will inevitably be lost, they say.
Myanmar is already slipping down the ranks of the world’s poorest countries, but its ruling generals deny anything is wrong. They say frequent day-long power cuts are due to newly prosperous people buying electrical appliances. A slumping currency and near hyperinflation are blamed on speculators.
Shunned by the West, the generals value the legitimacy ASEAN membership confers, and clearly revelled in their role as hosts to a weekend meeting of the group’s finance ministers, even if their uniforms and medals looked curiously out of place among the sober business suits of visiting delegates.
Escorted to the meeting by scores of machinegun-wielding soldiers, military intelligence chief Lieutenant-General Khin Nyunt told ministers Myanmar’s economy was “vibrant” and should grow by more than six percent annually in the next five years.
But countries like Malaysia, Singapore and Thailand, which invested heavily when Myanmar began opening its economy in the early 1990s, are starting to see it as a burden which not only offers poor returns, but hurts ASEAN’s ties with Western countries pressing for change.—Reuters
