"Reform in Myanmar: One Year On", crisisgroup

Reform in Myanmar: One Year On

Asia Briefing N°136 11 Apr 2012

Executive Summary

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One year into the new semi-civilian government, Myanmar has implemented a wide-ranging set of reforms as it embarks on a remarkable top-down transition from five decades of authoritarian rule. In an address to the nation on 1 March 2012 marking his first year in office, President Thein Sein made clear that the goal was to introduce “genuine democracy” and that there was still much more to be done. This ambitious agenda includes further democratic reform, healing bitter wounds of the past, rebuilding the economy and ensuring the rule of law, as well as respecting ethnic diversity and equality. The changes are real, but the challenges are complex and numerous. To consolidate and build on what has been achieved and increase the likelihood that benefits flow to all its citizens, Myanmar needs the international community to come closer, seeking opportunities for greater engagement rather than more reasons why sanctions should be sustained.

The by-elections held on 1 April represent a political watershed. Opposition leader Aung San Suu Kyi and her National League for Democracy returned to the formal political process and secured a landslide victory. Forty-three NLD representatives, including Aung San Suu Kyi herself, will now take up their seats in the national legislature. The NLD has become the largest opposition party. This does not alter the balance of power, given that only a small percentage of seats were contested, but it is of major symbolic importance, as it has the potential to inject greater dynamism into political life. The extent of the NLD victory may have alarmed some in the political establishment.

The speed and extent of these reforms has raised questions about how sustainable the process is. Any such program of major political change must inevitably face serious tests, but the broad consensus among the political elite on the need for fundamental change means that the risk of a reversal appears low; there is no coherent group of disaffected individuals with the power to undo the process.

Yet, there are other serious challenges. There is limited institutional and technical capacity to carry out detailed policy formulations and to implement some of the reform measures being adopted. This is acting as a brake on the process and means that citizens are slow to see the full impact of some of the changes. The pressures on the system are only likely to increase in the next two years as Myanmar hosts the South East Asia Games in 2013 and takes over the chairmanship of the Association of South East Asian Nations (ASEAN) in 2014.

Reforming the economy is another major issue. While vital and long overdue, there is a risk that making major policy changes in a context of unreliable data and weak economic institutions could create unintended economic shocks. Given the high levels of impoverishment and vulnerability, even a relatively minor shock has the potential to have a major impact on livelihoods. At a time when expectations are running high, and authoritarian controls on the population have been loosened, there would be a potential for unrest.

A third challenge is consolidating peace in ethnic areas. All but one of the ethnic armed groups have signed preliminary ceasefires with the government, a major achievement. Nevertheless, a sustainable peace will require a lot more work. No deal has yet been reached with one of the largest groups, the Kachin Independence Organisation, and serious clashes continue. The ceasefire agreements with the other groups remain fragile and could unravel unless progress is made in addressing the underlying political grievances. These are hugely difficult tasks, but a return to war in the borderlands has the potential to do great damage to the reform process and would be an enormous impediment to rebuilding the economy.

The reforms that have taken place appear not to have been driven primarily by external pressure, but rather by internal considerations. Now that major steps of the kind long called for by the West are being taken, it is incumbent on the international community and multilateral institutions to help ensure their success. There is much that the West, in particular, can do to provide political support, as well as much-needed advice and technical assistance. As the European Union (EU) approaches a key decision point in late April on whether to renew sanctions on Myanmar, the value of the coercive measures must be reconsidered.

The Myanmar government has gone extraordinarily far in putting aside old prejudices and reaching out to even the most strident of its critics domestically and internationally. The West should now make a commensurate effort to forge a new partnership. With the long-awaited reforms underway, there is no valid rationale for keeping sanctions in place. To do so would likely damage the process: undermining reformers and emboldening more conservative elements, rather than keeping up the pressure for further change.

Jakarta/Brussels, 11 April 2012