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Wednesday, April 4, 2012

EDITORIAL

Myanmar marching forward

The news from Myanmar continues to be positive. Parliamentary by-elections went ahead as scheduled, and despite some claims of vote irregularities, the results appear to be in line with most expectations. At the same time, the government is proceeding with economic reforms that could have even more widespread and powerful impacts.

Caution continues to be the watchword — progress on both fronts can be reversed — but there is reason to be optimistic. The rest of the world should work to ensure that there is no backsliding.

Landmark elections — the first in real vote in decades — were held to fill 45 seats in the 664-member assembly. The first vote for the assembly was held in 2010, after a new constitution had been approved by the public (a ballot that itself was the subject of considerable controversy).

But the number of parties allowed to contest the vote was restricted — the National League for Democracy (NLD) boycotted the vote — and 25 percent of the seats were reserved for the military. Not surprisingly, government parties were the overwhelming winners in that election. Last weekend's ballot was the first to include the NLD and offer the opposition a level playing field.

Preliminary results indicate that the NLD won 43 of the 45 seats it contested. (In one district, its candidate was disqualified, and in the other, the results are still uncertain.) The official results are expected later in the week, but even the state Election Commission confirmed that the National League for Democracy could claim victory and would lead the opposition bloc in the assembly. Official media in Myanmar said the NLD had won 40 of the 45 seats up for grabs. That is a promising development, as the NLD was protesting against election irregularities as late as last Friday.

It is a personal victory for Ms. Aung San Suu Kyi, leader of the NLD and Nobel Peace Prize laureate, who has spent most of the last 15 of the last 21 years under house arrest. She now goes from being one of the world's most famous prisoners of conscience to a parliamentary representative — she won a seat in the district in which she lives — and will head the parliamentary opposition. There is speculation that she may even claim a seat in the Cabinet.

Ms. Suu Kyi has said she hopes that "this will be the beginning of a new era" — as does the rest of the world. The key is whether the government will respect the results. Outsiders may well ask why the government would go through all of this and then merely overturn the outcome, but that has happened before.

In 1990, the government held an election that it expected to win and was stunned by an NLD landslide. It rejected that ballot and has ruled by brute force until now.

The difference today is that the government reserved enough seats in the Parliament to ensure its control. Despite its landslide, the opposition will only control 6 percent of assembly seats. But it is a worrisome development for the regime when an adviser to Myanmar's president, Mr. Thein Sein, concedes that the government was surprised at the size of the NLD victory. If that surprise turns to embarrassment, then trouble could follow.

While all eyes were focused on Myanmar's politics, equally important developments were taking place in the economic sphere. On April 1, Myanmar adopted a managed float for its currency, the kyat, which meant that the exchange rate for the currency immediate moved from the official rate of 6.4 to the dollar to 818 to the dollar.

The elimination of the more-than-100-to-1 discrepancy between official and black market exchange rates could transform Myanmar's economy. Not only will it shift the terms of trade to Myanmar's advantage, making its exports much more competitive, but it will squeeze corrupt officials who have exploited their connections for personal enrichment.

But a free and fair election and a currency realignment are just first steps. The country needs political and legal reform, the articulation and implementation of a sustainable economic development strategy, and the maturation of a democratic ethos within the society.

The military has operated with virtual impunity for decades and it will not be happy about surrendering its privileges.

With a per capita gross domestic product of $2.25 per day and extraordinary natural resources, Myanmar can rapidly develop. It needs partners, however, and they are lining up.

Japan is one of the key potential sources of investment funds. Japan is key not only because it has considerable amounts of money to invest, but because it has a long history of bilateral relations, and understands the strains that will develop as Myanmar modernizes. Japan should play that role with care, working with Myanmar to balance the influence of other nations that may not be as focused on the concerns of ordinary citizens and to ensure that the Myanmar government continues on the path of real and enduring reform.

Slow but steady improvement of its economy is a precondition of the Myanmar government staying on the reform path. It is cynical to say that the rehabilitation of Ms. Suu Kyi and the NLD is part of a larger national legitimization process, but that does not make the assertion untrue.

Friends of Myanmar must move in step with the government there, rewarding its progress — lifting sanctions and promoting investment — and punishing its transgressions. That is the only way to ensure that Myanmar keeps moving forward.



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