The houses along Inya Road, the heart of Rangoon’s most expensive residential district, are the clearest displays of the money now sluicing through Burma’s largest city. Fortunes made selling jade and timber to the Chinese have been invested in huge homes bristling with satellite dishes. Undeveloped land here goes for $500 per square foot and upwards, Palm Beach prices, payable in cash only. Tay Za, Burma’s richest businessman, has five Ferraris parked in front of his house, each a different colour. The rumour is that all have fallen victim to Rangoon’s wretched roads and no local mechanic can fix them.
And then there is No 116. Laundry hangs across the crumbling porte-cochere and stray dogs wander through the overgrown garden which stretches down to Inya Lake. It was built by my great-grandmother, Daw Ma Ma, a self-made businesswoman who owned and ran cinemas across Burma in the 1940s and 1950s. It was a gorgeous house once, with glistening American cars lined up along the drive. But it hasn’t been that way for years and is now the subject of a vicious family dispute. One cousin is accused of selling it without permission and running off to America. The man who bought it says it’s his. And so it goes, the third and fourth generations scrabbling over a rotten inheritance, symbolic of the country’s ruined heart.
Burma has been one of the world’s basket cases for half a century, ever since the military seized control in 1962 and began marching it down the Burmese Path to Socialism. The generals took a country that had been one of the richest in Asia and turned it into the poorest. They did what bad dictatorships do — brutalise opponents, trash the economy and salt away their foreign accounts. It is extraordinary to think that in the early 1960s, Singapore sent its doctors and nurses to study in Rangoon. Now, it’s the Burmese generals who fly to Singapore when they are sick.
My mother is one of the thousands of Burmese who grudgingly left their country. In 1969, she came to live in Britain and married an Englishman. Her thinking, and that of many of the Burmese émigrés I have met over the years, was always that Burma was finished. The trauma of their departure and memories of what Burma had once been turned them into hardened pessimists. Not even Aung San Suu Kyi, the Nobel Prize-winning opposition leader, could give them hope. I often heard her dismissed as an egotist with no chance of ever changing Burma for good.
But suddenly things are changing. Hillary Clinton visited in early December, the first US Secretary of State to do so in 50 years. She met the President, Thein Sein, and Suu Kyi, and left encouraged by what she saw, promising to match Burma’s progress towards democracy with support, and perhaps an eventual easing of the economic sanctions that have burdened the country for years. Burma’s immigration posts and hotels are busier than they have been in years as politicians and businessmen from all over the world come to see if the changes are for real.
Burma after all, has much of what the world covets: 50 million untapped consumers living in a country three times the size of France, awash in natural gas, oil, timber, gems, rare earths and fertile agricultural land, and sights and beaches to excite the most jaded tourist. It is always exciting when a new market starts to emerge, but Burma seems a special case.
Speaking at an NGO forum in Rangoon in early December, Andrew Heyn, the British ambassador to Burma, said that he had just returned from London where he had spoken to the powerful Burma lobby. He had found them deeply cynical about the reported changes. They had seen it all before, they told him, the promises that Burma was on the path to democracy, the requests for the slackening of sanctions, and then the reversion back to the worst old ways of military rule. Burma had blown too many chances to be given another. At least not until Suu Kyi says so, and perhaps not even then. Mr Heyn had told the lobby that this time the changes seemed real and the optimism justified.
Britain’s opinion of Burma is vital because it reflects most closely the views of Suu Kyi, who for much of the world is Burma. Having lived in Britain for many years and been married to an Englishman, Michael Aris, Suu Kyi has many friends in London and she speaks more frequently to Britain’s diplomats in Rangoon than to any others. If Britain changes its mind on sanctions, it will be with her consent, and Europe and the United States should quickly follow. Mr Heyn’s optimism is probably a reflection of hers. William Hague’s visit to Rangoon in early January was another significant marker on this journey.
But first, two main changes need to occur. The number of political prisoners being held in Burma’s jails is disputed, but there are still several hundred whom the West and Suu Kyi’s National League for Democracy party want to see released. Hundreds have been freed in recent months, so this would be a continuation of an ongoing process. The next step is for the parliamentary election due to be held in March to be conducted cleanly. Suu Kyi and many other members of her party are set to contest seats. If the vote can be conducted without any of the rigging suspected in the last election in 2010, it will be a sign that the government’s reform efforts are genuine.
Burma’s transition to democracy is far from ideal. It is agonisingly slow and the military are using the constitution to hold on to all the power they can. There is a severe shortage of intellectual horsepower in the government. When officials from the World Bank visited recently and started talking about inflation targeting and controlling M2, the generals nodded but conceded privately afterwards that they hadn’t a clue what was being said. They are desperate for help in every area of government, from how to play host to Hillary Clinton to building a financial system, funding infrastructure development and improving healthcare.
Burma lacks even the most basic tools for gathering economic and social data, which makes reform harder. A small group of Burmese advisers, educated abroad and with experience in international institutions, have been lured home but are struggling to meet the flow of demands for papers and memoranda from ministers.
The economy is still dogged by a “20 per cent” culture. Deals are seen as an opportunity for the government to collect rents rather than to create value. This makes local businessmen secretive about what they do or how much they make. The biggest opportunities are still seen to be those in which the government hands you an as-set which you then milk, while kicking cash back to your political patron.
The power of the old Socialist kleptocrats, however, is waning, and the generals appear to want a broader class of oligarchs to share control of Burma’s assets. The move from autocratic kleptocracy to oligarchy may not sound like much but, by Burmese standards, it’s a breakthrough.
Then there are the tribal wars which have dogged the country since independence in 1948. For Burma’s military, this has been the justification for their hold on power. Military rule was required to hold the country together during decades of civil war. Peace was a precondition to democracy, and peace was a long time coming. Now, despite the occasional flare-up, most conflicts have been brutally resolved. But there is the nagging fear that if necessary they will be used as an excuse for the generals to abandon their reforms, declare another state of emergency. That would be a tragedy for Burma.
But before getting too gloomy, it is worth understanding why Burma is where it is. We are now into the third generation of military leadership since 1962. The first generation, led by General Ne Win, was your classic, vicious kleptocracy. Ne Win was paranoid, superstitious and obsessed with numerology. In 1988, he ordered the Burmese currency to be reprinted in multiples of nine rather than 10, which rendered everyone’s savings worthless and prompted a civil uprising. Ne Win was eventually forced out, his assets seized and his closest family sent to jail. Next up was his protégé, General Khin Nyunt, a thin-lipped killer who had run the Burmese secret services. After he showed democratic tendencies, he was thrown into jail by his rival, General Than Shwe, who has run Burma for most of the past decade and still lurks just off-stage while his hand-picked successor, Thein Sein, serves as President.
But around Thein Sein is a new crop of military leaders who have grown up fighting, yet have also seen the changes in their neighbourhood. Burma’s poverty was acceptable as long as the rest of Southeast Asia was poor. But now they are surrounded by fast-growing economies led by India and China. Burma’s failures look all the more dismal set against the success of its neighbours. There is really no excuse any more. These younger soldiers also know what happens to Burmese generals who stay on too long. Democracy may be a better outcome than death, disgrace or both.
Then there is China. Due to the economic sanctions imposed by Europe and the United States, Burma has been forced into a position of economic dependency on China. It’s not one they enjoy, and last October, Thein Sein made the extraordinary decision to suspend work on one of China’s largest infrastructure projects in Burma, the Myitsone hydro-electric dam, which would have forced tens of thousands of people out of their homes. China was livid, the Burmese were delighted and for those trying to make sense of the government’s motives, it seemed proof of a new-found spine and responsiveness to popular will.
In Rangoon, you see Suu Kyi’s image everywhere. For most Burmese, she is deservedly a hero. But venture into the wealthier enclaves and you hear her dismissed as a “pop star”, an Oxford house-wife and part-time academic with no business trying to run a country. An adviser to one of Rangoon’s wealthiest families bemoaned the gulf between the West’s fascination with her and her domestic relevance. “Have you seen her party offices? They look like a cow shed.”
The current leadership is torn. They need her to validate their move towards greater democracy and economic progress. But they don’t necessarily want her in government. And even those Burmese who admire her courage question her political effectiveness. Her party, the NLD, is a gerontocracy. Her closest allies are men in their late 70s and 80s, to whom she has shown admirable loyalty. Few young people dared join them for many years for fear of being sent to jail. But if the NLD is to become a genuine political alternative, it needs to get younger and smarter and become more than Suu Kyi’s supporting act. She needs to become a true party leader if she wants one day to rule her country.
Burma is surrounded by different models of economic growth. The regional ideal has been Singapore, propelled by the technocratic and strategic brilliance of Lee Kuan Yew. Then there are the messier evolutions of Indonesia and the Philippines, with their herky-jerky passages from autocracy to democracy. Having waited so long to emerge from its shell, Burma gets to choose which it wishes to emulate.
Its leaders are now casting around furiously for ideas which can be applied to their own situation. Do they want Burma to be the next, cheapest stop in the global manufacturing supply chain, knocking Vietnam from that bottom rung? Or might large investments in ports and natural resources allow the country to vault over that grim phase of development?
“Do you think these are decisions Aung San Suu Kyi is competent to make?” asked a Rangoon entrepreneur over dinner. “Does the West think she is our Lee Kuan Yew?” It is a reasonable question, but it could equally be asked of the military leaders. Burma’s lack of economic expertise is divided equally across the political spectrum.
What Suu Kyi does hold, however, is ultimate sanction on Burmese trade. Only once word emerges from the “cow shed” will the world’s largest companies dare risk their reputations in Burma. For all the scepticism about her political gifts, every Burmese knows she will play a vital role in their country’s belated development.
For anyone with a taste for nation building, Burma offers an almost blank slate. It needs pretty much everything. Its education system is a mess, its universities gutted because they acted as bases for the opposition. Its infrastructure is primitive, its legal and financial system antique. There is no system of formal credit, and banks do little more than shunt remittances around. Even the most basic credit system would have a dramatic effect on Burmese growth.
Investors are salivating over Burma’s assets, from its agricultural land and gas fields, to the great old colonial buildings of downtown Rangoon, abandoned when the government moved to their new capital, Naypyidaw, two hundred miles north. But until there is a robust legal system, clear title and financing, it is hard to see any but the most hardened risk-takers moving in.
Yet even small changes could have a big impact on Burma. I arrived in Rangoon on this, my first visit since 1994, from Ho Chi Minh City, where scooters swarm around you like gnats. But here in Burma’s largest city scooters are banned, reportedly after a young man rode up beside the car carrying the then president, Than Shwe, pointed his fingers as if firing a gun, and disap-peared into the traffic. Just lifting this one ban would change the mood of the city, letting people move more freely.
In March, the European Union will decide whether or not to renew its sanctions against Burma. Britain’s voice will once again be the dominant one. If it chooses to give Burma a break, the US will probably follow later in the year. It will never be a simple decision. But this time, it will be a closer call than it has been in years. And for those of us who grew up hearing that Burma could never change, that counts for significant progress.