Price Of Development

Open for Business?

Mike Ives

As Myanmar transitions to democracy after decades of military rule, its increasingly vocal civil society is scrambling to protect forests and farmland from rapacious development.

Late last Fall, the government—built irrigation pipelines in the village of Alwan Sok stopped pumping water to rice fields. Local officials governing this small farming area about 13 miles southeast of Yangon, Myanmar's former capital, offered no explanation. The fall rice crop had been harvested already, but without irrigation farmers wouldn't be able to plant the year's second crop in the dry season. That was troubling. Rice is the farmers’ staple food, and most of them are heavily indebted to an agricultural bank where they buy seeds and fertilizer.

As the weeks without irrigation morphed into months, hope of a spring harvest evaporated. Some villagers began selling their cows and motorbikes to cover basic expenses, or sharing rice with those who were going hungry. Then, on January 31, hundreds of households in the village found notices posted on their doors ordering them to leave their land in 14 days or face arrest.

The villagers weren't entirely surprised by the eviction notice. For decades, Burma's military government had been trying to convert the fields around Alwan Sok into factories that would complement the adjacent Thilawa port—the largest deepwater port in the country. Back in 1982, officials confiscated a chunk of the village's farmland, saying they planned to build an industrial park. The complex never materialized, but the government kept the land. In 1996, it confiscated another parcel and built a tin factory that has long sat idle. Residents were told that while they could continue farming, their land was state property.

In April 2012, the government signed a memorandum of intent with Japanese investors to build a 2,400-hectare "special economic zone" or SEZ—a term coined by the Chinese government in the 1980s to describe sprawling industrial parks that woo foreign investors with tax incentives.

By November, Japan had agreed to provide US$270 million for the Thilawa SEZ and other economic projects across Myanmar. Construction was scheduled to begin in early 2013. A total of 3,900 people in Alwan Sok and nearby villages were ordered to move. Ten years ago, the villagers might have gone quietly. This time, they protested.

On February 14—the day of the planned eviction—the government backed off. ‘The Myanmar Times’ quoted an agriculture officer telling villagers that although the government technically owned their land, they would be treated fairly. Activists say the Thilawa SEZ has elements of both the old Myanmar- the repressive, military dictatorship that ruled the country for a half century—and the new Myanmar that has attracted a flood of international attention and development aid since March 2011, when a quasi-civilian government came to power on the heels of the Southeast Asian country's first general elections in 20 years.

The new government—which later introduced a series of landmark reforms including freeing political prisoners, legalizing labor unions, and passing several environmental laws—has raised hopes that the country's days of suppressing dissent are coming to an end. But it is still unclear if the ostensibly pro-democracy government will respect the rights of its citizens and protect its ecosystems as it opens its doors to international investors. Or if it will sell them out to the highest bidders.

Observers say the answer depends to some degree on how it handles the Thilawa farmers’ protests and other land-acquisition conflicts that are flaring up across the nation. "The space has opened up," says Paul Donowitz, campaign director for Earth Rights International, a Washington-based nonprofit organization. However, there still is no community consultation process around big development projects, nor any debate at the highest levels over whether such projects should go forward.

Investors view Myanmar, formerly called Burma, as Asia's newest "frontier market." A central part of the appeal is the country's 55 million people—a potential consumer market—and the vast natural resources that once made the country a jewel of the British Empire. Although profits from timber, minerals, oil, and gas have been a key source of funding for Myanmar's junta, the country's half-century of isolation also meant that much of its natural resources remained undeveloped.

Today Myanmar still has huge swaths of intact forests, sizeable offshore oil and gas deposits, and a vast catalog of rare and endangered species. But as the US and the European Union have lifted or conditionally suspended long-standing economic sanctions, many worry that an influx of foreign capital may set off a rush to extract resources that could cause significant environmental damage and negatively impact, rather than improve, the lives of ordinary citizens. Faced with these complex challenges, activists say they are encouraged by a growing network of civil society-groups that appear willing to speak out about simmering land and resource conflicts.

Casual observers of the country's politics might think its civil society remained silent throughout its long era of military rule. Not so: There were high-profile uprisings against the government in 1988 and 2007, and community groups rallied to help the country recover from natural disasters like the devastating 2008 Cyclone Nargis.

Still other groups have been working quietly for years to fill gaps in government-provided social services by hosting municipal blood drives, or raising funds for families that can't afford to bury their dead. Although the military government regarded civil society groups with suspicion, activists say officials weren't categorically opposed to grassroots advocacy work—so long as it didn't threaten the regime. What's new, activists say, is a sense that they can now be more politically outspoken. Local journalists, too, feel empowered, thanks to recent laws that have eradicated some, though not all, censorship. And the new government, hungry for foreign investment, appears eager to make a good impression. International investors are scrambling to get a share of Myanmar's natural resources.

On the flip side, activists say, business in this largely rural and densely forested country tucked between China and India is still primarily driven by crooked officials who strong-arm farmers off their land to build industrial parks, copper mines, and other large-scale economic projects. Activists complain that most of the new laws that are supposed to protect the environment and the poor are weak, and that many politicians in Myanmar's parliament lack the capacity or desire to implement them.

To what extent political reforms and increased media attention will translate into victories for Myanmar's poor and marginalized is still unclear, says Kyaw Tim, director of Paung Ku and one of Myanmar's leading activists. Ruled for half-a century by a military junta that overthrew a democratic government in 1962, Myanmar has long been seen as a pariah state. For decades the junta pillaged the country's vast natural resources while allowing basic civil services like schools, roads and hospitals to languish. As Myanmar's neighbors developed their economies, the junta's widespread human rights abuses led Western governments and aid agencies to impose economic sanctions against the repressive regime, although some investment did trickle in—mostly from China and other Asian countries. Tourists largely steered clear.

As the decades wore on, Myanmar became increasingly isolated and impoverished, even as its leaders grew richer on their citizens' backs. Today, parts of central Yangon look decrepit, as if a tropical storm has just torn through. Weeds sprout inside its abandoned British colonial buildings, and at night a handful ol streetlights cast an uneasy, florescent pallor over trash-strewn alleys. According to Transparency International, Myanmar is among the most corrupt places on earth.

But Myanmar also feels like a nation in transition. New construction projects are sprouting up in Yangon and property values are soaring. Oil and gas prospectors are vying for offshore energy blocks and international aid is flowing in. The Asian Development Bank is planning to overhaul the country's crippled road infrastructure: educators from American universities are preparing to help rebuild the country’s crippled university system; multinational brands are staking claims to potential factory space. Thousands of imported cars are rolling through Yangon's pot-holed streets, adding to growing traffic jams that are typical in Southeast Asia's megacities.

These changes mainly kicked off in 2011, a few months after Burma's junta surprised the world by holding its first general election in 20 years. Meanwhile, the race is on for Myanmar's natural resources.

A hotly anticipated foreign investment law, passed in November, allows international firms up to 100% ownership in most ventures and offers companies five-year tax holidays and 50-year land leases. International investors are now scrambling to get a toehold. The biggest investors so far are China and Thailand, which have committed $14.2 billion and $19.6 billion respectively for mining, hydroelectric, and mega-SEZ projects. The World Bank has approved at least $480 million in "support credit" and community development grants. Companies such as Nestle, Unilever, DuPont, Carlsberg, Ford, PepsiCo, Coca-Cola etc. have all signed distribution deals.

As the government clears land for investment projects, public resentment appears to be growing. The conflict over the Thilawa SEZ is just one example. Last year, a police raid of villagers protesting the expansion of a military-backed copper mine sparked nationwide outrage. (Anger was later directed at Aung San Sun Kyi, who tried to persuade the farmers to stop protesting and allow the mine to go forward.) And near the coastal city of Dawei, residents concerned about environmental and public health impacts are pushing hard against a proposed deep-sea port and a 155 sq.mile SEZ that would include steel mills, power plants, refineries, and a petrochemical plant. The project—funded mainly by a Thai company and slated to be Southeast Asia's largest industrial complex—would be a key transport link connecting Southeast Asia with India, Africa, and the Middle East. It also would displace about 30,000 people, mostly poor rice, cashew, and rubber farmers.

Faced with a barrage of industrial projects, local activists and civil society groups are trying to decide what to fight for, how to organize advocacy campaigns, and what policy reforms to realistically expect. Part of the problem, he said, is that activists opposed to development projects often don't propose alternative ways of creating jobs or boosting Myanmar's economy.

Thein Sein's government has taken a few environmentally favorable steps: suspending until 2015 the construction of the Chinese-sponsored Myitsone dam on the Irawaddy River; canceling a proposed coal-fired power plant in Dawei and banning mining within 100 meters of Myanmar's four largest rivers. But analysts say Myanmar still needs better laws that are strongly enforced. The country's first environmental conservation law, which passed last year after languishing for years in parliament, has been widely criticized for being too weak. (Firms are not required to conduct international-standard environmental impact assessments before beginning construction) Environmental activists say while it is positive that the Myitsone dam has been suspended, six others are going forward—all of them in hotbeds of sectarian violence.
—Third World Network Features

Vol. 46, No. 19, Nov 17 - 23, 2013

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