The Political Economy of Myanmar’s Transition: Lee Jones Presented by Nathan ghelli

Reform Process: skepticism 2010: first elections held since 22 years of military dominance Followed the botched “roadmap to democracy” Followed the “referendum” of 2008 Military backed Union Solidarity and Development Party (USDP) came out as primary beneficiary from elections 60% of seats in both houses of parliament Near complete monopoly of the regional assemblies Little change expected from superficial exercise

Reform Process: signs of hope 2012: real reform seemed to be underway NLD won in by-elections Peace talks with ethnic-minority insurgents Trade unions were legalized Internet censorship eased IMF, World Bank and Asian Development Bank were taking active interest in the country

Caveats for Optimism: social struggles could direct reform “Murdoch School” of critical political economy Highlights structural constraints Provides perspective Useful school of thought for placing developments in broader context Argues: Assessment of states should reflect social power relations rather than institutional makeup Political outcomes and reform aren’t dependent solely on policy Social strife and conflict for power relations exert influence

Murdoch School Approach: analyzing dictatorship to democracy Indonesia’s reformasi era Decentralized system of “money politics” Become “oligarchic democracy” Marcos dictatorship in the Philippines “elite democracy” of landholders Structural causes of poverty remained Political participation was a farce which never threatened dominant interests

Murdoch School Approach: analyzing socialism to capitalism Cambodia’s transition Privatizing assets to elites in the Cambodian People’s Party (CPP) Control of patronage resources Close ties to the military CPP controls the direction of reform process

State-mediated capitalism: Burmese Socialist Program Party (BSPP) gained power Pursued autarkic, state-led import-substitution industrialization Approach failed due to: Falling commodity export revenues Rising capital import and debt costs 1987-1988: inflation, and unemployment were both dangerously high Stagnating economy Collapse of the BSPP Pro-market reforms were quickly adopted

State-mediated capitalism: constraints Historically weak bourgeoisie Nationalization of internal trade in 1963 Regime’s political strategy State monopolies remained Restrictions on the private sector State Peace and Development Council (SPDC) enhanced military strength

Transition to capitalism: early results Army exploited process to enhance business holdings Regime promoted “national entrepreneurs” Re-emergence of bourgeoisie Shift in ownership towards private sector Complex relationship between business class and state: Reliance of business elites on state patronage “limited access order” Reliance of the state on business elites Brokering ceasefires with insurgent groups State-linked oligarchic elite Military’s retreat opens door for influence over reform process

Political complexes on the borderlands State power on borders has shifted Consists of “emerging political complexes” “Ceasefire capitalism” has weakened minorities Strengthened ethnic minority elites, regional army commanders and national and foreign investors Led to a relationship between business elites and the state which was accommodating and reciprocal Regime allowed access to “limited access order” State depended on drug lords’ capital Recently insurgent groups resistance has waned Redirecting trade Shift in power to military officials

Looking forward: Best-case scenario 1) Hard-liners have been marginalized 2) More democratic institutions favor a dispersal of power and empower reformers 3) Economic reforms are side-lining Myanmar's crony capitalists

Looking forward: Critical Political Economy Scenario/Perspective Reform is shaped through top-down process Military regime has been strengthened Opponents remain in position of weakness Increasing military strength and spending Persistent budget deficits Increasing money supply has passed costs on to consumers Western and domestic pressure has failed

Looking forward: Critical Political Economy Scenario/Perspective Top-down type of transition and “discipline flourishing democracy” SLORC constitutional changes Reserving parliamentary seats for military De-facto veto on constitutional changes Authority to retake power Implications: Constrains all other political actors No realistic prospect of accounting for human rights abuses

Looking forward: Critical Political Economy Scenario/Perspective Political complexes on the borderland: Regional army commanders remain power brokers State relies on crony businesspeople for negotiations In these business’s interests to promote stability Therefore: Even successful pacification of borderlands, power relations on the ground will remain the same Likelihood of corruption undermining reform remains high Struggle over the reform process relies not just on policy, but the implementation of policy

Struggles of Reform Critical Political Economy Scenario/Perspective Result: struggles of legislative reform: Farmland Act Facilitated land grabs Empowers state agencies to allocate land Foreign Investment Bill MPs introduced protections on domestic business Funnel foreign investment into minority joint ventures with established local firms Constitutional wrangling Battle over legislative power Parliamentary seats/power does not guarantee liberalization Dominance of big illiberal business class

Struggles of Reform Critical Political Economy Scenario/Perspective Illiberal big business Secure further political patronage in the future Impose broad limits on reform process Influence MPs from outside parliament Any attempt to dismantle wealth might lead to social unrest Money laundering Reform process might even be beneficial to big business Promote sector-specific liberalizations which they themselves gain from

The Next Cambodia? Ominous Similarities: Cautious Optimism: State-managed transition to capitalism Concentrated economic power Dominant party (USDP) Fusion of business and political elites Natural resource concentrated economy Cautious Optimism: Popularity of opposition leader Aung San Suu Kyi Division of state (executive) and legislative power Cronies hedging bets by supporting NLD in 2015