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Dark economics fuels Burma’s perpetual war

As Burma’s independence dawned in 1948, the country’s sizeable ethnic populations found themselves released from the clutch of the British Raj into the grip of the dominant Burmese nationalists. The latter had promised them equality and autonomy, but instead they were forced to accept a new state and constitution that for all intents and purposes was unitary. Successive regimes have since been on a mission to revive the local imperial vision of Burma, carried through today by President Thein Sein’s pseudo-parliamentary government that has in its crosshairs the resource-rich lands currently under the feet of defiant ethnic groups. That vision is being aided by an international consortium of business-hungry vultures, from Wall Street to the Asian Development Bank who, knowingly or not, are fuelling the pacification of minority communities.

The ostensible guardians of Burma’s minorities, the armed resistance movements, have evolved to tackle these new realities. From historic quests for independence, these groups are now battling to prevent the government and its allies from carving up the delicate but lucrative lands they inhabit. Those efforts have stepped up in line with a post-Cold War shift in priorities for Burma that has seen neighbours such as China and Thailand drop their support for armed groups and instead turn to the emerging capitalists pulling the strings in Rangoon and, latterly, Naypyidaw. The economics of Burma’s ethnic conflicts therefore aren’t just about the struggle over the control of the means of production, wage disputes and working conditions, but have a far more ominous, primitive dimension: the aspiring capitalist state in Burma, under a new generation of generals, now wants and needs nothing less than complete and effective control over commercial and strategic lands.

Worse still, the problem for the anti-Rangoon ethnic rebels such as the Kachin Independence Organisation and Karen National Union wasn’t simply that external support from Beijing and Bangkok dried up; the crucial neighbourhood powers decided instead to court Rangoon for highly lucrative commercial deals in resource extraction, arms sales, cross-border trade, and bilateral strategic and commercial cooperation. Their sights were set on the creation of a regional market for energy, special economic zones, construction of trans-boundary gas and oil pipelines, railroads, highways and deep sea ports. In fact, not only do Burma’s ethnic border regions make up some 60 percent of the country’s total land area, but they are strategically and commercially crucial for the new priorities of the post-Cold War era, and thus have been engulfed in conflict.

Further, these areas either contain or provide access to many of the country’s natural resource reserves, such as alluvial agricultural lands, offshore gas and oil, copper, tungsten, gold, lead, uranium, rare earth materials, precious stones, and teak and other hardwood. It is impossible to know where the ideological parameters of the Burmese military’s nationalism ends, and where the desire for control of land and other economic resources begins.

If the absence of clarity among Burma’s domestic ethno-nationalists is an issue, pro-market external players are crystal clear about their Burma priorities. In the eyes of venture capitalists and corporate investors from Wall Street to Tokyo, to development agencies like the World Bank and its regional proxy Asian Development Bank (ADB), and the myriad EU-based development agencies, Burma’s war zones have come to be seen as virgin but strategic lands waiting to be penetrated by international businesses near and afar.

The liberal West and the illiberal Naypyidaw have finally stumbled on a profitable common ground, while for its part, ASEAN is determined to transform itself from the region’s Cold War-era, anti-Red China bloc to pro-market regional business competitor of the emerging state-capitalist China. As the largest mainland bridge between South Asia and the ASEAN region, the conflict-soaked Burma is indispensible for the bloc as it pursues its grand commercial design, forging a region-wide expansive and integrated market which will facilitate the trading of electricity, petrochemicals and industrial and consumer goods across the borders of 10 different nations.

Commercial stakes are just too high for external players to allow Burma’s war-torn communities such political luxuries as peace, ethnic reconciliation, basic human rights and some semblance of popular sovereignty. For instance, some $US550 billion is expected to change hands within ASEAN over the next 25 years, backed by an assemblage of Western institutions from the World Bank to the Norwegian Government. They intend to create a single energy market across the Greater Mekong Sub-Region wherein electricity is generated in a least industrialised economy such as Burma’s, before being exported across the borders to fast-industrialising economies of China and Thailand. Imagine the gigantic windfall from two dozen similar schemes, from infrastructure construction to fostering a multi-billion dollar agri-industry; from market-friendly government reforms and national capacity building to mass tourism.

It is this background which explains why the misleadingly named International Crisis Group, whose primary concern is “turning the world’s conflict zones into markets”, keeps its Burma focus on the business-readiness of the country’s ruling generals and ex-generals, as opposed to the continuing ethnic conflicts there, the world’s oldest.   The business of the world post-Cold War is, largely, business, and anything else that stands in the way of business is, well, “collateral damage”.

For the past 200 years at least, Burma has been seen as a strategic venue by outside powers, be they European imperialists such as the French and the British in the 19th Century, or the 20th Century imperial and fascist powers of the US and Japan during the Second World War. These countries have always seen Burma as a commercial backdoor to China and India, a military launching pad, a half-way safe harbour, and a resource brothel.

From its inception in a military coup in 1962 until the collapse of its foundational dictatorship in 1988, Rangoon’s regime had adopted the “Burmese Way to Socialism”, fenced off the territories under their direct control, and fought a myriad of existing and emerging ethnic independence seekers. In those Cold War days, neighbouring powers such as Thailand, India, and China allied themselves with, indeed often supporting, these anti-Rangoon forces in exchange for serving the neighbours’ interests as frontier buffers and commercial partners.

As for the ethnic armed resistance movements, reeling from the unexpected loss of their commercial and strategic advantages following China and Thailand’s relinquishing of support, many groups opted for ceasefire deals with Rangoon. The KNU, the oldest and perhaps the only ethnic resistance movement that steered clear of the frontiers’ lucrative narcotics industry, and others such as the Karenni National Progressive Party and the Shan State Army factions, decided to keep fighting. They considered Rangoon’s ceasefire offers not as a step towards lasting peace, but rather as a part of its long-standing policy of “divide-and-rule” along ethnic lines.

Despite the socialist banner under which Burma’s generals have operated, the majority that have pulled the country’s strings since General Ne Win’s “way to socialism” have been more than happy to switch ideologies. Right after the bloody crackdown of the 1988 uprising in the heartlands of the Burman majority, which united the mainstream society across ethnic and professional lines, the new crop of generals decided to open up the country to international capital as a way of shoring itself up – and filling its empty coffers.

The “Burmese Way to Capitalism” began around December 1988 when the military signed away $US120 million worth of logging and mining concessions, as well as fishing licenses, to Thai companies with close links to the Thai army. Similar concessions were also made to China, which produced and exported over 2,000 commodities designed for Burma’s 50 million-strong market, while importing teak, minerals, forestry products, and agricultural produce fromBurma. That turned China-Burma cross-border trade into a multi-billion dollar business.

The move by the Burmese military leadership to open up the country – including the frontier regions where the civil war is still waging – to international businesses has turned out to be the single most important decision made by the Burmese generals.  It has precipitated a major windfall for them and their military in terms of commercial gains, strategic advantages, new international alliances and class-based politics at home.

Strategically, the Burmese military pre-empted, rather successfully, any inter-ethnic alliance between the Aung San Suu Kyi-led ethnic majority in  “mainland” Burma and about 20 different armed ethnic movements across the country’s vast frontier territories of Kachin, Shan, Wa, Karenni, Karen, and Mon states.

Between 1989 and 1999, as many as 17 different ethnic resistance organisations struck ceasefire deals with Rangoon, reasoning that a truce would at least bring some developmental benefits for their own ethnic peoples, and lucrative personal businesses for the ethnic leaders.

The loss of military, ideological and material support from their neighbourhood backers such as China and Thailand had forced some of the staunchest foes of the Burmese regime, such as the Kachin Independence Organisation, to sue for ceasefires in the early 1990s. Because these agreements included concessions for top ethnic leaders to do business in their own areas and get rich quick, they created, accelerated and deepened the new class division within the ethnic resistance communities and eventually fractured them, to the Burmese regime’s strategic advantage.

These deals then further split the existing inter-ethnic alliances among the resistance forces, but also between the ceasefire groups and the emerging opposition movement of the majority Burmese, led by Suu Kyi and the National League for Democracy.

History would be nothing, however, without ironies. Since the bloody crackdown of 1988, and after having been condemned and shunned by the West for two decades as a consequence, the generals have successfully primed western interests in Burma’s economic and strategic potentials, including those of the country’s frontier areas.  Thanks to Asian commercial interests and global oil corporations, the regime has succeeded in filling its once-empty coffers with billions of dollars from the windfall revenues of Burma’s resources.

Apparently Naypyidaw has decided that it is in its best interest to invert its strategic logic in dealing with dissent and rebellion at home: from a position of crushing Suu Kyi’s mainstream opposition and neutralising the ethnic armies via ceasefires, the government has decided to zero in on any ethnic resistance groups, ceasefire or active, which refuse to accept “peace on Naypyidaw’s terms”.

It is this new strategic logic which underlies the regime’s post-election moves. One clear example is the attempts to induce the breakdown of its lengthy ceasefire deal with the Kachin army on the ostensible grounds that it was threatening the China-backed Myitsone dam project.

These are indeed exciting days for the Burmese generals. Having failed to vanquish their nearest enemy with domestic and western support, they have now gotten Suu Kyi on board, along with Burmese commercial and technocratic elites. At the same time, the anti-Chinese west has combined with ASEAN’s commercial and strategic interests to converge nicely in Naypyidaw’s favour. Now, for the first time since the ethnic rebellions erupted 60 years ago, the generals are in the best position to make the non-Bama ethnic resistance sign peace deals. Support among international players for this resource conquest is unprecedented, and the country’s myriad minority groups now face a choice of either acceding to Naypyidaw’s demands, or readying for possible elimination.

Dr Maung Zarni is a visiting fellow at the Civil Society and Human Security Research Unit, London School of Economics, United Kingdom.



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