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Foreign Direct Investment in Myanmar will Increase Stability

Tensions in Myanmar are expected to ease over the next several weeks. In the past months, a series of violent conflicts between various ethnic groups in the country drew a concerned response from international observers.

A number of positive events this week, however, may lead us to consider that a period of calm is likely to follow. In particular, we are likely to see an increase in the level of trust between Myanmar’s leadership and the international community. An agreement was signed this week by Myanmar’s Foreign Minister Wunna Maung Lwin and Yukiya Amano, the head of the International Atomic Energy Agency (IAEA). This agreement will allow international inspectors wider access to facilities thought to have the potential to develop nuclear technology. According to the IAEA, this move will help clear lingering suspicions that Myanmar had been trying to develop nuclear weapons during the country’s long military rule that ended last year.

The World Bank also announced the approval of a 140 million dollar loan to upgrade the country’s power supply. France’s newspaper, Les Echos, reports that the loan will double the capacity of Myanmar’s main power plant while reducing its overall CO2 emissions. International companies have been taking note of these types of events. The Asahi Shimbun reports that five Japanese companies have just concluded agreements with Myanmar’s aviation authority to modernize equipment for all of the country’s major airports. Incidentally, this agreement follows Shinzo Abe’s visit to Myanmar last June, when the Japanese prime minister canceled the country’s $1.74 billion debt.

Japan’s government also announced its plans to relax visa requirements with Myanmar in an effort to boost tourism and to promote the country’s economy. A move probably not unrelated to Japanese airline All Nippon Airways (ANA) recent investment in Myanmar’s Asian Wings Airways (AWA).

A plan that is part of the ANA strategy to expand its business in the rapidly growing Southeast Asian markets. Japanese companies, in particular, are creating early inroads into Myanmar’s relatively new market, and are therefore likely to draw substantial benefits over the next few years.

A recent report by Yun Sun published by the Stimson Center points out that there has been a sharp decrease in Chinese investment in Myanmar over the past few years. Following recent political changes, Myanmar has been trying to detach itself from its economic overdependence on China and has been looking to the West and its partners in ASEAN to counterbalance the reduction in Chinese investment. Add to this the recent quibbles over profit sharing and pollution at Chinese-owned mines, dams, and pipelines, and it would seem that Myanmar is becoming impatient China, and possibly vice versa.

Despite the positive signals coming from the government, and the willingness of international companies to invest in the country, most observers know that there can be no lasting stability in Myanmar unless there is some sort of equilibrium between the different ethnic and religious communities in the country. Here, too, there are some positive signs.

The influence of Wirathu, the Buddhist monk and leader of the nationalist 969 movement that has been inciting sectarian violence in Myanmar has gone, until recently, almost completely unchecked. In our last article, we reported that locals were even noticing a conspicuous camaraderie between the movement and the government. This week, however, the Sangha Maha Nayaka Committee, a government-appointed body that oversees Myanmar’s Buddhist monkhood, has stepped in and banned all anti-Muslim organizations.

According to an article in the Irrawaddy News, the Committee has issued a directive intended to check the influence of the 969 movement, accused of stoking violence against minority Muslims. The article states that “at least 237 people have died in sectarian violence since June last year and more than 150,000 have been displaced.” The vast majority of the victims were Muslim.

Reuters reports that while “the Committee did not object to monks promoting the 969 ideology, which urges Buddhists to protect their faith against a perceived threat from Islam,” they did say that “the movement’s leaders had gone too far by drafting proposed laws, including one that would stop Buddhist women from marrying outside their religion.”

Even the Dalai Lama, attending an international peace conference in Prague, has appealed to Burmese Buddhist Monks asking them to act according to the principles of the Buddha, avoiding violence or targeted attacks against the Muslim minority in Myanmar. In an article in the Asia News, he said, “when resentment or anger towards your Muslim brothers and sisters emerge, please remember the principles of the Buddhist faith.”

The Strait Times reports that the Dalai Lama even had a private meeting with opposition leader and Nobel Peace Prize winner Aung San Suu Kyi on the sidelines of the Prague conference. While not the first of such meetings, the increasing frequency, and openness of such meetings further attest to the loosening grip of China on Myanmar’s political dialogue. The Strait Times reminds us that “Beijing has branded the Dalai Lama an anti-China ‘separatist’ who encourages violence.”

Irrawaddy News reports that Aung San Suu Kyi also touched on the issue of violence against minorities in Myanmar. The “Lady” said that the crux of the problem lies in the current constitution, written by the military dictatorship and ratified in what she calls a farce referendum in 2008. She said that it does not meet the aspirations of the different ethnic communities and that consequently, minorities “feel that they do not have equal access to justice.” She emphasized that the constitution must be modified to eradicate the roots of the conflict. Her points leads us to consider that while Myanmar may see a period of increasing trust over the near term, new tensions may yet break out at any point.