Is Myanmar starting to learn from some of its neighbours- that a government could liberalise economically but not politically? This week brought news of two economic changes in Myanmar.
First, Myanmar has announced a proposal that would transform 11 state-owned enterprises into public listed companies. These enterprises included textile, beer, cigarette, soft drink and ice, cosmetic, glass, paint, sewing and bicycle factories located in Yangon, Mandalay and Kyaukse. If the proposal goes through, the state will put in 51% of the capital while the remaining 49% would be sold to the public. Such a move would be a step towards the emergence of a stock market.
These 11 enterprises are among the 899 factories that have been approved for privatisation. The other 888 factories would be privatised subsequently. Since 1995,Myanmar has privatised a total of 194 state-owned enterprises as of March 2006.
The second change was in the banking sector. The Myanmar Central Bank has just announced a new regulation that would increase the minimum ratio of the paid-up capital against deposit amount for private banks.This measure is likely to be a belated response to the 2003 banking crisis in Myanmar. Then, more than 10 non-bank financial institutions collapsed, leading to a run on other banks. The limited cash reserves in the private banks were almost exhausted. In early 2005, the government shut down two major banks, Asia Wealth Bank and Myanmar Mayflower Bank, allegedly for being linked to money laundering. Later in August 2005, another bank, the Myanmar Universal Bank was also shut down for the same charge.
While it seems that there are some developments in the economic front, there does not seem to be as much development in the political front.
Myamar has rejected the Philippines’ Foreign Secretary Alberto Romulo’s request to meet Aung San Suu Kyi. Romulo was supposed to have visited Myanmar last week for a five-day official visit. However, he had to postpone it at the last minute when permission was not granted. Romulo also wanted to visit Myanmar’s new capital, Pyinmana.
If the Philippines had wanted to visit Aung San Suu Kyi to increase the pressure on the Myanmar military regime, India had another strategy- pretty much similar to ASEAN’s initial approach. The Malaysian newspaper, New Straits Times has reported how India hopes to gently “engage” Myanmar. Would this approach succeed where ASEAN has failed?
Malaysian and Singapore Foreign Ministers have continued to register frustrations with Myanmar while accepting that it is important that Myanmar remains a member of ASEAN. The recent snub by Myanmar against ASEAN envoy while welcoming UN Special Envoy was seen as a signal that Myanmar “prefers to deal with the UN rather than to work through ASEAN” because of the “complexity of their domestic political process”. George Yeo, the Singapore Foreign Minister, stated that ASEAN fully respected their decision, but added that it would also mean that ASEAN “can’t be involved in discussion on Myanmar” at international forums because “we really don’t know what is happening in the country”.
Malaysia’s Foreign Minister Syed Hamid was, however, more blunt in commenting that ASEAN was not defending Myanmar for what it was doing unless the situation had changed. And when this change will come about is everyone’s guess.
Myanmar to Transform Some State-Owned Factories into Public Companies (Xinhua, 12 July 2006)
Myanmar Sets Bank Regulations to Prevent Financial Risk (Xinhua General News Service, 11 July 2006)
ASEAN Studying Proposal that its Leaders Meet More than Once a Year (Channel News Asia, 11 July 2006)
ASEAN Countries to Sign Four Important Documents (Malaysia General News, 11 July 2006)
Romulo-Suu Kyi Meeting Rejected (Manila Times, 10 July 2006)
India Moves Gently To Win Over Myanmar (New Straits Times, 10 July 2006)