The Military's Deal with the West

German Instruments of Influence

Presently in Myanmar, as if in time-lapse, one can observe how Germany's foreign policy establishment assembles its typical instruments of influence. Today, German President Joachim Gauck will officially inaugurate the Goethe Institute and a field office of German business in Yangon, Myanmar's business metropolis. The field office is destined to help particularly German small and medium sized enterprises in their planned activities in Myanmar, according to the Federal Ministry of Economics. Last summer, the Federal Ministry of Economic Cooperation and Development had already taken steps in support of German small and medium sized companies expanding to this Southeast Asian country - with means from so-called development aid. (german-foreign-policy.com reported.[1]) Germany has granted Myanmar a 500 million Euro debt relief to create a favorable climate for German businesses. German party affiliated foundations have opened field offices - most recently the Friedrich Naumann Foundation (FDP). Berlin is also exerting influence on government bodies. For example last year, the German foreign ministry initiated a training program for employees of several Myanmar ministries, including employees of the foreign ministry, to help prepare the Myanmar government chair the ASEAN,[2] according to a declaration.[3] Myanmar has chaired the ASEAN since the beginning of this year.

The Malacca Problem

Germany is intensely pursuing these activities to win influence out of geostrategic considerations, because of the escalating rivalry between the West and the People's Republic of China. China transits its supplies of raw materials and other trade with Southern Asia, Africa and Europe primarily by maritime transport. Its vessels must pass through the Straits of Malacca, between Indonesia, Malaysia and Singapore. From the Chinese perspective, this is strategically a dangerous weak point, because the West, particularly the United States, has a strong military presence and could block these Straits with relative ease.[4] Already in 2003, Hu Jintao, China's President at the time, had spoken of the "Malacca problem." This is why Beijing has pursued its plans to again use the old "Burma Road" - an overland transit that had connected Burma, a British colony at the time, to China. In WW II, Great Britain and the USA were using the "Burma Road" to support China against their common enemy, Japan. Last year, the People's Republic of China completed construction of an oil and gas pipeline running close to the old "Burma Road." At least energy resources can now be transported through these pipelines directly from the Indian Ocean to China - avoiding the Straits of Malacca. In its struggle for geostrategic influence, the West is now also seeking to gain control over this route of Chinese energy supply.

Secret Negotiations

When in late summer 2007, plans of instigating poverty riots in Myanmar, similar to the "color revolutions" used to overthrow the governments in Georgia (2003) and in Ukraine (2004) proved impossible to implement,[5] the West used the devastation caused by cyclone "Nargis," in 2008, to further increase the pressure on the Myanmarian military government.[6] "Not only the head of the US government's aid agency but Admiral Timothy Keating, commander of the US Pacific Command was on board the first US plane delivering rescue supplies to the areas devastated by the cyclone, reported the publicist Thant Myint-U.[7] Negotiations, which began in secrecy and were continued officially in late 2009, led to a deal, whose effects are progressively becoming apparent. The West, demanding influence within the country, is tentatively offering investments, while simultaneously insisting on, at least superficial, measures safeguarding human rights, so that there can be public justification for reinstating cooperation. The, at best, half-hearted character of these measures have been regularly criticized by human rights organizations ever since. What they are particularly criticizing is the fact that the Myanmarian military has been able to consolidate its power - behind a civilian façade, without any sign of Western contestation. (german-foreign-policy.com reported.[8])

The Military's Strategy

Thanks to a succinct analysis of Myanmar's economic development, recently published by the FDP-affiliated Friedrich Naumann Foundation, the primary elements of the economic foundations of the deal between Myanmar and the West become apparent. According to this paper, the military government has "particularly since 2009" - when negotiations with the West showed promise of success - initiated "a process" in which "state property would be systematically sold to enterprises having close ties to military functionaries." In 2010, the "largest sale of state property in the history of the country," made the news, which was "part of the military's strategy" of "consolidating its behind the scenes influence." The generals have, in fact, been able to maintain decisive influence over the country's economy. "The majority of the economic sectors are dominated by a network comprised of military enterprises, state companies and private conglomerates, whose market power is based on decades of cronyism and corruption," according to the paper. This "decades of cronyism" refers to the period in which the military government had exercised absolute control over the country.[9]

Key Positions

The Naumann Foundation paper describes further, "for example, military holding companies, founded in the 90s, are still holding key positions in lucrative business sectors," including sectors ranging from "tourism, the banking sector, all the way up to heavy industry." "Military companies" are also "engaged in the development of the Thilawa Special Economic Zone, which upon completion in 2015, will be one of the largest economic zones in Southeast Asia." The fact "that a large portion of the economic expansion will still be in the energy and raw materials industries, which are traditionally under the control of state-owned and military companies, as well as influential private companies having close ties to the government," must also be taken into consideration. The foundation's paper concludes, "the heritage of decades of military dictatorship" is "deeply anchored in the economic structure."[10]

Persisting Grievances

The paper's author does not hide the fact that he is, above all, motivated by apprehension over the possibilities for "fair competition and the development of the private sector." As a matter of fact, because of "legal insecurity" and government despotism in Myanmar, small and medium sized German companies, for example, have not had a real opportunity. However, the analysis also confirms that the military's - economically based - consolidation of power has led to the rhetoric of human rights being insufficiently implemented "on the ground." In the areas of Myanmar's north and east, where civil war was waged over the years, "historical grievances between the government and ethnic minorities" could even "be accentuated" - accompanied by growing cooperation between the Myanmar military and the West.[11]

Other reports and background information on Germany's policy toward Myanmar can be found here: Change through Division, The Pacific Century (II), Roll Back China's Influence and China's Overland Transit.

[1] See Chinas Lebenslinien and China's Overland Transit.
[2] Dem südostasiatischen Staatenbund ASEAN (Association of Southeast Asian Nations) gehören Brunei, Indonesien, Kambodscha, Laos, Malaysia, Myanmar, die Philippinen, Singapur, Thailand und Vietnam an.
[3] See Roll Back China's Influence.
[4] See Chinas Lebenslinien.
[5] See Prestigeträchtig and Mit langem Atem.
[6] See In The Shadow of Catastrophe (III), Overt or Covert and The Right of Might.
[7] Thant Myint-U: Where China Meets India. Burma and the New Crossroads of Asia. London 2011.
[8] See Mörderische Partner, Die Prioritäten der Machtpolitik and Civilian Guise.
[9], [10], [11] Chris Kip: Wie stehen die Chancen auf fairen Wettbewerb in Myanmar? www.freiheit.org.