By: Priscilla Clapp

Priscilla Clapp is the former chief of mission at the US Embassy in Myanmar. In an extended report for the Washington, DC-based Council on Foreign Relations, she analyzes the results of the November 2105 elections and recommends the steps the United States and other western powers must take as they seek to bring the country out of a long isolation and onto the world stage as a viable democratic nation.

The ultimate success of democratization in Myanmar will be judged by the country’s ability to shed its authoritarian traditions, adopt pluralistic democracy, provide space for its diverse cultures and religions, and ensure a decent living standard for the entire population. The challenges to success are immense and contain the seeds of failure if they cannot be addressed in time.

The NLD victory is in itself no guarantee of stability because the party inherits a huge burden of problems from its military predecessors. More than five decades of military rule have left large parts of the country in a near feudal condition, beset by an overly large national army, a multitude of armed ethnic forces, and hundreds of militias. Rule of law is almost nonexistent, and the competition for resources and wealth is a virtual free-for-all.

The past five years of political transition have had the perverse effect of exacerbating the competition for resources with the rapid influx of foreign investment and the promise of economic growth. The early years of the transition also gave rise to new threats to the civilian population in the form of economic displacement, religious tension and communal violence, and a rapid increase in narcotics trafficking and drug addiction, which add to the continued warfare between the army and armed ethnic groups along Myanmar’s borders with China and Thailand.

Economic Inequity and Obstruction

One of the major obstacles to the country’s democratic transition is the legacy of patrimonial governance created purposely to concentrate the country’s wealth in the hands of a small military-oriented elite class. This process accelerated rapidly during the final decade of military government, with the result that the top generals from the former State Peace Challenges to Stability in Myanmar Challenges to Stability in Myanmar 9 and Development Council (SPDC)—which was dissolved by Thein Sein in 2011—and their families and friends still control the levers of economic power.

Some of these former SPDC officials have encouraged Thein Sein’s economic reforms, but others have deliberately obstructed them by opposing the liberalization of foreign investment, equitable land distribution, transparent banking and revenue collection, and streamlining of government regulations and controls over economic activity.

Although the NLD gain in the 2015 election has largely displaced the wealthy elite—both civilian and ex-military—from positions of power in the parliament and the upper echelons of the executive branch, the elite still maintain control of the economy and much of the country’s land and resources. It will be difficult for the new government to confront this problem head-on without alienating some of its important sources of political support.

Yet the unequal concentration of wealth in the hands of a few individuals and their hold on land and resources is central to the country’s social and economic problems, often erupting in public protest and local conflict. Despite efforts to legislate against corruption and misuse of wealth, the situation can be corrected only gradually by developing incentives for wealth to be repatriated from foreign banks and channeled more productively into national development, by creating more efficient business processes that drain the rampant corruption out of the economy, and by making government more transparent.

Both the US government and US businesses can help significantly with this task, but it will require substantially revising how US financial controls are managed, especially the SDN list, and relaxing the stringent restrictions on US business practices in Myanmar. Given that US businesses are required to observe US law when operating overseas, they could become a powerful vehicle for instilling modern business practices in their foreign partners.

Fortunately, a few promising signs indicate that some of Myanmar’s “crony” businesses are beginning to adopt greater transparency and fiscal responsibility in their practices, so it is clear that some members of the elite understand the need for reform.

Excessive Military Control

Myanmar is a highly militarized country at both the national and local levels and will remain so for years to come. Uniformed military leaders 10 Securing a Democratic Future for Myanmar believe that democratization in the country has not yet matured to a degree that civilian leaders can prevent society from descending into chaos and conflict. Military representatives made this argument vehemently when vetoing a majority vote in parliament in July 2015 that favored constitutional amendments to reduce the military’s hold on political power.