by Pepe Escobar
Al Jazeera
07 Feb 2012

Despite some reforms, Myanmar remains a hardcore military dictatorship and lacks a civil society.

Bangkok, Thailand – While the big story of 2012 in south-west Asia is the increasingly lethal US-Iran psychodrama, there’s no bigger story in south-east Asia in the Year of the Dragon than the controlled opening of Myanmar.

Everyone and his neighbour, East and West, has been trekking to Myanmar since US Secretary of State Hillary Clinton’s visit last November. It’s virtually impossible these days to book a flight or a hotel room.

Like Ashgabat in Turkmenistan and Astana in Kazakhstan a few years ago, the new capital Naypyidaw (“the abode of kings”) – built from scratch with natural gas wealth halfway between Rangoon and Mandalay – is surging as a new promised land.

In parallel, the European Union (EU) has lifted a travel ban on senior Myanmar officials. The Myanmar delegation was virtually mobbed at the recent World Economic Forum in Davos. Imagine rows of European CEOs salivating to the tune of Rail Transport Deputy Minister U Lwin saying: “Like Norway and Sweden, we have access to two seas and have fishing potential.”

Talk about a lot of fish to fry; the global mandarins of turbo-capitalism in crisis are falling over themselves with all that gold, gas, oil, teak, jade, uranium, coal, zinc, copper, precious gems, loads of hydropower and – crucially – cheap labour, all there for the taking.

This may not be exactly a letter of recommendation – considering the ignominious past record – but still the IMF, after a two-week trip, declared Myanmar as the “next economic frontier in Asia”.

And this even before the US and the EU lift all their sanctions, arguably within the next few months, supposing the April 1 by-elections – where the star of the show will be The Lady, the iconic Aung San Suu Kyi – and her National League for Democracy (NLD) party – are really free and fair.

In the long run, Myanmar will also need to be compatible with the Association of Southeast Asian Nations (ASEAN) Economic Community playbook, to go into full effect by 2015. Myanmar takes over the chairmanship of ASEAN in 2014.

Yet for all the hoopla around President Thein Sein’s “economic reforms” and the usual suspect companion rhetoric of “untapped markets” and “wide interest from foreign investors”, this is still an ultra-hardcore military dictatorship.

Thein Sein, a former prime minister, is an ex-general and member of the junta. He became president less than a year ago, after sham elections in November 2010 from which Suu Kyi was excluded.

It’s always crucial to remember that the 1990 general election was overwhelmingly won by the NLD. The junta ignored it – and kept Suu Kyi under house arrest for no less than 14 of the past 20 years. There’s no guarantee against the junta deciding to re-arrest Suu Kyi all over again – when no one is watching.

The amazing race

What’s certain is that the (remixed) road to Mandalay will be long. Myanmar badly needs foreign capital.

It starts with a new investment law – spun by Myanmar officials as “the most attractive in the region”, and including an eight-year tax exemption if projects are profitable for the country. The law may be approved by the end of this month.

Then there’s the herculean task of completely overhauling a supremely corrupt and incompetent legal system, and at least trying to contain corruption in all areas of activity. According to Transparency International’s Corruption Perceptions Index, Myanmar is only less corrupt than North Korea and Somalia.

The infrastructure is in tatters – from erratic electricity to crumbling roads, railways and ports. Myanmar will go nowhere without massive investment in the transportation/energy infrastructure.

In this race against time, Asia is ahead of the West. Thein Sein is just back from Singapore – the ultimate economic success story in East Asia. The Lion City will advise Myanmar not only in legal, banking and financial reform but also on trade, tourism and urban planning.

Japan, for its part, wants a bilateral investment treaty as soon as possible. And Thai Prime Minister Yingluck Shinawatra also met with Suu Kyi in December. Thais pride themselves of being one of Myanmar’s top trading partners already, and want to market themselves as investment leaders and the key hub for regional trade involving Myanmar.

And then there are the two hippos in the golden pond – China and India.

Enter Pipelineistan

Myanmar is usually regarded in the West as the strategic crossroads between BRICS members India and China, and between them and the rest of south-east Asia. For the paranoid/conspiratorial set, it’s above all a land bridge for China to dominate the Indian Ocean.

As far as the Pentagon is concerned, Myanmar is absolutely essential in the strategy, recently announced by President Obama, of “pivoting” from the Middle East to East Asia.

For their part, Myanmar’s wily leaders are now starting to play up Singapore elder statesman’s Lee Kuan Yew’s maxim that the US “must be a counterbalance” to China in south-east Asia. It’s unlikely that Myanmar will be turned into a Chinese province.

The Pipelineistan scenario is fascinating. A port is already under construction in Kyaukpyu – in Arakan state, on the west coast of Myanmar, close to Bangladesh. This is the home of the immense Shwe gas fields. The port will connect via a dual oil and gas pipeline to Yunnan, the huge southwest China province.

For China this Pipelineistan node could not be more strategic, because it bypasses a crucially problematic choke point for Beijing; the Strait of Malacca. And the best route to the heart of China from the Indian Ocean is via Myanmar – and not via Pakistan or Bangladesh.

But as Zha Daojiong, a professor at the School of International Studies at Peking University has observed, there is no conspiracy involved. Actually Myanmar’s first choice for the delivery of oil and gas was India. Only after India dragged its feet, “and the international consortium of gas field developers (that did not include Chinese) was running out of patience, did Myanmar turn to China as an outlet for sales”.

There’s no way Myanmar won’t be central to China’s vast, complex energy strategy. The gas to Yunnan will certainly come from Myanmar. But the oil will have to come from the Middle East (mostly Saudi Arabia and Iran, top Chinese providers) and Africa (Angola and Sudan). For all these networks to function smoothly, China needs a stable, relatively prosperous Myanmar.

Then there’s the even bigger Dawei port, in the southern coast. This one is geared towards Thailand, the rest of Southeast Asia and southern China. For Beijing, this is also a key alternative to the Strait of Malacca; it will boast a Chinese-style Special Economic Zone (SEZ) and an industrial park, developed by an Italian-Thai partnership. Another SEZ established near Rangoon will also benefit China plus Japan, Korea and Thailand.

The Lady and the tramps

The military junta, which used to be known by the Orwellian acronym SLORC (State Law and Order Restoration Council) renamed the country Myanmar in 1989. Myanmar is the Bamar term for the country’s central valley. Needless to say, the country’s ethnic hill tribes – Karen, Shan, Kachin and others – could never agree with it, and fought it relentlessly. In practice, the now “reformed” junta has treated the absolutely majority of its citizens – even the Bamars – in an absolutely ghastly way.

For all the official talk of an ongoing “peace process”, the concept of civil society in Myanmar is still virtually non-existent. So it all depends now on the election on April 1, and how Suu Kyi and her party will be able to rally not only Myanma but also the hill tribes towards sharing a real social contract.

That’s the hope shared by all who have been deeply moved by the terrible beauty (Yeats comes to mind) of the country and the graciousness of its people (including this writer; and in this respect, my friend Peter Popham’s book, The Lady and the Peacock: The Life of Aung San Suu Kyi, is highly recommended.)

Yet Myanmar is immensely more complex than a simple beauty (The Lady) and the beast (the junta) script. It will take the political activism of millions to end what’s been a de facto civil war raging for the past six decades; most of all a war of the Myanmar military against the overwhelming majority of their own people.