Myanmar’s military makes money grab

YANGON, 17 February 2021: Tourism crops up as one of the industries that line the pockets of Myanmar’s ruling government but nothing on the scale of mines, banks, petroleum, agriculture and the gems trade.

Experts and activists say key industries that have attracted foreign investors give army chiefs access to “enormous wealth from the sprawling conglomerates they control”, according to a widely publicised AFP report this week.

The report accuses the military coup leaders of “vested interests in large swathes of the country’s economy, providing them with a colossal and closely guarded fortune that the US President has targeted with sanctions.”

After last week’s military takeover to oust civilian leader Aung San Suu Kyi – and the subsequent protest crackdown – calls have grown for international penalties to be introduced against the generals.

Last Thursday, the US President Joe Biden said his administration was “cutting off military leaders’ access to USD1 billion in funds in the US, while the Treasury Department blocked any US assets and transactions with 10 current or former military officials held responsible for the 1 February coup.”

Eventually, the spotlight will focus on tourism and hospitality and the role of US and European hotel groups in Myanmar. If there are links to coup leaders pressure will mount to bring in more sanctions. History will repeat itself with international chains forced to abandon their investments in the country and withdraw their branding. It will set the country’s hospitality business back by decades.

The AFP report identifies two highly secretive military-controlled corporations — Myanmar Economic Holdings Limited* (MEHL) and the Myanmar Economic Corporation (MEC)*. Between them, at least 133 companies in the country are wholly or partially overseen by generals, according to a report by Justice For Myanmar (JFM).

According to Wikipedia, “MEHL has a monopoly on the country’s gems sector and also has a significant portfolio covering various industries including banking, tourism, real estate, transportation and metals.

Tourism investments touch on hotel investment, airlines, airports, hotel booking systems and aviation service industries. MEHL has exclusive access to secure preferential contracts with foreign firms. Most FDIs in Myanmar are concluded through joint ventures with MEHL.

Some of MEHL subsidiaries*
Bandula Transportation
Parami Bus
Myawaddy Trading
Five Stars Ship Company
Myawaddy Bank
Virginia Tobacco Company Limited
Myawaddy Tours & Travel
Myawaddy Enterprises Group
Pyininbin Industrial Park (in North Yangon’s suburbs)
UMEH Textile
Jade mines (in Kachin State)
Ruby and sapphire mines (in Shan State)
(*Wikipedia)

Wikipedia describes MEC as “owned by the Burmese military, along with the Union of Myanmar Economic Holdings. It generates most of the Burmese military’s operating revenue, which are not held accountable to the Burmese parliament.

MEC Business interests
“In 2009, MEC had 21 factories, including four steel plants, a bank, a cement plant and an insurance monopoly. It has remained on the United States’ list of sanctioned companies due to its affiliation to the Burmese military.

“MEC also operates Innwa Bank, one of Burma’s few banking chains. A subsidiary of MEC, Star High Public Company, owns 28% of Mytel, the one of Myanmar’s largest telecommunications company, in a joint venture with Viettel.
(*Wikipedia)

But the most lucrative and largely unregulated earnings come from the jade and ruby trade that is under the iron fist of the military-owned businesses. Myanmar is the world’s largest producer of jade, and the trade is estimated to be worth billions of dollars a year. Only a very small part of the financial windfall ends up in state coffers, AFP reports.

Under the MEHL portfolio, subsidiary companies reportedly hold the largest number of jade mining licences. The company, Myanmar Imperial Jade Co Ltd was among the three gems entities slapped with US sanctions Thursday.

MEHL has partnerships with companies in China, Japan, South Korea and Singapore, among others. Between 1990 and 2011, some USD18 billion was paid out to them, according to an Amnesty International report in September 2020.

Ruling for nearly half a century, “the military top brass had time to enrich themselves”, said Francoise Nicolas, Asia director of the French Institute of International Relations.

The brief stint of quasi-civilian rule from 2011 to 2021 did little to change that. But the military may have feared for its future prospects after Suu Kyi’s party won by a landslide in November, Nicolas told AFP.

“This risked endangering part of their wealth and was very probably part of their decision to launch a putsch,” she added.

In the wake of the takeover, the military has regained control of state companies. It now oversees the Myanmar Oil and Gas Enterprise — which has partnerships with France’s Total and the US’s Chevron — and is a hugely important asset reportedly netting nearly a billion dollars a year from natural gas sales.

So far, Japanese brewer Kirin and Singapore-based oil company Puma are the only foreign corporations to have announced they are reconsidering their operations in the country. Kirin said it would be looking for a new partner, instead of MEHL.

Total, which operated largely in the gigantic offshore Yadana gas field and paid USD257 million to the Myanmar government in 2019, said it would evaluate the impact of the coup.

Australia’s Woodside, which holds a stake with Total in another offshore project, said it was “monitoring the situation”.

Debbie Stothard from the International Federation for Human Rights pushed for more penalties to throttle the generals’ access to funds.

Stothard also urged international companies to break all partnerships with the ruling leaders and said Singapore — the largest foreign investor in Myanmar — was key.

“Some top Burmese military officials have had a lot of personal investments and bank accounts in Singapore since the mid-2000s. The trend has accelerated in recent years,” she said, adding that the city-state “has the leverage to act against” the army chiefs.

Justice For Myanmar’s Yadanar Maung urged swift retaliatory measures. “Without definitive action now, the military will inflict more violence against the people, and democracy will not have a chance,” she said.

But others cautioned against plunging one of Southeast Asia’s poorest countries back into an economic chokehold, especially as the junta is well-versed in circumventing sanctions.

Having run the country for decades under crippling embargoes, the military “will be prepared to do so again”, said Myanmar-based political analyst Richard Horsey.

“Policymakers must resist the urge to impose progressively harsher measures without clear-headed cost-benefit analysis,” he added. “Don’t inflict harm on Myanmar people for the sins of their rulers.”

Amnesty International’s deputy regional director for research, Emerlynne Gil, said: “The international community must use all the tools at its disposal to respond to the Myanmar military’s assault on human rights. Myanmar’s military leadership includes alleged perpetrators of crimes against international law, and they cannot be allowed to continue to commit abuses unchecked.”

(Source: AFP, Wikipedia)

1 COMMENT

  1. This is so sad, especially in this day and age where many are fighting for justice and freedom. Let’s hope that the world’s governments stand up and impose new elections, overseen by outsiders . I feel so bad for the lovely people of Myanmar that have brutally has their freedom snatched from them .

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