Take the money and run in Myanmar

http://www.atimes.com/atimes/Southeast_Asia/KB12Ae02.html

Feb 12, 2009

By Norman Robespierre

YANGON - Recent media reports indicate at least eight ministers and the mayor of the old capital of Yangon will resign their posts as a presage to Myanmar's general elections scheduled for 2010. The list is a veritable who's who of the ruling State Peace and Development Council's (SPDC) top lieutenants and signals the regime's intention to keep its members prominent in the transition towards an elected civilian-led administration.

Several of the outgoing ministers have served especially long tenures for Myanmar's cut-and-thrust politics and are expected to run for office at the upcoming polls under a military-supported political party. The regime has promoted the elections as part of its seven-step road map to democracy; opponents see the



promised political transition as a sham to give a veneer of legitimacy to continued military rule. It's unclear where the departing ministers fit into that political future.

Minister of Construction Major General Saw Tun, for instance, has maintained control over the lucrative construction portfolio since 1995, predating the formation of the SPDC. While allegations of rampant corruption have tarnished the reputations of many Myanmar ministers and ministries, Saw Tun's name is usually not mentioned among them. According to a Myanmar businessman who knows the minister, Saw Tun often says that it is better to make a little bit of money over a long time than to make a lot of money quickly. Apart from that temperance, his longevity in the position can also be attributed to his hometown ties to junta leader Senior General Than Shwe, who likewise hails from the Kyaukse township of the country's central Mandalay division.

Another long-serving minister is U Aung Thaung, who has served as Minister of Industry No 1 since the SPDC's formation in 1997. According to businessmen who know both ministers, U Aung Thaung is not as inhibited as Saw Tun. Many Myanmar ministers who have bid to maximize short-term profits from their positions have had their careers ended prematurely on corruption charges. Some say U Aung Thaung has survived in his post because of his close connections to the senior leadership: He is a known favorite of Than Shwe and his son is married to the daughter of Vice Senior General Maung Aye, the junta's second top-ranking official.


Other officials apparently set to trade their military khakis for civilian garb include Minister of Forestry Brigadier General Thein Aung, Minister of Immigration and Population Major General Saw Lwin, Minister of Livestock Breeding and Fisheries Brigadier General Maung Maung Thein, Minister of Transport Major General Thein Swe, Minister of Agriculture and Irrigation Major-General Htay Oo and Minister of Communications, Posts and Telegraphs Brigadier General Thein Zaw. Also mentioned is Yangon mayor Brigadier General Aung Thein Lin.

Some of the departing ministers are believed to be building up financial war chests for the elections or securing preferential deals and concessions for their families' businesses. It's a sometimes predatory process that has increased competition for resources among the ministers and exerted pressure on the country's private business community.

Ministers and their associates have in particular targeted foreign investors, pressuring many of them to renegotiate their existing contracts and business arrangements. Officials have through the discretionary power of their ministries reviewed the documentation of various joint foreign-local ventures for legal loopholes to pressure companies into forfeiting assets, accepting new business partners or receiving lower profit percentages than originally agreed, according to people familiar with the situation.

One of the higher profile victims is Woodlands Travel, a tourism company founded in 1995 by U Win Aung and which lists company addresses both in Yangon and New Jersey in the United States. The company's website lists its investment in two boutique hotels, the Kandawgyi Lodge and Popa Mountain Resort, in line with the government's eco-tourism campaign.

Unstated on the company website, however, is the source of those investments' funding, though local businessmen note that several Singaporeans hold senior company positions. Speculation recently intensified around the Woodlands Travel when its two boutique hotels - among the country's finest upscale resorts - were purchased last November by Htoo Trading Co. The controversial company is headed by Tay Za, a businessman known for his close SPDC connections and who was individually targeted by the US government's new "smart" financial sanctions.

It's not clear whether Tay Za purchased the properties independently or as a nominee in league with junta officials or their family members, despite speculation that the Ministry of Forestry had earlier exerted pressure on the company. According to a source intimately familiar with the deal, Minister of Forestry Thein Aung had previously sought to have Woodlands Travel modify its concession terms to include another local company, which apparently offered little in terms of expertise or capital.

Company officials instead decided to sell the properties outright at below market value rather than face a protracted legal battle over being forced to take on the new business partner and retaining their original contractual rights. That, the source said, would have put the company up against "influential people" and made future business difficult.

Woodlands Travel had originally brokered its deal under the auspices of former intelligence chief and prime minister Khin Nyunt, who was ousted from power on corruption charges in October 2004 and is currently under house arrest. Thein Aung's ministry office declined an Asia Times Online request for a telephone interview to address the allegations.

Expansive family empire
Minister for Industry No 1 U Aung Thaung has come under similar criticism. The controversial minister was paraphrased in a recent media report saying that he would retire only after providing for a comfortable future for his children. Accounts from one well-placed source indicate the long-serving minister has followed up those words with actions.

In recent months, the source says several businesses and hotels in the popular Bagan Nyaung U tourist area have been approached by ministry officials to grant concessions and contracts to U Aung Thaung's family businesses, including the Aung Yee Phyo Co Ltd and IGE Co Ltd companies. Both companies are run by his sons, Nay Aung and Pyi Aung. Given the influence of ministers and ministries in Myanmar's political and economic systems, such approaches would be difficult to reject without fear of repercussions.

A senior advisor to both companies, contacted at their Yangon-based offices, told Asia Times Online that he had "never heard anything" about the allegations and didn't know if they were true. Initially involved in industrial equipment and supplies trading, U Aung Thaung's family businesses have recently expanded into the energy, information technology and tourism sectors, which the senior advisor acknowledged.

The company's bid to move into the tourism sector, currently in a lull but expected to accelerate after the 2010 elections, has been viewed by some in Yangon as an attempt to further diversify the family's business holdings before relinquishing his ministerial post. The ministry's head of office, U Myint Swe, said by telephone that he had "no comment" on whether the ministry was trying to wrest concessions from private businesses in the Bagan area. He said that the minister was away from his office and unavailable to speak by telephone.

There are several allegations of top government officials using their positions to ramp up personal business activities before the 2010 transition towards democracy. One recent Kachin News Group report suggested that the planned move towards civilian rule has served as catalyst for SPDC officials to cash in on their positions in the northern Kachin State, including through the recent establishment of road closures to tax passing motorists.

Corruption is so endemic in Myanmar, which consistently ranks among the global worst in international country graft ratings, that it's difficult to tie any given incident specifically to the 2010 elections. Yet if the reported ministerial changes come to fruition, the departure of some of the junta's longest-serving members will open up to a new generation of soldiers and regime loyalists some of the most lucrative ministerial positions in government.

Ministerial positions are normally given to flag officers and occasionally deputy ministers promoted to the ministerial level. Considering the personal profits that could be accrued in the portfolios reportedly set to be vacated, it is possible that incumbent ministers from less lucrative ministries, such as the Ministry of Culture or Ministry of Social Welfare, Relief and Resettlement, could be transferred laterally, as has happened in previous shake-ups.

Their current positions could in turn be filled with flag officers currently serving in operational positions within the Tatmadaw, as the Myanmar armed forces are known. Cabinet reshuffles are common inside the SPDC, an outgrowth of the regime's need to provide cushy advancement opportunities to officers who occupy critical field-grade positions, including command over areas fighting against ethnic insurgent groups.

Often the cabinet reorganizations are timed to ensure a number of brigadier positions open up for colonels graduating from the National Defense College. The frequent ministerial musical chairs among generals and ministers has the psychological effect of promoting loyalty while ensuring that nobody gets too comfortable in their position. Officers often feel a sense of relief and renewed loyalty to the top decision-makers if they still have a job when the music stops.

In private conversations, some senior SPDC officers suggest that the 2010 election date is not etched in stone. Knowing that the 76-year-old Than Shwe intends to hold onto supreme power for as long as possible, they anticipate the democratic transition could be postponed for any number of reasons, including, according to one officer, the simple top-down determination that "the country isn't ready". The prognostications of the junta leader's astrologer, E Thi, could also offer cosmic cause for delay, he suggests.

Until then, Myanmar's citizenry and businesses will likely come under increasing pressure from ministers and other officials preparing for either elections or life outside of public office. All in all, the mounting money grab augurs ill for the political change Than Shwe and his junta has promised democracy will hold.

Norman Robespierre, a pseudonym, is a freelance journalist specializing in Southeast Asian affairs. Asia Times Online's Southeast Asia Editor Shawn W Crispin contributed reporting from Bangkok.

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