Burma's Soldiers Of Fortune

Ruling class Army cadets at ease in a juice bar in Pyin U Lwin, home to top military academies for training officers

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Monday, Jul. 26, 2010
Soldiers Of Fortune
By Hannah Beech / Pyin U Lwin

The weekend invasion begins with the click-clack of thumbtack-adorned shoes. For four hours, senior cadets from Burma's Defense Services Academy (DSA) and its sister technological institute march through the streets of Pyin U Lwin, briefcases in hand, maroon berets perched on proudly angled heads. Most are preoccupied with securing the rations of daily life: soap, socks, kung fu DVDs. But even as the stern-faced students contribute to the local economy, shopkeepers whisper about the arrogance of kids who are indoctrinated to believe they are, as the massive English sign in front of the DSA campus proclaims, the "triumphant elite of the future." Even after promised elections later this year, Burma, known by the ruling junta as Myanmar, will remain one of the most militarized states in the world. No wonder the privileged young men marching through this central Burmese town expect nothing less than to one day rule their cowed nation.

At a juice bar in this agreeable former British hill station once known as Maymyo, I chat with a group of cadets hunched over glasses of strawberry milk. Their attitude toward locals notwithstanding, the cadets are polite and surprisingly willing to speak to a foreigner. One baby-faced 20-year-old tells me his major is naval architecture, sharing dreams of designing warships for a nation that boasts 450,000 soldiers and dedicates 21% of its spending to the military, according to lowball official statistics. Another student is focusing on hydro-engineering; he plans to build dams, a lucrative new pursuit of Burma's military dictatorship, which sells plentiful energy to neighboring nations while leaving two-thirds of local households without access to any electricity. Yet another narrow-shouldered cadet is studying nuclear chemistry and confides, "my specialty is uranium and plutonium studies." His chosen subject is particularly topical given the U.S. State Department's recently stated concerns over a possible Burmese nuclear program — a project that a DSA graduate turned defecting army major tells exile media has its headquarters at the Defense Services Technological Academy's fortified campus in Pyin U Lwin. (See pictures of Burma's slowly shifting landscape.)

Later, I wander into an Internet café packed with cadets waiting for the electricity to be restored — a constant waiting game in Burma — so they can play World of Warcraft. I ask if they are skilled at the computer game. "Of course, we are good," says an English-speaking nuclear-physics major, his tone factual, not boastful. "We are students at the DSA. We are very superior." A Burmese friend, who passed all the academic and psychological requirements for the DSA but was rejected at the last moment because he had flat feet, fills me in on the cadets' mentality. "The point of going to the DSA is so you can become a rich and powerful person," he says, relating the trajectory of a schoolmate who attended Burma's West Point. His childhood buddy is now a rising star at a northern regional command, which means he can profit from government timber and mining businesses. "He is rich, his parents are rich, his brothers and sisters are rich, his children will be rich," says my friend. "They don't worry about anything."

Burma may be one of the poorest and most isolated nations on earth, but an emerging elite — a burgeoning officer class, attendant business cronies and the coddled offspring of both groups — is only getting richer, more powerful and less accountable. Over the past few years, the Burmese economy has been transformed as the junta has auctioned off the nation's plentiful natural resources to the highest foreign bidder, Western sanctions notwithstanding. The influx of cash has been reserved for the razor-thin top stratum of Burmese society, whose ostentatious displays of wealth shock a citizenry struggling just to survive. "For a long time, as the regime ran the economy into the ground, there was a feeling that most everyone was growing poor equally," says Sean Turnell, an economist at Macquarie University in Sydney who studies Burma. "But now tensions are growing because you see a small elite growing immeasurably richer while others are getting poorer. It's all about relative position, and in Burma today, the inequalities are growing faster than just about anything." (See pictures of Burma's decades-long battle for democracy.)

Poor Little Rich Country
Burma, which has been run by a military regime since an army coup in 1962, is no tropical North Korea. Amid the crumbling colonial buildings, Rangoon, the country's largest city, boasts glittering nightclubs, day spas and even espresso bars. In fact, because of mushrooming foreign direct investment (FDI) in the country's natural bounty — in 2009, 100% of implemented FDI was from the resource-extraction business — the government has more than $5 billion in foreign-currency reserves at its disposal, according to the International Monetary Fund (IMF). Financial chicanery, however, keeps most money flows obscure. For instance, Burma converts revenues from its lucrative natural-gas sector at an official exchange rate of $1 to 6 kyat, though the market exchange rate is roughly $1 to 1,000 kyat. That means of every $1,000 in energy earnings, just $6 goes into national coffers. Where the rest goes is a mystery. Global watchdog Transparency International ranks Burma as the third most corrupt nation in its survey of 180 nations, outdone only by Afghanistan and Somalia.

See pictures of tension in Burma.

Read "Chevron, Total Accused of Human-Rights Abuses in Burma."

Certainly, the revenues from natural gas, oil, timber, gems and other commodities haven't been used for the betterment of the Burmese. Five years ago, the country's military rulers spent billions of dollars building a sprawling new capital out of scrubland, forcing many civil servants to move from Rangoon with just a couple of days' notice. In two decades, the nation has doubled the number of soldiers in the Tatmadaw, as the Burmese armed forces is called, even though there are far fewer battles to fight against ethnic insurgent groups. Twenty Russian fighter jets — not to mention suspicious nuclear technology — are the military's latest playthings. On the outskirts of Pyin U Lwin, another costly megaproject is materializing: a cybercity whose vastness belies the fact that Burma, even with a proliferation of Internet cafés in Rangoon, remains one of the least wired nations on earth. And in the big cities and beyond, construction crews are busy outfitting Burma's upper classes with marble-lined mansions, fancy vacation homes and towering Buddhist pagodas chiseled with the names of generals and their cronies.

The building boom has surged even as at least one-third of the nation lives below the poverty line, according to the U.N. Inflation is so high that the U.N. estimates an average household spends 73% of its income on food. The World Health Organization ranks the country's health care system as the second worst in the world, just ahead of Sierra Leone's. On the recently built highway from Rangoon to Naypyidaw, the new capital, I meet a 15-year-old girl who spends her days in the 45�C heat carrying chunks of rock on her head. She has been working on this road since she was 11 years old. Her daily pay? $1.50 — and that's when Max Myanmar, a company run by a junta crony whose name was added to the U.S. sanctions list last year, bothers to pay at all. On its polished English-language website, Max Myanmar says employees' welfare is a top priority and that the conglomerate covers "field allowance, bonus, meals, medicare, education allowance and annual celebrations for pleasure and relaxation." The girl laborer has enjoyed none of these. But she dreams one day of reaching the end of her road. "I have heard that Naypyidaw has so much electricity that nighttime looks like day," she says. "Can you imagine such a beautiful place?" (See pictures of Burma's discontent.)

Following the Money
With the nation set to hold carefully orchestrated elections later this year, the economic disparities may soon yawn even wider. The junta ignored the results of Burma's 1990 polls, which the military's proxy party lost badly to Nobel Peace Prize winner Aung San Suu Kyi's National League for Democracy (she remains under house arrest). Now, military leaders seem to want to present a fig leaf of civilian rule to the West. Top posts like the presidency and key Cabinet seats, as well as a big chunk of parliament, will be reserved for military members. But to maintain the appearance of a transition to civilian government, the junta has in recent months privatized dozens of state-owned (read: military-owned) companies. Auctioning off these enterprises creates cash to fund the military's proxy Union Solidarity Development Party in the upcoming polls. In addition, many high-ranking officers are being forced to stand in the elections and they, along with other top brass uncertain about the postelection landscape, must be worried about losing their military lifeline. A redistribution of state assets to people close to them secures their future. (Read "Burma Court Finds Aung San Suu Kyi Guilty.")

Indeed, control of factories and banks, gas stations and ruby mines has been handed over, without exception, to a select circle of favored businessmen or military progeny. Many of these men — for they are all men — are targets of Western sanctions, such as Tay Za, a DSA dropout whose business empire has tentacles in everything from airlines to hotels, and Steven Law, the son of a drug lord whose conglomerate constructs dams, roads and practically any other project that uses copious amounts of cement. These cronies burnish ties with the junta through directorships, donations and even marriages. "I don't know of a single big company that doesn't have a princeling or other [general's] family member on its board or involved somehow," says economist Turnell. "The problem with this system is that these robber barons aren't creating an environment for sustained growth or the building of industry. It's just pure racketeering."

I see how wealthy the Burmese elite has become when I tour the Mindhama Residences in Rangoon, a Tay Za – owned housing development just across the street from an exhibition center where massive slabs of jade are piled high on government trucks. With villa types named after Burma's mineral wealth, like Imperial Jade and Red Ruby, the mansions start at $850,000 and go up to $1.2 million, not counting interior decor. All but one has been sold — this in a nation where per capita GDP is just $442, according to the IMF. Might I be interested in the remaining one? The agent allows me to gawp at the splendor: swirls of gilt and meters of marble, Jacuzzi bathtubs, crystal chandeliers. I feel like I have wandered into a Texas McMansion. "Who has bought the other houses," I ask, feigning interest in my potential neighbors. "Some businessmen," he says. "But mostly ..." he trails off, then taps his fingers to his shoulders, the Burmese code for army stripes.

Read "A Closer Look at Burma's Ethnic Minorities."

Read "Viewpoint: Why Foreigners Can Make Things Worse for Burma."

Hardwired
The red sign blocking the main entrance to the half-built Yadanabon Cybercity looks innocuous enough to someone who doesn't read the local language, a swirl of curved Burmese letters and numbers. But the people of Burma have been conditioned to fear this sign: "This area is under military order 144," it says. "Shoot to capture." It's a measure of Burma's peculiar mix of isolationist paranoia and technological ambition that its future Silicon Valley has been declared a military zone inaccessible to normal civilians. Inside the 4,050-hectare construction site, I drive along empty stretches of tarmac, past plots of land that will soon boast offices for Burma's biggest crony companies: Htoo Trading, Tay Za's conglomerate; IGE, headed by the son of Burma's Minister of Industry General Aung Thaung, who is barred by the European Union; Redlink Communications, owned by the sons of the junta No. 3, General Thura Shwe Mann, one of whom is on the U.S. visa blacklist. Thai, Malaysian, Russian and Chinese firms have staked their ground too. Burma's state media reports that foreign companies have so far invested $22 million in the first phase of Yadanabon.

Ever since images of protesting monks escaped from Burma during the crushed demonstrations of 2007, the regime has been scrambling to centralize control over the Internet. Thousands of websites have been blocked, cyberdissidents jailed and debilitating strikes launched against exile-media websites. Yadanabon will be the nerve center of Burma's Internet operations. But it's not all computer cubicles and high-tech wizardry. On a point overlooking the famous hills of Shan State, $200,000 vacation villas are being built. One model drawing shows a BMW SUV in a garage, and the half-finished houses already feature Tudor trimmings and spacious verandas. Nearby, a farmer toils on a sliver of land that has belonged to her family for at least three generations. Soon the Cybercity will eat up this tiny plot too. The woman doesn't expect any compensation since she received nothing when the rest of her fields were confiscated a year ago. "We are little people, so we cannot complain," she says. "All we can do is concentrate on feeding ourselves." (See pictures of the junta blocking Burma from receiving aid after a cyclone ripped through the country.)

The man entrusted to oversee Yadanabon is neither a businessman nor even an adult. But being the grandson of junta leader Than Shwe brings perks. A scrawny soccer fan with no discernible skills on the pitch, Nay Shwe Thway Aung was once added to the Burmese national team when prominent Japanese player Hidetoshi Nakata went to Rangoon for an exhibition match. Other privileged Burmese youth have made an impression off the field. The most notorious was an informal collective of military offspring called Scorpion, which was forced to disband after two members spooked the junta No. 2, General Maung Aye, by riding up to his car on motorcycles and making menacing gestures. Maung Aye responded by outlawing most motorcycles in Rangoon, a ban that still holds today. (Read "Getting to Know Burma's Ruling General.")

Even beyond Scorpion, there are plenty of other rich kids roaming Rangoon. At the packed JJ nightclub — where the bidding at "model shows," as prostitute auctions are called, reaches $2,500 for a comely maiden — one manager complains about the impunity with which military officers and their sons operate. "They drink for free and can pick girls for free," he says. "Nobody dares say no; otherwise we will be finished."

Flying High
There are no such diversions in Naypyidaw, the austere capital that takes a good hour to cross in a car — an hour in which I pass perhaps a dozen other vehicles. When I visited two years ago, I figured the barren landscape dotted with little more than grandiose ministry buildings and golf courses would eventually be filled with normal signs of life. But today, save the occasional color-coded civil-servant housing complex or shopping center already deteriorating under the unrelenting sun, the capital is still a monochromatic emptiness, as if Mark Rothko took to urban planning. The rumor goes that Naypyidaw was built without nightclubs or bars to prevent princelings and their cohorts from bad behavior.

So the party goes on in Rangoon instead — or in Singapore, where some wealthy Burmese maintain homes and bank accounts. Riding one afternoon in Rangoon in a dilapidated taxi that saw its best days four decades ago, I hear a deep-throated purr behind me. Turning around, I spot a sunflower-yellow Lamborghini careening past the potholes of Strand Road. The taxi driver knows the luxury car well. It is a plaything of Tay Za's family. Later I spot the same vehicle, along with several Mini Coopers and a Ferrari, parked at the mansion of the man the U.S. Treasury Department calls "an arms dealer and financial henchman of Burma's repressive junta." In June, Tay Za is believed to have helped the Burmese regime buy even flashier modes of transport: 50 Karakorum light attack aircraft from China. (His aviation company is also credited with brokering last year's deal for the Russian MiGs.) All these new planes will surely please the DSA cadets, who perhaps one day can graduate from computer games to real fighter jets. For the "triumphant elite of the future" — like the rest of Burma's pampered classes — even the stratosphere is within easy reach.