Tuesday, September 27, 2022

Follow the money: Myanmar coup puts pressure on army companies

From SIM cards to beer, parachuting and jade mining, Myanmar’s economic activity has few places to escape the long arms of its army Tatmadaw.

But after the high-ranking general Aung Hlaing led a coup on February 1 that disrupted a 10-year democratic experiment, campaign activists once again set their sights on the military’s huge and lucrative business interests.

“Min Aung Hlaing carried out the genocide against Rohingya, and there was almost no international response,” said Anna Roberts, executive director of the British Myanmar Movement. “He may have calculated that there will be a small response, but it will be a price worth paying.”

Aung San Suu Kyi and other senior members of the National League for Democracy (NLD), who won re-election on a slippery slope in the November election, have been detained for more than three weeks for military fraud and unsubstantiated claims to prove its seizure of power.

The United States has announced financial sanctions to prevent the military from using billions of dollars of funds deposited in the United States, as well as targeted actions against militias (including Ming Ang Lalin), which further increased the measures taken after the 2017 crackdown. These measures prompted Iraq to go into exile. More than 740,000 mainly Muslim Rohingya entered neighboring Bangladesh.

On Tuesday, after security forces used force to suppress peaceful protesters who killed two people, Washington added two more generals to its sanctions list.

Follow the money: Myanmar coup puts pressure on army companiesAfter the military used force on protesters to kill two Americans last weekend, the United States added two generals to its sanctions list.The fighters say that the international community must pursue the commercial interests of the military and its financial network [Reuters]

But experts say that the international community must go further than individual generals and engage in a wide range of commercial activities of the armed forces. “By doing business, the military has been able to obtain monopoly control over key areas of the economy.” The militant group Myanmar said in an email response to the problem.

“During the National League for Democracy, military enterprises gave them power and enabled them to carry out genocide, war crimes, and crimes against humanity. The military was able to use commercial funds to support military units, including units that committed atrocity crimes. , Which means they are not dependent on the defense budget allocated by the parliament.”

“Massive Theft”

When Ne Win (Ne Win) nationalized the economy as part of his “Myanmar Way to Socialism” after the 1962 coup, the military began to get involved in business.

As the military abandoned the planned economy, it began to foster a kind of crony capitalism, where senior generals and officers were able to ensure priority access to many sectors of the economy, including some of the most profitable industries in the country. In some areas, only military companies and their affiliates can operate.

This process built momentum in the asset sale in 2011, when senior generals and their families were able to use economic opening to ensure control of some of Myanmar’s major assets.

Roberts said: “True elites and corporate friends and family benefit from this large-scale theft of national resources.” “Marine soldiers will not benefit from it, and it is clear that ordinary people will suffer because of the money that should have been spent on health and education. Was transferred to the purchase of military equipment.”

Clare Hammond, a Burmese researcher at Global Witness in London, said that although the commercial interests of the armed forces are still largely a “black box,” recent reports and document leaks revealed two fortunes. More details of the crucial megagroups Economic Holdings Limited (MEHL) and Myanmar Economic Corporation (MEC).

Follow the money: Myanmar coup puts pressure on army companiesThe army controls Myanmar’s rich natural resources, including timber, gems and jade [file: Aung Shine Oo/AP Photo]

The Ministry of National Defense established MEHL in April 1990 to “provide economic benefits for soldiers, veterans and the people of Myanmar, and support the economic development of the state.”

In its 2009 telegram, the US Embassy recommended sanctions against MEHL, all its wholly-owned subsidiaries, board members and general managers. The company “ignores the influence and breadth of military control of Myanmar’s economy.” “Its influence and wealth are key components of the regime’s carefully designed sponsorship system to maintain power.”

Analysts say that even with reforms in the past decade, the military’s commercial influence is still important, and the coup may be seen as an attempt to protect the military’s wealth and interests from possible reforms in the civil administration.

In 2019, the National League for Democracy managed to ensure civilian control of the executive branch, which oversees important bureaucratic appointments, and also revised the gem and jade law.

Associate Professor Htwe Htwe Thein of Curtin University in Australia wrote in an article published in The Dialogue: “Many people are shocked that the military has been forced to give up control.” “This shows that the military’s control over government administration and patronage has weakened. , This is the core of its ability to accumulate and protect its wealth.”

Shareholder camp

The United Nations fact-finding mission established after the Rohingya crackdown detailed the military’s commercial interests in a 110-page report released in August 2019.

The report details the extent of the armed forces’ involvement in economic activities-exposing 106 MEHL and MEC-owned companies and 27 close branches to the military-and the armed forces’ control of Myanmar’s natural resources, including jade mining.

The United Nations says that Tatumado’s network of commercial interests allows it to be “independent of accountability and supervision.” “By controlling its own business empire, Tadmadaw can escape the accountability and supervision that is usually caused by civilian oversight of military budgets.”

Amnesty International’s business and human rights adviser Monce Ferrer said: “The military has tentacles all over the country.” Last year, the agency published a report that estimated that the military’s dividends from the Federal Reserve alone amounted to about $18 billion. (Based on the official exchange rate, Myanmar Kyat (1 to 6 kyats) for 20 years until 2011.

Follow the money: Myanmar coup puts pressure on army companiesThe military’s broad commercial interests mainly benefit elite officers and their cronies [File: Hein Htet/EPA]

Amnesty International learned from an unprecedented document obtained by the Myanmar Ministry of Justice that the group is not only controlled by top military leaders (those who led the coup on February 1), but also controlled by different factions of the armed forces. Army, Navy and Air Force-even fighting against battalions.

“It is very unique when you own the first-line battalion and they are shareholders of MEHL,” Ferrer told Al Jazeera.

The Myanmar Center for Responsible Enterprises tracks the transparency and standards of Myanmar’s corporate governance through its annual Pwint Thit Sa report. The center stated that it had a meeting with 15 members of MEHL’s management in August last year to discuss 3% of its 2020 report. Score.

They highlighted the difference in shares and the fact that senior officials were not identified as political figures. MEHL, which has business dealings with many foreign companies, told MCRB that the company’s goal is to pay 30% of dividends, while institutional shareholders such as the camp use its dividends for “welfare rather than military purposes.”

The report pointed out that as of November last year, MEHL had 7 directors and 1 alternate director, all of whom were active or retired military personnel. The camp owns about one-third of the shares, and the rest is owned by individuals. It pointed out that the company’s articles of association also indicated the existence of a “steering committee” (supervising the committee) headed by Min Aung Hlaing.

At the same time, the Pwint Thit Sa report described MEC as a “military enterprise controlled by the Tatmadaw”, which is neither controlled by civilians nor supervised by the Auditor General.

MEC scored only 2% on transparency, highlighting the challenges faced by anyone trying to understand or follow military business dealings.

Follow the money: Myanmar coup puts pressure on army companiesOn February 1, thousands of people took to the streets of Myanmar to show their opposition to the coup. [Ye Aung Thu/AFP]

Follow the money

Nonetheless, the candidates said that efforts must be increased to determine military revenue from legal and illegal sources, and to investigate the way military funds pass through the global financial system so that sanctions can be effective.

Hammond said: “We are calling for targeted sanctions at the same time that countries that impose sanctions work hard to investigate military revenue streams and expose the identities of unknown shareholders and wealthy banks.” “This is very critical because we It is necessary to understand exactly where the military makes money and keep their money in order to effectively put pressure on those funding sources.”

Others also pointed to the military’s banking and financial connections.

The Crisis Group emphasized in a latest report on the world’s response to the coup that the military’s preferred financial center in Asia, “especially Singapore”, may also face pressure, including asset freezes and denial of financial services from the general.

For years, activists have been urging Japanese beverage company Kirin to establish contact with MEHL. Finally did this on February 5. Lim Kaling, the co-founder of Singapore gaming company Razer, also gave up one-third of his stake in RMH Singapore, which has a tobacco joint venture with the group, and Facebook said on Thursday, It bans all military-related advertising entities.

The Burmese people themselves are boycotting the products and services of military companies.

As far as the government is concerned, perhaps it should also take a hard line against Min Aung Hlaing and his generals.

Roberts said: “He feels he will get rid of reality.” “This is why the international response needs to be strong; stronger than he calculated.”

Follow the money: Myanmar coup puts pressure on army companiesCandidates say the world must take tougher action-and told senior general Min Aung Hlaing that he cannot escape the democratically elected government in Myanmar. [Sai Aung Main/AFP]


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