[Analytics] Bold post-election reforms could remake Myanmar

Myanmar's leader Aung San Suu Kyi speaks on the second day of hearings, at the International Court of Justice in The Hague, the Netherlands, on Dec 11, 2019. PHOTO: REUTERS. Sketched by the Pan Pacific Agency.

The results of Myanmar’s 2020 elections are in: Aung San Suu Kyi’s National League for Democracy (NLD) has been re-elected in a landslide. The new government will be heartened by a strong showing across both lowland ethnic Bamar and upland minority regions. The ruling party must now chart a fair and inclusive path out of the COVID-19 crisis while translating ethnic aspirations into national reconciliation. Gerard McCarthy specially for the East Asia Forum.

Voting returns suggest an NLD ‘red wave’ akin to the historic 2015 election. The immediate challenge of the re-elected government, beyond getting a handle on COVID-19 infection rates, will be charting the country out of the economic disaster of the pandemic. The government has so far spent one of the least of any country in the region — around 3 per cent of GDP. The bulk of this minimal support has gone to corporations, which comprise a small slice of Myanmar’s economy.

Meanwhile, government-funded food and cash transfers have been sparse this year, often failing to reach those worst impacted. Left largely out in the deluge, households and small businesses have been battered by industry closures. Remittances are drying up and the disastrous impacts of lockdowns are forcing people to skip meals, pawn assets and take predatory loans. Worsening precarity could force even more children into child labour while pushing adults into exploitative and illegal industries.

If it is to halt the slide of millions into ever-deeper poverty, the new government must act fast to ensure domestic drivers of growth — especially small businesses and households — are not falling into debt-traps that could hold the country back for decades. The incoming administration has a range of policy tools at its disposal, from more activist industry policy to expanding social safety nets through direct transfers to those most likely to spend it productively. Such action could potentially transform the lives of millions in the ‘informal’ sector, who are the vast bulk of the NLD’s electoral base and comprise over 80 per cent of Myanmar’s workforce according to the World Bank.

The government has surprisingly wide fiscal space to chart a new direction out of COVID-19. The cost of government borrowing is historically cheap, while Myanmar’s debt-to-GDP ratio is low relative to the rest of ASEAN. The challenge is reversing the patterns of social austerity and minimal tax collection that have been constraining Myanmar’s policy space since the crony dictatorship of the State Law and Order Restoration Council/State Peace and Development Council.

Many of the same tycoons who accrued fortunes and paid no tax during dictatorship continue to pay little tax today. Instead, many make proportionally tiny yet tax-deductible ‘donations’ to government or NLD initiatives, securing themselves policy influence and public recognition.

Rejecting these autocratic legacies and delivering a new deal for Myanmar’s working class — regardless of religion and ethnicity — would help kick-start the economy and revive national reconciliation. The NLD’s strong showing in both the Bamar heartland and upland minority regions make it statistically the largest and most ethnically diverse party in the country. Expanding the social footprint of the state, even in far-flung regions, is crucial if the NLD’s form of ‘democracy’ is to offer voters more than oligarchy, poverty and conflict.

In recent years, the Ministry of Health and Sport has collaborated with ethnic armed groups and their health services to deliver vaccines and education in ceasefire areas. This shows how social service provision by civilian-controlled agencies can improve lives and build trust — even in the context of escalating skirmishes between ethnic armed organisations and the Tatmadaw (Myanmar armed forces). Expanding government-led social safety nets and job initiatives, especially in areas where land grabs and laws have dispossessed many, could help reduce precarity and foster peace.

The election results suggest voters — including many in ethnic minority regions — feel the NLD is up to the task of charting a new course forward. With the exception of Kayah, Mon and Shan States, ethnic parties look to have picked up fewer seats in this election than in 2015. Putting aside the disenfranchisement of the Rohingya and the distortionary effects of Myanmar’s rigid first-past-the-post electoral system, the NLD’s mandate may end up being less remarkable if elections are run in Rakhine State.

In a widely criticised moved, the Union Election Commission (UEC) — citing concerns about ongoing conflict between the Tatmadaw and the Arakan Army (AA) — cancelled voting in all townships but those won by the NLD in 2015. This decision effectively disenfranchised more than 1.2 million people, many of whom voted overwhelmingly for the Arakan National Party in 2015 and tacitly (if not actively) back the AA’s fight for greater Rakhine autonomy. Contradicting the UEC, in the week after the election the Tatmadaw and AA released statements saying they support elections being run across Rakhine State and would cooperate to facilitate their conduct.

It is unclear whether the unexpected alignment of the Tatmadaw and AA suggests a recognition on both sides that it is time to take the heat off the battlefield and into parliamentary and peace processes. Yet coupled with the NLD’s olive-branch to all ethnic parties since the election — inviting them to work with the government towards national reconciliation, an offer it did not make in 2015 — there are glimmers of hope for new openings.

Emboldened by a strong electoral showing, the NLD government must lead a robust and fair COVID-19 recovery while kick-starting national reconciliation. Bold actions that end pernicious legacies of austere crony autocracy are well within civilian constitutional powers — and could remake the country for generations to come.

Gerard McCarthy is a postdoctoral fellow in the Asia Research Institute at the National University of Singapore.

Share it

Exclusive: Beyond the Covid-19 world's coverage