Myanmar Dissident Cautions Perspective Investors, Urges Consideration of Wider Reforms

By webadmin on 11:26 am Jun 02, 2012
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Bangkok. Aung San Suu Kyi, the Nobel peace laureate and leader of Myanmar’s democracy movement, stared down into an audience of corporate executives here on Friday and issued a blistering assessment of her country’s judicial system.

“Would-be investors in Burma, please be warned,” she said, referring to the country by its former name. “Even the best investment laws would be of no use whatsoever if there are no courts that are clean enough and independent enough to be able to administer those laws justly. This is our problem: So far we have not been aware of any reforms on the judicial front.”

Suu Kyi’s speech to the business audience here came during her first trip outside her country in 24 years, many of them spent under house arrest. She did not sugarcoat her message.

She told the executives and bankers in the audience, many of whom do business with Myanmar or plan to invest there, that her country’s educational system was a shambles, that youth unemployment was a “time bomb” and that Myanmar is not a “genuinely democratic society.”

“I would not like you to be overoptimistic,” she said. “These days I’m coming across a lot of what I would call reckless optimism.”

She said many young people in Myanmar had lost their way and were drinking, taking drugs and gambling.

“If this goes on, we will not be able to reform them, let alone our own country,” she said.

As a dissident who was detained at her home for 15 years by Myanmar’s military, Suu Kyi was known for her defiance of the military, stubbornness and strong will. Now a member of Parliament, elected under a new civilian government’s fledgling political reforms, she did not modulate from that tone at the conference Friday, which was put on by the World Economic Forum, the group that also hosts the annual gathering in Davos, Switzerland.

But by cautioning investors at a time when the impoverished country is courting them, some in the audience thought that Suu Kyi had gone too far.

“I thought she was excessively pessimistic,” said Joseph E. Stiglitz, a professor of economics at Columbia University in New York who has helped advise the Myanmar government during its transition from military dictatorship.

Stiglitz said despite “uncertainties” and a weak judicial system, foreign investors could expect good returns. He compared Myanmar to China. The rule of law is very weak in China yet the country has grown at an impressive pace for the past three decades and foreign investors have profited, he said.

In Myanmar, “there is a commitment on the part of the current government to try to attract investment,” Stiglitz said. “That commitment implies it will be sensitive to the concerns of investors.”

Suu Kyi, who arrived in Thailand on Tuesday, said she did not want to discourage investment. She spoke of a healthy skepticism.

‘’I think you should see it as a word of caution, a strong word of caution,” she told reporters.

That contrasted with a presentation at the same conference by Than Htay, Myanmar’s minister of energy, a speech that received much less prominent billing.

“The new government is encouraging foreign investors to invest in wide-ranging industries,” Than Htay said.

Than Htay spoke in place of Myanmar’s president, Thein Sein, who was to have attended but canceled at the last minute. His visit to Thailand had been rescheduled for next week but that was also canceled, the Thai Foreign Ministry said Friday.

Than Htay’s speech was a classic pitch to potential investors and contrasted sharply with Suu Kyi’s remarks. The government is “making important strides” in education policies, he said.

Than Htay spoke about the country’s tourism potential, its vast jungles and mountains for “adventure-seeking sport enthusiasts.” He touted several special economic zones that the government had approved for foreign investors.

Suu Kyi, by contrast, said the zones were being created without any transparency. Specifically addressing an economic zone near the border with Thailand, she said, “We, the people of Burma, were kept completely in the dark about what was in the contracts, about what was going on.”

“This is very dangerous for a country,” she said. “It endangers national reconciliation. It engenders more and more suspicion and mistrust.”

One of the executives who heard Suu Kyi’s remarks Friday was Stuart Dean, the chief executive officer of General Electric Asean, the Southeast Asian branch of the US company. Dean acknowledged that there were risks in investing in Myanmar but said that the company could not pass up the opportunity.

“Our view is that you’ve got to look at the risk of going into an emerging market like Myanmar,” he said in an interview. “But at the same you’ve also got to look at the risk of not going into the country.”

Last month, US Secretary of State Hillary Rodham Clinton announced that the United States was suspending restrictions on investment by US companies in Myanmar.

Myanmar government officials visited the Washington offices of General Electric on Wednesday and asked the company to help devise an energy policy, Dean said. General Electric plans to open an office in the country later this year.

Dean said there were limits to talking about the risks of investing in Myanmar.

“They need electricity,” he said. “I can’t imagine that we ship some turbines there and they don’t pay us for them. Who else is going to ship turbines once that story gets out?”

General Electric’s dealings with the government so far were very positive, he said.

“I’m sure it won’t always be like that,” he said. “But right now it’s pretty good.”