Private Sector


Myanmar deemed rising Doing Business star, but at what cost?

7 April 2020

Map of Armed conflict zones in Myanmar (Burma) since 1995.

Armed conflict zones in Myanmar (Burma) since 1995. Photo: CentreLeftRight.

Myanmar, most recently in the news due to UN allegations of human rights abuses against its minority Rohingya population and renewed conflict in the Rhakine region, was deemed one of the top 20 performers in the World Bank’s 2020 Doing Business Report (DBR) (see Observer Winter 2018; Inside the Institutions, World Bank’s Doing Business Report), moving to 165 from 171 of the 190 countries analysed.

The DBR’s lack of contextual and conflict analysis is not only worrying in the case of Myanmar. It seems at odds with the Bank’s new Fragility, Conflict and Violence Strategy, a fact particularly concerning given the World Bank’s increasing emphasis on fragile states (see Observer Autumn 2019).

As underscored in a February 2019 journal article by Jason Miklian, Myanmar’s economic opening since the end of military rule in 2011 “has exacerbated ethnic tensions.” He added that the gains from economic opening “have primarily benefited existing local elites as most new investments require local partners who hold high-level roles in Myanmar’s political-military nexus. Moreover, Myanmar’s military undertook an ethnic cleansing of 2 million Rohingya Muslims in Rakhine state – just the type of authoritarian action that economic opening was promised to temper.”

[Myanmar's] economic opening has exacerbated ethnic tensions.Jason Miklian, Peace Research Institute Oslo

According to an October 2019 article in online Myanmar-based newspaper The Irrawady, the country’s improvement in the rankings was due to regulatory and legislative reforms meant to reduce bureaucracy, increase transparency and attract foreign direct investment (FDI). The article noted that, “The Myanmar government set the ambitious goal of reaching the top 100 of the index for 2020,” highlighting that it “aims to attract more than US$200 billion (305.7 trillion kyats) in investment from businesses over the next 20 years.”

While some of the steps lauded in the DBR, such as improvements in the water and sanitation infrastructure can hardly be criticised, the focus on attracting FDI, including through changes in the process by which state land is leased, are potentially problematic. An August 2015 article by Michele Ford, Michael Gillan and Htwe Htwe Thein similarly emphasised the disconnect between the drive for economic openness as advocated by DRB and important political economy considerations: “These processes are very much political not only in that they are often dominated by powerful political and business elites but also because they can directly influence, create or reorder power structures.” A March report by Netherlands-based civil society organisation Recourse on the lack of transparency in Myanmar’s public-private partnership Myingyan power plant provides a cautionary tale.

The challenges created by the country’s focus on FDI, including those linked to the principally Chinese-backed Belt and Road Initiative, are cited in a February report by the United States Institute for Peace. It highlighted that, “major infrastructure projects in Myanmar are likely to occur in or adjacent to the country’s conflict areas”, adding, “the presence of competing  armed forces, the lack of basic infrastructure and connectivity with the rest of the country, and large ungoverned areas…will provide fertile ground for development projects to trigger unrest and violence.” As Christopher Cramer argued in his 2006 book Civil War is Not a Stupid Thing, the political economy of conflicts is complex and influenced by numerous variables, including social economic relationships, all of which are impacted by economic transformations inherent in policies advocated by the Bank’s DBR. Dr. Thant Myint-U, formerly special advisor to the Myanmar Peace Center, cautioned in his November 2019 article in UK-based literary review magazine, The London Review of Books, “The Burmese are drifting towards a false choice between the crony capitalism of the past and a neoliberal future of low taxes, austerity budgets, tight money and global capital. A fairer society is nowhere in sight.”