By Aung Din
A pile of kyat, Burma’s currency. Business cronies of the former military regime are in a unique position to profit from the opening of Burma’s economy, as they own numerous resources and have government connections, but they are also adapting to the new economic and political playing field. Source: Jason. Tabarias' flickr photostream, used under a creative commons license.
Editor’s Note: Key players will shape Burma in 2013, for better or worse. As a guest contributor to cogitASIA, Aung Din will examine their current role in Burma, and their potential impact in the coming year, in a short blog series, “The People to Watch in 2013.” Part III examines the role business cronies, and their changing positions as the country moves forward with reforms. The author has requested the use of Burma to refer to the country. See Part I here and Part II here.
The year 2012 was a good one for business cronies of the former regime in Burma, who became some of the richest people in Southeast Asia after years of assisting the military regime in its oppression of the country’s people. In exchange for their loyalty to and wealth sharing with ruling generals and their families, these businesspeople controlled the country’s economy for over 20 years.
As the government begins embracing a new political system, and new leaders apply new political tactics, the cronies have adjusted themselves to the new playing field. They now serve as members of Parliament, leaders of the ruling Union Solidarity and Development Party, cabinet ministers, presidential advisers, peace brokers, and some have declared themselves to be philanthropists.
The wealth and business empires of these cronies greatly expanded as foreign investment returned to Burma under the government’s economic opening more than a decade ago and export opportunities to international markets increased, particularly in China and neighboring Southeast Asia countries. Foreign investors have little choice but to work with them as these cronies own most of the country’s land, buildings, banks, factories, and other economic resources – and have essential government connections.
For U.S. companies, setting up relations with many of these individuals is illegal – over 100 of them and their companies remain on the Treasury Department’s Specially Designated Nationals (SDN) list. American firms are not allowed to work with entities on the list.
Some of the major players in this cohort include Tay Za, a business tycoon and close associate of the former head of the military regime Than Shwe; Khin Shwe, chairman of Zaykabar construction, one of Burma’s largest construction companies and currently a member of the upper house of Parliament; and Zaw Zaw, head of Max Myanmar Group, a conglomerate with interests in logging, mineral, rubber, construction, and tourism.
These men recently have begun courting opposition leader Aung San Suu Kyi, who said in early January: “If those so-called cronies render assistance for social work, we agree with them and [we welcome] their sincere contribution. Instead of spending money for useless activities, the money can put to good use; it is a good idea.”
Aung San Suu Kyi’s party, the National League for Democracy (NLD), held a fundraiser for its education network in December 2012 sponsored by companies including Air Bagan and Asia Green Development Bank, both owned by Tay Za, and Sky Net, a television operation subsidiary of the Shwe Than Lwin conglomerate, owned by Kyaw Win. Shwe Than Lwin remains under the EU’s targeted sanctions. These companies donated over $240,000 to the NLD’s education network, and supported venues for the NLD’s press conference and other activities. Two sweaters knit by Aung San Suu Kyi when she was living in London 30 years ago, were auctioned at the event, raising over $123,000. Shwe FM, a radio subsidiary of Shwe Than Lwin, won one of the sweaters.
Aung San Suu Kyi recently visited her constituency, Kawt Hmu Township, with Khin Shwe, where they reportedly consulted constituents about regional development projects. Aung San Suu Kyi also visited a children hospital in Yangon built and donated by Zaw Zaw.
On January 24, U.S. Department of Treasury deleted U Kyaw Thein, a close business associate of Tay Za, from its SDN list. When Treasury announced its sanctions on Tay Zay and his financial network in February 2008, U Kyaw Thein, a permanent resident of Singapore and director of Tay Za’s companies there, was mentioned as a key financial front man of Tay Za.
Khin Shwe, Zaw Zaw, and Tay Za are still under U. S. and EU targeted sanctions, though the United States recently removed some sanctions on four banks, one of which is controlled by Tay Za and another by Zaw Zaw. Aung San Suu Kyi’s view of the cronies and her relations with them could potentially help them get released from the targeted sanctions. Given the mutual benefits for both parties, more fund raising events sponsored by cronies for the NLD are likely to be organized in the future, particularly as the country prepares for parliamentary elections in 2015.
Mr. Aung Din is a democracy and human rights activist and former political prisoner.
