I met with President Thein Sein to explain my views. I told the president that our built heritage was an asset, worth billions of dollars in the long run, which needed safeguarding. I agreed that Rangoon’s priorities today were electricity and other basic infrastructure, but in fifteen or twenty years we would have all these things. At that point, we could be like any other Southeast Asian conurbation, a concrete jungle of skyscrapers, elevated highways, and shopping malls, or we could protect what was unique and beautiful and create a very special 21st-century cityscape. I gave him specific ideas about how initial renovation projects could be financed. I stressed the importance of involving the people who actually lived and worked downtown, and making sure they and not outside firms benefited first and foremost. I also stressed the importance of expanding green and public spaces. He was interested, and had many questions. He requested a plan. And he asked that I use the media to explain to the public what I had told him.
The Australian government sent experts in conservation who proved invaluable. In April 2014, I called on Prince Charles in London. We discussed many things, including Burmese history and elephant and tiger conservation. We also discussed the work of the Yangon Heritage Trust. He soon dispatched architects and urban planners from several of his charities.
In November 2014, I met Barack Obama. On the plane after his very brief first visit in 2012, he had looked out the window and said to his aide Ben Rhodes, “It’s interesting how the place feels frozen in time. It reminds me of what Jakarta looked like when I lived there. Now it’s just high-rises. They’d be smart to preserve some of what makes this part of the world different.”3 Now he was visiting Burma a second time, and in his motorcade came straight from the airport to the colonial-era Secretariat downtown. I was asked to show him around. For twenty-five minutes, the two of us walked around the courtyard and the chamber that once housed the Burmese parliament, as National Security Advisor Susan Rice and an assortment of Burmese ministers waited in the distance. We talked about mutual friends, Burmese politics and Burmese history, and the importance of urban planning. He repeated what he had said to Ben Rhodes on the plane. Over the next couple of years, his encouragement helped bring us support from experts in Chicago as well as several US foundations.
There was a deluge of goodwill and, within Burma, political support at the highest level. No one was really against what we were trying to do, which was to move beyond a halt in demolitions to the actual renovation of several derelict and largely empty government-owned buildings, as a first step toward a broader program of urban renewal. There were no major vested interests to counter us. The public was on our side. But the Yangon Heritage Trust faced a wall of inertia, the existing way of doing things, which was nearly impossible to overcome. The bureaucracy offered many avenues for corrupt bureaucrats to get rich. In the past, a direct order from the military dictator had produced results. For anything else, however, there was only a Dickensian labyrinth of dusty desks piled high with yellowing typed and handwritten forms, and an endless number of departments whose clearance was required for even the tiniest permission. Everyone’s approval was needed, in triplicate, and anybody could hold things up for months if not years. A bribe could grease the wheels, but even a greasy wheel sometimes didn’t turn. The bureaucracy, under the old junta, had evolved to simply be, not to get anything done.
I saw more clearly how weak the state was. It could crack down on a protest, lock up any number of dissidents, or keep rebel militias in check, but it had had few instruments to craft policies and bring about actual results. Its instincts were to avoid confrontation and allow society to go about its business, unless its own survival was at stake. My own Soorti Mansions building was a case in point. No one knew who owned it. The Indian family that had bought the land and built the building was long gone. A taxi driver who was a distant cousin claimed ownership, but had no papers. There was no strata law, so those who acted as owners of the twenty apartments also had no documents other than a receipt from the previous owner. Different people had different rights to different parts of Soorti Mansions, some simply because they had been there for a long time and couldn’t easily be evicted. Downstairs was a shop that had been nationalized and taken over by a ministry. None of the higher-ups at that ministry had any idea that the space was still theirs. The state didn’t collect taxes on rental income or property. They didn’t enforce regulations. It was up to the people living in the building to find a modus vivendi. The common areas were occasionally fixed up in a group effort, but more often they weren’t. If there was an appeal to the government (for example, for permission to fix the roof), the first question was invariably: “Does everyone agree?” Things moved slowly, or not at all.
What was true of my building was true of the country. And into this dynamic came expectant investors from around the world. There were reasons to be hopeful. Thein Sein was a practical man, who wanted to see a rise in rural living standards. He also wanted massive foreign investment to kick-start industrial growth. He had aimed for an early end to Western sanctions, and achieved that by 2013. The same year, his finance minister, Win Shein, successfully renegotiated Burma’s $10 billion foreign debt. Then followed the normalization of ties with the international financial institutions, including the World Bank and the Asian Development Bank. Until then, the government had been dependent on China, which charged far higher interest rates. The foreign exchange system was overhauled. There was even a new Burmese stock exchange, established in 2015.
Over these few years, Thein Sein and Soe Thane personally met with every major potential investor and corporate CEO who came, from the heads of Google and General Electric to Samsung and Mitsubishi. Global capitalists felt welcome. There was much talk of corporate social responsibility, ending corruption, ensuring high labor standards, and protecting the environment. The government entered into the Extractive Industries Transparency Initiative that Bono had championed.
In May 2013, the consulting firm McKinsey issued a breathtaking report, which stated that Burma had the ability to quadruple its GDP by 2030 if it could attract $650 billion in investment. Just under half of that, $320 billion, would be needed for infrastructure projects alone. McKinsey further predicted that Burma’s consumer class would grow from 2.5 million people to 19 million, spending $35 billion a year within seventeen years. A Burmese translation was made required reading for cabinet ministers. It was mouthwatering stuff.4
By then, global capitalists were expecting only the best. Burma was being rebranded. A public relations company produced an ad for international television with the theme “Myanmar: Let the Journey Begin.” And in June 2013, Naypyitaw hosted the annual East Asia Summit of the World Economic Forum. The Davos crowd came in droves, nine hundred in all from fifty-five countries, dark pinstripes and stilettos mingling with slippers and silk sarongs. There were complaints that the convention center only served regular coffee and not espresso, but otherwise the jamboree was a success, adding to the feeling that the country was now open for business. The BBC aired a special panel discussion from the convention center (built a few years before as a gift from the Chinese government), starring Aung San Suu Kyi and Soe Thane. I was invited to make a comment and said something about the challenges around identity, violent conflict, and low state capacity. No one seemed very bothered.
The single largest target of new investment was telecommunications. Under the junta, this was a tightly controlled state monopoly that provided exquisitely poor service at exorbitant rates. A phone call to a relative oversees could bankrupt the average middle-class family. Internet usage was less than 1 percent in 2011, one of the lowest in the world. Downloading an email took minutes if not hours. A SIM card cost the equivalent of over $1,000, more than a year’s income for most people. In 2012, Thein Sein liberalized the phone market, opening up mobile networks to foreign companies. Several billion dollars in investment quickly flowed in. By 2014, the cost of SIM cards had fallen to $1. Telephone towers sprouted up even in the most
remote areas. By 2015, over 40 million people who had never had a phone were enjoying Internet speeds that were among the fastest in Asia.
The businessmen of the old regime were kept happy as well. There were no new windfalls like the ones made in the mid-2000s from contracts to build Naypyitaw. Few wanted to be tarnished by any connection to illicit sectors, like drugs. The more forward-looking ones were sliding away from logging, mining, and any industry that reeked of the old days. In any case, there were now enormous profits to be made from Rangoon real estate. Businessmen, bureaucrats, and generals had snapped up the best property in town over the preceding decade and were either leasing it for previously unimaginable sums or constructing their own multi-star hotels, condominiums, and shopping centers.
For millions of ordinary people, the picture was more mixed. The growing urban middle class had more jobs and more ways to spend money. There was a boom in retail and entertainment: hundreds of new eateries, from Mexican to Turkish to Vietnamese, popped up across Rangoon, together with world-class malls offering food courts and multiplex cinemas. If you wanted an evening in, there was now Netflix, Burmese reality TV shows, and home delivery of everything from bento boxes to Burger King. A newer type of businessman (and woman) also emerged, not cronies attached to army elites but self-made entrepreneurs, many of them working in the fast-expanding tourism and IT sectors.
In the countryside, as well, people saw their incomes rise, more than 40 percent between 2011 and 2016, as new roads and affordable scooters connected villages to markets and cheaper solar panels provided electricity. Candles were becoming a thing of the past.5 Villagers benefited as well from more affordable loans, the effect of government credit programs targeted at the poor. Farmers, buoyed by higher export prices, mechanized harvesting and turned to cash crops, like sesame and peanuts for sale to China.
Children’s health was getting better. In just the two years between 2013 and 2015 the percentage of kids who were stunted decreased from 33 to 25 percent, and those moderately or severely underweight dropped from 25 to 14 percent. Income in rural areas also improved. In 2011, half of village households in one survey were making more than $50 a month; by 2015, that number had gone up to 85 percent.6
Burma was, however, by any estimation still a poor country. In Maubin, a fair-size town in the Irrawaddy delta about two hours’ drive from Rangoon, only one house in ten had electricity or a water pump. Only half had a table. In Kanpetlet in the remote Chin Hills, 90 percent of homes had no bed.7 And families whose land had been confiscated by the army under the old regime still had little hope of restitution. Corrupt officials and shady but connected businessmen had conspired to appropriate millions of acres since the early 1990s.8 In 2012, a Farmland Investigation Commission was set up; it soon received over 12,000 complaints. But there was little sign that millions of acres of farmland would ever revert back to the poorest. Instead, a steady stream of landless poor trekked to slums around Rangoon. For now there was work in construction or in the garment sector, which was beginning again to take off. But it was a tenuous life at best. A generation before, losing a city job meant a return to subsistence farming back home. Now that safety net was gone.
One option for the poor was the jade mines of Hpakant. “I went hoping to save enough to give my wife and kids a better life,” Mra Tun told me. “Instead, I discovered hell.”9 Mra Tun was an Arakanese Buddhist born not far from Bangladesh. Local authorities had confiscated his five acres for a development project in the late 2000s. Destitute, he did what thousands of other Arakanese villagers were doing and scraped together enough money for the long bus ride to Hpakant, on the other side of the country, in the Kachin Hills near China. Hpakant is the world’s only source of imperial jade, carat for carat more valuable than diamonds.
Estimates of the value of Burmese jade exports in the early 2010s run from a few billion dollars a year to $30 billion in 2014, the peak year of production. Mining was done on an industrial scale, with hundreds of digging machines, including giant Komatsu PC2000s, carving out vast canyons across the 5,000-acre site. Only a small part of the profits from this trade found its way into government coffers. The rest slithered into the hands of the transnational mix of companies who mined, polished, and then sold the jade to an insatiable Chinese market.10
Like the other poor people attracted to Hpakant, Mra Tun became a scavenger. Every day, the big machines tipped waste soil over man-made cliffs, and every day, in 100-degree heat or under relentless monsoon rains, masses of emaciated men combed through the muddy heaps with their bare hands, hoping to find tiny fragments of treasure. To keep from collapsing from exhaustion they shot themselves up with heroin, available for 1,000 kyats (about $1) a shot, sharing needles. Women, also poor migrants and also high on heroin, offered sex in the little hovels crowded together across the moonlike landscape. Mra Tun never found the piece of jade he hoped might save him and his family from poverty. He was in Hpakant in November 2015 when a landslide killed more than two hundred scavengers. No one was ever held to account.11
THE ECONOMY WAS a strange beast. On the surface, Burma in the early 2010s looked to some like a new frontier market, emerging from long years of hibernation, and set to receive global capitalism with open arms. Scratch the surface and even the casual observer might realize that—unlike, say, Vietnam twenty years before—Burma was already enmeshed in its own strain of capitalism, more than a generation in the making, with markets stronger than state agencies, and a legion of shadowy businessmen keen to protect their turf. Dig deeper, and outsiders might see that just a few hours’ drive from Rangoon or Mandalay were territories beyond any state control, inhabited by a patchwork of armies and armed groups, illegal and illicit trades, and a Chinese frontier over which even Beijing’s sway was tenuous at best.
The Thein Sein government had moved fast and decisively to improve the economy. The results were plain to see. Inequalities, however, remained as deep as ever. And there was no real conversation about the future shape of the economy. To the extent that there was a vision, it was to move from the anarchic capitalism of the past two decades to a more garden-variety state capitalism, following other Asian examples and focusing on export-oriented industrialization.
And any genuine effort to restructure the economy faced monumental obstacles. Office-holders and cronies had fine-tuned venal relationships. Many stood ready to frustrate further change. State-owned firms, most suffering heavy losses, employed tens of thousands of poorly skilled and virtually idle workers. The army, through its own conglomerates and massive landholdings, still enjoyed a fat piece of the pie. Budgets were bloated and billions of dollars in public funds disappeared into the bureaucratic labyrinth. Few paid taxes, including on property. In 2012, two new land laws were passed, with the stated aim of rationalizing an extremely messy land tenure system; but depending on how the laws are implemented, they may well entrench a status quo that concentrates millions of acres in the hands of those with access to state power, leaving millions of people with nothing.
At the same time, the shadow of the country’s illicit industries loomed ever larger. By 2015, the northern and eastern Shan Hills had become the global epicenter for the production of meth tablets, as well as the higher-value crystal meth, or ice. Militia allied to the Burmese army were deeply involved. So, too, was the biggest rebel force, the United Wa State Army. Ice was exported to fast-expanding markets in Australia, New Zealand, and Japan, where an increasing number of housewives are among the new addicts. As with jade, no one knows the total value of the trade, though United Nations estimates run into the tens of billions of dollars a year.
All along the Chinese border were casinos in the hands of various insurgent armies and militia. They catered exclusively to Chinese customers, many of whom had been lured from cities across China with free transport and a week’s luxury accommodation. In all these places the staff spoke Chinese, Chinese currency was used, and Chinese phones could even be used with no roaming charges. Some customers lost t
he equivalent of hundreds of thousands of dollars in a few days. Anyone who couldn’t pay up would be held and even tortured until their relatives wired the money demanded. “To travel there is to be doomed,” said one gambler.12
Casinos were one way to make money. Robbing casinos was another. In March 2017, armed men belonging to the Myanmar National Democratic Alliance Army forced their way into the Fulilight Casino in Laukkai and rounded up three hundred staff members. In the pitched gun battle that followed between the thieves and both government troops and government-allied militia, over a hundred people were killed or wounded, including forty civilians. Using twenty trucks they had lined up outside the casino, the attackers made off with no less than $73 million in cash, burning the money they couldn’t take.
And wildlife trafficking to China was now reaching epic proportions. Tigers, bears, elephants, and pangolins from Burma were being smuggled whole or in parts for bogus medicinal use or to be served as dishes in exotic restaurants. The National Democratic Alliance Army, another (similarly named) rebel group based at Mongla, near Laos, was becoming a world hub for illegal wildlife trading, acting as a transshipment point for ivory and rhino horns in particular from Africa to China.
Over the past two decades, the biggest of Burma’s rebel armies, the United Wa State Army, had made weighty investments in China, Hong Kong, Macau, and Thailand. They also owned major businesses in Burma itself, including Yangon Airways. But after a crackdown on money laundering in 2015, the Wa Army found a new partner in the King’s Roman Casino on the Laos side of the Laos–Burma border. A colossal structure with water fountains, mock Italian Renaissance frescos, a health spa and, of course, hundreds of gambling tables, the casino is part of a Special Economic Zone run by China-born businssman Zhao Wei. In 2018, the US government placed Zhao Wei under sanctions for alleged ties to “drug trafficking, money laundering, child prostitution, bribery, and human and wildlife trafficking,” all facilitated through the casino.13
The Hidden History of Burma Page 21
