Suu Kyi’s tainted policies alienate foreign investors

ASIA TIMES 

by Rory Wallace
October 15, 2020

YANGON – Aung San Suu Kyi’s government is putting off foreign companies that emphasize human rights in their investment decisions, as Britain’s CDC Group, Norway’s Telenor and international mining groups struggle to navigate her administration’s controversial policies and their associated reputation risks.

That’s holding back the underdeveloped nation’s economic and business potential, significantly at a time the de facto national leader is running for national re-election amid a moribund economy. 

UN investigators have accused the Myanmar military, the Tatmadaw, of carrying out a brutal campaign with “genocidal intent” after more than 700,000 Rohingya Muslims fled Rakhine state into Bangladesh following a brutal military crackdown in 2017.

In a report last year, the UN fact-finding mission called on investors to cut ties with all army-linked businesses and identified around 60 foreign companies involved in the Tatmadaw’s corporate network. The military is active in parts of the economy through two holding firms and their subsidiaries.

That call is apparently causing a corporate rethink among certain Western investors. Danish shipping giant Maersk, for one, will stop using military-owned ports in Myanmar from the end of this month, according to rights group Burma Campaign UK.

Maersk announced last week that after October 15 its services will shift permanently to the Myanmar Industrial Port terminal and away from TMT Ports, which is owned by military conglomerate Myanma Economic Holdings Limited.

The shipping firm said it was “cognizant of recent recommendations from the United Nations to maintain operations in Myanmar while exercising heightened due diligence” but did not comment further.

America’s Western Union and clothing giant Esprit are among other companies that have shunned military-associated entities over the past 12 months. The move reflects growing pressure on foreign investors in the Southeast Asian country to ensure that their corporate activities do not contribute to human rights abuses.

Reputational risks for doing business in Myanmar, a country taken to The Hague for accusations of genocide, have inevitably heightened since the heydays of optimism prior to 2017. Yet, even post-Rohingya crisis, many still share Suu Kyi’s hope that responsible investment will contribute to reduced conflict, job creation and equitable development.

Myanmar’s civilian leader Aung San Suu Kyi attends the Asia Pacific Summit 2018 in Kathmandu on December 1, 2018. Photo: AFP/Sunil Sharma/Pool

As opposition leader, the Nobel peace laureate talked about the importance of investors being responsible and sensitive to human rights and environmental issues, an emphasis she has repeated since taking office.

“We only ask our investors to ensure that their investments are responsible, by incorporating environmental, social and governance factors into their investment and business undertakings,” she told a crowd of corporate executives and diplomats during her first government-backed investment conference in January 2019.

The speech was seen as an attempt to persuade global investors to put their money in Myanmar and mitigate the fallout of the Rohingya crisis.

But policy stumbles are undermining Suu Kyi’s economic vision by challenging the very companies who are trying to provide the responsible investment she supposedly seeks. Among them include the leading investors in Myanmar’s booming digital market.

The civilian government imposed an internet shutdown in June last year in parts of Rakhine and Chin states at the request of the military to deal with the Arakan Army, a Buddhist-majority insurgent group. A complete shutdown was in effect from June 2019 to August 2020, until 2G services were restored. Though, in actuality, web connectivity in the area remains extremely limited.

Cutting off internet access had undermined efforts to contain the virus and humanitarian work and put lives at risk in the process, digital rights organizations and the United Nations said. Authorities also blocked websites of Rakhine-based media outlets and Justice for Myanmar, a group of activists critical of the military.

Suu Kyi’s foreign ministry argued that the restrictions posed no hindrance because people can communicate via loudspeakers and SMS texts amid the ongoing conflict.

Digital censorship has hurt investor perceptions of the telecoms market, hailed as one of the biggest success stories in Myanmar since the sector opened up to the outside world in 2013 after being tightly controlled by the state for years. The country now boasts a smartphone penetration rate of 80%, according to a Telenor industry report.

Licensed by former president Thein Sein, Telenor initially defied a Communications Ministry directive to ban all websites accused of spreading fake news before bowing to government pressure.

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