The Myanmar miracle marches on, but don’t stop holding your breath. Great hazards are emerging ahead.
Still, the most recent shockingly good news is that former military dictator Than Shwe has declared the woman he kept under house arrest during his 20 years in power, Aung San Suu Kyi, “the future leader of the country.”
“I will support her with all of my efforts,” he said of Suu Kyi, whose NLD (National League for Democracy) won last month’s election by a landslide.
Well before the results were in – even while votes were being counted – the military acknowledged her victory. “Even though there is no official confirmation . . . I want to congratulate Aung San Suu Kyi and the NLD for their success in the election,” said Ye Htut, spokesman for military strongman and current president Thein Sein.
Even better, Myanmar is posed to soar economically.
Under the generals, Myanmar suffered from some of the worst economic policy in the world. In the Fraser Institute’s Economic Freedom Index (described by Nobel laureate Douglass North as the “best available . . . description of efficient markets”), Myanmar ranks 146th out of 157 economies.
Why is that promising? Countries that move away from horrible economic policy even to only bad policy experience explosive growth, at least until they reach the level of prosperity associated with their new level of economic policy. Then additional reform is required for further growth.
So in very short time with a dose of economic opening, the people of Myanmar could see their prosperity improve dramatically. Free market reform appears to be what the generals had in mind when they decided to open Myanmar up to the world and moved to democracy.
Isolated from the liberal democratic world, Myanmar was squeezed by the loving embrace of China: its economy dependent on, and its resources flowing to benefit, China with very little in return for the people of Myanmar.
The generals did not like their near-puppet status. To escape the Chinese trap, they envisioned economic reform to open up to the world, ending dependence on China. That meant they also had to move to democracy to end Myanmar’s isolation.
So the future looks bright. Sadly, possibly standing in the way of this optimistic future is the hero of the moment, Nobel laureate Suu Kyi.
Although western criticism of Suu Kyi has been muted by admiration for her as a courageous democracy advocate, media reports going back several years have cautiously noted an authoritarian streak of inflexibility in her. Many NLD party leaders and rank-and-file members have resigned in protest over her autocratic temperament.
As the Boston Globe noted after the election, “Aung San Suu Kyi is also known to be dictatorial and inflexible.” She is also a poor listener, lecturing instead of conversing and reluctant to absorb new information or even hear it.
She has declared that she will be “making all the decisions as the leader of the winning party.” The word “all” is worrying.
Unfortunately, her “dictatorial” tendencies are combined with lack of economic knowledge, policy that speaks only in generalities, and statist tendencies. The Wall Street Journal reports that international and national business leaders have been alarmed by her anti-free market views and apparent hostility to foreign investment, telling foreign firms they will have to operate as she wishes and make what she wants – in others words, an extension of the closed, government-directed economy which failed Myanmar under the generals and will fail it under a new government.
All of this underscores the importance of Myanmar adopting not just democracy, but liberal democracy, complete with checks on executive power, institutions that uphold and promote the rule of law, respect for both majority rule and minority rights.
The poverty-entrapped people of Myanmar desperately need the free market reform and openness to the world that brought booming prosperity to countries in the region that, like Myanmar, once suffered devastated economies and military dictatorships such as Taiwan and South Korea. China and Vietnam have revealed that even limited economic reform can improve the lives of people.
Will it happen in Myanmar? That question is the reason to continue holding your breath.
Fred McMahon is a Fraser Institute resident fellow and holder of the Dr. Michael A. Walker Research Chair in Economic Freedom.
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