Myanmar’s President’s call for constitutional change is economics disguised as politics

Myanmar’s president called for constitutional reform in his Independence Day speech. The move is economics dressed up as politics.

By Oliver Ward

Myanmar’s President U Htin Kyaw used his Independence Day speech to call for constitutional reform. He said, “we all need to work collectively for creating a suitable constitution”. However, the civilian head of state did not specify what he meant by “suitable”.

Constitutional reform is a dangerous subject to broach in Myanmar

There have been many calls to amend the Myanmar constitution. But there has been little discussion on the issue since January 2017. A gunman killed a lawyer who was advising the National League for Democracy (NLD) on the issue. Authorities caught the gunman at the scene. But law enforcement revealed little information about him.

So, why would the NLD raise the issue now? The Tatmadaw has made it very clear that it will not amend the 2008 constitution. Relations soured between the army and NLD after it came to power. The NLD created the Sate Counsellor’s Office which was in breach of the constitution.

The motivation is economic, not political

It has been more than a year since the NLD raised the issue. If it wanted to launch a campaign for constitutional change, it would have used Aung San Suu Kyi to lead the call. She commands far more support among the Burmese population. Htin Kyaw’s post is largely ceremonial. She carries the political clout.

Source: Trading Economics

The Myanmar economy is faltering. The budget deficit for the 2017-2018 financial year will be around K4 trillion (US$3 billion). It will represent 4.38 of the country’s gross domestic product (GDP).  The government has a deficit limit of 5% of GDP.

The World Bank also lowered its growth forecast for 2017-2018. It reduced it from 7% to 6.4%. Reduced foreign direct investment (FDI) to the country is to blame for the lower forecast. Heading into 2018, FDI will continue to fall. The crisis in Rakhine State continues to deter Western investors.

Political stability is a major factor for attracting foreign investment.  With weak political institutions, investment becomes too risky. Researchers at the Hamburg Institute of International Economics (HWWA) studied democracy and FDI. The study ran from 1972 to 1999. Countries with improving democratic rights received more investment per capita than repressive regimes. This trend emerged after the 1970s.

The trend is likely caused by the increased effectiveness of non-governmental organisations. Large companies cannot afford to have their brand associated with undemocratic regimes. This was particularly prevalent in the manufacturing and services industries.

Constitutional reform would be a way for the Burmese government to project stability. Curbing the military’s power would provide more democratic rights to Myanmar. If Myanmar can position itself as a stable democracy, it can reduce its deficit through FDI. The call for constitutional reform is an attempt to provide stability.

The call for constitutional reform is economics dressed up as politics

The NLD has little to no chance of persuading the military to reform the 2008 constitution. It has brought it to the table before and failed every time. If it gives up trying to bring the subject to the table, FDI will fall further, and the deficit will increase.

U Htin Kyaw’s speech was little more than smoke for foreign investors. But to attract the moths, you need a flame. However, for Myanmar, that flame of constitutional reform is not on the horizon.