The Myanmar military’s political power is tied in part to its web of private enterprises across the energy, mining, banking, telecom and other industries. These military-owned companies have hindered development and are the clearest target for foreign governments and companies as they move to support Myanmar’s growing resistance.
After the Myanmar military seized power in a coup on February 1, the response within the country was nearly immediate: vehement popular opposition, demanding that the generals return power to the civilian government. As Kyaw Zwa Moe of The Irrawaddy points out, these are the same demands that Myanmar’s populace has made for decades in opposition to dictatorship: “The people are asking for nothing more than what was stolen from them.”
As the international community reacts to the coup, this issue of the military’s theft from the populace brings up a key question: what will foreign governments and corporations do as pressure mounts to cut economic ties to the Myanmar military?
Myanmar military companies have long extracted wealth from Myanmar’s resources, land and citizens. Coup leader Senior General Min Aung Hlaing and a deep cadre of military leaders have held on to their power through Myanmar’s democratic transition in part through military-owned companies. The Myanmar military owns over 100 firms across the energy, mining, banking, shipping, food and beverage, tourism, real estate and other industries.
These firms present the most effective openings for foreign companies and governments to pressure the military—not through broad sanctions or total withdrawal. Though US President Joe Biden has announced sanctions against eight people involved in the coup and three jade and gem companies, he did not target the bulk of the military’s private enterprises.
The influence of foreign investors has also increased dramatically since Myanmar’s last military government. Foreign investment peaked in 2015 at US$9.5 billion, around 10 times what it was before 2009. Much of this is in ventures linked to the military.
The primary reputational risks for foreign investors are ties to these firms, not operating a business in Myanmar ipso facto. As the Financial Times editorial board put it, “exiting an ethical, normal business will only compound the damage done from the turmoil that accompanies the coup.”
Military-affiliated firms also hinder Myanmar’s economic development, as they receive preferential treatment and lucrative deals, allowing them to beat out their “clean” competitors—again, more theft. As it has for decades, this requires a response from anyone invested in Myanmar, financially or strategically.
Civil disobedience inside Myanmar points to the role of military firms
The resistance inside Myanmar began with residents of Yangon and other cities banging pots and pans at 8 pm every evening. A civil disobedience campaign quickly came together, with health workers at government hospitals and clinics striking nationwide while also establishing their own mechanisms to give people access to healthcare.
Students and teachers soon joined, followed by civil servants from the health, education, investment, social welfare and construction ministries. Soon, tens of thousands of people began the now ongoing protests in the streets.
The civil disobedience movement could have a major impact, putting intense pressure on the generals without exposing participants to the same risks as physically protesting in public. Any international action should be in line with this movement.
It also presents a major risk to the military government as, in addition to health workers, the volunteer groups that are central to Myanmar’s COVID-19 response have signaled they will no longer work. The military government’s handling of the pandemic will be critical in how the next few months progress.
But the civil disobedience campaign has also grown to target the military’s lucrative web of economic enterprises. Engineers at the military-owned telecom firms MyTel and VCM have joined the strike, as have thousands of workers at copper mines in Sagaing Region run by Chinese firms and military-owned Myanmar Economic Holdings Limited (MEHL).
MEHL and Myanmar Economic Corporation (MEC), the military’s other conglomerate, control a large list of subsidiaries. These are the private sector ventures directly owned by the military. In addition, the families of Min Aung Hlaing and other generals control their own set of corporate interests. Civil society group Justice for Myanmar has drawn up a working list that provides a starting point for following the money.
These revenue streams enrich the generals and maintain the system of patronage and corruption that long predates Myanmar’s democratic transition—again, this theft is decades old. These firms also fund military operations and, according to the UN Fact-Finding Mission in 2019 concluded, provides financial support for genocide and war crimes.
Since the coup, Myanmar’s citizens have targeted military firms for boycott. The Myanmar Times reports that sales of products produced by military-linked companies have dropped, affecting brands including Myanmar Beer, MyTel SIM cards, Ruby Cigarettes and multiple bus companies. Some shop owners say they have stopped carrying these products because sales have plummeted.
Foreign investors begin to cut ties to Myanmar military
The coup will have devastating consequences for Myanmar’s economy, as investors review their commitments and billions of dollars are at risk. Poverty rates were already rising rapidly due to the pandemic and blanket sanctions or a total exit by all foreign firms will only make matters worse. Cutting ties to and sanctioning military firms are the most effective and strategic steps for foreign investors and governments.
The impact of these actions will depend on whether the Myanmar generals are more concerned about their wealth or, as Myanmar historian Thant Myint-U has suggested, political power. The two are intertwined: Min Aung Hlaing and his family have a lot to lose, financially, if his political power declines or he is ever held accountable for his actions.
A few foreign corporations have now cut ties to Myanmar’s military. Japan’s Kirin Beer has ended their partnerships with MEHL in Myanmar Brewery and Mandalay Brewery after years of criticism, though the beer conglomerate now says it plans to continue selling beer in the country.
Singaporean businessman Lim Kaling, head of gaming company Razer, announced that he is pulling out of his one-third share of RMH Singapore Pte Ltd, which operates Myanmar’s Virginia Tobacco Company in partnership with MEHL. He made the announcement following pressure from an online petition with less than a thousand signatures.
But international telecom firms Oredoo and Telenor, to name a couple, continue to cooperate with the Myanmar military and profit from these partnerships.
As foreign corporations and governments shape their policies and look for ways to press the new military regime, the network of military-owned companies presents an obvious target, as it has for decades. Cutting ties with military firms and sanctioning them will also help loosen the military’s grip on Myanmar’s economy and foster more sustainable, less morally compromised development.
As Thant Myint-U put it, the apparent success of the democratic transition meant that “no one felt the need to do much homework“ on their Burma policy—but as that transition falls to pieces, “It’s probably time to do a lot of the homework now.”