Business as usual? International Responses to the Military Coup in Myanmar

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Intro    

 

This is the Nordic Asia Podcast.

 

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Kenneth Bo Nielsen    

 

Welcome to the Nordic Asia podcast, a collaboration sharing expertise on Asia across the Nordic Region. My name is Kenneth Nielsen. I am the coordinator of the Norwegian Network for Asian Studies located in Oslo. I'm joined today by Htwe Htwe Thein who is an associate professor in international business at the Faculty of Business and law, Curtin University in Western Australia, and also by Michael Gillan, associate professor at the University of Western Australia. With us is also Kristian Stokke professor of human geography at the University of Oslo. Htwe Htwe, Mike and Kristian were all part of a webinar that our network hosted in May this year, at which they discussed the international responses to the coup in Myanmar this February. Today, we continue this conversation under the title 'business as usual: international responses to the military coup in Myanmar'. Welcome to the three of you, and thank you all for joining us. Now, as we know the attention of the world has for many months now been captured by the wave of pro democracy protests that have rocked Myanmar, and not least by the violent response of the Myanmar military. If we look at how international governments and businesses have responded to this coup, however, they at first glance seem to follow a rather well known pattern established during the decades of military rule prior to the democratic reforms that commenced from 2011. Some countries impose select sanctions, other countries such as the ASEAN countries, advocate for constructive engagement, and international businesses ponder the well known ethical dilemmas and operational challenges when deciding whether to stay or leave. And yet I know that the three of you are all in agreement that this time around not everything about the international response has been business as usual. I will soon turn to primarily Htwe Htwe and Michael to discuss this in more detail. But first I'd like to hear from you Kristian Stokke. Back in May, you spearheaded the initiative to nominate the civil disobedience movement of Myanmar for the Nobel Peace Prize in 2022. This nomination is of course in recognition of how the civil disobedience movement has been working for peace and democracy through nonviolent means. But it was also, as Dr. Sasa said on the occasion, intended to serve as a clear sign that people from across the world stand with the people of Myanmar in their struggle. He also said that the nomination shows that the civilized world recognizes our plight and that they stand with us in our hope for a new Myanmar. Now, looking back a few months later, in your assessment, how has the international community done, or has it done enough to actually stand with the people of Myanmar during this crisis?

 

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Kristian Stokke   

 

Thank you Kenneth. My answer to the question of has done enough will be a clear no. The international community has condemned the military coup and sanctions have been imposed on military leaders and companies. We will hear more about that soon. But there have been few statements of support and very little aid for the democracy movement as such, and there has of course been no interventions to provide protection against military brutality. I think the lack of recognition and support for the civil disobedience movements (CDM), The Committee Representing the Union Parliament, (CRPH) and the National Unity Government (NUG) is disappointing. The CDM has been at the forefront of the struggle for democracy, confronting the junta by peaceful and economic means workers and their unions have effectively challenged the military junta through a general strike that has been very effective in both public and private sectors. This has been a pivot of the spring revolution. And it is fair to say that without the CDM it is very difficult to imagine how democratization in Myanmar can be achieved. Given the centrality of CDM they have been met with harsh repression and immense pressure to return to work. strikers and their families have also paid a very high economic price for activism. And while all of this has been going on, the international community has been watching rather than acting. There has been almost no statements of support, almost no economic assistance for the strikers and their families. The main exception is a group of international unions or union federations that have assisted local unions, and have in the process demonstrated that it is possible to reach those needs. In contrast, international NGOs, civil society have been largely ineffective and aid donor states have done relatively little in support of CDM. They have also failed to recognize and lend effective support for the CRPH, despite its popular mandate through the election. And the NUG, despite its attempt to build a democratic government, create a new kind of political inclusivity and foster genuine federal democracy in Myanmar. So I find that this lack of substantive support, both in words, and in more material terms is disappointing. And it demonstrates to the activists, it sends a quite clear message that they cannot rely on support from the international community in their struggle for democracy. They have to do it themselves.

 

[00.05:42]

 

Kenneth Bo Nielsen    

 

Thank you, Kristian. We'll bring you back into the conversation later. But for now, let me turn to Htwe Htwe Thein. Htwe Htwe could you explain to us, and in spite of Christians critical assessment, and generally the depressing news that pours out from Myanmar. What is it that nonetheless makes the current situation different from the past? Why do the old business as usual responses, if you like, no longer quite work for international actors in this context?

 

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Htwe Htwe Thein    

 

Thank you, Kenneth. I'll start by saying why this coup is different from any of the previous military era, military rule periods in Myanmar. So this coup attracted sanctions, quite a lot of opposition, and then also impacted on businesses' decision to, should I go should I stay? How to enter and how to exit? But this coup has different conditions. Unlike in the past. First of all, this coup was a reversal of nearly 10 years of quasi democratic era, in which we have seen the emergence of quite a strong civil society, democratic values have been instilled in people for the last nearly 10 years. So it's a total reversal, a total disregard of it. Therefore, you can see quite a very big surge of opposition, you have CDM and also including the emergence of an alternative government, who are calling businesses to condemn the cuop and to respond to the wishes of the people of Myanmar, and the wishes and demands/expectations of the alternative government. So business as usual, cannot be possible in this coup.  

 

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Kenneth Bo Nielsen    

 

Thank you! Michael, Michael Gillan. If we take a look at the international community and its responses, the obvious place to begin is probably the UN. How has the UN responded this time around to the situation in Myanmar?

 

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Michael Gillan    

 

Thank you, Kenneth. I think as Kristian mentioned, you know, the first reaction has been one of disappointment to the United Nations response on the part of pro democracy activists within and without Myanmar. But I think their disappointment is probably shared by different sections of the United Nations itself in terms of its different agencies and personnel. So if we look at the frontline response of the United Nations, the UN Security Council has passed some resolutions and made statements of concern about the situation on the ground in Myanmar, but has moved no resolutions that have any teeth in so far as imposing sanctions or penalties on the military, really creating any costs for them whatsoever. And that's largely the political obstacles that exist within the UN Security Council that are well known. And in this regard, in particular, the very high likelihood that China and Russia would veto any resolutions that had teeth that actually had sanctions attached. Under those conditions there have been attempts to try and work around this by putting a vote to the UN General Assembly for an international embargo on selling arms to Myanmar and the military regime. And that has not been put to a vote of the General Assembly, but it's still pending. So we'll have to wait and see how that plays out. It would be a moral rebuke and a political rebuke to the military regime, but it would not have the same binding effect as a UN Security Council resolution of a similar nature. So in that frontline sense, the UN response has been weak, and it's been difficult to coordinate action through the United Nations. Another interesting dimension of the UN system, though, is this question of this alternative government, which we've already discussed the National Unity Government. And really that government's existence has thrown down a challenge to the legitimacy of the military regime and a challenge to the international system as to how it responds to this alternative government. So for the United Nations itself, and its different agencies, there will need to be choices about whether this National Unity Government and its representatives are recognized, whether the military regime representatives are recognized or whether there's co-recognition. So we'll have to wait and see how that plays out. But it certainly will play out. We can wait and see in the forthcoming meeting of the International Labor Organization later this year, there was a strong demand on the part of international trade unions that the National Unity Government should be recognized as the legitimate representatives of the Myanmar people.

 

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Kenneth Bo Nielsen    

 

In this context, it's also worth perhaps looking at the actions of Kyaw Moe Tun, Myanmar's Permanent Representative to the UN, United Nations Office, and also a person who has been working for Myanmar's Ministry of Foreign Affairs for for close to three decades. In his speech to the UN assembly just a few weeks after the coup, he said, and I quote here, we need further strongest possible action from the international community to immediately end the military coup, to stop oppressing the innocent people, to return the state power to the people and to restore democracy. And these are comments coming from the official representative of the Myanmar government. What is the significance of statements such as this and more generally, the actions of Kyaw Moe Tun in the UN? 

 

[00.11:19]

 

Michael Gillan    

 

Yes. Well, I think it's an extraordinary moment, you know, where the official representative of the government of Myanmar publicly defected and made this powerful speech to the international community, you know, morally rebuking his own legitimate government which had come to power. So I think it was and he is a significant moment and really expresses this question about who is legitimate here, who is the legitimate representative of the Myanmar people? So of course, the military regime government, the State Administrative Council had moved to try and sack him and try and have him removed from the United Nations system, but they've been unsuccessful in doing so. So really, we now have this unusual situation where there's an open question about who represents Myanmar in the international system.

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Kenneth Bo Nielsen    

 

If you move on from the UN to look at some of the other main international actors, of course, the EU and the ASEAN standout as important constellations here. If we look at the EU first, sanctions seem to be the preferred strategy. But as always, the key question is whether it will actually be the military who is squeezed by the sanctions or whether the people will suffer. Mike Gillan, what is your assessment of the EU's response so far?

 

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Michael Gillan    

 

Yes, well, I think their responses largely, in many ways follow the lead of the United States and other countries like the United Kingdom, where the sanctions that have been introduced have sought to squeeze the military in the sense of targeting military personnel. And now more laterally members of this state administrative Council, including civilian officials of this military regime government, and targeting them with, you know, for instance, asset freezes of internationally held assets they may have in sanctioning countries or regions. Travel bans in the sense of denial of visas, but also squeezing or seeking to squeeze the military by preventing international businesses from dealing with or engaging with military owned companies. And within the Myanmar economy. There are a number of military companies particularly in lucrative sectors, such as extractive industries, but they're also major military owned business conglomerates that are diversified and work across a number of business sectors in Myanmar. So this potentially is quite significant with regard to squeezing the military, because it raises a whole series of due diligence requirements on the part of international businesses to make sure that they are actually separated from any business dealings with these military companies. And let's bear in mind that European businesses have been, you know, fast movers and early entrance into Myanmar over the last 10 years of democratic reforms. Actually, most American businesses have held back from entering the market, and with the benefit of hindsight, perhaps wisely so. So in a sense, the EU sanctions on the military companies will be quite consequential for many European businesses that are engaged in Myanmar. The other side of that in terms of where the EU goes is the question of whether they remove Myanmar's status under a trade preference scheme called 'Everything but arms' which essentially allows for export of goods from Myanmar to have tariff free access to the European Union market. And that economically has been very significant for the growth of manufacturing and export oriented manufacturing in Myanmar. And particularly the growth of a garment manufacturing industry, where we've seen major brand buyers from around the world including Europe, contracting from supplier factories in Myanmar and a big expansion of employment in that industry. So if the EU withdraws that 'Everything but arms' agreement and that preferential access to the EU market, it will have, you know, really a disastrous impact on the garment manufacturing industry in Myanmar. It will lead to wholesale job losses. And the tragedy of it is, if that occurs, there's a kind of moral logic to that and a political logic. But economically, it would not harm the military, because they have very little stake in the garment manufacturing industry. So it's a real dilemma in terms of how the EU responds in that regard, with regard to that trade preference scheme.

 

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Kenneth Bo Nielsen    

 

We'll return to the business side of things in just a few minutes. But I'd like to also just briefly discuss the response of the ASEAN countries. I remember we talked about this at the webinar. I mentioned in the beginning of this recording, ASEAN actually invited the senior general Min Aung Hlaing to the ASEAN summit on Myanmar in Jakarta in April. And this was the generals first foreign trip since the coup. So this kind of so-called constructive engagement with the dictatorship would perhaps in many respects, seem to be more or less business as usual or is it?

 

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Michael Gillan    

 

In certain respects, it is business as usual for ASEAN in the sense that their approach so far has been aligned with the approach they took, you know, in the long decades of military rule in Myanmar. And that was the idea that it's better to engage economically with Myanmar, and diplomatically with the country. And so they call this constructive engagement. The idea that it's better to have an open door and a sort of open dialogue and gently encourage the regime to reform and to move towards more democratic governance. So it is consistent with that former approach, and even their principle of so-called non-interference with other ASEAN member states. But as Htwe Htwe said right at the outset, we also have these different conditions now with this robust pro democracy movement in Myanmar, this alternative government. And I think that's really amplified this crisis for ASEAN in the sense of a demand for them to actually take action, and to take action soon to actually compel some change on the ground in Myanmar. And definitely you can see that ASEAN is under pressure. There's been a lot of public criticism of ASEAN, I think, behind closed doors, there's a lot of criticism from Europe, from the US and other major stakeholders that they deal with in the international system, for them to take stronger action. And even within ASEAN itself, countries such as Indonesia and Malaysia have expressed stronger public condemnation and concern about events on the ground there then in the past. So I think even within ASEAN there are, you know, pressure factors, pushing them towards taking action. But we'll have to see if that actually translates to anything meaningful on the ground, in terms of actually putting pressure on the regime. At the moment, ASEAN position largely is, you know, implicitly something that supports the military in the sense of really not putting them under much pressure to change.

 

[00.18:06]

 

Kenneth Bo Nielsen    

 

Thank you, Michael. Now, Htwe Htwe Thein, we should move from the world of international political institutions to discuss international business, what role does business play in all of this and more specifically, what kinds of demands have protesters raised vis-a-vis international business with presence in Myanmar?

 

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Htwe Htwe Thein    

 

So the international businesses that are investing in Myanmar have come under fire. So the request is to cut ties with the military. If you're already in a partnership with the military, to cut ties with the military, so that your business, your revenue that you're providing is not going to the military and in funding its military operation. So they have been requested to do this. And to stop if you're paying taxes, royalties, revenues, whatever money you're paying, stop, and instead, put that money in an escrow account where no one can touch it. And then when democracy is restored, that money can be used. So the demands are quite clear. Don't pay any money to the military, for now!  

 

[00.19:26]

 

Kenneth Bo Nielsen    

 

I think it might be worthwhile looking in more detail at some specific cases to appreciate just what is at stake here, both for business, but also for the protesters as well as the military junta. I recall at our recent seminar Htwe Htwe, you touched upon the case of Kirin, the Japanese beer company that has been present in Myanmar since 2015, and which is in a joint venture partnership with the military's Myanmar Economic Holdings Public Company Limited. How has Kirin navigated this shifting situation over the past five, six years, including the current crisis?  

 

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Htwe Htwe Thein    

 

So the Kirin, as you said, went through two crises. So the first crisis was in 2017, when the military was accused of attacking the Rohingya, ethnic Muslim minority. So in 2019 the UN launched an investigative report, and the report is called fact finding mission. And the title is 'The economic interest of the Myanmar military'. So this report found that the Myanmar military is being financially supported by the military conglomerates that Michael mentioned just now. So then the FFM report recommended businesses that are in working relationship with the military to cut ties with the military. So Kirin was actually named, among several companies, Kirin was named as the one who is in a joint venture relationship with the military. So that's a direct relationship. So Kirin was at the top of the kind of target list to cut ties with the military. So the Kirin response initially was defiant. It didn't cut ties. Instead, it reinstated a commitment to human rights causes, its human rights policies, and it embarked on a strategic review of its operations. Including asking the global consultancy Deloitte to look into the money trail from the breweries, you know, the joint venture breweries going to the military. And then that proceeds, the revenue, how the military use that revenue. So of course, the intention is if you can show how the money is going, to show the money is not actually used for military operations, or instead use for pension funds or something then it would have been alright. So they launched this investigative journey, but they failed to get a response from the cooperation with information, etc, from the military owned company. So in 2020, November, Kirin, to its credit, did stop dividend payments to the military conglomerate, but it continued the operation. So that's your first crisis. So the second crisis came in February 2020, when the military staged the coup against a democratically elected government. Four days later, so on the fifth of February, four days later, Kirin announced that it has ended its partnership with the military. So that was a decisive decision. And everyone thought that might have set the precedent to other foreign investors to do the same. But that's not followed suit. That hasn't happened. Actually, that's surprising.  

 

[00.23:02] 

 

Kenneth Bo Nielsen   

 

I guess a good example of this would be if we move from beer to gas. I mean, the French energy company Total has refused to suspend its gas production in Myanmar, something that I know that you, Htwe Htwe, have critiqued in an op-ed in Le Mond back in April. How are we to interpret this decision by Total?   

 

[00.23:22]

 

Htwe Htwe Thein    

 

So Totals has been asked not to pay tax to the military, what taxes and royalties and dividends sent in and not to pay. Stop, stop all the payments to the military. But they're allowed to continue the gas production and selling of the operations. All it was asked was to stop paying, supporting the military government. So Total CEO responded that it is not possible not to pay taxes, dividends, and royalties to the military, because I quote, it will be a crime, according to local law. And his Myanmar Total office, you know, might be hassled because they refuse to follow the local law. So then the dilemma is the legitimacy of the government, that this government if you consider legitimate then you follow their rules. If you consider not legitimate then you don't follow their rules. So that's a dilemma presented to Total. And also by saying this Total has failed to recognize the alternative government NUG. And also Total claim that because they are providing electricity, which is an essential commodity, to half of Yangon and the rest is going to Thailand, and you have to also consider the interest of Thai consumers. So the company is using the provision of essential goods to the public to excuse themselves from their full commitment to human rights is also a very interesting, very delicate and very complicated matter, you know, for the companies and for the society to consider. And another dilemma is that while Total looks after its own people, then in a crisis time like this, is Total not gonna look after the demands, the wishes of the people of the society. You know, democratically elected government, the alternative government, then it's an organizational issue that you know, you're looking after your employees is where it stops or your obligation should also extend to a wider society at large? So it presents a lot of dilemmas. It is a crunch time for multinationals to look into their human rights commitments, their organization versus society at large.  

 

[00.25:57]

 

Kenneth Bo Nielsen    

 

Lastly, since this is the Nordic Asia podcast, I'd like to focus a bit more clearly on the Nordic component here. The Danish clothing company Bestseller had earlier suspended sourcing from Myanmar, but now looks set to resume them. The global Swedish retailer h&m also paused orders from Myanmar earlier this year, but has now resumed. And then it's of course the Norwegian company Telenor, one of the largest mobile and internet operators in Myanmar. Who have also felt the impact of the Myanmar cybersecurity bill that was passed in February. When I sat down to do some background research for this podcast. I went back to some of the older articles from the time when Telenor first entered Myanmar back in 2014. And the tone of almost all of the media coverage at the time can be summarized more or less like this: Myanmar, a country of endless opportunities, and a hornet's nest of challenges. Kristian Stokke, in your assessment, how would you describe Telenor's engagement with Myanmar since 2014? And perhaps especially is anything different in Telenor's response this time around?  

 

[00.27:11]

 

Kristian Stokke   

 

I think your summary is very to the point, endless opportunities and a nest of challenges. And it's tempting to say that at least for the Norwegian companies that are engaged in Myanmar since 2011, they have paid more attention to the opportunities than the challenges. But Telenor is an interesting case, and in some ways, a more positive case than some of the other ones. But it certainly shows the complexity to business engagement in Myanmar in the last 10 years. It provides telecommunication services that are much needed and wanted, and Telenor has experienced a tremendous business boom since it entered Myanmar. But it now finds itself in a situation where they are under pressure to comply with the military regulations, the cyber security law. And they're critical questions about how they handle data security, and how they have contributed economically to the junta and military companies by paying fees, taxes and other ways. So the military coup has put Telenor under pressure politically and economically, but they are asked to stay by the people and to provide secure services rather than leave. But certainly pay attention to the economic side as was discussed earlier. And part of this is that Telenor is seen as more responsible and transparent than the alternative providers. But for Telenor, this is serious. It's definitely a challenge that has come home to roost. And they have in the meantime written off their assets in Myanmar, clearly showing the uncertainty that they are now facing. Behind Telenor there are other companies that engage in more controversial activities and may have been less professional in handling them. For instance, a state owned investment fund engaged in banking, and also a state owned company that has been preparing for a hydro power scheme in an ethnic state marked by a long history of armed conflicts. So what does this tell us about the analysis and the preparedness for handling these challenges that you started out by mentioning? I think that the foremost lesson is that the Norwegian actors both the state, and companies have been too naive and optimistic about the political opening and the opportunities since 2011. They were driven by a pragmatic opportunism and overly optimistic about the transition and the narrative or how it was driven by reform minded generals in plainclothes. This meant they failed to understand the contextual power constellations and the political dynamics, and they paid insufficient attention to conflict analysis and conflict sensitivity. I think that the military coup has removed the naive blinders. You can no longer go on like before. But I think that the Norwegian actors are unevenly but generally poorly prepared to understand and act constructively and effectively on the ground realities of politics in Myanmar. And especially to devise strategies that make a substantive contribution to genuine democracy. They can at best hope to do no harm, but they risk contributing to a worsening of the situation. They end up hoping and calling for stabilization, the end of violence, but they fail to make real contributions to the drivers of democratization. So I think that there is a risk that Norwegian actors, both state actors and companies may de facto lend some assistance to the stabilization and restoration of the previous hybrid order on their military command. And this happens at a time when people fight to disrupt military rule, and to create a more genuine federal democracy.

 

[00.31:35]

 

Kenneth Bo Nielsen    

 

Michael Gillan, I'd like to bring you back into the conversation now, because since you mentioned the garment industry earlier, I would like also to hear your thoughts on the resumption of sourcing from companies such as Bestseller and the Swedish retailer, H&M, what the implications are of such actions on the one hand for the regime, but also, on the other hand, for the capacity of workers to make a living in the middle of an economic crisis?  

 

[00.32:03]

 

Michael Gillan    

 

Yes, I think, as we discussed already, you know, it creates a whole set of dilemmas in the sense of the pragmatics of workers needing to find employment, and to sustain themselves in terms of their families, on what in the past were already meager wages and difficult working conditions have worsened after this coup. So we now have a situation where there was a exodus of workers out of industrial zones around Yangoon, which were the epicenter of the garment manufacturing industry, because they were literally conflict zones. They are amongst the worst incidents of violence and conflict were in those industrial zones. Many of those workers have come back, but they're basically looking for daily wage work. So you know, the conditions of their insecurity have worsened dramatically over the last month or two. And now they're just looking to eke out a wage. And while labor laws, which were reforms that were made under democratization over the last 10 years still exist on paper, as does a minimum wage. In practice, they're not being respected or observed at all under the current conditions. So it is a situation where in terms of the sourcing resuming, it may provide opportunities for employment, but the whole set of new concerns about the lack of observance of labor laws and labor protections under this military regime. And of course, fundamentally, the scope for trade unions to operate is effectively removed. Again, on paper, they may have the right to exist, but politically, they cannot function under this military regime. In fact, the trade unions in Myanmar, which have really grown partly with the support of funding from Nordic countries, actually, but we might talk about that another time. But they have grown in Myanmar over time. They have been on the front lines of the civil disobedience movement and the strike actions against the military regime because they know that under this regime, it is not going to be possible for them to represent the voice of workers. So it's a very sad and you know, distressing situation, to be frank in terms of the erosion of labor rights over the last few months.  

 

[00.34:13]

 

Kenneth Bo Nielsen    

 

Michael Gillan, Kristian Stokke and Htwe Htwe Thein. Thank you so much for an engaging and wonderful conversation. My name is Kenneth Bo Nielsen, and thank you all for joining the Nordic Asia podcast showcasing Nordic collaboration in studying Asia.

 

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Closer 

 

You have been listening to the Nordic Asia Podcast.