Nay Pyi Taw's road to reform remains long and winding, but its neighbours can help power the country towards internal peace
Myanmar's chairmanship of Asean, which began in January, will become an open display of its progress on national economic and political reforms. Nay Pyi Taw's hosting of the regional bloc has the potential to improve the country's international reputation, national economy and domestic reconciliation efforts.
After emerging from international-pariah status, Myanmar sees taking the Asean helm as an opportunity to demonstrate its reformist credentials and as a platform to re-engage the global community. The nation's chance comes after almost 50 years locked in the grip of a fierce and repressive military regime that paid little attention to international criticism.
However, under the leadership of a quasi-civilian government, it has stepped onto a path towards substantial reforms, including a loosening of the political system, press freedom and economic liberalisation. This has not only convinced Nay Pyi Taw's Asean neighbours, but has also managed to woo major powers including the United States into easing sanctions.
As Asean Chair, Myanmar now has the opportunity to discard its isolationist foreign policy and become a responsible stakeholder of the international community, helping steer Southeast Asia through contentious regional issues, including the South China Sea disputes. Nay Pyi Taw's challenge now is to translate this chairmanship into genuine leadership.
Apart from raising its international profile, leading Asean could unlock greater economic opportunities for Myanmar, spurring investor confidence and further integration with surrounding economies.
Asean's goal is to create a single Southeast Asian market and regional trading bloc by 2015. However, Myanmar remains the bloc's poorest member with a GDP of only US$53 billion (Bt1.75 trillion), contributing only 0.2 per cent of total production in mainland Southeast Asia. Myanmar will struggle to meet the strict policy reform requirements for the Asean Economic Community (AEC) in the specified time frame.
Nevertheless, increased investor confidence after taking the regional helm could help narrow the crucial gaps in critical infrastructure and employment, as well as provide the momentum to achieve market regulation and greater human capacity in Myanmar.
Domestic economic reforms have already helped to increase the flow of foreign capital into Myanmar. In a recent report by the private sector, Myanmar was listed as one of five countries that had made the greatest improvements over the last five years to their business environment. The floating of its currency, the kyat, as well as the launch of a new foreign investment law to regulate foreign ownership limits and land leasing rules, have not only made Myanmar more attractive to foreign investors but has also enabled further exploitation of its natural resource riches, such a arable land, forestry and natural gas. One report suggests the country's energy and mining sector is projected to expand to $22 billion by 2030 from $8 billion in 2010.
However, Myanmar's capacity to fully exploit such opportunities is questionable at best. Endemic corruption, lack of transparency, limited legal recourse, slow and costly approval procedures to rebuild infrastructure, and remaining Western economic sanctions continue to stifle the country's economic growth. The World Bank recently ranked Myanmar 182 out of 189 countries for ease of doing business.
There has also been a brain drain of skilled workers to neighbouring countries which offer higher wages. While the economic payoffs in heading Asean may be great, more reforms must be made to create an inviting business environment to set the stage for Myanmar's full integration with the AEC.
National reconciliation presents the biggest hurdle to the country's reform process. Many outsiders remain sceptical of Myanmar's development amid ongoing internal inter-ethnic conflict. Myanmar expects Asean to recognise its national reconciliation efforts to solve deep-rooted conflicts between the government and ethnic armies with ceasefire deals and comprehensive peace settlements.
While its neighbours are keen to see it succeed in its path to democratisation, Asean's support for the country will not be unconditional. The prestige and legitimacy associated with helming Southeast Asia's regional bloc must not obscure the fact that Myanmar still has a long way to go, particularly in protecting human rights and pursuing national reconciliation.
Myanmar's inter-ethnic violence continues to strain its Asean neighbours with the flow of Rohingya-Muslim refugees to Thailand, Malaysia, and Indonesia. The Rohingya also pose a spillover potential security threat to some Asean members. In 2013 two Rohingya leaders linked to the Rohingya Solidarity Organisation (RSO) were reported to have enlisted assistance in the form of weapons and tactical knowledge from Islamist groups in Indonesia.
At present, peace agreements with ethnic armies have not been consolidated. Instead of granting greater autonomy, Nay Pyi Taw is offering economic incentives through development projects to rebel leaders in exchange for signing ceasefire agreements. While this process has facilitated re-engagement between the two sides, it is no more than a short-term fix; it cannot replace sincere political dialogue to address the underlying political, economic and social causes of the ongoing armed conflict.
Human rights setbacks
Slow progress in national reconciliation efforts is compounded by increasing concern over human rights inside Myanmar. Reports of rights violations – particularly against the Rohingya – are rife, despite Nay Pyi Taw having set up a national human rights commission in 2011. The visit last month by the UN special rapporteur on Human Rights only confirmed Myanmar's inability to conduct objective investigations on widespread violations and to bring the perpetrators to justice, including those belonging to local security forces.
Last week, Nay Pyi Taw further angered the international community by suspending the operations of medical NGO Doctors Without Borders in Rakhine state, claiming it was biased towards the Rohingya.
While Myanmar has announced the Rohingya issue will not be on the Asean agenda, the government says it will accept advice on the crisis from individual Asean members. Asean could thus play an instrumental role in pushing Myanmar to achieve national reconciliation and encourage it to implement the 2012 Asean Human Rights Declaration. The bloc could also call upon its Institute for Peace and Reconciliation (AIPR). The AIPR's Intergovernmental Commission of Human Rights could investigate the various demands of ethnic groups and give recommendations to Nay Pyi Taw.
As the largest democracy in Asean, Indonesia could also cooperate to strengthen Myanmar's civil society and engage in more transparent inter-ethnic dialogues. With the potential regional spillover of Myanmar's internal strife, Nay Pyi Taw should not interpret Asean's move as intervening in its internal affairs. Rather, it would be in Nay Pyi Taw's best interests to embrace Asean's assistance with open arms.
Eliane Coates is a senior analyst at the Centre of Excellence for National Security at the Singapore's S Rajaratnam School of International Studies (RSIS), Nanyang Technological University.