In his speech at the July US-ASEAN Business Forum in Siem Reap, Cambodia, U Thein Sein explained that Burma “has embarked on a democratic path” and is “moving toward a new democratic era.” He went on to outline the reform efforts his country is presently undertaking, efforts that give reason for optimism following April’s dramatic electoral victories for Aung San Suu Kyi and the National League for Democracy.
In addition to promises of regular and free elections, increased media freedom, and constructive engagement with leaders of ethnic minorities, President Thein Sein announced plans “to transform [Burma’s] centralized economy into a market-oriented economy.” At this same event, US Secretary of State Hillary Clinton said that President Thein Sein is a leader “who has moved his country such a long distance in such a short period of time.”
Moving forward, a successful and sustainable transition in Burma requires that economic growth be widespread and that economic opportunities arise for more than the well-connected few. However, numerous key institutions that are necessary for the realization of this goal are either weak or completely missing in Burma today.
Paramount among these institutions are private property rights and the rule of law. If these institutions, which are fundamental for the development of a market economy, are not substantively reformed and strengthened in Burma, its economic and democratic transition will prove unsustainable.
Secure private property rights, and the legal mechanisms to uphold these rights, are a core institution of any free-market democratic system. Not only do private property rights incentivize property owners to invest and improve their assets, they help protect the civil liberties and personal security of individual property owners. In a genuinely democratic society, the government does not possess unchecked control of all economic resources and citizens are protected against property expropriation without due process.
As countries transition away from centralized, command-and-control economic policies, market forces often drive up the value of real estate and other forms of property. If private property rights are not protected and enforced by law, corrupt officials and their crony business partners will be presented with tremendous rent-seeking opportunities. For in emerging markets across the globe, increases in property values are often accompanied by a rise in illegal seizures of private property. With an influx of private investment, what was once farm land of limited commercial value becomes a potential location for a factory or an export processing zone. Corrupt officials seize the land, providing negligible (if any) compensation to the legal property owner, and then re-sell that land to investors at an enormous profit, much of which winds up in the pockets of the officials that seized it.
As reported by The Irrawaddy and other media outlets, along with international observers and human rights advocates, such cases of these “land-grabs” are becoming increasingly common in Burma. “Farmers and their families are being forcibly moved for major projects, such as the oil and gas pipelines being built through the country from the Bay of Bengal to the Chinese border, and for smaller industrial projects by firms with long crony links to the military.”
To counter this alarming development, legislation must be put in place to ensure that such violations of private property rights and other forms of economic predation are unambiguously illegal. Citizens must also be made aware of their legal rights and the legal recourses available to them when their rights are violated. When legal protection is out of reach for the majority of the population and when rules are enforced arbitrarily, abuse thrives and democracy cannot flourish.
Rule of law
Private property rights must be backed by the rule of law. In a democratic society based on political and economic freedom, laws must be enforced consistently and fairly, and citizens, entrepreneurs, and property owners must have equal protection under the law. Because government promises of legal due process and toleration of public dissent are only as good as the underlying judicial system entrusted to uphold the rule of law. Unfortunately, a March 2012 United Nations report on human rights in Burma noted that the country “lacks an independent, impartial and effective judiciary.”
Additionally, Burma’s present constitutional structure will greatly encumber efforts to build a such a judiciary. While the 2008 constitution requires the President to submit his nominees for judgeships to Parliament for approval, the constitution also states that Parliament “shall have no right to refuse the person nominated by the President for the appointment of Chief Justice and Judges to the Supreme Court” and there are no specific constitutional mechanisms to prevent political interference.
Strengthening democracy in Burma through institutional reform
The actions of Burma’s new government to re-introduce democratic practices in a country nearly a half-century removed from its last democratic government have been remarkable. These encouraging developments include the fact that the national budget was publicly debated for the first time in Burma during the most recent session of Parliament.
Significant legislative reforms undertaken by the government include the adoption of the Labor Organizations Law and the Peaceful Demonstration Law, as well as the amendment to the Political Party Registration Law. There are other encouraging laws currently under preparation, including a revised Prisons Act, a media law and a social security law, among others. President Thein Sein is working with MPs affiliated with the National League for Democracy to fight corruption by requiring all government officials to publicly declare their assets.
If this progress is to endure beyond the term of any particular political leader, and if this progress is to prove sustainable, the Burmese government and its partners in the international development community must prioritize the development of durable, reliable and politically independent institutions.
Without these institutional reforms that fundamentally change the economic and political operating environment in Burma, no amount of foreign aid or technical assistance will have a lasting impact. As Larry Diamond explained in a July interview, Burma’s “transition is still very much in an early stage.” Nevertheless, he went on to note that while this democratic transition “is only incipient at best, it is exciting that the process has begun.”