In my previous article I discussed how former South Korean president Park Chung-hee, by bestowing favors on big business conglomerates, gave rise to “crony capitalism” and corruption in the country.
There is another country in Asia that is notorious for crony capitalism, and that is Myanmar.
Crony capitalism refers to a political and economic system where connections with the powers that be, rather than productivity and competitiveness, determine the success of a private business.
Under such a system, the only way for any business owner to succeed is to befriend those in power through bribery or transfer of benefits so that they will grant you favors in return.
Crony capitalism is unjust, of course; it gives rise to corruption and unfair distribution of public resources.
However, it also has been proven to work in terms of boosting the economy and producing impressive economic figures in the short run.
As such, it is often adopted by autocratic regimes, or by newly elected regimes that are desperate to turn out glowing economic data as quickly as possible.
Myanmar is a typical example of how a dictatorial regime relies on crony capitalism to sustain its small and isolated economy.
Back in the days when the military regime was in power, the country’s economy was dominated almost entirely by a tiny group of oligarchs composed mainly of business tycoons and powerful retired generals who had good connections within the military high command.
Even after opposition leader Aung San Suu Kyi and her National League for Democracy (NLD) party won by a landslide in the 2015 election and assumed power, the oligarchs are still able to maintain their firm grip on the economy, and their political influence has shown no sign of diminishing.
The reason for that is simple: even though Aung San Suu Kyi and the NLD have vowed to eradicate corruption in government and restore social justice, they have been relying heavily on the political donations made by these oligarchs in order to run their election campaigns.
And the oligarchs are more than happy to donate money to the NLD to hedge their bets and turn the NLD into their new ally, so that they could maintain their monopoly of the national economy.
As a result, Myanmar’s economy remains firmly in the hands of the oligarchs and the military even one year after the NLD took power, and their influence is continuing to grow rather than, as many might have expected, shrink.
Ang San Suu Kyi and her government are well aware that they may risk alienating their pro-democracy supporters by allowing “business as usual” for the oligarchs and the military.
However, it appears she doesn’t have much choice, and has to resign herself to the fact that her government will have to continue to tolerate the vested interests and work with them in the foreseeable future.
That’s because these oligarchs have already formed the irreplaceable pillars of the country’s economy so much so they have become simply too big and too powerful to be removed.
This article appeared in the Hong Kong Economic Journal on March 23
Translation by Alan Lee
[Chinese version 中文版]
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