Workshop Magazine Regional Integration, Yangon, Myanmar

DATELINE

ASEAN A DW Akademie Workshop Magazine

DW Akademie – Yangon, Myanmar – 5th - 16th of August 2013

DATELINE

ASEAN A DW Akademie Workshop Magazine

A DW Akademie Workshop Magazine With financial support from the Federal Ministry for Economic Cooporation and Development (BMZ) Editors: Thomas Kohlmann, Andrea Thalemann Reporters: Amie Fenia Arimbi, Iris Gonzales, Ah Ngae Htwe, Zarni Mann, Le Yee Myint, Khanh Linh Nguyen, Bopha Phorn, Joyce Pangco Pa単ares, Ikram Putra, Basfin Siregar, Huong Hoang Thu Design: Moritz Tschermak Cover photo: Francisco Anzola As of: 9th September 2013

COVER STORY YANGON ROLLS OUT THE WELCOME MAT | 04

ASEAN ECONOMIC COMMUNITY 2015 GARMENTS SECTOR JITTERY OVER ASEAN INTEGRATION | 08 LESSONS FROM CAMBODIAS TEXTILE INDUSTRY |! 12 MYANMAR STRUGGLES WITH OUTDATED TRADE ROUTES |! 13 BATTLE FOR HUMAN RESOURCES |! 14 VIETNAM - MYANMAR: MAJOR COMPETITORS IN AEC? |! 16

HUMAN RIGHTS MYANMAR’S ROHINGYA: DOMESTIC OR REGIONAL ISSUE? |"# 18 BANGARLI OR ROHINGYA? | 24 MYANMAR FAILS LANDMINES BAN | 26

8888 COMMEMORATION A STUDENT SOLDIER STORY | 28

EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE CHALLENGES AHEAD FOR BURMA ON ITS PATH TO EITI | 32 ASEAN COUNTRIES URGED TO COMPLY WITH EITI | 36 ASEAN’S FIGHT AGAINST CORRUPTION | 37 INDONESIA DELAYS EITI TARGET | 38

COVER STORY

YANGON ROLLS OUT THE WELCOME MAT "When you arrive at Yangon Airport, you should set your watch 50 years back", says Maung Maung Lay as he leans forward and mockingly points at his wrist.

Text by Basfin Siregar - GATRA Magazine | Photos by Martine Perret, Al Scrapeo

T

he Vice President of Myanmar's Federation of Chambers of Commerce & Industry (UMFCCI) makes no bones about just how underdeveloped Myanmar is compared to other ASEAN (Association of Southeast Asian Nations) countries.

Investors arriving in Yangon for the first time quickly appreciate the lack of pretence. Since Myanmar opened its economy two years ago, the once sleepy city is getting more busy, crowded and gridlocked in traffic jams by the day.

"A lot has changed over the past two years", says Rika Gartika, the Second Secretary at the Indonesian Embassy in Yangon.

Two years ago, there were almost no private cars on the streets. But as the reforms gathered pace, many used cars were imported from Japan, and the new Toyota mini-van – mostly used as taxis – quickly came to dominate the roads.

Signs of economic reform abound.

One of them is Junction Square, a glitzy new shopping mall thronged with nouveau riches and the curious sampling expensive price tags. "The prices of many goods have increased", says Gartika.

One can easily find many western brands in the mall, even a 3D cinema.

When Gatra visited, the latest blockbuster movie from Hollywood, "Pacific Rim" was playing for 3000 kyat a ticket, about $3.00.

"Myanmar is changing rapidly", says Pyae Sone Oo, a rice trader whose company exports half a million tonnes of rice to Africa this year.

Signs that something was afoot after half a century of military rule began to emerge in 2010 when the ruling junta, the State Peace and Development Council, shed its uniforms for civilian clothes and formed a political party, the Union Solidarity and Development Party (USDP).

The USDP had won elections in 2010 amidst widespread allegations of vote-rigging. Unbeknownst to many, the vote was the last step in a so-called seven-step road map towards democracy that reached back to 2003, the year when national democracy icon Aung San Suu Kyi narrowly survived an armed attack on her convoy.

Today there are still many barriers seemingly specifically designed to prevent "The Lady" from winning the muchanticipated presidential election in 2015, such as a constitutional clause prohibiting a presidential candidate to have children with foreign nationals – both of Su Kyi's sons are British.

The reforms, however, have brought on vast changes in Myanmar's virgin economy. Foreign companies have been pouring in since well before the ink on the country's new investment law had dried. Among them Thai state-owned oil and gas company PTT and its Malaysian counterpart Petronas. Indonesia's Pertamina was, as usual, late.

"Myanmar is now a darling of the international community", Maung Lay says with a broad grin.

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Downton Yangon: The numbers of private cars are growing by the day. Most of them are secondhand imports.

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A boy selling copies of Myanmar's new investment law at a traffic light in downtown Yangon.

Many countries have welcomed the changes, among them Indonesia, which imports half a million tonnes of rice from Myanmar this year and considers Myanmar to be of strategic importance in its food security.

Decades of isolation have left Myanmar with just ten big players in the trade, nine of which are private companies.

The sanctions hit small businesses There were several reasons for Myanmar's transition from authoritarian rule to democracy. One of them was that the military generals had realised that the only way to head off people's growing discontent was to open up the impovrished economy.

The sanctions hit mostly the country's small businesses. Khine Khine Nwe, a textile busineswoman who is also the Secretary General of Myanmar's Garment Manufacturers Association, says when the US imposed sanctions on Myanmar in 1999, the country's garment industry collapsed.

Of 400 textile factories in 1999, only 150 survived. One of these survivors was

Khine Nwe's company, Best Industrial Company Limited, which managed to shift its client base from the US to the Japanese market.

Many others simply went out of business because there were no more orders.

Within a matter of years the number of textile workers plummeted from 400,000 to only 60,000.

About 80 per cent of textile workers are young women, many of whom come from remote provinces of Myanmar to find jobs in Yangon to support their families.

When the textile industry collapsed, many of these young women went back to their provinces. But others stayed on and took up jobs in the entertainment sector – in karaoke bars and night clubs.

"Sad but true: the entertainment sector had a boom in 2003, after the U.S. imposed sanctions", says Khine Nwe. The new influx of unemployed young women also boosted other illicit businesses like prostitution and human-trafficking which spread across Myanmar's borders to Thailand and China.

Today, Myanmar's textile industry is beginning to recover. Khine Nwe even feels that it is doing better than Indo06

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nesia's which collapsed after the 1997 economic crisis.

One good example is how Myanmar's traditional clothes are still produced by local businesses, compared to Indonesia's Batik. Officially recognised by UNESCO as a world heritage in 2009, Indonesia's famous cloth is traditionally made with a special dyeing technique and is also increasingly produced in China. Which is why Indonesians are feeling somewhat resentful, saying that their country got the cultural recognition, whereas the Chinese took all the profits.

ASEAN 2015 on the horizon The thrust of the ASEAN Economic Community (AEC), designed to integrate the region's markets, is to take its next step forward by the end of 2015. Under the blueprint, agreed by ASEAN countries in 2007, the single market will be based on five core elements: the free flow of capital, goods, services and investment as well as the free flow of skilled labour.

Import duties for ASEAN products and services will also be cut to zero.

Of the ten ASEAN member states,

Seventy percent of Myanmar's population live off agriculture. six countries are to implement the single market in 2015 (Brunei Darussalam, Indonesia, Malaysia, Singapore, Thailand and Philippines). The other four countries with less developed economies, known as CMLV (Cambodia, Myanmar, Laos, Vietnam), are to follow in 2018.

Once completed, the AEC will transform ASEAN into a single market of 600 million consumers – with 240 million of them living in Indonesia.

Even though Myanmar and the rest of the CMLV bloc have three more years to prepare for the single market, people in Myanmar are concerned whether their country is ready for it. "We have a huge concern about the integration, about the free flow of goods and services", says Khine Nwe. She cites several factors, for example the low level of skilled workers in Myanmar, the poverty and the widening gap between the rich and poor – another consequence of a liberalised economy.

Her concern is understandable. A quick tour to some mini-markets in Yangon reveals that although the single market has not yet been implemented, the shelves are full with goods from other

ASEAN countries: instant noodles from Thailand, canned foods and drinks from Singapore, pharmaceutical drugs from Vietnam, biscuits from Indonesia.

Another concern is the country's financial system. Until very recently, business people needed to bring wads of cash because very few local businesses accepted debit or credit cards. An opportunity quickly seized by Indonesia's state-owned bank, BNI, with a joint-agreement with Kanbawza Bank Limited, one of the five major private banks in Myanmar.

"We don't want protection.

We want facilitation."

Although there are many concerns, there is also optimism. Maung Lay from the Chamber of Commerce says that Myanmar's strength lies in its agricultural products, its status as a food source for many ASEAN countries. "We want to become Southeast Asia's rice bowl again", he says.

Of the 60 million people in Myanmar, about 35 million are farmers. A large farming sector will likely be key to Myanmar's future as an agricultural exporter 07

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– to produce and ship rice to countries like Indonesia.

And there are other sources of food, such as fish, barely touched by Myanmar's undeveloped fisheries industry.

Maung Lay jokes: "Many fish in Myanmar die of old age."

The country has also geared up to provide a legal framework for foreign investors in Mynamar. Maung Lay says that a new law governing joint-ventures with foreign companies has already been passed by Parliament. But a lot still needs to be done: The law, for example, does not define specifically how much company stock foreigners are allowed to hold in local companies.

Khine Nwe, who managed to survive in times of economic sanctions – and without having connections to powerful figures in the military junta – however, is optimistic: "We don't want protection because then we won't grow. We want facilitation so that we can grow."

Basfin Siregar works for GATRA Magazine in Indonesia.

ASEAN ECONOMIC COMMUNITY 2015

GARMENTS SECTOR JITTERY OVER ASEAN INTEGRATION Many people working in the labour-intensive textile industry in ASEAN's ten member countries don't know what to expect from the region's planned single market. But they are worried about the side-effects of the ASEAN Economic Community, coming into effect at the end of 2015.

Text by Joyce Pangco Pa単ares - Manila Standard Today | Photos by Thomas Kohlmann, Zarni Mann, Joyce Pangco Pa単ares, Basfin Siregar

Aye Aye Khaing feels uneasy when it comes to ASEAN's single market.

F

orty-year-old Aye Aye Khaing has been employed in the garments sector for almost two decades now – one of the many industry workers across the region on a hand-to-mouth existence who are feeling jittery as ASEAN moves toward a single market economy.

Khaing, who earns as little as $90 a month, or barely P130 a day, is not aware of the details of the ASEAN Economic Community (AEC) that will be implemented two years from now, but feels insecure just the same.

In the Philippines, garments is one of the nine industries that will receive government support under the Manufacturing Industry Roadmap which aims to help local sectors boost their competitiveness ahead of the ASEAN economic integration in 2015.

According to Philippine Exporters Confederation Inc's Sergio Ortiz-Luis Jr., the Philippines has had high comparative advantage in the labour and capital-intensive garments sector which is expected to post roughly $1 billion in exports this year, up from $800 million posted in 2012.

But Ortiz-Luis admits that the garments industry has yet to recover fully, noting that at its height, exports were

at $1.6 billion annually. ASEAN trade liberalisation has sparked fears that local markets of the ten member states can be exposed to cheaper fabrics from neighbouring countries where wages are lower and workers are plentiful.

Tougher competition on the horizon Integration for the ASEAN market, with an estimated consumer base of 600 million people, not only means duty-free importation from any member country but tougher competition as well.

Not only workers like Khaing are feeling worried but industry leaders as well, including Maung Maung Lay, VicePresident of the Federation of Chambers of Commerce and Industry of Myanmar, who said that local manufacturers are "not prepared" for the integration.

"We are totally not that ready. We are lightweight compared to the heavyweights in the region", Lay says in an interview.

"This is making us a bit jittery. We are not ready for the big event. There is fear that we can be overwhelmed."

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Cambodian manufacturers who have yet to recover from a slump in 2009 feel the same, says Garment Manufacturers Association Secretary General Ken Loo. The Philippines is now looking at ways to attract more investments, address missing gaps as well as create linkages in allied or support industries, among others.

The Philippine Industry for Development Studies has recommended aggressive marketing and promotion to lure investment, especially those bringing in new technology, to "enable our industries to take advantage of the opportunities and face the challenges that would arise from Asean Economic Community 2015."

Cambodia – where one can buy brand new branded tops or coats that usually sell for $30 (P1,200) for only half a dollar (P20) – is now eyeing to expand its share in the ASEAN market after exporting mainly to the United States and the European Union.

Thailand is bullish as well of the benefits of the integration, according to National Federation of Thai Textile Industries chairman Pilan Dhammongkol.

The country is positioning itself as the region's manufacturing hub for textiles and garments, he says.

TOUGH TIMES AHEAD

Besides Indonesia, Thailand is the only other country in the region with a complete supply chain from upstream to downstream production as well as fashion design, Pilan says.

Pyae Sone Oo, a rice trader and member of the Myanmar Rice Federation (MRF), says the country's agriculture sector will face a hard time to meet the requirements for ASEAN's single market. "We've been left behind quite a lot. Even if we want to catch up, we can only do it gradually.

There are some areas – in particular the rice industry – where we can say that we are quite ready. However, there are still some gaps to catch up with the other ASEAN countries." According to data by the Ministry of Agriculture and Irrigation from 2011, some 25 per cent of the country's economic output comes from the farming sector. The MRF said earlier this year that rice exports almost tripled in the last three years and are expected to reach 1.4 million tons in the current fiscal year. Pyae Sone Oo says financial support for rice firms was still weak and infrastructure, such as ports and trading points, were not yet capable of supporting an export boom. The quality of Burma's rice also made it difficult to compete with neighbouring countries, such as Thailand and Vietnam.

by Zarni Mann

No reverse gear for the single market For Khine Khine Nwe, deputy managing director of the garments firm Best Industrial Company Ltd. and secretary of the Myanmar Garment Manufacturers Association, facilitation and capacitybuilding are necessary to ride the wave of ASEAN integration.

"We have huge disparities. Everybody is worried, but being ready for the AEC is something that we should all do", she says.

With two years to go before the AEC, Myanmar's garments association is now taking pro-active steps that include skillstraining and market expansion. Myanmar's garments industry is no stranger to trying times, having faced sanctions from the US and the EU in the past over human rights issues that forced workers like Khaing to produce a dozen branded jeans for the low price of $2.50 or less than P10 per denim jeans.

"It was our peak season when the sanctions were imposed in 2003, and we were hit in the middle. We had nowhere to turn to", Nwe says. From a peak of 400,000 workers in the garments sector, Nwe said the figure went down to 60,000 by 2005, and is now slowly picking up with the lifting of the sanctions.

DANGEROUS GEMS

For Myanmar's Chamber of Commerce leader, all member states in the bloc must roll up their sleeves and gear up for the inevitable integration. Says Lay: "In some areas, we will not be ready, but this will happen to other ASEAN countries and not just us... There can be no reverse gear for the AEC." Joyce Pangco Pañares works for Manila Standard Today in the Philippines.

Khine Khine Nwe's garment factory in Myanmar's business capital Yangon has survived US and EU sanctions. Today her main export market is Japan.

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AEC 2015

Philex Mining Corp., headed by businessman Manuel Pangilinan, is exploring talks with possible partners in Myanmar on copper mining. Myanmar is rich in natural resources such as oil, timber, tin, antimony, zinc, copper, precious stones and natural gas. The Mogok Valley in north central Myanmar is the source of the majority of the world's finest rubies and sapphires. But mining is a controversial issue in Myanmar because of the environmental damage that often comes with it. Hla Sai, a parliament member from the National League for Democracy, however, said that unsustainable mining already caused "over 50 or 60 mountains" to disappear in the town of Hpakant.

"There are only around 10 mountains left for jade mining", Sai said, noting that climatic changes began in 2005, when mining companies started using heavy machinery to extract greater quantities of jade.

by Joyce Pangco Pañares

LESSONS FROM CAMBODIA'S TEXTILE INDUSTRY Text by Bopha Phorn - The Cambodia Daily | Photo Iris Gonzales

O

ngoing upheavals in Cambodia's strike-whacked garment industry, one of the country's largest GDP earners, have been noted with concern in Myanmar, the region's poorest and once military ruled country.

Myanmar, which will be chairing the region's body ASEAN for the first time in 2014, does not want to emulate Cambodia's experience with union power, strikes and wage demands, Dr. Maung Maung Lay, vice president of the country's Chamber of Commerce, told Cambodia Daily.

"They are warning us and they are even considering shifting the manufacturing base away from Cambodia", says Lay. Myanmar would do well to take Cambodia's lessons on board, he says, not least as labour in Myanmar and Vietnam are relatively cheap and employers can easily move away from Cambodia.

Cambodia's economy is expected to grow more than 7 per cent this year, much of it on the back of new garment orders. But Myanmar's battered textile industry could be a lion in waiting.

Just a decade ago, Myanmar had 300 to 400 textile factories . That number fell to about 150 during the sanctions, according to Khine Khine Nwe, deputy managing director of the textile factory Best Industrial Company Limited.

Ms. Nwe says she never fired a worker because of declining orders. Yet, the number of orders fell from 1,500 to about 200 during the sanctions imposed by the US and EU after the junta's repeated crackdowns on pro-democracy activists. After the sanctions were lifted, the number of workers has gone up from 200 to 400.

Higher wages, strong unions Cambodian officials and economic analysts have long worried that Myanmar might woo investors away after the Cambodian government's recent minimum wage increase. Continuous protest and human rights abuse are also causes that have already have pushed potential employers away. Thousands of Cambodians are working in the garment industry.

Employers have long omplained of unions blackmailing them into ever greater concessions. For Dr. Maung Maung Lay such a thing would be a nightmare if it were to happen in Myanmar.

"For example if one factory has one thousand workers, and there might be eight unions, so be careful", he said. "It's so unproductive. The unions are demanding all sorts of rights."

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Experts and the government officials in Cambodia have also said that increases in wage and continuous protests may impact Cambodia's garment industry.

Last March, the Cambodian government has agreed to increase the minimum wage for the garment workers to $75 per month, up from $60. Workers said that this increase to doesn't help much and demanded $120, citing the increase in price of electricity, rented rooms, water, other daily supplies and improvement of the country's economy.

The United States and the United Kingdom lifted the sanctions against Myanmar, a move which is hoped to bring foreign investors' cash into the impoverished country after half a century of isolation.

Ms. Nwe, who set up her factory in the mid-1990s to give young women work, feels upbeat despite the new competition expected from neighbouring countries. "We are ready all the time", she says.

Bopha Phorn works for The Cambodia Daily in Cambodia.

MYANMAR STRUGGLES WITH OUTDATED TRADE ROUTES Text by Le Yee Myint - Living Color Media | Photo by Marcel Oosterwijk

M

any export companies in Myanmar rely mostly on ports. Only very few use road transport which costs nearly twice as much as shipping.

Myanmar's business companies have been demanding transportation projects for cross-border trade with ASEAN neighbours. After having been isolated for decades, the country needs to upgrade its ports and derelict railways and highways.

"Garment exporters used maritime transport only. For the last years, I have been using the Myawady highway road which is in a bad condition. But it is a very useful way to trade with Thailand, Vietnam and even Japan. When you arrive in Thailand you can send your products to every country in the world", said Khine Khine Nwe who is the deputy director of Best Industrial Company Limited, a garment producer in Yangon.

There have been stalled projects funded by the Asian Development Bank (ADB) for highways linking Myanmar with India, China and Thailand and plans to modernise Dawei and Kyauk Phyu deep-sea ports. New highways and deep-sea ports are of paramount importance for the country's export and import sectors, but they are also long-term projects that will only materialise well after 2015.

According to figures compiled by the Ministry of National Planning and Economic Development in the fiscal year of 2010-2011, export and import amounted to $13.14 billion, up from $10.38 billion in the 2009-2010 period Among ASEAN countries, Singapore is leading the pack of export nations with over $434 billion in 2010-2011. Second was Thailand with over $219 billion the same year.

Stalled projects in ASEAN's backyard Until 2000, the Myanmar authorities had only border trade agreements with India, Bangladesh, Thailand and Laos.

But after that, general trade agreements have also been signed with Malaysia, Pakistan, the Philippines and Vietnam.

The Myanmar government built seven trade stations on the border to Thailand in 2013.These are named Myawady, Maw Taung, Tar-Chi-Late, Myeik, Kawthuang, Taee Kei and Nabulae.

The Asian Development Bank has long planned a highway project between India's isolated north-east and Myanmar.

It will run all the way to the Indian city 13

AEC 2015

of Agartala on the border to Bangladesh and connect the cities of Silchar, Imphal and Moreh with Myanmar. This future road will eventually also be linked to other trade routes that go all the way to Kunming, the capital of China's Yunnan province. The ADB hopes to boost trade between China and India with Myanmar with the planned road network.

Pyae Sone O, managing director of Infinity Innovation, a rice export company, says Dawei and Kyauk Phyu ports will benefit Myanmar's rice exporters. But if Myanmar fails to impose strong rules and regulations for foreign investors, it will be a threat to the country's ability to compete in AEC, he said.

Dr. Soe Htun of the Myanmar Rice Federation says: "We are competing not only in export but also in logistics. Transportation around the country is more expensive than overseas trading, so if the government does not reduce transition costs, we cannot prepare for AEC."

Le Yee Myint works for Living Color Media in Myanmar.

BATTLE FOR HUMAN RESOURCES AEC implementation may leave Myanmar with a shortage of skilled labour.

While businesses are determined to face the challenge, higher wages in neighbouring countries drive Myanmar's workforce abroad.

Text by Amie Fenia Arimbi - ANTARA News Agency | Photo by Moritz Tschermak

I

t was still 9 a.m. in the morning, but workers at garment manufacturer Best Industrial Company Limited were already busy cutting and sewing fabric to be made into clothes. The factory has received an order to make 340,000 football shirts for a Europe-based company. It is the largest order for Best Industrial since the United States and the European Union began to remove sanctions imposed on Myanmar under military rule.

"We had a hard time before. We laughed, we cried about it. But in the end we survived", says deputy managing director Khine Khine Nwe as she recalls the days when her factory could not operate at all because of the sanctions. The restrictions had been gradually imposed by the US and the EU during the 1990s after the ruling military junta cracked down on Myanmar's democratic movement. Not all of them have been lifted yet but Myanmar's garment sector is already able to export to the European Union under the EU's EBA programme.

This means companies like Khine Khine Nwe's can sell their products to customers in the EU at zero import duties.

From sanctions to single market Khine Nwe, who is also the Secretary General for Myanmar Garment Manufacturers Association (MGMA), said in the year of 1999 there were 300 to 400 factories in Myanmar including subcontractor garment manufacturers such as her company. Before the sanctions

were imposed those companies employed a total of 300,000 to 400,000 workers.

But after 2003 the number of companies went down and the number workers plummeted to 60,000 people.

"Luckily the US and EU have revoked most sanctions recently", she says.

"Right now the garment sector and other industries in Myanmar are trying to get back on their feet again. We need to rush as the ASEAN Economic Community is going to be implemented by 2015."

But despite Khine Khine Nwe's optimism, owners of small and medium-sized businesses in Myanmar are also concerned about the negative impact caused by the implementation of AEC, like the availability of qualified workers.

A survey conducted by the Japan External Trade Organization (Jetro) in 2012 about minimum wages in selected Asian economies with substantial Japanese investment such as China, South Korea, India and ASEAN countries showed that wages in Myanmar's manufacturing sector are the lowest of all.

The "Survey of Japanese-Affiliated Companies in Asia and Oceania" revealed that average industry wages in Myanmar per year are US$ 1,100 compared to $ 6,704 in Thailand, roughly six times higher. Vietnamese wages are twice as high as in Myanmar. Perhaps the closest to Myanmar is Cambodia with an average annual income of $1,424. Still according to Jetro's survey, even engineers, managers or administration staff in Myanmar get paid the lowest among the 19 surveyed countries.

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Judging from an investors' angle, this may be good news for Myanmar as foreign entrepreneurs want to invest their money in the country with the cheapest labour costs. But on the other side, especially with the upcoming implementation of the ASEAN Economic Community in 2015 where there will be a smoother flow of people in the region, Myanmar is likely to suffer.

Battle against the big brain drain "With the current average wages, skilled labourers in Myanmar may find it more beneficial for them to work in other ASEAN countries. This is a threat for Myanmar's industrial development. We need those workers but we cannot give them the job conditions they want, hence there's nothing we can do to stop them from leaving the country and looking for a better job", Khine Khine Nwe says.

Maung Maung Lay, the Vice President of Myanmar's Chamber of Commerce and Industry, is more optimistic when asked whether Myanmar is ready for full economic liberalisation in ASEAN. While some sectors of the country may be negatively hit by a lack of skilled workers, Lay says Myanmar can cope with the challenge and should not hide behind protectionism.

"Myanmar has just started its transformation. Technically we are not sound, there is no capital market, we are financially weak and our human resource quality is low", he says.

But we also have a strength factor, namely a large amount of potential labourers. And we have land, natural resources such as jade and mining products."

Pyae Sone Oo, who runs a rice trading business in Yangon, agrees that Myanmar has to improve its human resources quality – especially in farming.

"Almost 80 per cent of the workforce in Myanmar are farmers", he points out.

"Most of them are still conducting traditional farming and have limited knowl-

edge about fertilisers. They don't cultivate rice paddies which produce a good quality grain. So we are trying to catch up with other ASEAN countries but I don't think that it will be easy for us."

Currently the Myanmar government, with the support of its neighbouring countries in ASEAN such as Indonesia, is trying to improve the quality of Myanmar's work force. Indonesia, for example, grants agriculture machinery and provides training for Myanmar's administrators and farmers.

Capacity will be key to the country's efforts to catch up. Foreign investors broadly agree that the Myanmar government needs to provide a better working environment, including

A worker is pouring concrete at one of Yangon's many new construction sites.

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decent salaries and sound labour laws, to improve living standards and enable the country to compete with other ASEAN countries.

Amie Fenia Arimbi works for ANTARA News Agency in Indonesia.

VIETNAM - MYANMAR: MAJOR COMPETITORS IN AEC? Text by Huong Hoang Thu - Vietnamnet | Photo by Eric Brochu

M

yanmar has been making headlines worldwide since 2010 when it embarked on a political and economic reform process ending decades of international isolation.

"And because Myanmar is an agricultural country, it will at first compete on the region's markets mainly with farming products", says Dr. Maung Maung Lay, Vice-President of Myanmar's Federation of Chambers of Commerce and Industry (UMFCCI).

In a metaphor for the country's ecnomic awakening, Lay likens Myanmar to a sleeping beauty, waiting for princes to come. Certainly Myanmar is not lacking

suitors these days. Foreign businesses are visible almost everywhere in the streets of Yangon, the country's economic centre.

Foreign products and companies are waving their banners everywhere on billboards, in the newspapers' advertisement sections and even on vehicles.

Vietnam, one of early movers into Myanmar, is present with its Lioa brand, a well-known producer of sound technology, its ad figuring prominently on the body of a truck.

Vietnamese companies also appear on communication equipment, such as telephones or meeting-room speakers in conference rooms and hotels.

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Myanmar has long been importing products from Vietnam, including many Western products that were barred from the country during the West's sanctions.

Vietnam, the second biggest rice exporter in ASEAN, and market leader Thailand will be Myanmar's direct competitors in AEC, says Pyae Sone Oo. The 29-year-old businessman, a World Economic Forum Global Leader, earned an economics degree in Canada and exports rice to Africa.

Even though Myanmar currently exports only small amounts of rice to other ASEAN countries like Indonesia and the Philippines, it wants to target the EU and

US markets in the future. To that end, Pyae is betting on scientific research to improve the quality of his rice, as well as training and capacity-building.

"I know it is not easy to enter the fight and we will face a lot of difficulties, but I believe we will have our own way to overcome", Pyae said. "By now, Vietnam is the major competitor for us.

Its established export industry and low price are advantages for Vietnamese rice.

To compete, we will have to focus on producing high quality rice", the young businessman added.

"We will train our farmers with high technology and modern knowledge on the product's quality as well. I think all these things will help", Pyae said.

Rice production in Vietnam's Mekong and Red River deltas is important to the country's food supply and its economy.

Especially the Mekong River and its tributaries are crucial. The delta produced about 20 million tons of rice in 2008, about half of Myanmar's total production.

Paddy fields have secured the country's food security. About 75 per cent of the average diet in Vietnam consists of rice meals while exported rice from Vietnam supports the diets of international consumers.

Myanmar's rice exports going strong Meanwhile, according to figures cited in Myanmar's media, rice exports from Myanmar in 2012-13 were the highest in 46 years and are expected to grow to

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three million tons between 2013 and 2014, an increase of 43 percent from the previous year.

Myanmar also wants to expand its export markets to neighbouring Asian countries like China and Japan as well as to European countries, including Russia, Spain, Portugal and Belgium.

A first step in this direction has been made. Myanmar recently signed an agreement to export up to 500,000 tons of rice per year to Indonesia as ASEAN's largest country seeks to diversify its food imports.

Huong Hoang Thu works for Vietnamnet in Vietnam.

HUMAN RIGHTS

MYANMAR'S ROHINGYA: DOMESTIC OR REGIONAL ISSUE? The conflict between Rohingya Muslims and Buddhists in the northwestern Rakhine State is starting to impact on neighbouring countries, but ASEAN's policy of non-interference is hampering regional involvment.

Text by Amie Fenia Arimbi - ANTARA News Agency | Photos by Human Rights Watch

E

arly afternoon in Yangon, Abu has just returned from attending daily prayer at a mosque in Myanmar's major city. The 38-year old is wearing a navy blue shirt paired with black Longyis, the Burmese traditional sarong.

He has come here with his 10-year old son, who is following him around willingly. It is just another father-son afternoon out, but Abu's brown complexion looks wrinkled as if he is worried about something.

"I stayed up all night last night. I am guarding my neighbourhood from possible threats. This has been the daily activity of Muslim men in this community since communal clashes in Rakhine State last year", said the man who once lived in the north-western part of Myanmar, the place where 192 people were killed last year due to clashes between the Buddhist majority and the Muslim minority.

He said the Muslim community in Myanmar's business capital had been on high alert during the past months following the outbreak of violence in Rakhine State that forced 140,000 Muslims to leave their homes.

Abu mentioned even though the clashes happened in another area, the Muslim community in the Yangon was on high alert. The fear of attacks by radical Buddhists is very real according to him. He also believes that the government does nothing to stop the violence.

The fear of attacks is very real "The government says they want dialogue, they want to protect us. But they only say that for the sake of their public image while in fact it is them who set an attack to our community", he said while holding his breath, looking away to the streets of Yangon full of vehicles and people.

Communal violence in Myanmar, especially in the Rakhine State, has been the subject of concern among the international community. The concern

has mainly been centered around the issue of human rights violations towards the Muslim community and how extremist Buddhist monks, led by a figure named U Wirathu, conducted a series of negative campaigns against the Muslim community. They claim to do this in the name of securing Myanmar's national interest from the wildly growing population of Muslims who supposedly pose a threat to Myanmar's Buddhist culture.

There are also allegations that the Myanmar government does not do enough to ensure the safety of the Muslim minority in Rakhine which the government refers to as "Bangarli".

Responding to the international community's allegation, Ye Htut, spokesman for Myanmar's President Thein Sein, reiterated that the clashes in Rakhine were not motivated by religious motives, but rather triggered by criminal acts involving people from two religious communities.

He also said the government is trying to calm down the situation by planning an interfaith dialogue between the two communities.

"However, it is hard to approach the Bangarli Muslim community and convince them to participate in the dialogue.

They are isolated communities very much controlled by their religious leaders.

They don't seem to want to have contact with other people except from their own community", said Deputy Minister of Information Ye Htut.

Indonesia's Minister of Foreign Affairs, Marty Natalegawa, has called for trust building and reconciliation between Rohingya and Rakhine ethnic groups, after his visit to Rakhine at the invitation of Myanmar's President Thein Sein earlier this year.

Marty had visited refugee camps in Maungdaw and several other towns, stating the situation in Rakhine remained "unfavourable" with widespread distrust between the communities. Obviously, besides basic needs such as housing, food, medicine and education, there was also a need to promote mutual trust and reconciliation between the two ethnic groups, the minister said.

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"The main impressions I had during my short visit to the area was that we are involved basically not only in the physical reconstruction and rehabilitation of the damage caused by the recent violence, but we must also nurture a sense of confidence, a sense of reconciliation among the different communities", Marty Natalegawa said.

Indonesia has actually uttered its intention to support the Myanmar government in solving the Rohingya issue.

As a Muslim-majority country, which is used to deal with minority communities, Indonesia wants to share its experience in solving the conflict in Myanmar. But so far, the support is mainly in the form of humanitarian aid for displaced Rohingya people.

Regional or domestic issue?

Although the Rakhine conflict takes place in Myanmar, its impact is felt in other countries in Southeast Asia.

Indonesia, Thailand and Malaysia, for example, have been hosting thousands of Rohingya refugees who left Myanmar on traditional boats. Most of the refugees are illegal migrants heading for Australia to seek asylum. Many journeys end in Indonesia, Thailand or Malaysia – instead of Down Under.

Hosting refugees is a challenge of its own for the three countries. In Malaysia and Indonesia, where the majority of the population is Muslim, several outbreaks of violence allegedly related to the Rohingya issue were recorded. In Indonesia, the anti-terror police squad on May 22 killed two terrorist suspects in two different locations, namely in the Tanjung Priok area (North Jakarta) and Tangerang (Banten).

"The two suspects named Sigit and Rohadi have been on our search list for their alleged involvement in planning a bomb attack in front of Myanmar's Embassy in Jakarta a while ago", Indonesian police headquarters spokesperson Boy Rafli Amar said.

An overpopulated camp of internally displaced persons (IDP) outside Sittwe, the capital of Rakhine State.

A police officer points his rifle at street level in Sittwe in June 2012.

The riverine Rohingya village of Zailya Para in Minbya Township burns after attacks by Arakanese mobs in October 2012.

Local Arakanese dismantle and loot the site of a destroyed mosque in Sittwe, June 2012.

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Boy explained police had found material to make bombs inside Rohadi's home in Tangerang. "There was one kilogram of fertiliser, sulphur, cable, steel pipes with a diameter of 1.5 inches and black powder", he said.

In Malaysia, the Strait Times reported on May 30 about four Myanmar men killed and eight others severely injured in four separate incidents after being attacked by men with sticks and big knives.

In the latest incident, it was reported that a Myanmar worker was knifed behind a car wash centre in the city.

Utusan Malaysia, a Malay-language daily, quoted sources as saying that the police was investigating a group of Myanmar nationals believed to be members of a radical Buddhist movement known as "969", with a mission to kill Rohingya Muslims.

Even though some ASEAN countries have been badly affected by the ethnic conflict in Rakhine and have offered assistance to Myanmar in solving the Rohingya issue, the Myanmar government insists that it is a national matter.

"It is our country's internal issue, not a regional one. Some people try to put this as a regional issue, but this is our internal problem. What we are trying to do is to establish a dialogue with the Rohingya.

But they never allow local officials to enter their camps", President Thein Sein's spokesman Ye Htut said.

ASEAN is known for its non-interference policy which basically says no member state can interfere with the national issue of other members. The policy aims to protect the sovereignty of member states. However, it has also been blamed for the failure of ASEAN in agreeing on some difficult issues from border conflicts between member states to the recent issue of the Rohingya Muslim minority in Myanmar.

"The non-interference policy adopted

by ASEAN undermines human rights efforts and essentially blocks any monitoring of alleged human rights abuses in member states. If we truly are to be a 23

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single community, then we must act like one, looking out for the interests and needs of all our citizens in their diversity", said the President of the ASEAN Inter-Parliamentary Myanmar Caucus (AIPMC), Eva Sundari. The AIPMC is comprised of regional lawmakers from both ruling and non-ruling political parties and parliaments across Southeast Asia, working toward a peaceful future in Myanmar.

Sundari called on ASEAN to sharpen its role in the fight to protect human rights in the region.

"Leaders can rise above bitter national conflicts" "Rather than being a mirror of our own national failures, ASEAN, as an institution, must provide the space for which the people and leaders of this region can look to rise above bitter and complex national conflicts and tensions, where the bar of ambition is set high. The ASEAN Economic Community must be exactly that, a community with shared visions, ideas and responsibilities", said the Indonesian parliamentarian.

Sundari added that Myanmar cannot hide behind the non-intervention principle as the Rohingya conflict has regional repercussions, especially in Malaysia and Indonesia.

"For the interest of other countries, as the ASEAN economies will be integrated, it is impossible to keep that principle.

I and my friends in the human rights caucus, of course, will use our voices to remind every country to respect, protect and fulfil every citizen's human rights, living in this regional economy", said the Indonesian parliament member from the Indonesian Democratic Party of Struggle (PDIP).

Amie Fenia Arimbi works for ANTARA News Agency in Indonesia.

BANGARLI OR ROHINGYA? People in Myanmar are divided over ethnic violence in the northwestern Rakhine State close to the border to Bangladesh.

Should it be addressed as a domestic, regional or international problem?

Text by Ah Ngae Htwe - Eleven Media Group | Photos by Evangelos Petratos / EU - ECHO

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any people in Myanmar are tired of hearing about clashes between the Muslim and nonMuslim population in Rakhine State.

The Muslims involved in this conflict call themselves Rohingya. The Buddhists in contrast call them Bangarli, suggesting they originally came from former British India, what is now Bangladesh. The international community views the conflict as a human rights issue.

"In fact those people called Bangarli, who flood into our country with many reasons, are not even recognised by their own country as their citizens", said U Than Maung, a native of Rakhine State and lawyer who runs his own firm in

Yangon. "They come here to escape extreme poverty, just to survive. This is okay. We sympathise with them as we are human beings, we are sharing our food with them and share our places to live.

But they ask for Myanmar citizenship and ethnic minority rights. I understand that they have human rights, but citizenship rights are on a different level."

From tensions to violence Ethnic tensions have simmered for decades but escalated in May 2012 when Thida Htwe, a young Rhakine woman, 24

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was raped by three Bangarli men. News of the incident spread all over the Rakhine State and violence erupted between the two communities, both sides committing crimes. "It is certainly a problem for us to deal with as it originates in our country.

However, to deal with this problem by ourselves alone does not make sense", said Ko Ginmi, a political activist and veteran of the so-called 8888 generation. "Now Thailand and Malaysia are saying that refugees from Myanmar are coming to their border areas, blaming us for the Bangarli issue. So it becomes our problem again.

In this regard, countries in the ASEAN region and a country like Bangladesh should help us to deal with this problem", the former political prisoner added.

Discrimination continues to affect Rohingya in Rakhine State (left). Many of them flee to camps for internally displaced persons (right).

Demanding citizenship has repercussions on Myanmar's 1982 citizenship law. To be acknowledged as an ethnic minority is another problem. The country's 1982 citizenship law states that only the third generation of immigrants can be granted the right of citizenship.

And Myanmar's recognised ethnic minorities are worried by the fact that Bangarli also ask for ethnic minority rights, as they guarantee certain constitutional rights.

"If you are talking about ethnic rights, the process will take longer than expected and it will take many years", said Ko Ginmi. "It touches not only our national sovereignty but also the rights of other ethnic minorities like the Kachin, Kayah, Kayin, Chin, Mon or the Shan. By principle, we never ever considered Bangarli to be one of our ethnic groups. But if we use the term Rohingya, it will also be problematic.

If the process leads to an amendment of the 1982 citizenship law, only parliament has the power to solve this problem. No one else can make this decision."

this problem with many other countries", said U Ye Htut, Deputy Information Minister of Myanmar. "However, bringing in third parties is impossible because the case is very sensitive and there is a great deal of mistrust between the two communities." So the government was trying to encourage the two communities to start talks looking for a peaceful solution. However, often the refugees were claiming to be Rohingya from Rakhine State only because they wanted refugee status. "Malaysia and Thailand say refugees from our country claim that they are Rohingya from Rakhine State. The problem is that most of them can't speak the Rakhine language and also cannot prove they have relatives and family living in Rakhine State", U Ye Htut said.

"So instead of putting the matter on the international table trying to make it a regional and international issue, I think it is a domestic issue of Myanmar", added U Ye Htut. The government was planning a census to look for a solution.

"The problem is that nowadays some of the Rakhine people are also scared to live in their homes and are trying to go to other countries. I think it is a domestic issue but it needs constructive international help", said a former local of Kyutphyu town in Rakhine who now lives in New Zealand.

According to data from the Rakhine National Democratic Party (RNDP), in Maungdaw township – close to the border to Bangladesh – 90 per cent of the population are Bangarli and in Sittwe, the state capital, 50 per cent are ethnic Rakhine and 50 per cent are Bangarli.

ROHINGYA MUSLIMS ON THE RUN Around 13,000 Rohingya are estimated to have fled Myanmar by boat last year, 485 of them are believed to have drowned. In mid-August, 38 Rohingya people escaped from a detention centre in Koh Lane in Phuket's Muang district in Thailand after they illegally entered the country in March. A few days later, Thai police fired water cannon through the gated front door of a detainment centre in Thailand's southern Phang Nga province to stop over 250 Rohingya asylum seekers from leaving the centre.

Kuala Lumpur deputy police chief Amar Singh Ishar Singh was quoted by a local paper as saying that the riots in Myanmar have also caused a spate of violence in Malaysia. Since May 30, four Myanmar workers in Malaysia were killed in four separate incidents after being attacked by men with sticks and parangs. In early April, similar attacks also took place in Indonesia's North Sumatra province, leaving at least eight people dead and 21 wounded. In early May, police blocked a plan to bomb the Myanmar Embassy in Jakarta, capturing two men with pipe bombs en route to the site. And just recently, a Buddhist temple in Jakarta was bombed, causing minor injuries to three members of a 300-strong congregation that had gathered for a sermon. There was a note from the perpetrators reading: "We respond to the screams of the Rohingya."

by Ikram Putra

"Now we start introducing third parties to deal with this problem which include international and domestic NGOs. Also religious leaders are, according to the suggestion of President U Thein Sein, going to take part in the process", said U Kyaw Khin, a religious leader from the All Burma Muslim Association.

Ah Ngae Htwe works for Eleven Media Group in Myanmar.

The official view in Myanmar, however, is that the Rohingya are a domestic issue, not a regional concern. "We share 25

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A Rohingya asylum seeker who lives in a detention centre. Photo: Digital Democracy

MYANMAR FAILS LANDMINES BAN Text by Le Yee Myint - Living Color Media | Photos by Giovanni Diffidenti / International Campaign to Ban Landmines

A prosthetic technician (right page) is producing an artificial leg for those who stepped on antipersonnel mines.

M

ine contamination has emerged as a major public safety issue ahead of Myanmar's ASEAN Chairmanship, with the ink on many peace agreements barely dry after decades of ethnic unrest.

"I know the government and the armed groups can't solve this landmine problem before 2014", says Saw Moe Myint, President of the Mine Action Myanmar Organization. "It takes at least four years to clear all the mines", he says, adding that Myanmar is presently lacking both mine experts and the equipment to detect and remove mines.

Myanmar's President Thein Sein has suggested that both government and ethnic troops clean the unexploded mines from the remote areas. In ASEAN, Myanmar ranks among the worst in terms of mines and has also not signed the International Mine Ban Treaty.

U Win Mra, Chairman of Myanmar National Human Rights Commission says his team "already urged our government to remove all landmines in Kachin State. On the other hand Myanmar needs to sign United Nations Mine Ban Treaty, and actually this is long-term process."

Landmines & Cluster Munition Monitor, an initiative providing research for international campaigns to ban landmines, estimates that 47 townships in Myanmar are so-called suspect hazardous areas (SHAs). These include Karen State, Karenni State, five townships in Kachin State, six townships in Mon State, four townships in Pegu division and Maungdaw township in Rakhine State and three other states.

84 deaths in Kachin State in only one year Local NGOs and international donors are already teaching mines risk education and rehabilitation, and handicapped centers are now starting to ban landmines in remote and conflict areas. But it is difficult to say exactly how long it will take to finish clearing the mines. IRIN news agency published the mines situation of Kachin State in May, according to its story there were at least 381 landmines casualties, including 84 deaths in 2011, but international mines experts say the real number could be significantly higher.

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Mines are a problem in six out of ASEAN's ten member countries – in Myanmar, Thailand, Cambodia, Laos, Vietnam and the Philippines where 262 casualties and 113 deaths were recorded over the last decade. In Vietnam, as much as 20 per cent of the mines laid during the Vietnam War are believed to be still there.

Cambodia signed the International Mine Ban Treaty but has been unable to clear all mines because of unstable politics.

In Myanmar, international donors offering assistance in clearing mines include the United States, the European Union, Denmark, Norway and Sweden.

Denmark is the largest contributor, with $373,587 in 2011, followed by the US with $189,106 and Norway with $111,675.

Le Yee Myint works for Living Color Media in Myanmar.

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8888 COMMEMORATION

A STUDENT SOLDIER STORY For 25 years, Myanmar's military junta did not recongnise the existence of the so-called 8888 generation. There was never a public commemoration, even not the slightest mention in history.

Now that lost generation is coming back.

Text by Basfin Siregar - GATRA Magazine | Photos by Archives, Thomas Kohlmann, Basfin Siregar

Toe Zaw Latt, currently working as a journalist, managed to return to Myanmar after more than 20 years in exile.

T

oe Zaw Latt is 43 years old. The spectacled and dark-skinned man is one of the journalists covering the anniversary of the 8888 uprising, held on August 8 at Myanmar Convention Center in Yangon.

At first there seemed nothing special about him, just a journalist doing his job.

He mingled with other journalists outside the building, and occasionally shot his Sony camera to capture the crowd of more than 5,000 people who attended the rally. But for Latt, the event was more than just a job assignment. It was also a reunion with his old past.

On August 8, 1988, exactly 25 years ago, an 18-year-old Latt also took to the streets and demonstrated against the government, demanding an end to military dictatorship. The economy of then Burma was on the brink of destruction. The junta's socialism failed to give prosperity to the people. Poverty ruled.

The UN even put Burma on the list of "least developed countries".

But the junta's reaction was absurd. Instead of tackling the problem, the regime's military commander, General Ne Win, withdrew the country's kyat currency notes of 100, 75, 35, 25 without any compensation, leaving only 45 and 90 notes.

The reason for this move was superstition. The latter two notes were considered lucky because they were the only numbers divisible by nine.

demonstration was responded with a "shoot to kill" policy. At least 3,000 to 5,000 people were reportedly killed, mostly students.

The policy angered many students in the country's biggest city, which was then still called Rangoon, since they lost their tuition savings overnight. They began to demonstrate. More and more people joined. In a few weeks, it was estimated that one million people took to the streets of Rangoon.

But Latt survived. He escaped to the Burmese-Thai border and joined the socalled "students' army". He lived in the jungle, learned how to use weapons and began an armed rebellion.

For almost five years Latt waged a guerilla war against the junta. "I was very young and very angry at that time", he said, smiling.

"I was very young and very angry at that time."

Aung San Suu Kyi, who was at that time in Burma to take care of her sick mother, quickly became the symbol of the movement. Her popularity during the uprising would show its significance when her National League for Democracy won the 1990 election – but was overruled by the military.

The uprising began on 8 August 1988 – hence the term 8888 – and ended abruptly in September in horror. The junta reacted violently. The students' 30

8888 commemoration

But soon he got exhausted and quit the guerilla war.

Latt decided to leave the jungle, travelled to Australia and applied for a scholarship. He then got a job as a journalist in Thailand and stayed there for almost 23 years, unable to return to his homeland.

Only in 2011, when Myanmar's political reforms started, he managed to set foot on Yangon's soil again.

"This event was like a reunion. I met old friends back in those days. And I still bring my weapon, but now my weapon is this", he said, showing his Sony camera with the telephoto lens.

But it might be an akward reunion.

Latt was not the only one with a history.

Besides his comrades back in the jungle and prominent leaders of the 8888 movement (many were in prison until just two years ago), the convention hall also saw the ruling party vice-chairman and former general, Htay Oo.

"The military set the bar pretty high."

Of course, Aung San Suu Kyi was there too. She was in fact the big show, speaking for more than an hour about the importance of unity and how the referendum, or the will of the people, has the power to change something, even the constitution – a reference to her dislike of the current Myanmar's constitution, since there is this article prohibiting her from running for president.

The crowd's reaction did really show why the generals are afraid of her if she runs for president. The crowd which had been waiting since noon (Suu Kyi showed up at 3 p.m.) was jubilant when she came. All listened attentively to her speech, but dismissed themselves after she stepped down from the stage, as if they were only there to listen to her – and left the speaker after her with a much smaller audience.

But will she have a chance to become president? "No, they [the military] set the bar pretty high", said Latt firmly.

But that's not an issue for him. For Latt, a public anniversary of the 8888 movement was already a big step. For years the junta didn't even recognise the existence of the 8888 movement and outlawed any mention of it in Myanmar's history. "They called it anarchy", Latt said.

He also didn't mind the fact that Myanmar's constitution gives 25 percent of the seats in parliament to the military – without the need to be elected – although he knew very well that it was the tactic used by Indonesia's Soeharto during the New Order era (1966-1998) to ensure he won the presidency every time. "They

copy many things from Indonesia, bad things. But I think it's a transition from military rule", Latt said.

"Part of the reconciliation process is to forgive."

For a guy who spent nearly five years in the jungle of Myanmar waging a guerilla war, it might be surprising that he was rather satisfied with the so-called "transition".

But this is Myanmar's story, not Indonesia's. After years under the military junta, a semi-civilian government like the Soeharto era might really be an improvement, a transition to a better phase.

Perhaps that's why Latt also didn't mind that the military still refused to apologise for the bloodbath they caused in the 8888 uprising. "Part of the reconciliation process is to forgive", he said.

Basfin Siregar works for GATRA Magazine in Indonesia.

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8888 commemoration

People from farmers to monks came to the first public commemoration of 8888. Some also brought the picture of their relatives who died during the 8888 uprising.

EXTRACTIVE INDUSTRIES TRANSPARENCY INITIATIVE

CHALLENGES AHEAD FOR BURMA ON ITS PATH TO EITI A country that has been ruled by the military and its corrupt cronies for 50 years is making a head-start for transparency in its mining sector. But there are many barriers to overcome, before Burma will be able to join the Extractive Industries Transparency Initiative.

Text by Zarni Mann - The Irrawaddy | Photos by Michael Cory, Pianporn Deetes, Soe Zeya Tun / Reuters

People on the banks of the Irrawaddy River have been panning for gold for centuries.

R

esource-rich Burma is giving its ASEAN fellows a run for their investment money in the extractive industry, and not just with its resource riches but also with big strides towards global transparency standards.

Almost unnoticed, the country is busy fulfilling as quickly as possible the requirements that would allow it to join the international Extractive Industries Transparency Initiative (EITI), a global standard certifying squeaky-clean transparency in image-troubled industries, such as oil, gas and mining.

Burma wants to apply for EITI membership before the end of the year and has already completed two out of four steps, Min Zar Ni Lin, Deputy Team Leader for the country's EITI Co-ordinating Office, told "The Irrawaddy".

If all goes to plan, Burma would have the administrative rules and regulations in place by 2015, before the general elections, and join EITI in 2016 or 2017.

In a first step, President Thein Sein publicly announced in mid-2012 that the country has the intention to implement the EITI, followed by the second step of

appointing a senior individual to lead on the implementation of EITI. A commission is headed by the Union Minister Soe Thein, together with the Minister of Environmental Conservation, the Minister of Mines and the Minister of Finance and Revenue as members.

If Burma, rich in natural resources like oil, gas and minerals, becomes a compliant country in EITI, it will have to improve its investment climate by providing a clear signal to investors and international financial institutions that the government is committed to greater transparency.

No transparency without civil society Burma is planning to strengthen accountability and good governance, as well as promoting greater economic and political stability. This, in turn, can contribute to the prevention of conflicts based on the oil, mining and gas sectors.

According to the Myanmar EITI Cooperation Office (MEITI), the country 34

EITI

has some challenges to meet like working with civil society organisations as well as with companies and establish a multistakeholder group to oversee the implementation of EITI. "There are many things to think about regarding civil society organisations because we have many in the country which are not registered yet due to several reasons. We are still working on it", Min Zar Ni Lin expained.

In fear of political protest movements and unrest in the country, the military government barred the operating of civil society organisations (CSOs). While some operating international NGOs are allowed to work in the country gradually, social activists from Burma have set up CSOs in many sectors; however, legalisation of the CSOs is still in discussion at parliament. Only a few CSOs are registered while most of them are still under consideration process.

"We still need to create the awareness of international standard and law to domestic businesses to make sure the country's economy is going along with international standard and law", Min Zar Ni Lin said. "It will take time, but hope-

Though rich in oil and gas resources, many fuelling stations in the Golden Land look like this. fully we will be a compliant country by 2016 or 2017."

After many decades under military rule, the citizens of Burma are totally barred from access to reports of revenue, foreign investment and the situation of projects operating in the country, since Burma has not practiced transparency and there is no reporting mechanism to the public.

"The big challenges for first years will be the reporting of the actual revenue and tax. There will be problems on who will confirm those data given by the government and to determine whether multistakeholders are correct", said the Deputy Team Leader for the country's EITI Co-ordinating Office.

"However, we believe we could overcome these problems for EITI has controls such as giving warning and blacklisting to the one who does not comply with the rules and who gave data incorrectly", he added.

Helene Johansen, EITI Communication Officer, said that the limitation of public access to information is one of the challenges because of the size and complexity of the extractive sector, in particular on the mining side.

"The most common challenges relate to producing EITI reports that give a complete picture of total revenues received from the extractive sector. Another common challenge is to ensure that this data is reliable and used to inform public debate", she said.

Civil society groups said that CSOs in Burma are playing the vital role to act as a watchdog to make sure the data given to EITI is reliable and correct.

From civil rights groups to industry watchdogs "Education and capacity building regarding the people of Burma is also important. From that, we could inform the regarding authorities if the government or multi-stakeholders are cheating", said Devi Thant Zin, a famous activist, working for the preservation of the environment and urging the government to ensure transparency in the mining, oil and gas sectors.

"The policy and the mindset of the government towards the CSOs and its citizens needs to be clear as well as trust35

EITI

building between the two parties is vital", she added.

Currently in Burma, some of the CSOs which are not yet registered are facing difficulties and are threatened by the legal situation, often accused of threatening the stability and security of the state.

"I believe all these hardships will work out in very small time once we are with EITI and have more transparency, while we could reduce some corruption", Devi Thant Zin added. "We can learn from the lessons of Indonesia to make sure we will not delay in publishing the report as well."

According to the Extractive Industries Transparency Initiative, the EITI process in Indonesia has suffered from challenges related to national procurement procedures, delays in funding and a complex extractive industries sector.

Zarni Mann works for The Irrawaddy in Myanmar.

ASEAN COUNTRIES URGED TO COMPLY WITH EITI Text by Iris Gonzales - The Philippine Star | Photos by Axel Drainville, Teza Hlaing / The Irrawaddy

Pumping gas to China (left).Devastation by the copper mining project in Central Myanmar (right).

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SEAN countries, including the Philippines, can help to protect their oil, gas and mining industries by complying with the Extractive Industries Transparency Initiative (EITI), a global standard that calls for disclosure of payments and receipts, a leading anti-corruption advocate says.

Erry Riyana Hardjapamekas, former chief executive officer of Indonesia's Tambang Timah PT, the world's largest tin producer, estimates that in ASEAN countries at least 10 per cent of government revenues from extractive industries are likely to be lost to corruption.

"One measure to prevent corruption is the EITI because one basic thing in combatting corruption is transparency", he told Southeast Asian journalists.

Hardjapamekas said that without proper disclosure, revenues from extractive industries such as oil, gas and mining, may not be maximised and instead are lost to corruption.

"It's difficult to measure how much corruption there is in each country but we can feel it. It could be reflected on the quality of public services", he said.

"It shows how serious governments are in combatting corruption in their extractive industries."

In the region, EITI is becoming a big issue with Indonesia, the Philippines, Myanmar and Vietnam which are all making efforts to hold companies and

governments accountable for the revenues they make from extractive industries.

conflict based around the oil, mining and gas sectors", she said.

Marie Gay Alessandra Ordenes, the national co-ordinator of Philippines-EITI said in an article posted on the Philippines-EITI website that efforts to join EITI would allow Filipinos to know how much the government is really getting from mining and how much the industry is paying the government.

"Filipinos should be getting the answers to these and other questions about the extractive industries after the government formed the Philippine Extractive Industries Transparency Initiative (PHEITI), following the issuance", she said.

"Publication of payments will also aid local communities in monitoring the exact benefits that they are entitled to, including those under the Social Development and Management Program mandated by the Mining Act." Furthermore, she said EITI compliance would also make the Philippines more attractive to foreign investors because it promotes transparency among industry players and levels the playing field.

In an EITI workshop held in Manila in January, Philippine Finance Secretary Cesar Purisima said complying with the EITI shows that the Philippines is serious in protecting the mining industry.

"I believe this is a crucial component on the better way forward for the mining industry", he said.

Toward this end, Manila's Mines and Geosciences Bureau recently introduced an online database of mining taxes, royalties and fees and charges.

Helene Johansen, Communication Officer of EITI International Secretariat, said it could also prevent conflict around resource-rich areas. "EITI also assists in strengthening accountability and good governance, as well as promoting greater economic and political stability. This, in turn, can contribute to the prevention of 36

EITI

However, Hardjapamekas, former commissioner of Indonesia's Corruption Eradication Commission, said the Philippines should not only focus on mining, but on oil and gas as well.

At the same time, Hardjapamekas said EITI compliance is only one step in fighting corruption. "The extractive industry is only the first step. Governments must create transparency in other sectors", he said.

Resource-rich Myanmar aims to carry out the EITI tasks by the end of 2013.

Iris Gonzales works for The Philippine Star in the Philippines.

ASEAN'S FIGHT AGAINST CORRUPTION

FIGHTING CORRUPTION THROUGH TRANSPARENCY

Text by Khanh Linh Nguyen - Vietnam News Agency | Photo by Roger Price

Mining companies have a devestating impact on the environment.

C

orruption is not the problem of one country alone, and by complying with EITI, the Association of Southeast Asian Nations (ASEAN) can do anti-corruption better, a former Commissioner of Indonesia's Corruption Eradication Commission told reporters from Jakarta.

"Corruption is happening everywhere, corruption is an organised crime and it happens not alone; it cannot stand with just one official or party. It takes two to tango, one public official is corrupt and must have a partner with the private sector", the Erry Riyana Hardjapamekas said.

Since 2002, the Extractive Industry Transparency Initiative (EITI) has helped activists, investors and the media to hold companies and governments to account by voluntarily reporting how much is paid for extracting natural resources.

Revenue lost to corruption in extractive industries maybe 10 per cent of GDP of all ASEAN countries, Hardjapamekas estimates. But there were also many tools to deal with: "EITI is one of those [tools] that can help to prevent corruption".

Indonesia has been the first country in ASEAN to apply for EITI status. EITI was good for Indonesia but also for other ASEAN members countries, business, investors and civil society, Hardjapamekas says. Some countries in the region now are considering to join the initiative, such as Myanmar, the Philippines, Malaysia and Vietnam. ASEAN countries are realising transparency is good for economic development, the investment climate and a key to the planned establishment of a complete ASEAN Economic Area (AEC) by 2015. "For ASEAN, there is consensus that by 2016 there will be concrete steps on EITI", Hardjapamekas said.

However, transparency in the extractive industries is a sensitive issue. Most governments say they want to combat corruption, but they do not want to join the EITI, whereas people and companies want their governments to. The problem is that it totally depends on the decision of the government, says Hardjapamekas.

"Multi-stakeholder dialogue – all the people should talk with industry, then together, the people and the industry make the appeal to governments to accelerate the process."

"The main thing for EITI is to show people how serious the government is in combatting corruption", he added. "The seriousness should also be followed up by other measures because the extractive industry is only the first step to create transparency in other sectors."

Khanh Linh Nguyen works for the Vietnam News Agency in Vietnam.

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Indonesia's efforts to become the first ASEAN country to mandate financial transparency in the mining and oil industries have hit a road block over the sheer complexity of the industry and the government agencies regulating it.

"It's still a long road [for Indonesia]", said Erry Riyana Hardjapamekas, former vice chairman of the Corruption Erradication Commission and member of the EITI Board. The country has taken the ASEAN lead in adopting a global standard for transparency called EITI (Extractive Industries Transparency Initiative). The rules make it possible for citizens to see how much money their government receives from its extractive industries and how much companies pay to governments. Both sets of data are then compared by an independent auditor, thus highlighting any irregularities.

Indonesia has been a candidate country since 19th October 2010 with the aim of becoming a full EITI member this year. In May, however, the country was found wanting by independent auditors in several key areas, including international accounting standards.

Indonesia is expected to publish its next reports covering data from 2010 and 2011 at the end of this year, at the latest.

Then it will undergo a validation process to decide whether or not it is eligible for "EITI-compliant" country status.

Says Hardjapamekas: "If we failed, we would go back to square one."

by Ikram Putra

INDONESIA DELAYS EITI TARGET ASEAN's largest member state hast taken the lead in promoting transparency in the region.

But complying with international anti-corruption standards is turning out to be more complex than expected.

Text by Amie Fenia Arimbi - ANTARA News Agency | Photo by Bryan Bear

Indonesians want to know where the profits from the country's natural resources go.

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I

ndonesia plans to publish a report of the revenue it gets from the mining, oil and gas sectors this October, three months later than planned, as the process turns up more challenging than expected.

"We must delay until October but we are working on it", Erry Riyana Hardjapamekas, a member of the EITI Indonesia Advisory Board, said in an exclusive interview.

The report is part of the country's effort to join the Extractive Industries Transparency Initiative (EITI), a global voluntary initiative to disclose the earnings of the largest companies from sectors such as oil, gas and minerals. In a first step, a potential applicant country must produce a report that discloses revenues from the extraction of its natural resources.

"The most important thing is that government, civil society organisations and the industry agree that we have to adopt the EITI concept and use it as a preventive measure against corruption", Hardjapamekas said.

A preventive measure against corruption Under the EITI, companies must disclose what they have paid in taxes and other payments and the government discloses what it has received. These two sets of figures are compared, reviewed and then published.

Earlier this year, Indonesia has released its revenue report from the oil and gas sector using 2009 data. In October, the country expects to publish another report based on 2010 and 2011 figures. By disclosing state revenue and being admitted as an EITI member, Indonesia expects to provide a better and more transparent investment climate for international companies.

But Indonesia faces various challenges in completing the EITI process, Hardjapamekas said, not least the some

10,000 mining companies operating in the country. "For now, we do not include all 10,000 companies for the EITI process but rather include only companies which have big revenues from oil and gas exploration."

Another challenge is the hard work in compiling, validating and comparing data from both industry and government, especially since Indonesia is on the rush to publish its revenue from the years of 2010 and 2011 this October.

In Indonesia, the transparency initiative for revenues from the extractive industries began in 2007 when former Finance Minister Sri Mulyani expressed support for EITI to the representatives of Transparency International Indonesia.

Erry Riyana Hardjapamekas teamed up with Waluyo, then-Deputy of the Corruption Eradication Commission (KPK).

Together they reviewed the legal basis to prepare the implementation as regulated by the President of EITI and discussed it with the Ministry of Energy and Mineral Resources (ESDM).

The next year, Coordinating Minister for Economic Affairs Boediono was leading the coordination meeting for the EITI, and finally in 2010, President Susilo Bambang Yudhoyono signed the Presidential Decree No. 26 of the year, regarding the transparency of revenues and in particular revenue obtained from the oil and gas sector.

Helene Johansen, Communications Officer from the EITI International Secretariat in Oslo, said that the EITI process in Indonesia suffered from challenges related to national procurement procedures, delays in funding and a very complex extractive industries sector.

According to the Resource Governance Index published by Revenue Watch Indonesia (RWI), the country gets a score of 76 out of 100 due to its comprehensive legislation and a competitive licensing process. Most oil and gas companies sign production-sharing contracts; mining companies receive licenses in exchange for royalties and taxes.

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The Finance Ministry collects payments from oil companies and deposits the funds in the national treasury. The director general of mining collects most non-tax mining payments; the director general of taxation collects mining taxes.

Government agencies publish all legislation related to natural resource extraction online. However, these laws do not include detailed regulations on fiscal terms.

Indonesia also requires environmental impact assessments, but only makes them public for a brief comment period after licenses are granted.

Indonesia has still a long way to go Indonesia gets a score of 66 for its comprehensive reporting on a number of indicators, but lacks contract transparency and sufficient disclosure of transfers of resource revenues. Some information on petroleum auction rounds is published, but contract terms are not. The 2009 Mining Law reduced transparency in the mining sector; only contracts that predate the law are available, and only by request.

The Finance Ministry publishes some information on oil companies' operations and their different revenue streams. The Energy and Mineral Resources Ministry provides data on reserves, production volumes and prices, but does not include information on extractive revenues.

So there are critical voices from some NGOs that Indonesia still has some homework to do in terms of full disclosure and transparency.

But Erry Riyana Hardjapamekas says, "the most important thing is that government, CSOs and the industry agree that we have to adopt the EITI concept and use it as a preventive measure against corruption."

Amie Fenia Arimbi works for ANTARA News Agency in Indonesia.