History was made in Myanmar, the country formerly called Burma, on November 8, when the National League for Democracy (NLD), headed by Noble Peace laureate Aung San Suu Kyi, won a near-total sweep in the first democratic election in 25 years.
The NLD cruised past the 329-seat threshold it needed to gain control of both houses of parliament. The longtime freedom fighter, aged 70, will nominate a new president, to be elected by parliament early next year—someone who, in all probability, will act as her proxy. Suu Kyi is constitutionally banned from running for the post. Her sons are British citizens, and foreign citizenship in a family disqualifies a candidate.
While much is expected from the new democratic leadership, change will be gradual and dependent upon the level of cooperation established with the armed forces. The military is guaranteed 25% of parliament, and a vote of more than 75% is needed to change the constitution.
The government and military will likely find common ground for economic reforms to boost manufacturing and modernize the banking system, but the lingering impact of five decades of economic and political isolation won’t be easily erased.
“A bloodless and relatively clean election was a necessary precondition to higher levels of foreign investment,” notes Christian Lewis, Southeast Asia political risk analyst at Eurasia Group. “[But] investors will continue to grapple with serious infrastructure shortfalls and a low government capacity to design and successfully implement needed regulatory reforms.”
He expects some movement on the Companies Law (replacing legislation dating back to 1914) to “improve capital-raising efforts and clarify the pathway to listing on the Yangon Stock Exchange, in addition to improving audit standards.”
Other political and economic hurdles will be tougher to negotiate. In mining, for example, development is expected to move slowly, owing to revenue-sharing agreements with Myanmar’s ethnic minorities. Lewis says consensus will be greatest around sectors “that confer benefits to the government and its constituents domestically”—like energy, which is a major source of budget revenue, and manufacturing, which creates jobs. But one thing is certain: As Aung San Suu Kyi and her allies seek to transform Myanmar into a modern economy, the world will be watching.
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