Myanmar was widely viewed as one of the most opaque and mismanaged countries in the world throughout decades of abusive and unaccountable military rule.
That was supposed to change with the transition to democracy in 2015, with Aung San Suu Kyi’s National League for Democracy (NLD) party resoundingly voted into power on a promise of change and reform.
Now, as Myanmar enters a new election season pitting her NLD against the military-aligned Union Solidarity and Development Party (USDP), the NLD’s anti-corruption record is expected to feature on the campaign trail.
Certain international measures are on the NLD’s side. Global graft watchdog Transparency International’s latest Corruption Perception Index saw Myanmar move up two positions, from 132nd in 2018 to 130th out of 180 ranked countries in 2019.
That ranking has slowly but steadily improved since Suu Kyi assumed electoral power in 2016, when Myanmar ranked 136th on the index.
That’s quantifiable international recognition of her government’s anti-graft battle, a campaign of new laws, high-profile arrests and sackings, and improved collaboration on graft issues with the private sector.
Her administration has also enforced greater transparency over business ownership in a bid to prevent conflicts of interest in government.
The campaign is being driven by an empowered Anti-Corruption Commission (ACC), which since 2018 has been allowed to launch preliminary investigations into received tips, including allegations of unusual wealth.
Previously, the anti-graft body could only act on formal complaints.The most high-level ACC-led case to date involves then-Tanintharyi chief minister Lae Lae Maw, a member of Suu Kyi’s NLD who was sacked in March 2019.
Last month, the Tanintharyi regional court accepted to hear bribery and corruption charges against her and three private company directors.
Others arrested or jailed for corruption include Than Htut, former director general of the Food and Drug Administration, Khaing Soe Hla, deputy director general of Naypyitaw’s Veterinary and Abattoirs Department, five senior bureaucrats at a water agency and two Department of Hydropower Implementation directors.
Cabinet-level officials have also fallen. In 2018, Finance Minister Kyaw Win stepped down amid an ACC investigation, though he was neither arrested nor charged. Last July, Industry Minister Khin Maung Cho resigned amid allegations he violated undisclosed “office procedures.”
More corruption charges could be in the offing as newly created watchdogs are unleashed. Last year, the NLD government created new Corruption Prevention Units (CPUs) across 22 government bodies to prevent and uproot ministry-level corruption.
Other key corruption-related reforms remain stuck in the pipeline, including measures to stop rampant conflicts of interest in government where officials award privileges, concessions and contracts to family members and associates.
The most glaring omission in the anti-corruption fight concerns the military, or Tatmadaw, arguably the country’s most powerful institution. The Tatmadaw is involved in vast areas of the economy through two major military-owned conglomerates and subsidiaries.
Tatmadaw members are immune from prosecution in civilian courts and ACC probes, a protection written into the military-drafted 2008 Constitution which guarantees the armed forces a strong and overarching political role.
Nor are there legal protections for whistleblowers, meaning they run the risk of defamation suits or worse for speaking out about corruption in their midst.
At the same time, it is not legally a crime to offer bribes, with regulations on business donations and corporate philanthropy unclear and ill-defined.
In one example, Suu Kyi controversially raised donations from local tycoons to fund a development agency created by her administration for the restive Rakhine state, site of the alleged Rohingya genocide.
Many major Myanmar companies run so-called “foundations” for the main purpose of making donations, including for activities that benefit lawmakers and officials.
Such donations were commonplace under military rule, where they were made in return for car import permits, construction contracts, land deals and other benefits, according to a corporate transparency report by the Myanmar Centre for Responsible Business (MCRB), a Yangon-based nongovernmental organization.
A 2018 MCRB study found extensive use of corporate and social responsibility (CSR) budgets by Myanmar mining firms to make payments touted as “donations” to village elders and officials in return for their signatures and support for extractive and sometimes environmentally damaging projects.
Early in its tenure, Suu Kyi’s administration instructed companies to set up internal mechanisms to prevent corruption and cracked down on giving gifts to government employees, as outlined in the President’s Office’s 2016 “Guidelines for Acceptance of Gifts.”
Ross Taylor, a lawyer with Tilleke & Gibbins, a regional law firm, said even so there is still no clear guidance on anti-corruption issues. That, he says, is compounded by an Anti-Corruption Law that is vague on many measures, including on what constitutes “bribery.”
The Directorate of Investment and Company Administration (DICA), a state body, prohibited in 2018 published guidelines any form of gift-giving or entertainment, including funding seminars with accompanying lunches for officials.
The policy, however, was not followed in practice and was widely panned by Yangon-based lawyers and corporate executives as “unrealistic.”
The ACC subsequently published its own guidelines to replace DICA’s instructions, requesting companies to “develop a strong business code of ethics as well as to establish appropriate internal control measures to prevent corruption.”
The United Nations Office on Drugs and Crime (UNODC), with the support of German tech firm Siemens, recently launched a three-year $876,000 program to strengthen the government’s fight against private business corruption through promotion of the adoption of anti-corruption codes and guidelines.
Myanmar has already moved to tackle issues related to “beneficial ownership” (BO), referring to individuals who ultimately own or substantially benefit from a private company, and “politically exposed persons” (PEP), defined as people who are entrusted with prominent public functions and their family members and associates.
Analysts say greater transparency could help to untangle Myanmar’s web of public-private connections, and make it more difficult to hide and launder funds or pay bribes via shell companies and offshore accounts.
Myanmar authorities are rushing to push through BO-related regulations, driven in part by the threat of being “grey-listed” on the intergovernmental Financial Action Task Force’s money laundering watchlist.
The body will decide this month on whether to return Myanmar on its list, a designation that would complicate and impede international financial transactions and give the US and others more leverage to reimpose financial restrictions on the country.
Other regulatory initiatives are being driven by the need to implement the Extractive Industries Transparency Initiative (EITI), which requires Myanmar companies involved in oil, gas or mining to disclose their BOs by January 2020.
In November, DICA issued a directive on the disclosure of BO information for all companies, defining BO’s as an individual who holds more than 5% shares of voting rights in a private company. Myanmar’s central bank contradicted DICA in a later notification and raised the BO threshold to 20% without clear explanation for the move.
The DICA directive, which entered into force last month, has major loopholes, including language which says PEPs may not include leaders of ethnic armed groups or family members of senior officials.
Last month, the government published separately a BO database for extractive businesses covering five state firms including the powerful Myanma Oil and Gas Enterprise and Myanma Gem Enterprise, and 158 other companies involved in gemstones, mining, oil and gas, and other industries.
Only five out of the 163 companies declared that they have PEPs, while some with very obvious links to powerful figures did not disclose their involvement, based on Asia Times’ review of the database.
Myanmar’s first electronic company registry, known as “MyCo” and run by DICA, offers unprecedented access to official Myanmar corporate information, though it still lacks a search function for individual corporate connections.
That would make it easier to identify family-owned companies of senior officials and clamp down on the bureaucracy’s still deeply entrenched conflicts of interest.
During the last general election’s campaign period, Suu Kyi said in September 2015 that “no corruption will be tolerated” if her NLD party was elected to office.
“If the NLD will have the chance to form a government after the November election, the only promise I can give you is that we will form a clean government,” she said at the time.
With general elections set for November this year, Myanmar’s voters will decide – among other issues – whether Suu Kyi and her NLD have delivered on that graft-busting pledge.