Anti-coup protesters show their support for Myanmar's National Unity Government. Photo: Jose Lopes Amaral / NurPhoto via AFP

YANGON – Foreign companies and chambers of commerce doing business with Myanmar’s military junta face new reputational and potential security risks with a grave, new warning sounded by the National Unity Government (NUG) opposing coup rule.  

Firms and business groups from Australia, China, South Korea and Thailand, among others, have continued to work closely with the junta regime, despite massive and increasingly armed resistance to the military’s February 1 democracy-suspending coup.

The NUG and other critics say those foreign commercial ties have lent a facade of legitimacy to the generals and weakened the anti-coup movement by providing the regime a financial lifeline at a time national strikes and other protest actions have deliberately hit the economy.

The Asian Development Bank predicted in September that Myanmar’s economy could shrink by 18.4% in 2021, due in large part to instability caused by the coup.

In a letter issued to foreign chambers of commerce in Yangon and reviewed by Asia Times, the NUG’s Planning, Finance and Investment Minister Tin Tun Naing sharply criticized a recent meeting held between several foreign chambers and junta-appointed Minister of Investment and Foreign Economic Relations Aung Naing Oo, which was organized by the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI).

“I am disappointed that the UMFCCI’s engagement, limited though it may be,” said Tin Tun Naing, according to the letter. “We condemn clearly and unequivocally those engagements that provide the military junta with a fig leave of credibility and respectability.” 

“Foreign chambers engaging with the junta helps them create that illusion [of normality]. Working with the military helps it maintain its murderous grip. Propping up a murderous regime is no act of political neutrality,” Tin Tun Naing told Asia Times when asked about the letter. “Would these businesses have conducted friendly ‘meet and greet’ sessions with the regimes of Hitler or Pol Pot?”

NUG Planning, Finance and Investment Minister Tin Tun Naing in a file photo. Image: Youtube screengrab

The NUG has been instrumental in organizing both consumer boycotts at home, including against military-run companies, and getting targeted sanctions imposed abroad. The NUG also supports proliferating armed People’s Defense Forces (PDFs) that have targeted the junta’s economic and financial interests including through bomb attacks.  

Soon after the coup, several Chinese-owned factories in Yangon were torched in what some analysts and observers interpreted as a fiery response to Beijing’s perceived support for the regime.

Beijing has since called on the junta to protect its 2,100-kilometer pipeline that runs the length of the country and into southern China amid social media calls to attack the infrastructure.

The junta’s Aung Naing Oo has blamed the country’s abysmal economic performance on “economic sabotage” by foreign countries and the “civil disobedience movement”, and asked investors to maintain confidence in the regime.

Yet the NUG’s strong if not ominous statement will put more pressure on the foreign business community to rethink their engagement approach, analysts and investors warn.

Tin Tun Naing cited a recent consumer backlash against the Vietnam-owned Myanmar Plaza shopping mall in downtown Yangon after its security guards violently broke up a flash mob protest on November 25 as a warning that businesses that do deals with the military could pay a heavy price. 

Nearly all the stores which had leased space at the mall, the country’s first modern retail center, announced that they would shut their operations due to the crackdown. Asia Times drove past the mall on December 20, which remained empty and deserted nearly a month after the incident.

Many foreign companies still active in the country are consumer-facing and have established presences in Myanmar, including the Siam Cement Group of Thailand, Adani Ports of India, the Marga Group property developer of Hong Kong, VDB Loi of Malaysia and SCM Legal of Australia. 

The UMFCCI, despite claiming to have suspended its operations in February after a public backlash against its leadership, has continued to engage with the regime despite widespread condemnation both from businesspeople and anti-junta protesters.

Protesters hold posters in support of the National Unity Government (NUG) during a demonstration against the military coup on ‘Global Myanmar Spring Revolution Day’ in Taunggyi, Shan state, on May 2, 2021. Photo: AFP / Stringer

UMFCCI chairman Zaw Min Win has regularly met with Aung Naing Oo and other junta officials since the coup, according to media reports. Corporate contacts speculate that certain UMFCCI leaders are poised to quit as criticism ramps up in particular against vice chairs Maung Maung Lay and Wai Phyo.

Several embassies, senior business executives and chambers of commerce in Yangon declined to attend the UMFCCI’s virtual annual general meeting earlier this month, due to concern junta officials would show up at the event, Yangon-based diplomats and industry leaders told Asia Times.

“Very few of these chambers or companies are well-informed about what’s going on in Myanmar. Many senior executives flew out during Covid-19 last year or after the coup, and they probably mistakenly thought there’s nothing wrong about working with the generals, who they saw as the de facto government,” said a well-connected corporate executive in Yangon who requested anonymity.

“This is highly mistaken – companies may face reputational damage, massive domestic boycotts and even sanctions for legitimizing a regime which struggles to consolidate control over the country, let alone giving out perks to businesspeople friendly to them,” the executive said.

AustCham Myanmar, China Enterprises Chamber of Commerce in Myanmar (CECCM), the Myanmar-Hong Kong Chamber of Commerce and Industry (MHKCCI), Korea Chamber of Commerce in Myanmar (KOCHAM), India-Myanmar Chamber of Commerce, Malaysian-Myanmar Business Chamber, Thai Business Association of Myanmar and Israeli-Myanmar Chamber all held a physical meeting with Aung Naing Oo in Yangon on September 24, according to news reports.

The meet and greet was heavily condemned by rights groups such as Justice for Myanmar, Human Rights Watch and local activists. The reputation risks of doing business under the regime are growing.

The military regime has killed more than 1,350 and detained over 11,000 people since staging its February 1 coup, according to the monitoring group Assistance Association for Political Prisoners.

The junta’s offensives against resistance groups have been marked with abuses, including credible reports of massacres of civilians in the Sagaing Region and Kayin state.  

Myanmar’s Tatmadaw flexes in an Armed Forces Day parade in Naypyitaw, March 27, 2021. Photo: Agencies

“This is a regime that is guilty of unspeakable acts of violence against its own people. Aiding and abetting the regime is effectively being complicit with those guilty of war crimes, crimes against humanity, and probably even genocide,” Tin Tun Naing said in the letter. “To comply under duress is deplorable but to collude voluntarily is unforgivable,” the letter said.

The South Koreans stand out for their collaboration with the regime, critics say.

In November, the South Korean embassy in Yangon and the South Korean Chamber of Commerce and Industry in Myanmar, which is chaired by the embassy’s minister, organized a joint “dialogue” to promote “economic collaboration” with the junta’s investment arm, the Directorate of Investment and Company Administration, according to a report by journalist John Liu that cited government records and senior industry sources in Yangon.

“Businesses in large parts of Myanmar have little choice but to comply with the regime’s orders and regulations. But meeting and greeting the junta is an entirely different matter – this type of interaction is inexcusable,” commented a senior executive at a Yangon-based multinational which has actively pushed back against the regime.

“If the Chinese, Thais, Koreans and local tycoons collectively spoke out and pushed back earlier [following the coup], the business community would have a lot more leverage against the regime and its actions. Responsible investors – major ones – are now pretty isolated because we are in a small minority,” he added.

“Their willingness to do whatever it takes to continue making money and doing business undermines our ability to navigate the situation.”

“As a consequence of the need to operate responsibly with the existing legal framework, businesses occasionally need to respond to, or engage with the regulators on specific issues such as import-export regulations, visas and factory inspections,” said Vicky Bowman, director of the Yangon-based Myanmar Centre for Responsible Business.

“However they need to recognize the reputational risks of any engagement at higher levels, particularly with SAC Ministers,” she said, referring to the State Administration Council junta’s acronym.  

Japan’s Kirin beermaker has announced it is leaving its military partnership after the coup. Image: Facebook

Since the coup, many multinational firms have exited or indicated plans to leave the country. They include Germany’s Metro cash and carry stores, British American Tobacco, China’s Alibaba Ant Group and Japan’s Kirin beverage company, among others. 

Norway’s telecom giant Telenor fully wrote off its Myanmar operations in May and plans to sell its in-country assets to Lebanese firm M1. Telenor’s foreign executives were effectively taken hostage and at one point barred from leaving the country. 

Those who remain are sometimes literally caught in the crossfire of a rising armed conflict. Mytel, a telecom firm operated as a joint venture between the Myanmar military and Vietnam’s Ministry of National Defense’s Viettel, has seen its towers targeted by anti-coup resistance forces, driving the generals to lay landmines near them to deter attacks.