Politics of corruption in Myanmar

By Larry Jagan 

YANGON - Signs of corruption are mounting in Myanmar, a crisis of confidence that threatens to derail President Thein Sein's ambitious reform program. Whether Thein Sein is willing to push through top-level prosecutions, including at the tainted telecommunications ministry, could make or break the country's transition from military to democratic rule. 

Underscoring decades of unaccountable military rule, Myanmar has consistently ranked near the top of Transparency International's global corruption rankings. Now, with financial reforms and economic liberalization measures promising to lure big new foreign investments and boost asset prices across the

economy, officials are increasingly leveraging their positions for personal gain, according to government insiders situated at the president's office. 

An investigation launched in January into alleged corruption at the Myanmar Posts and Telecommunications (MPT) ministry signaled wider mismanagement and graft at key economic ministries during a crucial juncture in the country's transition from military rule. While Thein Sein's office has championed reform, many line ministries continue to operate as they did under the former military regime. 

The probe into former telecoms minister Major General Thein Tun and other high-ranking ministerial authorities represented the first time top officials have been publicly accused of graft during Thein Sein's tenure. The move won plaudits among foreign investors, many of whom have called for greater transparency and rule by law before committing significant funds to the country. 

While Thein Sein has acknowledged the problem of endemic graft and has launched a high profile anti-corruption campaign - highlighted by the ongoing investigations into the telecommunications industry - other military-linked politicians have played down the extent of official corruption and its impact on the sustainability of reforms. 

In an interview in Naypyidaw, Union Solidarity and Development Party (USDP) vice-chairman Htay Oo dismissed allegations of rampant corruption, both now and during the previous military regime he served. ''We were all ministers then,'' he said, referring to the previous ruling military junta. ''And we were not corrupt. We are trying hard to reduce corruption in our country. The government is making a great effort to reduce corruption. The recent news of corruption has only emerged because of the government action, otherwise it would have stayed hidden.'' 

Indeed, other cases have emerged. A report published by The Voice weekly journal that quoted from an internal attorney general report indicated major corruption involving six different ministries, including at the ministry of mines. The newspaper's editor was charged with libel and forced to attend over 30 different court hearings before the charges against him were dropped. Nobody has yet been charged for the corrupt practices alleged in the attorney general's report. 

The anti-graft campaign threatens to engulf many high-ranking political officials and in the process deepen the political divide between Thein Sein and the powerful speaker of the lower house of parliament, Shwe Mann. Both played prominent leadership roles in the previous ruling junta and are now locked in a heated competition to represent the ruling USDP as its presidential candidate in 2015. 

Corruption charges were often used for political purposes under the previous military regime, including during the 2004 intra-junta purge of former intelligence chief and prime minister Khin Nyunt and his political associates. Now, some analysts wonder whether the probe into the telecommunications ministry, which threatens to ensnare certain of Shwe Mann's family members, could be a similar power play. 

More than 60 officials, nearly 20 of whom were temporarily detained, have been investigated as part of the probe, according to a government source familiar with the situation. Almost all of them, apart from Thein Tun, who remains under virtual house arrest, have since been released and reinstated to their posts. However, they are not precluded from future prosecution, the same source said. 

Thein Tun has threatened to implicate ''more senior people'' if he is formally charged and tried in court. Brigadier General Thein Zaw, a previous telecommunications minister and now the chief minister for Kachin state, is also under investigation, according to the government source. He also hinted that at least one former senior member of the Myanmar Posts and Telecommunications (MPT) ministry had turned state witness in the case. 

''We know everything now,'' said the official, who claims to be close to the still pending investigation. 

According to a police source familiar with the probe, a suitcase containing US$2 million in cash was allegedly found in Thein Tun's residence. Investigators are trying to establish whether the alleged funds may have originated from foreign firms, including major Chinese companies Huawei and ZTE known to be angling for potentially lucrative telecom contracts in Myanmar, according to the same source. 

Authorities are also trying to gain access to bank accounts in Bangkok, Hong Kong and Singapore where kickbacks to senior ministry officials may have been deposited, according to the same source. Both Chinese companies have voluntarily given investigating authorities documents related to their previous deals with the MPT ministry, including during Thein Zaw's tenure as minister, according to the police source. 

In a 2004 contract, ZTE provided a $150 million loan to the MPT ministry to build 300,000 fixed phone lines. That figure, a ministry official at the time estimates, was more than 10 times the real cost of the project. In comparison, he notes that ZTE later proposed to supply Nepal with a million telephone lines at a cost of just $7.5 million. 

Thein Tun has not made any public comment on the allegations. Because he is under virtual house arrest, he could not be reached for comment for this article. Both former ministers are believed to be close to former junta leader and now retired Senior General Than Shwe. 

Local telecom-related companies, including Htoo company subsidiary Elite and Red Link, are also under scrutiny, according to the police source. Red Link is owned by Shwe Mann's younger son, Toe Naing Mann. The company was formed in 2008 and provides internet services that it acquired from a joint venture with the MPT ministry. With less than 2% of the population on-line, Myanmar has one of the lowest Internet penetration rates in the world. 

Executive conscience

The fact that former finance minister Hla Tun, regarded by some as an anti-corruption crusader, is overseeing the investigation has been viewed by some as indication of the importance President Thein Sein has given the potential landmark case. Hla Tun is regarded as the ''president's conscience'', according to another source close to Thein Sein. 

Some analysts argue that if Thein Sein's anti-corruption campaign and wider bid to introduce greater accountability and transparency in government economic dealings, including with foreign partners, is to be taken seriously, then formal charges should be lodged regardless of the political consequences. To date, Thein Sein has yet to decide whether to proceed with charges against either or both former telecoms ministers, according to the police source. 

''This impunity will simply send a strong signal that economic reform is, in fact, just another way for the connected and the powerful to rip the wealth from country and the ordinary people,'' said Sean Turnell, a specialist on Myanmar economic matters at Macquarie University in Australia, about the pending investigation into the telecoms ministry. ''Corruption is a barrier to real investment and above all pervasive corruption undermines public support for the broader reform process,'' he said. 

Other investigations, including a probe that has implicated former fisheries minister Maung Maung Thein, have been launched only to later stall. In March, Khin Ko Lay, a senior bureaucrat in the fisheries ministry, was summarily dismissed on the president's orders for alleged corruption. He was reportedly ordered to pack his bags and leave immediately without returning to his office, according to an official who was present at the meeting. 

Current fisheries minister Ohn Myint could be next, according to government insiders. Thein Sein cancelled Ohn Myint's recently planned visit to France - reportedly organized and paid for by a private French company - for undisclosed reasons. His new role in peace talks with Kachin rebels, however, may give him a reprieve and explain the cancellation of his trip, according to the insiders. 

There have been other reports from the interior ministry that home minister General Ko Ko is also under investigation for possible corruption. His personal assistant, however, dismissed these as unfounded rumors fueled by reports on the internet. Others have raised questions about agriculture minister Myint Hlaing, including his promotion of an expensive rice hybrid imports that many experts believe is inappropriate for Myanmar's climate and terrain.

The opposition is pushing for top-level convictions. ''We all know about this corruption - all the country's citizens know about it,'' said Nyan Win, spokesman for the National League for Democracy in an interview at the opposition party's headquarters in Yangon. ''The ministers must be prosecuted. If the government has evidence of their corruption they should try them in the courts, even if it reaches up to the very top.'' 

Some political analysts, however, believe that the evidence that has been gathered - rather than form the basis of any future prosecutions - will instead be used to contain Shwe Mann's political ambitions for the presidency. ''They have all the evidence now, especially to use to black mail Shwe Mann,'' said a government source. 

Others believe the anti-corruption drive is part of a broad campaign to clean up the ruling USDP in preparation for the 2015 elections. Many of those being targeted are senior figures in the party but have been tainted by corruption claims, including when they served as ministers in the former military regime. 

USDP vice chairman Htay Oo dismisses such suggestions as political speculation. ''Of course there are differences within the party,'' he conceded. ''But these are being dealt with in a gentlemanly manner and will not disrupt the party.'' 

Larry Jagan previously covered Myanmar politics for the British Broadcasting Corporation. He is currently a freelance journalist based in Bangkok. 

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