Myanmar: FDI, Local Economy and the Rohingya Conflict

10 Jul, 2013    ·   4030

Asma Masood analyses the linkages between the Rohingya conflict and its possible impact on the local economy

Asma Masood
Asma Masood
Research Intern

On June 27, Myanmar announced that the government awarded a telecommunications contract to Qatari company Ooredo. It sparked a social media backlash in Myanmar. Citizens threatened boycott of its services. The Buddhist community was surprised by the win, especially as public pressure on the government in 2012 blocked the Organization of Islamic Countries from opening a Myanmarese office. The incidents reflect societal prejudice against OIC’s intentions. A grand strategy to spread Islamic beliefs is suspected. Local Muslims are also shunned in trade. But here discrimination is fuelled by perceptions of Rohingya as economically unworthy. 

FDI, Aid and the Rohingya Conflict: The Linkages
Myanmar in transition is emerging as a new destination for profitable ventures. The evidence is in the numbers. Myanmar’s economy of USD45 billion in 2010 will reach USD200 billion in 2030. USD170 billion are expected in capital inflows - external finances to purchase essential land, buildings or machines. The billion-dollar investments will fund new Myanmar’s infrastructure, energy, electronics, brewery and food-processing sectors.

The enormity of FDI potential adds to ethnic strain. The 969 movement is provoked when Muslim-owned construction companies magnetize FDI with attractive names (‘Motherland’, ‘Fatherland’, ‘ Naing’  or ‘Win’). The movement fears that Muslims businesses’ status will be elevated from small-medium scale to be on par with the elite Buddhist construction executives. Traders thus cancel licenses with Muslim builders, or risk riot- damage to finished buildings. The government is aloof on the Buddhists’ boycott of Muslim businesses. Excuses made include “Free will of people” and “market economics”. Hence domestic commerce has been disrupted.

However there is a different dynamic on the international front. Foreign reform-aid is uninterrupted. Aid contributors either remain silent on the crisis or simply voice concern. For them the aid-process is crucial for smoothening investment flow. It is exemplified by Norway strategically waiving hundred percent of Myanmar’s debts in January 2013. It paved the way for Norwegian firm Telenor seizing the other telecommunications contract. The parent country still turns a blind eye to the conflict. Realpolitik also drives Western countries, India, Japan and South Korea to maintain aid and trade. They see reforms as a window to counter Chinese stronghold in Myanmar. Thus no sanction on Myanmar is drafted based on the Rohingya crisis. OICs voice strong concern and channel relief aid for the Rohingya. Yet they too desire a share of the high economic stakes. 

Low Employment Value vs Low Opportunity
Rohingya are not deemed economically ‘valuable’. Illiteracy is the main root-cause. They have a historical tendency of little interest in education (SOAS Research Bulletin 2005). Today 80% are illiterate; 60% of children between ages 5-17 were never schooled. The percentage is higher among women. A key reason is families have upto ten children and struggle for food-security. Rohingya are hence largely unskilled except for manual-labour. Consequently their societal status gets downgraded. This feeds the vicious cycle of the Rohingya minority not gaining citizenship and opportunity.

The situation is exacerbated by several factors closing doors to upliftment. Firstly the military practices forced labour (Human Rights Watch 2009). Also Rakhine’s Rohingya must seek military’s permission for travel, impeding trade. HRW documents the few women espousing education are denied teaching, nursing or administrative jobs. Lastly, IDPs’ movements are highly restricted. Hence even if the Rohingya are allowed into the mainstream, they have no active role in Myanmar’s economic transition. Nor can they benefit from FDI’s job creation.

Displaced Migrants: Stereotyped or Segregated?
Stateless, displaced and unemployed, many victims search avenues elsewhere. But hope is bleak for refugees. Bangladesh accepts a few victims as refugees. Even within camps, the UNHRC is allowed to provide only primary education. This small respite has no livelihood weightage.

It is debatable whether accounts of states denying Rohingya asylum based on low skills are substantial. Thailand has many illegal unskilled migrants from Mekong-region. Significantly, Thailand does not proactively return trafficked Kachin women. Bangladesh’s poverty compels withholding refugee-status or accepting Rohingya as Bengalis. High Rohingya inflows can also affect scope of native Bangladeshis for labour jobs abroad. Only Islamic states accept Rohingya refugees. They may capitalize on cheap labour later. It remains to be seen if they will also provide adequate scope for education and improvement. The odds are uncertain, as Arab states discriminate against migrant labourers.

The dim prospects for livelihood would have made Rohingya seek the less-trodden path of education for their children. But here too, the next generation faces lofty barricades. There are reports of UNHCR finding it difficult to keep displaced children motivated. They fear them turning to radicalism. If this does materialize, then two outcomes arise. The conflict will take an uglier turn and investment might be hampered. For now, despite the scale of human-rights violations, FDI is unaltered. The rich opportunities are a relief for investors in wake of global recession, but there is no relief in sight for the Rohingya.