Last December, Aung San Suu Kyi, de-facto leader of Myanmar, travelled to the Hague to defend her worst enemy.
The Nobel laureate had no obligation to defend Myanmar's military against genocide charges before the International Court of Justice (ICJ). She did not have to side with an organisation that kept her in house arrest for 15 years, and then did everything in its power to stymie her in civilian politics.
Yet she did, and her motivation may not have been moral, or even political, but economic.
The Case for Plausible Deniability
It has been more than two years since the "clearance operations" (to use the official label) that sent a UN-estimated 742,000 Rohingya Muslims fleeing across Myanmar's western border into Bangladesh. By now, the ongoing situation has settled into a political smog in Myanmar that has warded off foreign investors, especially from Western nations. Things seemed to climax last August, when the United Nations Fact Finding Mission for Myanmar called for a global boycott of the military’s business empire, which has roots in industries ranging from oil, to construction, to beer.
After being brought to trial by The Gambia last December, Myanmar has been ordered by the ICJ, the United Nations’ highest court, to prevent genocidal violence against its Rohingya Muslim minority, and preserve any evidence of past crimes.
Yet until January's ICJ ruling, the international business community has had an element of plausible deniability. Myanmar's civilian government has categorically denied accusations of ethnic cleansing, dismissing reports of systematic village burnings, executions and other abuses as exaggerated. With human rights icon Aung San Suu Kyi herself taking up the cause, investors have been able to give Myanmar the benefit of the doubt.
Japanese beer giant Kirin, for example, shares a stake with a military-owned corporation in Myanmar's largest beverage company. That partnership recently threatened to derail its acquisition of an American beer company — an entirely unrelated business deal two continents away. Yet the deal went through, and Kirin maintained its controversial partnership.
The situation is no longer a mere geopolitical he-said-she-said. Now, investing in Myanmar means working with a country that has, by decree of the world's highest court, committed genocidal acts.
How the ruling could erode Myanmar's international ties
"The ICJ ruling is unlikely to hit Myanmar's economy directly for now, but it adds to a broader set of problems that are pushing foreign investors away from a market that until relatively recently generated considerable excitement,"" says James Crabtree, Associate Professor in Practice at the Lee Kuan Yew School of Public Policy and senior fellow at the Centre on Asia and Globalisation.
After its transition to a civilian government, Myanmar was indeed an exciting frontier market, with international investors scrambling to take advantage of a market that had languished under successive dictatorships. When Aung San Suu Kyi's NLD government won the 2015 election, Western investors were even more optimistic about the new, democratic Myanmar. But after the Rohingya crisis, Myanmar turned to China as its chief economic ally. China has begun investing in the so-named "China-Myanmar Economic Corridor", a key component in China's broader Belt and Road Initiative. Although China is financing highways, railways, power plants and other infrastructure in Myanmar's north, this is not the ideal scenario for Aung San Suu Kyi, Crabtree argues.
"Aung San Suu Kyi's government is in a fix. It wanted to bring in foreign investment and avoid excessive reliance on China. But a combination of poor economic policy and the aftershocks of the Rohingya crisis leave Myanmar with few investment avenues and international friends outside Beijing," he says.
Critics of Myanmar's deepening Chinese ties include ethnic armed organisations operating along Myanmar's northern border, with whom the country has varying levels of peace. They fear China's political influence over their rival. However, many of these organisations themselves conduct large amounts of business with China. Indeed, when an outbreak of violence last August disrupted cross-border trade, Chinese officials met with both sides to push for a lasting peace.
A recent visit by Xi Jinping, the first from a Chinese head-of-state in 19 years, seemed to punctuate the deepening relationship. By the time Xi left, he had met with both Aung San Suu Kyi and top military officials, and signed 33 fresh trade agreements.
Of course, Myanmar is not entirely without other trade partners. Japan, South Korea, Thailand and other Asian nations continue to make huge investments in Myanmar. Even the Western response to the ICJ ruling has been lukewarm. The European Union merely called for "adequate follow-up investigations, in line with international standards." The Trump administration recently added Myanmar to its notorious travel ban, but American ambassador to Myanmar Scot Marciel insisted the decision had nothing to do with the Rohingya crisis or the ICJ ruling.
Yet, as Crabtree pointed out, the full impact of the ICJ ruling will likely play out in the long term, not shattering Myanmar's Western economic interests, but eroding them slowly, like soap under a tap.
Looking ahead into Myanmar's future
Complying with the court-ordered provisional measures could help Myanmar restore its global reputation and, perhaps, win back some of the optimism its market once enjoyed. But prior efforts to set things right have fallen short. The Myanmar government is not willing to grant Rohingya the rights of citizenship, and the Myanmar populus by and large still views the ethnic group as illegal immigrants, using the term "Bengali" rather than "Rohingya." Yet, refugee communities have been untrusting of proposed resettlement and registration schemes.
The Rohingya issue is a political and cultural Gordian Knot, and the last thing Aung San Suu Kyi's government needed was more pressure to untangle it. Her trip to the Hague showed how desperate Myanmar's de facto head-of-state was to avoid a guilty verdict.
And now that the verdict has been reached, it could shape Myanmar's economic future.
(Photo: Shafiur Rahman)