Myanmar: The unfinished business of an unfolding coup

Since Myanmar’s Tatmadaw (military) overthrew the civilian government and took power on 1 February, a civil disobedience movement has rapidly grown. This has seen civil servants and workers in all walks of life, such as banking personnel and medical workers, going on strike, causing significant disruption in daily lives. Weeks of demonstrations and the ensuing military crackdown have roiled the country. As events continue to unfold, we explore the preliminary and potential impact of the tumultuous past month on duty of care, business continuity and exposure to political and external communications risks for foreign businesses in Myanmar.

Unfinished coup

The coup has ushered in a potentially long period of profound uncertainty in Myanmar. The scale and momentum of anti-military demonstrations suggest that the Tatmadaw will face fierce resistance in reaching its political endgame of holding fresh elections and forming a military-dominated coalition government. There continues to be no sign of a possible resolution to the present crisis, either in favour of the military or the Myanmar people, who are overwhelmingly opposed to this return to military rule.

Protests and crackdowns are almost certain to persist in cycles over the coming months, as the Tatmadaw takes steps towards setting up a military-dominated coalition government. Civil unrest could temporarily de-escalate as the Tatmadaw ramps up efforts to disperse and arrest protesters, only to flare up again following political developments or encounters with security forces that stoke public outrage against the military. The millennial-driven protest movement’s tactics will also keep shifting – likely taking on specifically disruptive forms – to ensure that it stays one step ahead of the military’s escalating clampdowns. 

Each such cycle would have the potential to spiral into widespread violence and significant loss of life, as seen in past episodes of large-scale unrest under previous military-dominated regimes. Associated disruptions to commercial operations, which are already significant, will also intensify periodically or whenever protesters shift their tactics in line with the military’s evolving response and policies. 

The Tatmadaw argues that it represents “a different kind of military” compared with that which had oppressed and isolated the country for almost half a century. Military leaders also continue to claim – publicly and privately – that security forces have been following defined rules of engagement and that protesters and striking civil servants had provoked them to use lethal force. Such claims at least indicate that the Tatmadaw is eager to appear intent on minimising violence to maintain a veneer of legitimacy among Myanmar’s regional partners.

Making a coup sound respectable

Although the Tatmadaw’s political adventurism has clearly had damaging consequences for the business environment in Myanmar, the new military government seems to be taking pains to present itself to foreign investors and domestic corporate groups as being pro-business. Upon seizing power, the Tatmadaw set up a self-proclaimed “hybrid civilian-military” State Administration Council (SAC) and promised to honour all existing contracts and tenders, including those approved by the civilian government (2016-21) it deposed. It has also appointed faces familiar to the business community into key ministries, such as seasoned bureaucrat Aung Naing Oo, who was put in charge of attracting – and, perhaps more importantly, keeping – foreign investments. However, the fact that a coup has taken place is proof that the Tatmadaw is willing to overlook economic or its own material interests for the sake of ensuring its long-term centrality in Myanmar politics.

International and domestic businesses alike are watching the Tatmadaw for indications of how exactly it intends to manage the economy, which had undergone considerable transformation since the last time a general oversaw policymaking. Already, there are very clear signs of mistrust between the current Tatmadaw leadership and domestic business elites, with a few prominent Myanmar business figures who had been reportedly held against their will in hotel rooms in the capital Naypyitaw.

Emergent risks

The Tatmadaw’s ostensive pursuit of legitimacy does not entirely bode well for foreign businesses in Myanmar. Its desire to tighten its grip on domestic flows of information has so far translated to frequent interruption in internet connectivity and the floating of a draconian cyber security bill. Existing laws, including Myanmar’s equivalent to the bill of rights, have already been weaponised, allowing the Tatmadaw to increase the personal costs of joining or supporting the protest movement without having to resort to its old, scorched-earth methods.

Given their obvious intent, newly revised and future security policies of the military government sharpen ethical dilemmas for foreign companies. Foreign businesses are likely to be subject to new variations of safety, ethical and reputational risks. Companies are and will be faced with complying with requirements mandated by Myanmar laws on one hand, and their commitment to international norms and duty of care for their staff on the other. The Tatmadaw could also exert political and regulatory pressure on businesses involved in any commercial activity that has security or legitimacy implications for the Tatmadaw, including banking, telecommunications, media, mass transport and infrastructure. 

Many foreign businesses could find themselves in the crossfire of a propaganda battle between the military government and the protest movement. Perceptions that a foreign company – or their domestic partner – is conferring legitimacy to the military government by engaging with it could make the company the target of a boycott campaign or anti-coup demonstrations, within or outside Myanmar. As the political drama drags on, there is almost certain to be conflicting pressures to at least imply public support for either the pro-democracy movement or the military government. New forms of domestic and international resistance to the Tatmadaw’s staying power could create variated risks in terms of corporate social responsibility and external communications.

What comes next?

Meanwhile, corporate decision-makers should be wary of advice that assumes inevitable momentum towards either the military’s or the protest movement’s endgame. While the efficacy and sophistication of tactics employed by either side will continue to shock outsiders, Myanmar has lived through decades of political and civil strife, making domestic stakeholders – except perhaps the Tatmadaw leadership – much more tolerant of protracted uncertainty than their international partners. 

The Tatmadaw and the pro-democracy movement have only started to seriously contend with the diversity of preferences across Myanmar, including those of ethnic minority communities. Together these communities make up almost a third of the country’s population and their interests are safeguarded by ethnic armed groups in the border regions. Their perceptions of how the conflict between the Tatmadaw and Aung San Suu Kyi’s National League for Democracy (NLD) will play out may well determine the outcome of the present crisis, as will the extent to which senior military leadership can continue to command the loyalty and confidence of younger officers. 

The intensity of protest and military activities and of international pressure will continue to fluctuate, but the Tatmadaw has likely carefully considered most developments that have unfolded before it launched a coup. Although the Tatmadaw will be able to adapt and respond to some events that it might not have initially accounted for, what decision-makers should keep a close eye on are new and specifically disruptive forms of popular resistance that take the military by surprise or are outside its leaders’ comfort zone.

For example, the pro-democracy movement has sustained disruptions in the banking system in a concerted attempt to force the Tatmadaw to give up power. The ongoing banking stalemate potentially marks the first acute juncture at which the Tatmadaw’s apparent resolve, in terms of avoiding widespread and repeated use of lethal force, will be put to the test. These disruptions – along with widespread calls to withdraw as much cash from military-owned banks that serve as financial vehicles for the military’s business empire – are potential watersheds that could bring forward the moment of truth and provoke the military to reveal its tooth and claw.

Every such development would require an informed reassessment of the domestic balance of power, as well as of its strategic and ethical implications for foreign businesses. Such is the new risk environment that emerged when a small group decided to risk it all for a power grab at a time when Myanmar can little afford to gamble.