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FEER: Internal Matter: All



                            Internal Matter
                      All may not be well within the military regime

                           By Shawn W. Crispin in Rangoon

                                 August 13, 1998
              T he contrasts could not have been sharper in the Burmese
              government's six-day stand-off with the opposition, which ended on July
              30. Stranded on a bridge on the outskirts of Rangoon was the dissident
              Aung San Suu Kyi. Wearing a traditional Burmese pinni jacket and the
              headdress of a peasant girl, she seemed somehow saintly. Looking on,
              the forces of the ruling junta, with their barb-wired roadblocks and
              firearms, appeared downright beastly. Meanwhile, in a country haunted
              by a history of shocking images, the streets of Rangoon remained quiet.

              Nearly 10 years to the day--August 8, 1988--on which the military killed
              thousands by opening fire on crowds of pro-democracy demonstrators,
              this veneer of calm has the junta spooked. Domestic and international
              political pressure mounts for the government to open dialogue with Suu
              Kyi's National League for Democracy. Meanwhile, any hope that Asean
              membership, granted last year, would help to boost the beleaguered
              country's wealth has been squelched by the regional economic crisis.
              And increasingly erratic signals hint at divisions between military
              intelligence and the rest of the armed forces. 

              "There is a growing, albeit quiet, antagonism between military
              intelligence and the army--particularly between intelligence chief Khin
              Nyunt and army commander Gen. Maung Aye," says a Western
              diplomat. Khin Nyunt, handpicked in 1984 by then-dictator Ne Win, has
              always been seen as Burma's heir apparent.

              Indeed, nowhere are the policy inconsistencies between the junta's two
              power centres more apparent than in their recent divergent approaches to
              dealing with the NLD, the country's chief opposition party. Quiescent
              since 1995, when it withdrew its participation in drafting a new
              constitution, in June the NLD upped the tempo of its opposition
              campaign by demanding a dialogue with the government, which goes
              under the name of the State Peace and Development Council. The party
              also insisted that the parliament democratically elected in 1990 be
              convened by August 21.

              In seeming accord, the junta has answered such demands with a
              characteristically hard and ruthless line. Since June, it has jailed 42
              elected NLD members and restricted the movement of many others. In its
              hardest position against Suu Kyi since it freed the Nobel Peace Prize
              winner from six years of house arrest in 1995, the SPDC restricted her
              from leaving the Rangoon area on three separate occasions. 

              But a deeper inspection reveals cracks in the party line. Suu Kyi's first
              two halted excursions to meet provincial NLD members outside the
              capital on July 8 and July 20 were resolved peacefully through
              military-intelligence intervention. But her latest attempt ended with her
              being violently forced back to the capital--an abrupt policy departure
              from the earlier two incidents. "The army decided to deal with this one,"
              says another Rangoon-based diplomat. "They have lost their patience,
              which may indicate Khin Nyunt's influence is on the descent."

              This isn't the only time that mixed signals have emerged from the junta
              since November, when, in a quiet coup, a number of ministers were
              sacked on charges of corruption. On June 25, stick-wielding hooligans
              under the army's direction attacked a "reading group" in front of Suu
              Kyi's compound. (Since the military closed all universities in 1996, Suu
              Kyi has held fortnightly meetings to peacefully discuss current events.)
              In the melee, one of the military-intelligence officers in Suu Kyi's
              compound, Maj. Thura, suffered minor head injuries while trying to stop
              the flogging. 

              The November coup, many diplomats contend, originated with Gen. Ne
              Win, Khin Nyunt's patron. Ne Win ruled Burma from 1962-88 and
              continues to act as junta puppetmaster. But as rumours swirl that the
              87-year-old's health is declining, the coup may not have come off as
              cleanly as first thought. "Because Khin Nyunt controls the press and
              information dissemination, everyone assumes he is running the country.
              But in the end Maung Aye still wields a bigger stick," says the Western
              diplomat.

              Rivalry and suspicion between military intelligence and the army are
              nothing new, nor are differences in outlook between Khin Nyunt and
              Maung Aye. But whatever the two men's differences, so far they have
              avoided creating full-blown groups. Now, though, the regime faces its
              greatest political and economic challenges since the 1988 democratic
              uprising, and the strain is beginning to show.

              Khin Nyunt brokered numerous recent ceasefires along the Thai border,
              where some ethnic insurgents have fought for 50 years. Maung Aye, a
              former army commander who has built his career battling ethnic
              insurgents, probably preferred a final military solution to the conflicts.
              What's more, political analysts speculate that Maung Aye thought the
              ceasefires spared his former battlefield adversaries. "The terms of the
              Shan ceasefire, in effect, legalized all Khun Sa's drug money and have
              made him veritable royalty in Rangoon," says a Burma watcher in
              Thailand, referring to the notorious Shan opium warlord.

              There may also be a philosophical schism opening within the regime.
              Khin Nyunt was the impetus for Burma's entering Asean in July 1997 and
              many analysts speculate his fate rests on the initiative's success. At that
              time, the top brass agreed that Asean would grant the regime the
              legitimacy needed to woo much-needed foreign investment into Burma.
              "They figured the Asean model of an authoritative political system, an
              open economy, would work for them just like it did for Indonesia," says
              an ambassador to Burma. "But the regional financial crisis has made their
              moment of triumph very short-lived."

              Worse yet for the military, that moment of triumph has quickly turned
              into a moment of ignominy. Thai Foreign Minister Surin Pitsuwan's
              recent call to replace Asean's founding precept of "noninterference" with
              "flexible engagement" was seen as a direct attack on Burma. The regime's
              continued political intransigence quickly became a topic at the recent
              Asean and Asean Regional Forum meetings in Manila, and Burma's
              foreign minister, Ohn Gyaw, had to listen. "The Asean shield for the
              SPDC has completely evaporated," says the ambassador. "They
              suddenly feel very much alone and exposed."

              Criticism from its perceived Asean brethren caught the junta off-guard.
              And as foreign investors flee the country, isolation looks a lot more
              appealing to many SPDC members than keeping a door open to the
              world. "Considering what the financial crisis has brought to bear on the
              more liberalized Asean economies, openness is beginning to be
              perceived as a threat and may soon be replaced by a resurgent
              isolationism," says a Rangoon-based analyst. 

              The first signpost has been recent restrictions placed on all border trade
              in a crude attempt to stop the free-fall of the Burmese currency, the kyat.
              Since July 1997, the blackmarket rate has slid to 365 to the U.S. dollar
              from 170. The currency remains officially pegged to the dollar, however,
              at only 6.25 kyat. 

              With Maung Aye serving contemporaneously as head of the Trade
              Policy Council, the prospect of future economic opening looks bleak.
              "Maung Aye is a soldier boy through and through. Decisions are made
              by dictate and without consultation," says the Western diplomat.
              "Unfortunately, he is hopelessly ignorant about economics." 

              More outward-looking, Khin Nyunt knows that a return to the
              isolationist policies of the 1960s and 1970s is a dangerous proposition. In
              January and March, he even solicited suggestions from private
              economists on how to solve the country's economic woes. They called
              for the blackmarket and official currency rates to be brought into line. But
              the more conservative elements of the SPDC fear the effect a devaluation
              would have on inflation, already dangerously high at 50% on
              domestically produced goods. 

              If it wants to avoid inflationary pressure, reworking the exchange rate will
              require that Burma obtain foreign aid. But with Washington-led
              sanctions still in place, that probably won't materialize until the
              government starts talks with the NLD.

              How long it will be before this happens, if ever, remains unclear. Khin
              Nyunt seems to understand the need for openness. Maung Aye appears
              to be in denial. And Prime Minister Than Shwe, increasingly a
              figurehead, would probably rather retire than deal with it. None of them
              like it, but as Suu Kyi continues her push, it will likely accentuate their
              different perspectives and a fractious power struggle cannot be ruled
              out.