Coming Apart at the Seams

Most of the reporting on Burma over the past year has focused on the rise of the democratic opposition and its attempts to challenge the government. This is understandable — especially considering that the opposition is led by Aung San Suu Kyi, the only Burmese politician to enjoy global recognition.

But there’s another conflict going on that could well end up having an even greater impact on Burma’s liberalization efforts. The Union Solidarity and Development Party (USDP), which governs Burma, is on the verge of splitting. A bitter power struggle is unfolding within the party between President Thein Sein and conservatives opposed to his reformist agenda out of fear that it will reduce their political and economic influence in the country. There are many Burmese who would undoubtedly welcome the news of the party’s collapse, considering that it has, in its various guises, dominated political life for so long. But, in fact, a fragmenting USDP is likely to do more harm than good to Burmese democracy.

The battle that’s currently under way revolves around two personalities: the president and the powerful speaker of the lower house of parliament, Shwe Mann (pictured above). In early October the USDP held a long-overdue national convention that ended up reappointing Thein Sein as the party’s leader. This outcome came as a surprise, since many observers were expecting Shwe Mann to take the reins so that he could lead the party into the next national election scheduled for 2015. "In effect the president has checkmated the speaker," said a senior government official.

But the president is elderly and ailing, while Shwe Mann is comparatively young and vigorous — meaning that Thein Sein’s retention of the top party post has done little to calm the troubled waters. While Shwe Mann says he approves of the reforms, he has a deep personal antipathy toward the president (now compounded by Thein Sein’s move to retain the leadership of the USDP), and this has led him to join forces with the many conservatives who, behind the scenes, are desperate to prevent Burma’s progress toward democracy. Above all, they are anxious that further liberalization could jeopardize their control over the country’s economy. (The fact that the pro-government forces were trounced by the NLD in last April’s parliamentary election probably hasn’t made them feel any more secure.)

The sense of instability is aggravated by the rules of Burma’s political game, which were laid out by the new constitution rammed through a sham referendum (2008) and then ratified by the parliament when it convened in Jan 2011. According to the constitution, 25 percent of the seats in the parliament are reserved for serving soldiers, who are essentially appointed to the assembly by the army chief.

Currently the USDP, with more than 60 percent, holds the overwhelming majority of the seats in parliament. But if the party fragments, it is likely to break up into several smaller groups, leaving the military with the largest single bloc — and thus potentially giving it effective veto power over planned reforms. A parliament of fractured parties might see soldiers taking a more active role, probably by stressing core military values and putting security as the top priority. Some have even warned of the potential for a "soft coup" that would put the military back in charge of policy.

The reasons for the USDP’s underlying weakness lie in its history. The party was formed by the country’s former dictator, General Than Shwe, out of the old political movement of the ruling military back in 2010. This opened the way for the USDP to compete in the first general election in 20 years, also held in 2010. The USDP’s members are a mix of former military men, ministers, civil servants, and businessmen. Its main purpose was to ensure the military’s continued dominance, but aside from that it has no real ideology to hold its disparate constituents together.

Aside from its vaguely populist approach to the economy, and its strong commitment to law and order, the party has had difficulty forming a proper policy approach. It suffers from its association with the old military rulers, many of who still play prominent roles. Educated and cosmopolitan former ambassadors, civil servants, and intellectuals resent being forced to cohabit with authoritarian and corrupt former ministers.

The tensions between the president and the speaker have become increasingly open lately. Early last month, Shwe Mann declared that laws passed by parliament should take immediate effect and did not need the approval of the president. Many observers saw this as a de facto declaration of war on the president and his cabinet.

Shwe Mann’s move exacerbated the conflict within the party– especially during the USDP’s first national congress in mid-October. "To elaborate, I am the one who is mostly responsible for convening the convention and reorganizing the party," Shwe Mann told party members at the time, even though Thein Sein had been elected as the party chairman and was obviously in charge. A Burmese businessman with close ties to the USDP told me. "It was a slap in the president’s face, and his declaration that he controlled the party [was] sheer arrogance."

That was only the latest in a series of other conflicts between the two men (including, most notably, a fight in September over a constitutional tribunal that Shwe Mann had set up as part of his efforts to boost parliamentary powers at the expense of the president’s). In the end those plans went nowhere. But one government official close to the president told me that the episode demonstrated the extent of Shwe Mann’s designs on the presidency. Shwe Mann, he said, was "a wolf in democratic clothes, waiting to pounce for the presidency in 2015." (The next general election is set for November 10, 2015.)

The struggle is likely to intensify. The president is planning a new anti-corruption campaign within the government and the USDP that will probably target some former ministers who are also senior officials within the party. Some of them were even re-appointed as central executive committee members at the recent congress.

Thein Sein recently launched a massive cabinet reshuffle, appointing many civilians and technocrats as deputy ministers. These changes are continuing, according to government insiders, but the president cannot get rid of everyone at once. The main problem is that the hardliners are still have a significant presence in parliament, and they still control massive amounts of money they accumulated previously under the old regime. Many senior officers who grabbed huge assets in key sectors of the economy (including timber, energy, agriculture, and fishing) are now being targeted for investigation.

The investigations into the officials’ activities have been blocked by Shwe Mann’s allies in parliament, such as the chairman of the finance and banking parliamentary committee, Aung Thaung. In the next few weeks, the government is preparing to release the results of its investigation into the activities of Maung Maung Thein, a former fisheries minister and ex-general secretary of the USDP. Sources in the fishing industry say that he will be accused of siphoning off more than $80 million a year into his private coffers, and depriving the country of some $200 million dollars a year in lost taxes.

The outcome of the investigation could have a big impact on the fate of Shwe Mann’s political ambitions. But while Shwe Mann is facing a growing hornets’ nest in the party itself, the old guard is still out to disrupt the president’s reform process, using the USDP as their base.

The new law on foreign investment, passed by parliament last week and immediately signed into law by the president, also reflects the struggle between the two rivals. Shwe Mann tried to win the support of local business interests by advocating for greater protectionism. Thein Sein pressed for a version of the law more open to foreign investment. In the end the president won.

"Everyone knows the foreign investment law is critical and that it is desperately needed for the country’s economic development," Ko Ko Hlaing, the president’s top political adviser, told me recently. Thein Sein and the USDP leaders know that they have to deliver on their economic promises if they are to avoid losing to Aung San Suu Kyi’s National League for Democracy (NLD) at the next elections.

The battle for control of the USDP is set to become even messier as the party’s members prepare for the next elections. They know only too well that, in the court of public opinion, they are rapidly losing ground to the NLD. For that reason there is now mounting pressure on Thein Sein — who had earlier declared himself to be a one-term president — to stay on as party head and serve a second term as the country’s leader. But that will probably do little to fix what ails the USDP.