[Asia Report] Amid Chaos in Myanmar... Korea Must Not Let Go of Investment

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The weather in Southeast Asia this week was a continuous furnace, with temperatures soaring around 40 degrees Celsius daily. The immigration procedures at Yangon International Airport in Myanmar flowed smoothly, much like in other countries, showing no significant differences. However, upon entering the city, the sight of a darkened downtown suggested poor electricity conditions. Power outages have lasted over eight hours a day, and a strict curfew from midnight has left the streets deserted early.

Following the COVID-19 pandemic in 2020 and the military coup in 2021, Myanmar's economic situation has steadily worsened. The number of Korean residents, which once approached 4,000, has sharply declined to fewer than 1,500. Interest from Korea in Myanmar, once hailed as the biggest beneficiary of the New Southern Policy and expected to become the 'second Vietnam' with its labor-intensive industries, has cooled significantly. Large corporations and small businesses have withdrawn like a receding tide, leaving about 100 garment and sewing companies focused on low-wage labor operations.

◇ Stalled Industrial Complex Development = "If only the land had been sold even three or six months earlier, it would have been better..." Lee Jung-wook, 62, CEO of the Korea-Myanmar Economic Cooperation Industrial Complex (KMIC), who has lived in Myanmar for four years, expressed deep regret over the joint industrial complex project that has seen no progress for two years since the coup. Expectations for Myanmar's reform and opening after ending over half a century of military dictatorship in 2011 were high. Korea also positioned itself as the biggest supporter, with Presidents Lee Myung-bak (2012), Park Geun-hye (2014), and Moon Jae-in (2019) visiting Myanmar consecutively. Among several major projects, including the Myanmar Development Institute (MDI) modeled after the Korea Development Institute (KDI) and the Dalat New City development, the most prominent was the industrial complex development project covering a total area of 2.25 million square meters, located 25 km north of Yangon Airport.

Due to good accessibility to Yangon, the economic capital, and favorable labor supply conditions, many companies inquired about the project. After more than eight years of preparation, applications for land sales began in 2021, and demand surged. However, the coup that occurred less than a month after the sales started reversed the situation completely. If the sales had started just a little earlier, would several factories now be humming with busy machinery? Of course, the opposite assumption is also possible?that many companies might be relieved to have avoided investing in such an unstable country.

"We must maintain ties with Myanmar and not stop investing. Considering Korea's limited land and aging industrial structure, Myanmar is the most ideal cooperation partner."

Cheon Ki-hong, 48, professor at Yangon Sejong Institute, urged Korea to adopt a future-oriented stance toward countries like Myanmar with unstable political situations. In other words, one should not confuse the division caused by international political trends with the mutually beneficial bilateral relationship. For example, some civic groups demand a complete halt to all Korean investments to prevent funds from flowing to the Myanmar military.

"If Korea completely withdraws to criticize the Myanmar military, China or Russia will immediately fill that void. Such imbalance would worsen Myanmar's crisis and erode Korea's future. A strategic perspective that balances ideology and pragmatism is essential."

◇ Ban Ki-moon’s Surprise Visit = Recently, with escalating US-China tensions and the Ukraine war shaking international affairs, it is not easy for Korea to turn its attention to ASEAN, especially to Myanmar, which is on the periphery. The Western world has steadily increased economic sanctions against Myanmar's military coup, which is summarized by human rights abuses and the undermining of democracy. The Myanmar military is preparing for a prolonged conflict by relying on Russian oil and Chinese daily necessities. They insist on maintaining the Myanmar-style military regime without yielding to Western pressure. Naturally, Korean government agencies such as the Korean Embassy and KOICA, which have expanded cooperation projects over the past decade, are virtually inactive. This is interpreted as a decision to wait until the US and Japan resume relations.

When will the 'de facto civil war' in Myanmar, represented by the military and the People's Defense Forces (PDF), end? Currently, the core cities accounting for 80% of Myanmar's economy (Yangon, Naypyidaw, Mandalay) are firmly controlled by the military, maintaining security. However, the mountainous border regions are rife with continuous unrest and clashes with the PDF. Myanmar's vast territory, about 3.5 times the size of the Korean Peninsula, includes many remote areas unreachable by military equipment, and conflicts between the Bamar majority and ethnic minorities have been intense since before independence. Now, the anti-military PDF, enjoying overwhelming public support, has allied with ethnic minorities to wage guerrilla warfare on a long front, frequently unsettling the military.

This year, the military has repeatedly carried out inhumane airstrikes using armed fighter jets and helicopters to suppress rebel areas. In the central Sagaing region, 168 civilians were massacred by airstrikes ahead of the Thingyan festival, drawing international condemnation.

There is growing international consensus that the irrational Myanmar military must not be left unchecked. On the 24th, former UN Secretary-General Ban Ki-moon made a surprise visit to Naypyidaw, meeting with the de facto leader, Commander-in-Chief Min Aung Hlaing, and former President Thein Sein, emphasizing the implementation of a peace process before departing. Although a dramatic meeting between Ban and detained Aung San Suu Kyi, isolated from the international community for over two years, did not materialize, Myanmar's people seem to hold a faint hope for negotiation possibilities, as Ban firmly conveyed the international community's sober concerns and worries to the military.

◇ Dreamless Youth = Apart from electricity shortages, Yangon city has not changed much since before the coup. The main difference is the intensified polarization between rich and poor due to the collapse of the Myanmar kyat and the soaring value of the dollar.

It is noteworthy that high-end coffee shops and jazz bars modeled after Bangkok, Thailand, have been opening throughout the city. Young people have started to enjoy coffee and food at trendy cafes, despite prices being burdensome relative to their income levels. Myanmar's middle-aged and older generations seem to somewhat understand this consumption behavior of the younger generation. Conscious young people resisting the military have fled to the borders, upper-class children have gone to Singapore or the US, and the middle class has left for Thailand, Japan, and other countries to earn money. While past youth generations saved to buy air-conditioned homes, now frequent power outages and factory closures abroad have led to growing dissatisfaction over losing both friends and futures. Naturally, durable goods consumption has decreased, and people enjoy a kind of 'small but certain happiness' consumption.

"Thousands of young people lost their lives on the streets in 1988 and again in 2021. The military remains greedy, and political forces have closed off possibilities for compromise. It is truly depressing." The lament of a local businessman in his 50s reflects the widespread sense of loss among Myanmar people across generations.

Jung Ho-jae, Researcher at Korea University ASEAN Center

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