Burma's Democracy Struggle Hostage to Real Estate Boom

07/07/2014 02:36 pm ET | Updated Sep 06, 2014

Ethical issues in Burma (also known as Myanmar) have never been simple, and the real estate boom roiling Rangoon ranks with the thorniest. Those poised to reap rewards are scoundrels and those being fleeced have their backs to the wall. Unless persons with influence intervene, no real progress toward democracy and a free market are possible.

The June 6 announcement that the U.S. will establish a Commercial Service Trade Office at the U.S. Embassy in Rangoon, to advise American companies hoping to invest in the country, could not have come at a better time.

One immediate crisis is property values. On May 22, The Irrawaddy, the magazine respected for fearless political coverage throughout the years of military rule, ran a hard-hitting editorial about the dark side of international businesses and organizations storming into Myanmar with insufficient attention to unintended consequences.

UNICEF, it was reported, having been forced from its prior location due to the sudden increase in speculators, had found that the best rental it could arrange was at three times the previous rent -- a whopping $1 million per year -- and that its landlord will be the wife of Major General Nyunt Tin, a once-senior member of the military junta famous for having brutalized its people.

The criticism, which gained global traction, was not aimed at UNICEF, which is recognized for its important work, including right now finding shelter for 1,000 children displaced by conflict in Myanmar's Kachin State. The question, according to Kyaw Zwa Moe, editor of the English Edition of the Irrawaddy, is whether the agency, given its stature, could have found a different landlord or resisted the upward pressure on rent.

To be sure, real estate everywhere is an intensively competitive arena where the word "fair" has its own meaning. But two factors in Rangoon create a particularly pernicious climate and elevate the fairness question.

First, members of military, retired military or cronies own 60% of available property.

Second, the military-dominated government owns vacant buildings and unused lots in central Rangoon that it can keep off the market. This is not a fluke. In 2007, in one of its more bizarre acts, the junta decided to build a new city in an isolated area and vacate Rangoon. (Think of Washington D.C. should Congress decide to move every federal government function to central Kansas.)

Driving about Rangoon one circles one large abandoned facility after another. The future of these properties is not known. Persons who request permission to purchase or use the buildings meet obfuscation and delay.

"It is a matter of supply and demand," Ko Kyaw Lin Oo, Coordinator of the Myanmar People's Forum Working Group, told Dateline Irrawaddy. All world cities experience wild property spikes when an unanticipated infusion of international investment skews values. Urban neighborhoods everywhere shift, from time to time, with local residents displaced.

The free market argument is inadequate here, however. There is very little "free" about the market in Rangoon.

International investors must tread carefully, for as UNICEF discovered, the impact of their decisions is not obvious. Below the buzz of possible progress, local businesses, agencies, and residents, oppressed by decades of abuse are being driven out. Rangoon is not Singapore, London, or New York. There is no safety net for the displaced and no energized middle class to create alternatives. Prospects for benefiting from this boom seem open only for those able to carry forward the gains of unchallenged opportunity during the former regime.

Trust is in short supply. Kyaw Zwa Moe, having spent his youth in ungodly prisons for having passed out leaflets, knows the ethical numbness of those in power. "Isn't there an ethical issue?" he asked Vicky Bowman, director of the Myanmar Center for Responsible Business. People are distressed not because the international organizations were able to pay but that they seem, in focusing on getting the best deal they can for their own purposes, to turn a blind eye on what is, as a result, happening to everyone else -- including those they have come to help.

Is no one willing to push back? Is there no one to whom the local people can turn to stop what can become a further concentration of wealth and power in the hands of the few?

The new office at the U.S. Embassy seems right on target. At the launch, Secretary of Commerce Penny Pritzker spoke the right words. "We have communicated to your government the need to ... implement measures that increase inclusive economic development, promote government transparency and accountability, and safeguard labor rights and human rights." That sounds about right. Now Pritzker needs to make it happen.

Susanne Dumbleton, Professor Emeritus at DePaul University, has been studying the situation in Burma as part of research on Aung San Suu Kyi for a book on women as leaders for human rights.