How Can International Assistance to Burma Avoid Mistakes of the Past?

May 9, 2012

By Thomas Parks

Burma (also known as Myanmar) may be on the verge of a dramatic expansion of international assistance. After last month’s parliamentary by-elections, there is likely to be more support for easing sanctions and increasing foreign assistance to the country to support the changes underway. Several major donor governments have announced easing of sanctions and increased aid to Myanmar, including Canada, the European Union, and Denmark. Dozens of donors and international NGOs are poised to establish new programs in the country in the coming months.

Monks collect alms in a neighborhood market in Yangon. After Burma’s parliamentary bi-elections last month, there is likely to be more support for easing sanctions and increasing foreign assistance to the country. Photo: Geoffrey Hiller.

The hotels in Yangon are packed with international aid professionals. According to one NGO leader, “there are many ‘Burma experts’ in Burma right now” – an allusion to the dozens of researchers and aid workers that keep his phone ringing constantly. The development and humanitarian needs in the country are enormous, so this new wave of assistance is likely to bring much needed aid to millions of people. But in these heady days of Burma’s opening up to the world, let’s not forget the risks and lessons from scaling up the level of foreign aid too quickly.

There are several recent cases in Asia where the international community dramatically increased aid to a country that was not previously a major recipient. This scenario has generally played out in response to a major political transition, a post-conflict moment, or in the aftermath of a devastating natural disaster. Burma is a unique case. In most of the other cases, rapid scale-up of international assistance has come on the heels of civil wars that have left the country devastated. Burma is neither a post-conflict nor a “fragile state.” So, in many ways, this will be new territory for the international community.

The Government in Naypyidaw is preparing the groundwork for an expected increase in foreign aid. In a speech on March 1, President U Thein Sein spoke of the government’s interest to open up the economy, expand services, stabilize the currency, and achieve reconciliation with ethnic minorities. By preparing a “roadmap,” the Government is sending a clear message that it expects international aid to support its plans for development and reconciliation.

At this stage, it is important to reflect on some of the key lessons from other countries that have been down this road with rapid scale-up of assistance. For example, during the post-tsunami response in Indonesia and Sri Lanka, and in the immediate post-conflict periods in Cambodia, Timor-Leste, and Afghanistan, the international community responded with an outpouring of support in the form of technical assistance, democratization and elections support, budget support, and humanitarian aid. In the past 25 years, hundreds of billions of dollars have been spent in transitional, conflict-affected countries. While Burma is not at the same level of risk as these other countries have been, these comparisons may provide some useful guides for the international community given that the scale of assistance and the diversity of international organizations involved are likely to create similar challenges.

There are a few basic lessons from the past that should be kept in mind at this early stage, as the international community has an opportunity to get things right in Burma.

Lesson #1: Don’t let scale overwhelm the mission. When international assistance scales up rapidly in a place unaccustomed and unprepared for large-scale aid, problems are likely to follow. In post-tsunami Aceh and Sri Lanka, and post-transition Timor-Leste, large-scale aid often created perverse incentives that led to poor program quality and wasted resources. In most cases, donors are faced with the challenge of moving large sums of money in areas that have difficulty absorbing the funds. This scenario typically leads to implementation decisions that may have negative consequences. For instance, when donors cannot find adequate local capacity, they may turn to international contractors to deliver the assistance and meet the accounting and financial requirements of the donor. Under pressure to deliver quickly, contractors must often spend the funding on high-priced, imported materials rather than going through the more time-consuming process of sourcing locally. Tensions between the foreign aid providers and local groups can also lead to difficulties in monitoring of program activities, and low levels of local ownership. There is a major risk that aid to Burma could follow a similar course, without a concerted effort to manage the risks stemming from rapid, large-scale aid.

Lesson #2:  Political dynamics and informal “rules of the game” are just as important as formal institutions. In many past cases, international assistance has focused primarily on formal institutions, such as elections, courts, and parliaments, while ignoring the political dynamics that have largely shaped (and often undermined) these institutions. Intense political competition and informal patronage relationships were usually the factors that shaped power and governance before the transition, so it is almost certain that they will continue to play a significant role during and after the transition. In Cambodia, for example, the international community helped to establish a fragile truce between the major factions in 1993 – including two prime ministers – only to see it all fall apart in 1997 when the Hun Sen faction took over the government. Setting up the formal institutions and running an election is not enough. The informal power dynamics will eventually overwhelm formal institutions if the political settlement (a term commonly used to describe the informal power arrangements or “social order” in a country) does not hold.

In recent years, international donors have recognized the importance of political settlements in determining the trajectory of governance and stability in a country. In Nepal, during the post-civil war transition, the UK Department for International Development (DFID) recognized that the political settlement itself was in transition, as the major parties and the CPN-Maoists sought to recreate the political system and break down the old system of Kathmandu elite-dominated rule. DFID programs during these years sought to support this transition by supporting the peace process, strengthening new political leadership, and facilitating dialogue between elites to manage tensions between the major parties.

Lesson #3: International best practices are probably not the solution for Burma. In many developing countries that receive a large-scale influx of foreign aid, the international community has urged host governments to considered establishing state-of-the-art, western-designed models for new government agencies and formal state institutions. These new institutions are often poorly suited for the political and cultural realities in these countries. For example, with the support of international assistance, many countries quickly set up anti-corruption and human rights commissions to monitor abuses and prosecute officials and political leaders who broke the rules. Within a few years, however, it was clear that corruption was flourishing, human rights violators were acting with impunity, and these new western-modeled institutions were being mostly subverted.

Lessons #4: Prosperity at the center largely depends on the stability at the periphery. While most aid will likely be concentrated on change at the center of government, the key to Burma’s future stability and development will largely be determined by what happens in the conflict-affected ethnic minority regions. For more than half a century, the struggle between the ethnic Burman-dominated regime and ethnic minority insurgencies has profoundly shaped governance and security in the country. Many border regions are still affected by armed conflict. It will be essential to use this opportunity to draw the isolated, conflict-affected ethnic minorities into the positive changes that are taking place. Experiences in other countries have shown that international aid is often concentrated in the ethnic populations with the best connections to power. Ethnic groups with long-running resistance movements are often excluded – not necessarily by donors, but by governments that are seeking to use aid to reward their allies in the conflict area. For example, in Mindanao (southern Philippines) from the 1980s to the early 2000s, the vast majority of assistance was concentrated in the Christian-Filipino growth centers of Davao, General Santos, and Cayagan de Oro. The ethnic Moro-Muslim population close by in the Autonomous Region of Muslim Mindanao was largely left out of the economic transformation happening nearby, often creating more tension and frustration within this critical community. Donors mostly recognize that there will need to be an extra effort, and considerable additional risk, to channel aid to these subnational conflict areas. This is often enough to deter them from making the conflict areas a priority. In the case of Burma, neglecting the remote conflict areas could lead to a renewed cycle of armed resistance and military suppression, putting the whole transition at risk.

Lesson #5:  Do not underestimate the complexity and diversity of subnational conflict areas. While it will be critical for the international community to focus much of our effort on the subnational conflict areas, delivering aid to these regions will be extremely challenging. One common mistake in conflict-affected areas and fragile states is to treat the entire country (or subnational conflict area) the same, using the same program models and approaches across the region, and delivering the benefits through organizations or government officials who are not from the area. In reality, subnational conflict areas are usually extremely diverse and complex environments, with multiple factors leading to violence and multiple local political factions competing for dominance. Internal conflict areas are increasingly known for their “conflict micro-climates,” where local dynamics are a more frequent cause of violence than regional or national factors (i.e., conflict between insurgent group and the military). In Mindanao and Nepal, for example, the types of conflict and key actors involved may differ considerably from town to town or valley to valley. The international community has an increasingly sophisticated understanding of these local conditions, but has generally struggled to adapt programs to these complex realities.

The subnational conflict areas of Burma will likely be one of the most challenging environments for aid programs, and will require much greater adaptation. Business as usual will simply not work.

Thomas Parks is The Asia Foundation’s regional director for Conflict and Governance based in Thailand. He can be reached at [email protected]. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.

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