Land grabbing as big business in Myanmar

Asia Times | 8 March 2013
State agencies and private companies are seeking to acquire increasingly larger tracts of farmland in the hopes of enticing foreign partners.

By Brian McCartan

Inadequate land laws have opened rural Myanmar to rampant land grabbing by unscrupulous, well-connected businessmen who anticipate a boom in agricultural and property investment. If unchecked, the gathering trend has the potential to undermine the country's broad reform process and impede long-term economic progress.

Under the former military regime, land grabbing became a common and largely uncontested practice. Government bodies, particularly military units, were able to seize large tracts of farmland, usually without compensation. While some of the land was used for the expansion of military bases, new government offices or infrastructure projects, much of it was used either by military units for their own commercial purposes or sold to private companies.

The threat of military force meant there was little grass roots opposition to these land seizures and few avenues to secure adequate compensation. That's changed under the new democratic order as local communities band together to fight back against seizure of their lands. Many of the current land disputes date to the period before the 2010 general elections that ushered in President Thein Sein's reformist quasi-civilian government.

The Ministry of Agriculture and Irrigation's Department of Agricultural Planning reported in January 2010 that 216 companies had received a total of 1.75 million acres (708,200 hectares) of farmland in the form of state concessions. Many of the disputes now being contested are related to land taken in the mid- to late-1990s. A significant proportion of the land grabbing during this period took place in ethnic-majority states in the country's peripheral regions.

This was especially the case in areas along the border with China in Kachin and Shan States and along the border with Thailand in the Karen and Mon States. The army has maintained a strong presence in these areas to battle ethnic insurgencies and uphold tenuous ceasefires with other insurgent organizations. Much of the land was taken for military camps and military access roads, but also for commercial projects either run by the military or companies with ties to the military. Significant land grabbing also took place in the Sagaing and Irrawaddy Divisions.

The confiscation of land has been repeatedly documented since the 1990s by human-rights groups such as the Karen Human Rights Group (KHRG), the Shan Human Rights Foundation (SHRF), the Human Rights Foundation of Monland (HURFOM), and Earth Rights International (ERI), as well as numerous smaller grassroots organizations.

With new hope for an economic revival and rising property prices sparked by Thein Sein's reformist government, land grabbing has continued in many of these areas and has also increased in central Myanmar and in Rakhine State in the west of the country. Current land grabbing is forcing farmers off their land for commercial agri-business ventures, infrastructure projects, tourism development, industrial facilities and gas pipelines.

Political and economic reforms, together with relaxed sanctions and a better relationship with the West, have raised expectations of a foreign investment-led economic boom. The government has actively encouraged more investment in agriculture, one of the country's more laggard economic sectors, by promoting the country's former role as the "rice bowl of Asia" and highlighting its potential for commercial agriculture.

This has encouraged state agencies and private companies to seek to acquire increasingly larger tracts of land in the hopes of enticing foreign partners. Local firms are both seeking new land as well as reasserting dubious claims to past ownership over land they received as concessions during the 1990s under the military government.

Much of the land grabbing in the 1990s occurred during a previous opening of the country to foreign investment. However, the lack of foreign interest at the time meant much of the land remained unplanted and many companies subsequently allowed the former owners to continue farming the land.

The symbiotic relationship between serving and former military officers and influential private businessmen that flourished under the previous military regime remains largely unchanged under the current administration. Indeed, these alliances are in the forefront to land lucrative joint venture deals with foreign investors.

Although widely derided as "cronies" of the military, these businessmen have long occupied a powerful niche in Myanmar's economy, a role which will be enhanced with foreign investment-driven faster economic growth. At the same time, connections to the security forces provide these firms with the muscle to intimidate or force small landholders off their claimed lands.

Under military rule, many farmers simply understood that it was fruitless to challenge land seizures by state-owned enterprises or government cronies. Indeed, protests could result in lengthy prison sentences, enforced disappearances, or, especially in ethnic areas, summary execution.

Potent protests
Rising land grabbing is resulting in greater displacement and landlessness among Myanmar's rural population. Public dissatisfaction with the situation, coupled with a new openness brought about by the reform process, is leading some farmers and other land owners to protest the seizures.

One highly publicized protest has involved the forced removal of villagers from three villages in Sagaing Division to expand a copper mine being developed by the government-owned Union of Myanmar Economic Holdings (UMEH) and the Wan Bao Co. Ltd, a subsidiary of China North Industries Corp.

A protest that included a large number of Buddhist monks supporting displaced villagers was violently broken up by police. Incendiary devices fired into the protest camp severely burned several of the monks, according to press reports. The heavy-handed crackdown sparked outrage across the country.

In another case, farmers in Mandalay Division filed a court case against the Bureau of Air Defense and the High Tech Concrete company owned by army crony Aik Tun for their perceived as unlawful seizure of 40 acres (16.1 hectares) of land. Most recently, on February 26, a police attempt to break up a protest in Maubin Township, Irrawaddy Division resulted in a clash where one policemen was killed and dozens of police and villagers injured. The farmers were protesting the confiscation of their land by the military in 1996 and its later sale to a businessman in 2004.

Under Myanmar's 2008 constitution, the state is the ultimate owner of all land and natural resources above and below it. Land rights are exclusively in the form of either leasehold rights, user rights, or the right to cultivate a certain plot of land. These rights are granted on the approval of local government bodies appointed by the central government.

Two new land laws passed on March 30, 2012 - the Farmland Law and the Vacant, Fallow, and Virgin Land Management Law - were intended to clarify ownership under the constitution and provide protections to land owners. While the laws guaranteed more individual ownership rights, to date big businesses have profited most from the legislation.

The new laws created a dysfunctional and opaque system of land registration and administration that reinforced a top-down decision-making process without local participation. The absence of adequate legal and judicial recourse for the protection of land rights has further exacerbated the situation. Rather than deter land rights violations, the laws have effectively facilitated more land grabbing and manipulation of the system.

While providing for certificates of ownership and the selling of rights to land, the Farmland Law requires prospective land owners to register at local Farmland Management Committees. These committees are appointed by the government with no representation from farmers, leaving them open to corruption and the influence of government and military officials in league with commercial interests. The composition of the committees and enduring distrust of the bureaucracy after years of mismanagement under the military regime will likely discourage many farmers from registering.

Farmers appealing decisions of these bodies must appeal within the same system of farmland management committees at various levels up to the state and regional levels. These same government appointed bodies are also empowered to issue fines, enforce evictions, and issue criminal penalties, allowing for a mechanism which few farmers would be willing to challenge.

The customary rights held by millions of agrarians, land laborers, and contract farmers including shifting cultivators and pastoralists are also not recognized within the current legal framework. Without land tenure security, small landowners are particularly vulnerable to speculators and corporate agri-businesses.

The Vacant, Fallow, and Virgin Land Management Law likewise vests an enormous amount of discretionary power in a central committee appointed by the president. The committee is empowered to grant permission to use vacant land, set taxes, and request security fees for land use as well as monitor compliance with the law.

Additionally, central committees determine whether land is unused, a particular concern for farmers practicing the traditional taungya form of shifting upland cultivation in which crops are rotated with some fields left fallow for certain periods of time. Much of the land seized and given to private companies is classified by the Ministry of Agriculture and Irrigation as fallow, vacant, or virgin land without registered owners.

Without any meaningful recourse to the courts under the current legal framework, opportunities abound for manipulation of the system. Myanmar's justice system has for decades been integrated into the military's authoritarian governance structure and is still equated in many people's minds with summary justice and kangaroo courts.

As such, the system is largely incompetent and virtually powerless against powerful vested interests in other parts of the state or private companies. Officials are neither inclined to intervene in land disputes nor effectively capable of protecting the rights of small landholders against encroaching military-owned companies and their partners.

The provision for the selling of land rights is also open for exploitation by businesses which encourage farmers under mounting debt to sell off their land for short-term gains. Many farmers in Myanmar are in debt due to a widespread inability to access credit through formal channels and the high costs of agricultural inputs.

Reform test
Unchecked land-grabbing has the potential to imperil both Thein Sein's political reforms and the overall economic potential of the country. The current lack of transparency and public participation in the planning and decision-making processes involved in land management has served to continue public perceptions that land transfers are frequently undertaken outside the rule of law.

This has undermined local confidence in both Thein Sein's supposed democratic government and the overall reform process. The situation is compounded by an enduring attitude in the bureaucracy that treats farmers with contempt, threats and intimidation. Rising landlessness, meanwhile, will push many farmers into cities, creating a new urban underclass and a potential source of instability.

Growing discontent among small landowners, displaced agrarians and landless rural workers has the potential to create a powerful voting bloc in the 2015 elections. Nearly 70% of Myanmar's population of some 60 million live in rural areas, among which one-third are estimated to be landless laborers. Effective land reform promises thus have the potential to win massive popular support at the next polls.

In apparent recognition of the importance of the rural vote, Naypyidaw-based parliamentarians are paying more attention to the plight of farmers. Both the majority Union Solidarity and Development Party (USDP) - commonly perceived as the party of the former military rulers - and the opposition National League for Democracy (NLD) have broached the topic in parliament.

In July 2012, parliament, including members of the USDP, took the unusual step of overruling the government and voted to form a committee to investigate land disputes across the country. The Parliamentary Land Investigation Committee began visiting various areas of rural Myanmar in late September to probe alleged land seizures, particularly in Rakhine, Mon and Karen States, as well as in the southern Taninthanayi Division. Committee members have reportedly received numerous reports of land seizures during their investigations. Government officials and presidential advisors have subsequently sought out the advice and assistance of local and international experts on land issues.

A recent report by Displacement Solutions, an international organization involved in land rights issues, recognized the importance placed on the issue by the government. "There is a clear recognition at all levels of society - from the Government, the political opposition, the private sector, civil society groups, the UN and donors - that the way in which [land rights] issues are addressed within the reform process will be a central factor in determining the social and economic (and political) destiny of the nation."

At least some of Myanmar's private businesses, including several owned by so-called cronies, have recognized the sensitivity of the land issue and have taken positive steps to mitigate the damage from past seizures. While the laws still work in their favor, some analysts believe this signals a grudging recognition that in the new more open political and social climate it is important to maintain a positive social image.

With the country's poor reputation for human-rights violations and the alleged involvement of businessmen in some of those violations, including land seizures, many foreign investors are wary of investing with partners associated with such unsavory practices. Rising governmental and parliamentary attention to the issue will also bring more scrutiny to arrangements by local and foreign firms seeking to develop land-intensive projects. Media attention will also keep the issue in the spotlight in the lead up to the 2015 elections.

Some local companies have already moved to improve their image in relation to land ownership and compensation. Several companies have taken steps to either return land or initiate joint development programs with the former owners of the land. In June, a local parliamentarian successfully lobbied the military to pay compensation to owners of over 500 acres (202 hectares) of land in Shan State confiscated in 2009. In August, under similar pressure the Ayeya Shwe Wah Co Ltd returned a concession of some 40,000 acres (16,187 hectares) to farmers in the Irrawaddy Delta.

In December, Max Myanmar, one of Myanmar's largest conglomerates, owned by military-linked tycoon Zaw Zaw, paid 13 farmers US$838,000 for 106 acres (42 hectares) of land it had seized in the Irrawaddy Delta. Max Myanmar is also planning to assist farmers whose land was taken by Max Myanmar and 15 other companies for use in contract farming in Dagon Seikkan township near Yangon. Zaw Zaw is still on a US economic sanctions list for his association with the previous rights abusing regime.

By better guaranteeing land rights, Thein Sein's government has the opportunity to put Myanmar's rural areas on a more equitable and democratic track. Genuine land reforms could also help to stave off rural unrest and a potential new source of urban instability through land grabbing driven migration into cities. Whether his government seizes or misses the opportunity will likely be a determining factor in the 2015 elections pitting his USDP against the opposition NLD.

Brian McCartan is a freelance journalist. He may be reached at [email protected]
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