Proceedings of the Standing Senate Committee on
Foreign Affairs and International Trade
Issue 9 - Evidence - Meeting of April 30, 2014
OTTAWA, Wednesday, April 30, 2014
The Standing Senate Committee on Foreign Affairs and International Trade met this day at 4:15 p.m. to study security conditions and economic developments in the Asia-Pacific region, the implications for Canadian policy and interests in the region, and other related matters.
Senator A. Raynell Andreychuk (Chair) in the chair.
[English]
The Chair: Honourable senators, we continue our study on the security conditions and economic developments in the Asia-Pacific region, the implications for Canadian policy and interests in the region and other related matters.
I have received a letter from Susan Gregson, Assistant Deputy Minister of Asia-Pacific. Further to their testimony on April 3 and in answer to questions from Senator Dawson and Senator Robichaud, there was to be a clarification in the total amount of remittances from Canada to the Philippines in 2013. Their letter indicates that, according to the Philippine central bank, remittances from Canada were U.S. $879,937,000 in 2013, approximately $906 million Canadian. They're indicating that rather than "million," their presentation should have referred to "billion."
I want to circulate the letter in both official languages and have it appended to their testimony.
Senator Downe: I'm not clear on what the letter said. The question that was asked, chair, was how much is sent from Canada, and what is the figure in Canadian dollars?
The Chair: It is $906 million, and they're indicating they should have said —
Adam Thompson, Clerk of the Committee: I believe the issue was they had referred to "million" rather than "billion," the total being $906 million. I think they referred to an estimate and that it was $0.9 billion. We can review the testimony to get that, but we have a letter indicating the correct amount.
Senator Downe: Thank you.
The Chair: They've replied. I'm seeking leave to have it appended to their testimony. Should it require further clarification, if we review it with the testimony, please advise me and we'll follow up.
Senator Downe: The testimony was from?
The Chair: From Foreign Affairs and International Trade.
Senator Downe: We also had a witness, a woman, who indicated a figure.
The Chair: We're not correcting hers. It's the testimony of the government witnesses.
Agreed to append?
Hon. Senators: Agreed.
The Chair: We will turn to our witnesses for this panel, Mr. Joshua Kurlantzick, Senior Fellow for Southeast Asia from the Council on Foreign Relations, and, as an individual, Mr. Richard Barichello, Director, UBC Centre for Southeast Asia Research. Both are by video conference. I will turn first to the Council on Foreign Relations, Mr. Kurlantzick.
Joshua Kurlantzick, Senior Fellow for Southeast Asia, Council on Foreign Relations: Thanks for having me. I was under the understanding that I was supposed to answer questions about the Asia security environment.
The Chair: Normally we have an opening statement, whatever you wish to put on the record about your study or anything that you can contribute to our reference, and then we go to questions.
Mr. Kurlantzick: I'm happy to do so.
My study at the Council on Foreign Relations primarily focuses on Southeast Asia, although I do look at northeast Asia somewhat. I focus on the pivot or rebalance, as the Obama administration now calls it, and its implications for the region, Southeast Asian regionalism. In particular, over the last two years, I have focused on the retrenchment or regression of democratic change in a number of countries in Southeast Asia and the implications of that for the security environment and for trade. Specifically, that includes challenges to the democratization in Thailand, Malaysia, Myanmar and several other countries.
The Chair: Thank you.
We will turn to Professor Barichello. Do you have an opening statement that you wish to make?
Richard Barichello, Director, UBC Centre for Southeast Asia Research, as an individual: Madam Chair and honourable senators, it's a pleasure to be talking with you today.
As a word of background, I don't have a specific study to which I will be referring. I will be drawing on my experience in the region since about 1985. The countries that I know best are Indonesia, where I lived and worked in the late 1980s, and then with Vietnam and Thailand and Myanmar and Cambodia and Singapore.
The question that was put to me was along the lines not so much on human security but rather on economic development. The region, as I'm sure you're all aware, is rapidly growing and has a history of this rapid growth, punctuated by the Asian financial crisis and somewhat of a slowdown more recently with our recession, but, generally speaking, a rapidly growing environment and one where there has been a fair amount of effort through ASEAN for more economic integration among the ASEAN countries. There are many challenges, but it's good to start with the fact that there is an appetite within the region for more economic integration, as well as integration through trade, particularly, and investment with the rest of the world.
The challenges to this, though, are that the internal politics in many countries is constraining. Although there has been quite rapid growth in trade and investment within the region, the goal of an Asian free trade agreement with completely free trade is still an ambitious goal because of constraints within various countries in terms of their domestic policies.
I could talk more about the agricultural sector, which I know best, with industrial policies and so on, but I will stop there and leave those areas as topics for questions if any of you are interested in exploring those more deeply. Thank you.
The Chair: Thank you. Those are probably the two shortest presentations we have received before the committee, so we'll certainly have a great opportunity to explore it by questions.
[Translation]
Senator Fortin-Duplessis: My question is for Mr. Kurlantzick. The U.S. President just completed an Asian tour, which took him to Japan, the Philippines, Malaysia and South Korea. He signed a defence cooperation arrangement with the Philippines. Canada just signed a free trade agreement South Korea, but do other Southeast Asian countries have an interest or any appetite for expanding their relationships with countries other than the United States and China? And is Canada interested in investing in any of those countries?
[English]
Mr. Kurlantzick: Thank you. I hope you don't mind that I take notes. Whether the Southeast Asian countries will be affected by the South Korea-Canada free trade agreement? Is that your question?
[Translation]
Senator Fortin-Duplessis: No. What I was asking you is whether Southeast Asian countries have an interest or any appetite for developing their relationships with countries other than the United States and China. Do you think they are interested in doing business with Canada?
[English]
Mr. Kurlantzick: The major economies in Southeast Asia already do considerable business with Canada.
First of all, I should preface by saying that my focus is on U.S-Southeast Asian relations, but when we talk about the major economies, we mean Thailand, the Philippines, Singapore, Indonesia, Malaysia, and now to a lesser extent Vietnam and possibly Myanmar in the future. Those are the countries in the region that matter in an economic sense, and most of them already do considerable business with Canada, of course.
If you're talking about increased economic opportunity, those major economies face several challenges. One is they have worked for years to have their own internal free trade agreement. It has been promised, as you probably know, for years and has moved more slowly than they expected for a number of reasons. They still have their own regional challenges. That challenge also comes from being a bloc of countries that in theory has some similarities to the European Union, but the disparity in income and between the countries in Southeast Asia is enormous, and it's hard for them to all get their act together.
In terms of bilateral trade, you have quite a range here now. You have countries where what the government desires to do is basically what to put into action, like Singapore, which is like a quasi-democratic, quasi-authoritarian state, or Malaysia, which probably fits into that, and other countries such as Indonesia where whether or not economic policymakers desire greater trade or investment, it has become quite a vibrant democracy, and so as in any other democracy, the population puts pressure on politicians. Indonesia has actually rolled back some of its economic openness. So you have quite a range in the region, but overall, most of the countries are looking to broaden their relationships. They are concerned about some of their economic and strategic relationships with China. They're looking for a closer relationship with Japan and India, and so certainly they would be looking for a closer economic relationship with Canada, as well.
[Translation]
Senator Fortin-Duplessis: The Asian Development Bank recently published some data on foreign direct investments for each Asian country. It comes as no surprise that China is by far the largest foreign direct investor in Burma. Given China's mixed record on human rights, do you think the ubiquitous Chinese presence in Burma may curtail the democratic reforms taking place in that country?
[English]
Mr. Kurlantzick: That is an excellent question, senator. I will refer to it as Burma and Myanmar, meaning nothing political by either reference.
First of all, the political reform in Myanmar could not yet be called a democratic revolution. We are on the cusp of serious change, but it's unclear what direction that change will go. As in a number of places, the change has unleashed both positive forces in terms of the emergence of civil society, freer media, the release of Aung San Suu Kyi and the openness of political parties, but it has also released pent-up negative changes such as interreligious violence and a significant lack of security, particularly in western Myanmar.
What direction this will take is still unclear, and someone who says they truly know is probably not telling the truth.
China's influence in Myanmar certainly predates the reforms that began in Myanmar in 2010. I would say that in the past, China's influence on the human rights situation was negative. That's not to absolve other countries of their influence. I would say that the major energy companies — Total, for example — that had participated in Myanmar in the past were not exactly paragons of human rights, either.
Although China is still the largest provider of FDI, now its influence is more muted. You will see that in the latest round of offshore gas and oil blocs given out by the Myanmar government that it was dominated by non-Chinese companies. So the Myanmar government is clearly looking to diversify investment in major sectors. They are concerned about China's influence.
Second, although China is still an authoritarian government, they do understand that in a place like Myanmar, bad PR is bad PR. So the Chinese government has instructed Chinese companies to pay closer attention to what we would call in the West "corporate governance" or "corporate social responsibility" in Myanmar.
All of this together is to say that, yes, in the past, China probably had negative nuance. I'm not sure they were alone in that negative influence. And their influence, even though they remain a large investor, is not what it was. Also, Myanmar's trajectory is uncertain, but there is a much greater opportunity for other actors besides China to change that trajectory.
Senator Johnson: Mr. Kurlantzick, in your recent op-ed in Bloomberg Businessweek, you said "Can Malaysia Salvage Its Public Image?" and recommended that Malaysia get over the dislike of cooperation with Western governments.
Can you tell us how pervasive this tendency is of Malaysian leaders and officials to resist cooperating with Western governments, and does it only relate to search and rescue missions or does it pervade other areas?
Mr. Kurlantzick: I would say the Malaysian government has, going back to independence from Britain, always pursued a policy in which they have, on the one hand, often condemned Western governments — and that was primarily the U.S. and Britain — while at the same time pursuing relatively close cooperation on defence and security issues. That goes back to fighting the insurgency in what was then Malaya up to even the time of former Prime Minister Mahathir Mohamad who was often harshly condemning the U.S. while pursuing security cooperation.
The legacy of that is that if you spend a long time condemning other countries — and this is primarily condemning the U.S. — you do leave legacy in which future leaders are consigned to continue to follow that policy. Because of the United States' own policies and because of this legacy, it has become the norm in Malaysia for senior leaders to condemn a lot of their cooperation, and this has a follow-on effect in that it makes people wary of cooperation, not only in search and rescue but in all sorts of other areas
It doesn't mean that Malaysia is not cooperating. Malaysia and the United States are close now in this strategic relationship, but they don't want to look too openly that they're cooperating. It follows on that it is not popular.
The bigger problem with the entire tragedy of the vanishing is that the Malaysian government has a history of really non-transparent and opaque policy making in all areas. So although I think they have handled the search and rescue in the early time incompetently, because they were so opaque in the past, it leads people to believe the worst — believe in conspiracy theories — and to see conspiracy theories even when there probably are none.
This has been a shock to the Malaysian government to see how they are reflected on the world stage. The reason is because they are not used to dealing with transparency and a completely free press. They have a free online press, but not a completely free press.
Senator Johnson: So regarding that missing flight result, do you think that could possibly see a more open attitude from Kuala Lumpur? I think you suggested that might be the case.
Mr. Kurlantzick: In terms of the actual search and rescue operation, the Malaysian government has been doing well now. They have been cooperating quite well with Australia and China. They are very eager to put their relations back to what was quite a good relationship with China, and I think China is eager to do so, too, after a certain amount of time.
Let me go back and say that I don't think there is any conspiracy that they know where the plane was after the first few days. I just think they set a standard of opacity that came back to haunt them.
They are cooperating better on search and rescue, but I don't know that means you will see greater cooperation on other issues.
I would add as a side note that I think it was unfortunate that President Obama spent very little time with civil society in Malaysia. To my mind, he gave that aspect of Malaysian society pretty short shrift.
Senator Johnson: Mr. Barichello, I know you're an expert in food and resource economics, so could you elaborate on food security issues in Southeast Asian nations? For example, what is the risk of food shortages leading to further unrest in the region and are there any areas of concern? Could a major meat and grain exporter such as our country play a role in supplying at-risk nations and contributing to food security?
Mr. Barichello: In terms of food security in the region, like Dr. Kurlantzick mentioned, there's a great deal of diversity in the region in terms of income levels. That's an important factor to bear in mind in terms of food security.
As you may know, the ASEAN countries include some of the largest exporters of a variety of food and agricultural products in the world, and so there is a lot of food production in the region. The biggest rice exporters in the world, except for the U.S., are in the region, and then it extends across a great variety of commodities, obviously where there are the production conditions that can grow those commodities.
But you do have issues within countries where there are food security problems. They're primarily related to people's income levels. There are occasionally issues that relate more to violence and difficulties that come from conflict.
Look at Myanmar, for example. They used to be the biggest rice exporter in the world, and after all of the decades of terrible economic mismanagement, that state was substantially reduced. They're now a net exporter of rice and growing but, at the same time, there are regions within the country that have a great deal of difficulty with adequate nutrition and being able to purchase nutritious diets. If you think of food security as a simple matter of quantity of production, there's ample within the region, but if you think of it in terms of the consumption of some groups who are substantially disadvantaged economically, there of course are difficulties with their own regional or family food security.
For Canada's prospects, though, there certainly are strong trade prospects in general. For example, our wheat exports find entry into a number of the countries. Just on purely commercial grounds, Canada has good options and has been fairly successful in exporting to the region. There's no reason I see why that wouldn't continue.
Something was alluded to earlier that really applies across the board. This isn't just unique to agriculture; it's for all economic issues. There's growing economic nationalism in a number of countries, so that tends to be manifested by either restrictions on imports of some sort or restrictions on exporters in terms of requiring them to engage in more processing. These kinds of domestic policy issues arise and make it a little more challenging in specific cases, specific countries and specific commodities, but I would say overall there are still very good prospects for Canada in our traditional export areas.
Senator Demers: Thank you very much to both of you for being here today. I have a long question. I apologize. I'll try to shorten it up and summarize it.
Indonesia scores unfavourably in terms of risk for political and social turmoil on the most recent Asia political risk index authored by Political Monitor, an Australian-based political risk research website. I will go to the question that is most important to us. In large part, youth employment, level of government corruption, ethnic and religious tensions and dysfunction in its political institutions have implications for the country's future economic growth. Do you agree or disagree with that?
Mr. Kurlantzick: Is this question for me?
Senator Demers: To both of you, please.
The Chair: Again, we'll go to the order we have on the agenda, so Professor Kurlantzick.
Mr. Kurlantzick: I'm actually not a professor.
The Chair: I've elevated you.
Mr. Kurlantzick: Thank you very much for your question. It's an interesting one.
Everything depends to some extent on the context. It's probably true that other than Myanmar in Southeast Asia, and the three southernmost provinces in Thailand in which where a full-on insurgency is going on, Indonesia probably has the highest political risk. At the same time, I think if you asked anyone who has spent time in Indonesia and who was there in the late 1990s and looks at where Indonesia was then and is today, I would say that although that analysis is perhaps accurate, it doesn't capture the tremendous changes that have happened and the fact that, in most of the country, Indonesia is significantly more stable, outside of Papua. There is ethnic tension certainly. There are significant problems with protection of religious minorities, particularly non-Sunni Muslims with some Christians and some others. There's obviously still some ethnic tension. You have a whole series of problems in Papua. Compared to where you were, personally, from my point of view, having spent a lot time in the country in 1998, 1999 and 2000 when it really did appear that the country was going to separate and become ungovernable, I'm quite impressed overall at where Indonesia is today.
Corruption remains a significant challenge. I think it's commensurate with the size. The problems of corruption are left over from the pre-democratic era. The decentralization process has had a lot of positive impacts but also has led to, in some way, a decentralization of corruption. Indonesia has a legacy of corruption that is very hard to combat quickly. It has to be done on a city-by-city basis almost, which is what the Governor of Jakarta, who is now the leading presidential candidate, tried to do.
Overall, I would say, where are you coming from and where are you going? I think overall, the analysis is broadly positive. I would challenge anyone who has spent time in Indonesia going back 15 or 20 years to dispute that.
Senator Demers: Thank you, Mr. Kurlantzick.
Mr. Barichello, do you have an opinion on that?
Mr. Barichello: Yes. First of all, I would concur with what Joshua has just mentioned to you.
The political risk is high by these measures, but if you talk to people in foreign countries wanting to invest there, the firms that have invested there have, by and large, found it to be quite profitable and have generally, I would say, prospered.
However, it's also fair to say that investing in Indonesia, given the risks that you outlined, is not an activity for the faint of heart. If you are uninitiated in what a lot of standard practices are within the region, you might find that these political risks, corruption in particular, are very hard to bear. You have to be somewhat seasoned and familiar with standard business practices, and those in Indonesia include corruption and they include risk regarding the legal system and the courts. There are now, as Joshua mentioned, regional religious issues that create problems in a few locations.
Having said all of that, I share completely his observation of how much things have improved. If you talk to especially companies who are larger and are familiar with dealing with this kind of economic/regulatory environment, they find these risks quite bearable. I think they can be overblown, although from a level of domestic politics, there's no question that corruption is a major political issue. SBY, the existing president, was elected, especially re-elected, on his promises in this area. But because very little progress seems to have been made during his tenure, the mayor of Jakarta, who is a strong leading candidate for the presidency, is also expected to be quite successful in this area.
So it's a work-in-progress. There is a lot to be done, but there is a lot to be encouraged about.
Senator Demers: Just to finalize that question, what is your assessment on youth unemployment? That's the future of any country. What is your assessment on that, please?
Mr. Kurlantzick: Indonesia has a significant demographic challenge. They look at it optimistically as a potential demographic dividend. You can be optimistic or pessimistic.
Ten years ago, you could have been more pessimistic, because Indonesia was seen as uncompetitive regionally in a number of areas, particularly with China. They still have a lot of challenges. If you look at U.S. investment, for example, President Obama came into office with a lot of natural advantages to building the relationship with Indonesia, which you're probably aware of: He spent time as a kid there, et cetera. U.S. investment has not taken off in Indonesia the way it could have outside of natural resources, and that's partly because of some of those ingrained challenges.
Indonesia still needs to get over the hump of attracting greater investment. That said, they've been growing 5 to 6 per cent per year for a significant period of time, which are not the growth rates of China or Vietnam when Vietnam was really cooking. It's not bad; it's certainly enough to sustain the population and to absorb the demographic dividend. It's not what they would have liked, but it's enough.
The other thing I want to say about that is that young people in Indonesia have been a major driving force in politics in a way that you don't see often. You see it somewhat in Thailand and Malaysia, but because Indonesia is a freer country, social media is critical. The mayor of Jakarta has risen up from — what would have been said 10 years ago in Indonesia — almost nowhere. He is primed to be the president, and his style is very much a "direct democracy, social media savvy, appeal to young people" type of politician. Whether that can work on a national level, I don't know, but young people are making their voices heard in politics in Indonesia in a way that is quite impressive.
Mr. Barichello: Let me just add that on the list of problems facing Indonesia, youth employment is not a very significant one compared to all of the other subjects you've mentioned that are challenges. Of course, it's not as easy to get a job now as it was maybe a few years ago, but the economy is growing relatively strongly. It's not like it was in the 1980s and the 1990s before the Asian financial crisis, but it is still very good. And in the face of the more recent global recession, Indonesia hardly slowed, and this provides jobs.
There's a very large number of youth in rural areas. They're still migrating successfully to urban areas. It's a major pathway out of poverty, and that credit should be acknowledged.
All of the other comments about their political involvement, energy and contributions to the political system are all accurate from my perspective as well. So I don't see that particular issue as that problematic.
As a point of comparison, my students will hunt for jobs in Canada after their degree — maybe even for nine months or a year — to get a job that they're pleased with. Those students that come to me and go home to China now have the exact same problem, and my students who go back to Indonesia seem to be able to get jobs much more quickly.
Senator Ataullahjan: Mr. Kurlantzick, in an article on China's slowing economic growth, you remark that China's urban middle class is unlikely to turn against Beijing due to perceived political legitimacy. Why is this the case particularly with regard to the use of social media? You spoke about the use of social media in Indonesia. Do you think we would ever see something like an Arab Spring in China or in any of the countries in the Asia-Pacific?
Mr. Kurlantzick: To broaden that out a little bit, the difference in some of these places, if you're talking specifically about the urban middle class or elites, like most people, I would say they viewed their interests as aligned with the government or their interests being bettered by not being aligned with the government.
In China, over the reform and opening period, but particularly since the post-Tiananmen period, the government has favoured the urban middle class. I can give you an enormous list of ways in which they have done so. Growth has favoured the urban middle class. This doesn't mean that every person views it that way, that there will never be change or that there's no possibility, but the government has very skillfully cultivated their urban middle class.
In other countries in the region, the urban middle class — I'm speaking here particularly of Thailand — clearly sees itself and its interests as not necessarily furthered by greater democratic change. In Thailand, what we would think of as democratic change has brought to government a series of governments that were elected more by the rural poor, and the urban middle classes and elites in Bangkok have not been thrilled by that. In Indonesia, the urban middle classes see their interests furthered by the expansion and broadening of democracy, just like I would hope would be the case in Canada and the United States, et cetera.
I'm sorry to take a more Hobbesian view, but it depends where people see their interests furthered. That doesn't mean there wouldn't be an "Arab Spring" there. The combination of continued high growth and the cultivation of the urban middle class has forestalled that. I shouldn't even need to mention this point, but obviously severe repression of any significant challenge to the Communist Party has really forestalled that possibility.
Senator Downe: You referred earlier to the corruption in the region. I'm just wondering if you have any information — I understand if you do not; it's not your area — but where do they transfer their money to if they're receiving kickbacks or other payments? Where are they likely to send the money, and what cooperation are they receiving, if any, from Western financial institutions?
Mr. Kurlantzick: You're asking a question that's a bit beyond my remit. I think you have to take hopefully a more diversified point of view. Corruption in Southeast Asia — first, let's step back for a moment.
You have countries in Southeast Asia that, on Transparency International's index, which rates perceptions of corruption around the world, there are countries in Southeast Asia, like Singapore, that rate extremely high, up there with New Zealand and the Scandinavian countries as perceived as the least corrupt nations in the world to do business. Then you have countries in Southeast Asia like Myanmar that are down there on the bottom with Somalia. There is quite a wide range.
In some of these places, when you are talking about corruption, you are talking about an enormous range. In Indonesia, corruption could mean that if you drive through Jakarta on either a motorbike or a car and you don't have good connections or probably you don't have a Westerner in your car, you will possibly be stopped by a traffic police officer and be asked for a "fine." A similar thing would happen in Bangkok sometimes. That's a small amount of money, and I doubt that traffic policeman will do anything with it other than stick it in his pocket and take it home.
If you're talking about significant graft of the type that has been exposed in China and that probably goes on in Myanmar, you would need to question financial institutions. You have a significant number of places in the region where transparency of financial institutions has been a big problem. Singapore has an enormous private banking industry, as you're probably aware. As Switzerland has become more open about their private banking, under pressure from other countries, Singapore has sought to capture some of the private banking assets that have fled Switzerland and other places like British overseas territories. Bangkok has also significant problems with financial transparency. In terms of the actual specifics of where people hide their assets, you would have to ask someone else. I'm sorry.
The Chair: Professor, do you want to add anything to do that?
Mr. Barichello: Just a few words, perhaps.
Answering this kind of question as to where the money goes is one of the trickiest questions to try to research and get any data on because people will not be so forthcoming.
As to where the money does go, I used to be quite active working with the customs service in Indonesia, and all the young customs agents would know that the older customs agents would always have one or two or three houses, large fancy houses, so obviously some went there. They would educate their children overseas as best they could, and some would go there. Of course, as Joshua mentioned, there is a lively and highly networked international banking network handy in Singapore for starters. These are all well-developed mechanisms, all of these particular components.
Senator Housakos: I'm curious to have your thoughts and comments regarding the state of the financial institutions in Southeast Asia and, in particular, their rules of governance. In the late 1990s, there was a huge economic crisis in the region. A lot of economists feel that one of the primary reasons for that was weak financial institutions with weak governance. We all know in the West that if you are going to have strong economic growth, it has to be based and supported by strong financial institutions. Do you have any comments to share with regard to how those financial institutions are working in the various countries of Southeast Asia, as well as the accessibility of venture capital in the region for small-, medium- and large-sized businesses in Canada?
Mr. Kurlantzick: The type of venture capital activity that we would think of in Canada or United States is pretty nascent in Southeast Asia other than in Singapore and, to a small extent, in some of the other more developed countries in the region. There is certainly plenty of capital available through the people, organized through family networks, but the type of VC activity that exists in the West is pretty nascent.
The Singapore government has strongly encouraged this type of activity through their own funds and pushing for private VCs, but it's difficult for the government to create VC activity because it's the type of activity that emerges usually from the private sector.
Many of the countries in Southeast Asia are really too poor to even have this type of activity, other than through a family network. The type of VC activity we think about is also linked to a fully open and free market, and there are still a lot of problems with monopolies, with state companies and with monopolistic practices in many industries, so it's just hard for entrepreneurs to flourish.
Not to belabour this point, but in some of the countries, although they have excellent science and tech education systems, you have a lot of educational systems that don't necessarily encourage risk taking and innovation the way that you would in Canada and even to some extent in Singapore, so that's a problem.
You have a huge range of financial institutions. You have places like Vietnam, which are among the most opaque, debt-ridden, really impossible to understand financial institutions in the world, and those problems are challenging the Communist Party and putting a serious dent in Vietnam's growth. You have places like Singapore, where you have private banking, for sure, but you also have modern, first-world financial institutions. You have places like Myanmar, where ATMs have only appeared in the most recent times. You have a pretty wide range.
I think the major centres are Singapore, Bangkok and to some extent Kuala Lumpur. In Bangkok, they have done a better job since the financial crisis. Western countries put pressure on them to crack down on assets that could be related to organized crime and terrorism, but they still have a huge way to go.
Singapore is a lot better in that area, but because they are trying to encourage private banking, they still have a high degree of secrecy or a wall around some of their financial institutions.
Mr. Barichello: I would just add a couple of points.
Obviously transparency is still an issue and still on ongoing problem with a variety of the banks, bearing in mind all the time here that as we have been saying repeatedly, there is such variety across the region that it's a bit difficult to generalize.
Another big issue has been the leverage ratios and setting aside adequate provisions for losses when loans default. These are questions of prudential regulations and the degree to which they're strong, and good governance in that area is highly variable. It's better than it was at the Asian financial crisis, admittedly, which caused many banks to default. But I think it's still a fair statement that a number of the banks operate on the assumption that growth will continue at 4, 5, or 6 per cent or more, and they can then replenish and get enough good loans from that kind of economic growth that they can sort of ignore and not have to put up capital of their own to cover the losses for the non-functioning loans.
This is not just a question of private banks, but state banks are just as much as fault for this. They can just as well go bankrupt unless supported by the state. It is a fair comment that the banking system is highly variable in terms of the question you raised. It has improved since 1997-98 a great deal, but there is still some distance to go.
The Chair: I have a final question to both of you. When we studied China, one of the issues was that the rule of law was not fixed there and that businesses going in there could not rely on the fact that you signed an agreement and it would be upheld. I think one person had coined it saying that agreements were just pauses in the negotiation, and it very much still needed the reinforcement for investment and trade to have a more secure environment of rules and adequate and independent courts for quicker resolution of business disputes.
Can you tell us, setting aside Singapore and looking more to Indonesia and other countries, are these the same problems? We don't hear about them. Do we not hear about them because there aren't perhaps enough businesses to highlight them, or is it because they're on a different development scale?
Mr. Kurlantzick: That's a great question.
There are a few different things you could say. There are similar problems in terms of holding up agreements, problems with the rule of law and problems with the court systems in most of the other countries in Southeast Asia. You have a few countries that are so poor that they don't attract much investment. You have Singapore, where the rule of law — in commercial law, not political or civil law — is quite strong.
Then you have Thailand and, to a lesser extent but pretty good, Malaysia, countries where, despite all their political problems, the government is interested in attracting foreign investment. The judiciary has carved out commercial law dealing with foreign investment to some extent and operates on a relatively fair basis compared to how they operate dealing with the political and civil domestic law.
You also have countries in the region, like the Philippines and Indonesia, in which commercial law and overall the rule of law is seriously challenged.
But China is way different from a lot of those other places, because China is so important and so potentially prosperous and so attractive to foreign investors that they are willing to go back over and over no matter whether they get the legal protections or not.
However, in these other countries in the region, like the Philippines, for example, I don't know that much about Canadian companies, but American countries are able to exert leverage over the rule of law because their investment is so valuable and it's more of a one-way street.
But in China, it's not. If companies wanted to exert leverage in China, push for a greater rule of law, they'll come to your hearings or issue reports about the rule of law, but when the rubber hits the road they won't do anything about it. That's the difference between pretty much every economy in Southeast Asia and China. Companies have leverage but in China, if they're not willing to use that leverage, then they have no leverage.
Mr. Barichello: For the case of Indonesia, I suspect many of you are familiar with the experience of Manulife, a Canadian financial services firm. They had the same kind of problem that you're describing. They had it from their partner.
Because of their contacts within Ottawa as well as the willingness of the Government of Canada to act on their behalf, it produced the exact result that Mr. Kurlantzick mentioned regarding U.S. firms in the Philippines.
You get a lot more clarity now on regulations and policies that a company would have to deal with. The courts are still problematic, but there is an anti-corruption commission that you probably are aware of in Indonesia that is operating very seriously and successfully. It has not solved all the problems, but it has helped a great deal.
As one final comment, these problems that you outlined are one of the main reasons it's very important to have a strong and trustworthy domestic partner when you're doing business in the region. That certainly applies within Indonesia, but also throughout the region.
The Chair: Thank you.
We've run out of time. Professor Barichello and Mr. Kurlantzick, thank you very much. You have certainly covered a number of areas and filled in some of the gaps of the testimony as we are furthering our study. We very much appreciate your attendance here from Baltimore and Vancouver.
Honourable senators, we now welcome Robert Anderson, Professor, Simon Fraser University, coming to us by video conference from Burnaby, British Columbia.
We have the rain here in Ottawa; I trust you have the sun in Burnaby. Other than that, your bios, et cetera, are always circulated, so we will go immediately to your opening statement and then senators will have questions. Welcome to the committee.
Robert Anderson, Professor, Simon Fraser University, as an individual: Thank you very much, Senator Andreychuk, for this honour to speak to you and listen to your questions.
In the statement document that I sent a couple of days ago there are three broad areas I would highlight for our conversation. One is about the military and political reform; the second is about the shifts in the public mood related to communication; and the third is about conflicts in the country and the relationship with the peoples who live on the frontiers of Myanmar.
I have a brief statement, which I hope, Madam Chair, you will allow me one extra minute to make.
I think there are genuine changes under way, changes which could be reversible but also could be sustainable. I think Canadians should accept this risk just as the Burmese do. Forty-nine years of martial law from 1962, preceded by a 1950s "boss" politics and a 1940s world war, laid down a deep structure of coercive power relations and minimal administration, so it will take time to shift this structure. Changing patterns of communication are at least a start.
These changing patterns of communication reveal that new publics are forming, new ideas are in circulation. People are listening to one another, especially the 45 per cent of the population under the age of 30. The mood is exciting but very turbulent.
Canadians have a new, very engaged ambassador, a new trade commissioner and a new development officer. Fortunately, I've just been in Yangon and I've met all of them. They will have a new embassy in few weeks, already, with a post-initiative fund, and later a Canada fund. However, I'm asking you: Is this small team sufficiently resourced? Is Canada ready to participate in a situation in which the operational costs are suddenly very high and where other nations have unprecedented resources?
I think the opportunities for Canadians and Canadian institutions to participate in and contribute to Myanmar's development and trade efforts are numerous but most countries, the ones known to Canadians as like-minded, are already far ahead of us. We need to quickly learn from and collaborate with others. We have to make up for lost time. There will be advantages to Canada's economy and Canadian interests and in some ways I suggest this situation resembles the risk and the opportunity of Canada's involvement in Indonesia in the 1980s and 1990s. From listening to the previous presentations, I know that you have just been discussing Indonesia.
The business and trade networks, along with investment and policy engagement of other countries like Germany, Australia, the U.K., Japan and even the U.S.A., have left Canadians behind. Has Canada had a blind spot about Myanmar perhaps? Although the working environment in Myanmar is hard to forecast and the risks may be hard to manage, there are important new projects, new businesses, and problem issues which we could, if invited, address in cooperation with others.
I suggest that we need to support and cooperate in all of our involvements — cooperate in research on the country's complex economic development and resource questions. The census now under way, though troubled in two or three areas, is one of the many requirements for a deeper understanding, flowing into a feedback loop, informing policy and informing practice.
In comparison to the previous regime, this is an entirely different and positive method of thinking about the future. One can hear the optimism of mid-career professionals and business people, the kind of people that I work with when speaking about these possibilities.
Canadians also need to listen carefully to and learn from those individual Burmese Canadians, men and women, who have professional, working and social contact with their home networks. They come from all linguistic groups and from all over Myanmar. These valuable people in the diaspora now travel regularly to and from the country.
We should pay particular attention to the insights and suggestions of Myanmar women, given the special role they play in business, administration, medicine and the universities. I know women who are successful entrepreneurs, scientists, vice-presidents of university, CEOs of civil society organizations and junior cabinet ministers. One woman is even thinking about becoming the president of the country, though it may not be possible within this version of the constitution. As an example of their importance, note the networking link between the wife of President Thein Sein and Aung San Suu Kyi herself.
Finally, I hope the committee might agree that all societies generate conflicts and Myanmar has had many conflicts, some with a long history. Military methods have now clearly met their limits, both on the frontiers and in the heartland. Now Myanmar is looking for a new less costly and less destructive method to address its conflicts, but the conflicts reappear and the new method takes time to learn. Because there is bound to be trial and error, inevitably there are mood shifts between optimism and frustration on all sides.
My last suggestion to you is that Canadians have a long experience with a dynamic confederation of different provinces, both large and small, both strong and weak. Though the situations in Myanmar and Canada are very different, since there is a degree of negotiated self-government and self-management running through Canadian history, this is one area among many others in which Canadians can play a positive role.
There are a few Canadians already involved in Burma and Canada has a unique opportunity to establish an evolving dialogue with this old and suddenly very new country.
Ladies and gentlemen of the Senate, this is a brief sketch, the context in which we as Canadians can begin to plan our next positive actions. I hope this sketch opens questions in your minds and that we can build a dialogue which furthers the work of this committee.
Thank you.
The Chair: Thank you, Professor Anderson.
You indicated that women are embedded in the society at the moment, and that you find them in business, academia and perhaps even in the politics of the country.
There is a large rural component to Myanmar. Have women played a traditional role there in any of the commercial ventures? In other words, are they involved in any of the agriculture and then the subsequent selling of those products, or is it a different mode of system there than we're led to believe in other countries?
Mr. Anderson: That's a good question, Madam Chair.
The role of the women in the agricultural economy is very important, but women begin to appear in the business sector in the small towns and the markets, some of them not so small, in which women dominate in trade, especially in agricultural trade, but in all the big markets the main sellers, traders and money lenders are females. Women, of course, are involved in business at much higher aggregate levels, running companies in the larger cities.
There are a few women, of course, who are among the most rich and most successful business people in the country. A few of them are in the millionaire group. But I think your question is also about in the rural society, what are the problems that women might be facing. That is certainly the case. I've worked in Bangladesh, by the way, and Thailand, so I know the rural societies of adjacent countries. Poor, agriculturally based households have women, in many cases, as almost head of household because the men are often out migrating for work and for income, so women have played from the bottom to the top a rather prominent role in Burmese society. That holds true in the parts of the non-Bamar speaking parts of the country as well. But in business, it's quite spectacular to observe the influence of women.
The Chair: Thank you.
Another question concerns me. Canada certainly has opportunities, although others have arrived there earlier. Because the society was so closed and isolated, and because of the sanctions on Myanmar, there is obviously a catch-up phase. Is the catch-up higher in technologies that they need where they would be able to handle some of the other manufacturing and other scientific and pharmaceutical areas? Is it that high end to bring them up to that international standard that they need urgently to be competitive and self-sustaining, or is it in more fundamental development issues, or is it in institution building, or is it in all of them?
Mr. Anderson: If I were to pick from your list, I would focus on institution building and infrastructure, some of which requires high-tech, also requires a huge amount of electricity, of which the country is in short supply.
I would again return to my suggestion that we listen very carefully to those who are already in business and in development activities in Myanmar and take our lead from countries that we feel are like-minded. But do also remember that, in some cases, these foreign nations have been involved in Burma since its independence and, so to speak, never left. The British embassy has been occupied by British diplomats since 1948. The Australian embassy opened shortly thereafter and never closed. The Germans never closed their embassies. The Japanese never closed their embassies. These are countries with deep networks that are many years old. Japan and Germany know a lot about high-tech, if I may say so, so we have to study with great care those who have set the precedents and already have deep forms of engagement.
I think that institutional and infrastructure work is perhaps going to be the most satisfying, and sometimes in unsuspected areas, in the areas we wouldn't think intuitively that Canada could play a role.
The Chair: Would you have an example of that?
Mr. Anderson: I was just thinking that we probably aren't going to be successful in the mining industry or in oil or gas, as those activities are already tightly sewn up, but perhaps there's infrastructure or institutional support, institutional involvement that we might be able to provide. Perhaps there's gas infrastructure rather than the extraction and the pipeline itself, if you see what I'm saying. That is a zone in which we might be able to make a contribution. We have a long experience with telecommunication. The field is already crowded with Norwegian and Egyptian and other foreign firms. We may not be able to act directly there, but perhaps on the infrastructure side or the institutional side, in regulation and management, we might. I hope this shows that I think there are great opportunities and we only need to study them carefully, but also quickly, if I may say so.
Senator Downe: I'd like to follow up on your opening remarks. I'd like more information, if you can provide it, about how the society is set up. We've heard, over many presentations, about the role of the military, but you responded to the question from the chair talking about certain women and business groups who have become millionaires. I assume, and tell me if I'm wrong, that they have deep connections to the military that have ruled the country for many years, or have they been able to do this independent of the military influence?
Mr. Anderson: Not really independent. Those few women who are CEOs, millionaire type CEOs, yes, through their kinship relationships, they had close ties even with the generals, but it's interesting to look at the mid-career businesswomen I meet from time to time to see that they are of neither that era nor that type. They may certainly not be as wealthy, either, but the lines of work in which they're engaged, for example, in the garment industry, not large scale but mid-size, medium scale, show that they're quite independent of their day-to-day military relations. Of course, with the change over the last three years, we have the appearance of some people in business who have really minimal connections with the military.
Senator Downe: Tell me about the society as well and the role of the religious groups and how they're funded. I'm thinking specifically of what appeared to be a large number of Buddhist monks or followers who, when I was there, seemed to be selling gasoline on the side of the road. Do they receive any funding from the state? Do they just survive on donations? Do they own many businesses? How are they involved in society? I assume they don't serve in the military. I'd just like a little overview of them.
Mr. Anderson: You must first of all accept the premise that the monasteries and the other Buddhist related institutions are extremely different and vary extremely widely in the way they're managed and run. Some are in commercial spaces such as in downtown Mandalay. Some are next door to businesses. Some let out little parts of their land in front near roads to small business. Others are in remote areas and have been established on land donated, granted, as a gift, sometimes quite large pieces of land. That land sometimes includes agricultural land from which they get revenue. So you can begin to see that there is already a world of donations, of daily donations of food. As you know, since you've been to Myanmar, you've seen that the monks go out at 6 o'clock in the morning and go door to door and collect food for the day, rice, usually, and vegetables. Monastic schools don't usually charge, but people often give money as a sign of their gratitude for the schooling of the children.
The monasteries are supposed to be relatively self-reliant, and once in a while a rich patron will give something important to them. One or two of them operate clinics or hospitals. This is not a world I know very well, but I know in a couple of cases they are the only clinic around. They charge minimal fees. But that's another sort of social function they play.
There are rich monks and poor monks. By that I mean the head of a monastic order might be a very famous monk, such as U Sittagu. People give money to him by the truckload. They believe this is going to be well spent, and there's evidence that it is well spent. I went on a tour of schools rebuilt after the cyclone. The schools were built by money collected by that monk and other senior monks, but built by local people and with local building material. I went with a man who was sent to audit construction.
I don't want to spend too many minutes; you may not be this interested in the details. But I'm hoping you see there's a wide variety of ways these institutions are managed.
Senator Downe: Do you know of any outside governments who are funding these religious organizations to try to gain influence in the country?
Mr. Anderson: I thought that might be where your question was leading. I'm not well enough informed to know which governments would fund and support which monastic orders or which abbots. As you may know, the abbots are relatively independent, but they're grouped in a thing called the Sangha, and the minister of religious affairs chairs what's called the State Sangha in which he has the right to request the presence of the senior abbots.
There are others, especially under the martial law regime, who formed a non-state sangha and probably exerted a degree of autonomy away from General Than Shwe, and a few may still do that with President Thein Sein. There may be governments and foundations or individuals who would like to see institutions exercise that autonomy and may give donations particularly to them.
But those kinds of donations are something I don't know much about.
May I just interject and continue for one minute? A spectacular moment came in May 2008 when the government of Than Shwe was revealed to have no responsive capacity to the cyclone. The monastic orders and other people not in Buddhist institutions moved into the Delta area where 140,000 people had been killed — disappeared — overnight. They all moved in and were effective. I think this raised the status again of the Buddhist institutions.
People do hold them in high regard. There are many people I know, for example, who don't hold much respect for this monk U Wirathu, who is the advocate for a Buddhist-only view of Burma.
So there's quite a wide spectrum of the relationship of Buddhist institutions, both functional and dysfunctional, to Myanmar society that you can see when you look carefully.
[Translation]
Senator Fortin-Duplessis: Professor Anderson, I want to thank you for your excellent presentation, and I have two questions for you.
You mentioned that Myanmar has had many conflicts. Over the past few weeks, we have seen an increase in interfaith and interethnic tensions in Burma.
Do you think this is just a phase, or is true relief of tensions among different faiths and communities still not there?
[English]
Mr. Anderson: I should start by asking you a question: Do you mean an uptick in the tension between Muslim and Buddhist inhabitants of the Rakhine coast?
[Translation]
Senator Fortin-Duplessis: I am talking about what has happened lately. The tensions over the past few weeks are very recent.
[English]
Mr. Anderson: This particular tension is related to the census that began on April 1. This is the census month — the first census for 30 years. If I hold this copy of the Myanmar Times up to you — I've just come back from Myanmar — you won't be able to read it or probably even see the picture. I'm just showing you that on the front page of the Myanmar Times, there is a photograph of soldiers accompanying the census team who are dressed in civilian clothes. This photograph, which I admit you can't see, but I'm assuring you that it was taken on the Rakhine coast.
The census is a very important instrument for the government of Myanmar. They have not had one for more than 30 years, but it also has a troubling history on the Rakhine coast, because there are many people there without citizenship. They call themselves Rohingyas. There is a whole conflict within the census bureau with the donors — the UN itself — on how these people can be described to the census team.
I will put this down and try to answer this quickly. It would take probably an hour to explain to you how complex the situation between Muslims and non-Muslims is on the Rakhine coast, because there are three kinds of Muslims there. There are different kinds of Buddhists there. There are different language groups, even on this coast.
Your uptick remark is census related, if I'm not wrong. That's the consensus of the views in Yangon. But I believe you have to be on the ground and looking from the inside to understand why this census period would be so troublesome to the relationships between people who actually live in the same space, share the same markets, sometimes intermarry, go to similar schools and plow the same fields.
[Translation]
Senator Fortin-Duplessis: I would like to ask a question to follow up on your answer. Do you think they are on the path of stability or will there always be some conflicts there? Will we always have to intervene in various parts of the country?
[English]
Mr. Anderson: This is a profoundly multicultural and multilingual country, and the state has not managed it very well — not for 50 or 60 years. That's why I made the remark about Canada's experience about learning to deal with self-managing and self-governing units. We call them provinces. They have chosen previously a path of a single unitary and authoritarian system, and the cost of that system is a legacy of this list of conflicts.
I'm suggesting to you that I know Burmese now, younger and less powerful people perhaps, who indeed are convinced that they need to use a new, non-military method of resolving conflict.
So to answer your question about whether we will see stability in the long run, we will see stability but not without conflict. This is a profoundly more multicultural and multilingual society than even Canada. Being an anthropologist, that's something for me to say.
These are frontier societies, some of them quite large, and in one case, as you know, madam, there's combat. The Burmese army, the Myanmar army, is involved in out and out fighting with the Kachin Independence army. These frontier areas are not marginal to Myanmar's future: they're the key; they're essential. They're where the hydroelectric power will come from, where the pipelines will pass through and where the super ports will be located. The Burmese part, Bamar-speaking people part of the society, understands that they have to find a method to deal with their conflicts that is different and not so destructive.
[Translation]
Senator Fortin-Duplessis: Professor, my question has to do with what you said in your brief. You recommended that Canada work with other countries and listen to people who are doing business with Myanmar. You mentioned that certain countries have had embassies in Myanmar since 1945, that they have been there for about 50 years and that they have successfully created some networks. Do you think those countries are interested in helping Canada establish a presence in Myanmar?
[English]
Mr. Anderson: Of course you must remember that I've worked for 15 years building a network of young environmentalists in a situation where I had no Canadian ambassador, so I relied on the British, Australian, German, French, Japanese, and other embassies.
Why did they speak to me? Why did they talk to me? They were already well placed. They talked to me because I had access to a world they did not. I had the freedom that they did not. Embassies are unusually restricted in their movements, so I brought something to the table. They knew that environmental politics, policy and regulation were going to be profoundly important in the future of the country, so they respectfully asked me questions, gave me cups of tea and offered me suggestions. I asked for nominations for my network, and they sometimes made very good ones. I would say that it was an interactive, reciprocal give and take.
As you can see, I'm a professor at a university and I don't come to the table as an ambassador with the resources of the state of Canada behind me.
I suggest, respectfully, that if we approach these other countries in the right way and if we approach the Burmese with this same expectation of reciprocity, if we bring them here and show them how we do things and let them look critically at the way we do things, we will find quite a place at the table, if I may use that phrase.
Does that answer your question?
[Translation]
Senator Fortin-Duplessis: Yes, thank you.
[English]
The Chair: In the time allocated, it will have to be the answer.
Senator Oh: Thank you, professor.
Can you tell us about the NLD party, which is led by Madam Aung San Suu Kyi, which is probably the most pro-Western party? Her late husband was British, and she struggled for a long time to come to where she is today. What are the chances of her someday, after the next general election, running Myanmar?
Mr. Anderson: As I understand, you'd like to know a bit about what I think the future of Aung San Suu Kyi will be, and also what I think of the future of the NLD as a party?
Senator Oh: Yes.
Mr. Anderson: Let's start with the party first, please. The party did not compete in the first 2010 election. I think strategic errors were made and a number of younger members split off. Daw Suu, as we call her, or Daw Suu Kyi, has not really reintegrated with them. I think there will be pressures on her, especially after the recent death two weeks ago of U Win Tin, who was her most senior adviser. I think there will be pressure to reunite those factions that split off.
Unfortunately, in my opinion, Daw Suu Kyi is not a good negotiator. She's a very principled person, but as a strategic negotiator I think she needs better advice. If we talk about her, for example, she has tried in January and February, particularly on visits abroad, for example in Australia, to encourage friendly governments, governments like Canada, to put pressure on the government of Myanmar and encourage a change in the Constitution that would allow her to run for and be elected as the President of Myanmar.
The Constitution, as it is currently constructed, prohibits that. She has a criminal record and, as you know, she married a foreigner and her children are living abroad. These are trivial, I agree with you, but they are constitutional. I'm hearing now a certain perhaps more realistic acceptance that the Constitution is going to be hard to change within the next 12 months. Since it would have to be changed within the next 12 months for her to compete for the post of president, there's talk that she might compete for the post of vice-president. It's uncertain to me.
As you know, she's 68, going to be 69 in June I think, and my knowledge is that her health is quite good, so we would expect her to run in the 2015 election. Of course, it would be like betting on horses, sir, to presume to know what will happen to Aung San Suu Kyi 12 months from now.
Senator Johnson: Professor Anderson, can we talk a bit about the environment and your work in that respect? With the support of IDRC, you've been working on a project for many years. You mentioned earlier that you work with young people to strengthen their capacity to do research and influence the development of environmental policy and law in Burma/Myanmar. According to your website, the project is set to conclude at the end of this year.
Could you report on the progress of this project? Does the political class, and indeed the broader population, recognize how critical it is to protect Burma's pristine natural heritage and environment? Is that on the radar?
Mr. Anderson: That is a good question, but very complex.
The political class accepts that environmental issues are going to be very important and already are, but they also are overwhelmed by the need to reform almost everything, if I may say so. As far as I know, there are 17 bills on the table of the Attorney General being — what's the right word — clarified and coordinated in order to come forward as a package. The environmental regulation is supposed to be in that cluster. We have a thing called the Environmental Conservation Act, but its language is so vague and so unrealistic that it provides almost nothing for departments like the Department of Environmental Conservation to actually enforce.
You have a very complex situation on the ground where a lot of the country is under the jurisdiction of the forestry department or the agricultural department or the irrigation department or fisheries department, but they don't have environmental regulations to enforce.
They do have some specific laws, specific policies on pollution, but it's not comprehensive enough. On my side, since you asked about the project that IDRC is supporting, I'm working with people who work within these ministries, who are there. I go to the ministries. I visit my colleagues in the network. I have a long — in some cases, an eight- or nine-year — relationship with them. I follow their careers. The ones working inside the government talk to me about the frustration of not having the instruments that they need to use to influence the situation, so the ministries of highways, and construction, and industry more or less carry on as they always have unless they are confronted.
Part the network that I'm building outside of the ministries, outside of government, is in an enormous state of flourishing. They're largely in NGOs and in the universities, and there is change there already — quite profound change — or coming soon, as in the universities. For example, I'm attempting — and I think I will succeed if I'm tenacious enough — to install, in the University of Yangon, a program of environmental studies just like at SFU. It's low cost. It's low friction. It's attractive to students and so on. With IDRC's support, I'm modelling this for the president of the University of Yangon and for the vice-president and the heads of the departments.
Of course, this is an institution that's been cramped in an arthritic jacket for years and years and has, of course, rewarded caution, not innovation. So these new ideas, while exciting to them, are not going to be easy to implement. The window for engaging with the Burmese on these institutional and infrastructure questions is open now. In 10 years, they will have succeeded in dealing with many of these things. The real opportunities for Canadians are, I think, on the table now. In the environmental field but also in health and in education generally, the opportunities are so enormous because the possible transformation is so great. It is exciting, as I said, but there is a certain amount of turbulence and unpredictability.
So I went to Yangon and was expecting to be able to initiate this program three weeks ago, but the president, who had just come from the minister's office said, "Oh I'm sorry, sir, the new act is still two months away; the minister refuses to do anything because it might not conform to the new act, unless the act is passed by the parliament." It's still locked in committee; there is some new delay.
So that gives you a microcosm of the kind of real possibility but the need to be very patient and calm while waiting and to have an outlook — after all, I've been doing this for 15 years — that these big changes will take time.
Senator Johnson: When would you expect that your program at the university might be taught?
Mr. Anderson: I hope on the first of December. The academic year starts on the first of December this year, and I hope it will be running on the first of December.
Senator Johnson: How often do you go back to Myanmar?
Mr. Anderson: I've gone twice in the last six months, so I would hope to delay my return for a few months and perhaps go in November or December. After all, I also have a day job.
Senator Johnson: You have a day job. I hear it's an amazing country, coming along. Thank you, and good luck with your work. It's excellent.
Mr. Anderson: May I say one thing about this network? That is that they have learned about IDRC through me and through IDRC visits, so they are beginning to form an impression of Canadians. I have introduced them to the ambassador. I've introduced them to Madam Garneau, who will be the new development officer, and I think that for the first time in their lives they are meeting living Canadians who are interested in them and who have a reciprocal willingness to work with them. I am marking, for the first time, a kind of awakening. Canada, to be frank, has been an unknown and unfriendly place — except for Burmese who have come to live here — a not very unwelcoming place to people in Myanmar, but I think that's about to change.
Senator Johnson: You're certainly playing a part in that. Thank you.
Senator Ataullahjan: Professor Anderson, as to the new violence that we're seeing, the crisis that has been in Burma, do you think it's due to the fact that the census will show that the Muslim population is more than double what they thought was 4 million? The Rohingya problem is a historical problem. It goes back to the 1820s; yet, we're hearing about it now. Are we seeing more violence towards the Rohingya, or is it something that, because Burma was such a closed-off country, we didn't hear about and that has continued since the early 1800s?
Mr. Anderson: Thank you very much for reminding us of the historical depth of this situation. People have been migrating down from what we call Bangladesh now into the Rakhine — into the Arakan — Coast, since the 16th century. The King of Mrauk-U deliberately created a policy of engaging with the Nawab of Dhaka and with the Delhi sultans in trade, and military activities. It has been known among Buddhist elites of the Rakhine that there are Muslims, long-resident, who belong on the coast and also those who migrated down and who have, in fact, bought and sold land and have land rights but who have never achieved citizenship for a very long time.
To use your phrase, we're hearing about this now. You ask why we are hearing about this now and why we didn't hear about it before. Yes, indeed, Burma was a relatively closed country, but we had 150,000 Rohingya refugees coming to live in Bangladesh in 1977, 1978. I can't remember the dates exactly. I visited them there. They moved out of their villages because of a census at that time, in the mid-1970s, and they feared that they would be dispossessed by answering the questions of the census teams. The census in Myanmar is not voluntary, not optional. People come to your door, and you have to answer. I know that, by law, in Canada, you are supposed to answer, but there is a much more firm attitude in Myanmar. So we're hearing about this tension, and, of course, relationships between Muslims and Buddhists on the coast go up and down historically. The census is like a compression of that relationship. We're hearing about that because of the spectacular new visibility of the media, and I'm again holding up the Myanmar Times and the picture of the soldiers accompanying the census team to what they call a "conflict zone" on the Rakhine coast. So I'm not sure how this will be resolved. You know that the census categories contained the word "Rohingya" in it or "Other," and then the government, in an immediate, sudden move, withdrew that and reclassified that category as "Bengali." Of course, people who are living on the Rakhine coast who are Muslims didn't want to answer the question, "Are you Bengali?" because that would be an automatic disenfranchisement. I hope that answers your question.
Senator Ataullahjan: It does.
Why is there no one willing to speak on behalf of the Rohingya within Burma, no leadership?
Mr. Anderson: People do. People speak on behalf of the Rohingya all the time, but, yes, the leadership is very cautious on this subject. It comes back to the long history of — I shouldn't. It's very complicated. The relationship of Burma before 1948 with India was that the British brought labourers, often very poor, into the country, and professionals, dentists, lawyers, teachers, professors. In all walks of society, there was a huge Indian presence. It gradually declined after 1948, but there are parts of that population still in the big cities. Even in the small towns, there are what we would identify as the remnants of the Indian part of Burmese society. That relationship was very complex and very unhappy. The Burmese never liked it. The Indians who lived there did like it. Some of them made a lot of money and were very successful. In 1942, even those who were wealthy had to walk out in the exodus, as the Japanese occupying-troops arrived. That's a very painful but complex history in which the Indians felt abandoned by the British colonial government and masters and the army.
This is why I use the word "memory" in the paper that I submitted to you. The memory of this relationship, its perversions, if I may say, has not disappeared entirely, and it's left here on the Rakhine coast. Now you're hearing about the Rakhine because that is the place where the new super-port will be. That's where the pipeline from China meets the tankers. That's where one of the special economic zones will be. That is precisely where the big gas fields are and the LNG conversion plants might be if there is enough electricity and so on. It's rural and was once considered a remote and almost irrelevant part of Burma, but now it's considered central.
For example, the Canadian ambassador was taken to the Rakhine three months ago and shown villagers who were moved to IDP camps for internally displaced persons. There is a new attention to this, and maybe the Burmese will get this right. I hope so.
The Chair: We've run out of time. Professor Anderson, thank you for your incredible knowledge of Myanmar/ Burma, the history, the current situation and the politics. It has been extremely helpful to our study, and we thank you for being with us for this time.
(The committee adjourned.)