Economic Review: Businessmen on pilgrimages for relationships with new BSO chiefs

BDD

“If you want to be triumphant Burmese businessman, you must be well connected to one of the chiefs of the Bureau of Special Operations [BSO]. If you do not have direct access to the First Lady, then the Zoning Warlord and the BSO Chief are the most important contacts for any business,” a Rangoon businessman whispered.

Smaller and more conservative businesses struggle, as business owners contend with corruption and being forced to pay authorities at the local, district, and state levels. Business owners are unable to make a profit through conventional methods such as buying and selling inventory, which are too time-consuming under these circumstances. Additionally, the extremely high inflation prevents businesses from making a profit. Regardless of the investment or business idea, the only way to generate a profit from business in Burma is to be well connected to senior BSO officials.

A recent shakeup by the State Peace and Development Council (SPDC) replaced the BSO Chiefs, and as a result many middle-sized businessmen suffered. Before the reshuffle, select leading businesses were well connected to BSO Chiefs due to the annual fees these businesses paid as well as their providing one time gift of shares in the company. In fact, before the shakeup, one of Burma’s well-known business tycoons paid half a million US dollars to improve his influence and for greater business opportunities. However, now this influence with the previous BSO chiefs means nothing.

In the past, BSO officials were known as an entrance to a gold mine. As an employee responsible for business finances explained, “whether expanding a business or getting export and import opportunities, businesses had to give 15% to 20% loyalty fees to BSO. How do can someone expect to make this? These costs must be paid by consumers.”

As a result of these fees, Burma has some of the most expensive motor vehicles and cellular phones in the world. For example, in Burma a Toyota Land Cruiser is sold for $600,000 USD, and one cell phone costs $3,000 USD. According to a Burmese scholar, “more than 95% of the population has never even touched a cell phone.”

Recently, an economist stated that “when the Regime introduced its open market economy in 1988, many efficient and business savvy people wanted to start various private enterprises. However, more than 90% of the people failed and didn’t make it.” Some of these people were imprisoned while others escaped.

Nevertheless, new faces made their fortune using different strategies; they became well connected with the State Law and Order Restoration Council (SLORC) ministers in the early 1990s. However, when many former SLORC ministers were locked under house arrest in 1997, many businessmen left the business community, and only a few survived.

The entire medium-sized business community tries to deal with top officials. “However, there are few gatekeepers at the gate, and these people have monopolized all major money making industries. Additionally, all respective ministers have been doing well since 1988. No wonder these generals are so loyal to the Senior General. I should have joined the army” a Doctor turned businessman declared.

Now, in order to maintain successful businesses in Burma, business owners must once again develop the right connections with authorities. These strategic relationships must be developed with the officials who are in the position to provide business opportunities and who are looking to share the profits. In addition to these officials, business owners must also develop relationships with the people, from school teachers to astrologers, who are acting as middlemen for the new business opportunities and lucrative connections.

Currently, existing business owners are working to create and secure new business opportunities through forming relationships with the new BSO chiefs, the new ministers, and the new regional commanders. “We have to wait a few months for the dust to settle because newcomers may not dare to do it right away. After three months, there will be more opportunities, as October’s Full Moon Day brings the Burmese’ ritual Lighting Festival, when people pay respect to elders or authorities, and this might create opportunities for us because they want to a same fortune as the past officials.” A businessman stressed.