A costly new capital junta's other crisis

PUBLISHED : Sunday, 30 September, 2007, 12:00am
UPDATED : Sunday, 30 September, 2007, 12:00am

As village tracks with bone-jarring depressions suddenly release you on to silky-smooth, six-lane, concrete-topped roads that could double as airport runways, you can tell you are nearing Myanmar's remote new capital.

Built in a 10 sq km area hacked out of dense jungle, Naypyidaw - or Seat of Kings - is still teeming with an army of 80,000 bedraggled-looking construction workers, which human rights groups claim includes people in forced labour programmes.

Unlike the former capital, Yangon, where the streets are grubby yet vibrant, Naypyidaw is eerily quiet and desolate, its torpor only mildly shaken by the blasting of nearby hills, just one of the many signs of a flurry of construction activity currently under way.

Since early 2005, Myanmar's military junta has been building Naypyidaw, away from the world's glare, in the middle of a malaria-infested jungle. The place is a perfect embodiment of the junta's own delusions of grandeur, partly reminiscent of Russia's Potemkin villages, the fake settlements built purely to give a good impression to visiting dignitaries.

Its huge buildings are spread out unevenly with large empty spaces dividing them. The Stalinist feel is heightened by the behemoth statues of bygone Burmese kings and the monumental size of the buildings, which include government offices, diplomatic quarters with blue and yellow metal roofs glinting in the sun, a parliamentary building and a large military complex, the latter strictly out of bounds for anyone not in uniform.

Visitors can, however, sidle past the numerous mansions that the military leaders have built for themselves.

The junta has never given any real explanation as to why they chose to move to Naypyidaw, which, until the start of construction back in 2005, was little more than a patch of malaria-infested jungle still served by steam trains. One theory was that Yangon had become too crowded and congested; another was that it was simply on the whim of Senior General Than Shwe's fortune teller, whom the Myanmese leader has a habit of consulting on matters of state.

But the inland fortress, hemmed in by mountains and forests, undoubtedly confers the junta a strategic vantage point over its potential enemies - firstly its own people, and secondly, perceived foreign aggressors like the US. During the last anti-regime uprisings in 1988, the US moved naval vessels into the Bay of Bengal, watching carefully in case the state collapsed completely.

There are unconfirmed reports of extensive tunneling at the main site and missile-proof bunkers built in nearby mountains.

The idea of locating the capital away from the coastal area due to strategic reasons, however, does not hold water. Any conceivable foreign attack would begin with an air strike and to pinpoint this location from air needs no major effort.

Given the current restive situation in Myanmar, the other theory holds more weight. Today it is at a crossroads. Yangon is a cauldron of tension and political confrontation with the country's Buddhist monks, who have led protests against the regime. The biggest fear is that the massacre of 1988 will be repeated.

In the event of an all-out revolt in the streets of Yangon, the junta can rest assured that Naypyidaw offers a secure bolt-hole.

Seated far away in this isolated place, away from the people, the junta can run the country's administrative affairs while sending troops to quell protests, say analysts. 'Naypyidaw is the junta's war bunker,' says a political analyst in Yangon, who asked not to be named, fearing reprisals.

'In the '88 uprising, activists attacked government ministries. The junta is weary of that. They are running away from their own people.'

The present military government began moving ministries from Yangon to Naypyidaw on a crisp November morning in 2005. It was at precisely 6.37am, an astrologically auspicious time, that military convoys began leaving Yangon. Five days later, at 11am, a second convoy of 1,100 military trucks carrying 11 military battalions and 11 government ministries rumbled out of the capital.

A stout, middle-aged man with a slight paunch, who works for the Ministry of National Planning and Development, remembers the moment vividly.

'We received two days' notice to pack up our offices and be ready to move,' he says on a bus journey back to Naypyidaw from Yangon. He speaks on condition he remains anonymous. He makes the trip twice a month to see his wife and 10-year-old son, as now they live separately so his son can still attend school.

'For the first few months, we stayed like refugees in unfinished buildings, without basic amenities like drinking water. I was terribly unhappy,' he says.

Given a choice, he, much like his other colleagues, would rather not live in a 'dead town' like Naypyidaw, but few, he acknowledges, have the courage to defy the military establishment.

Naypyidaw - which is due to be completed by 2012 - is being built by a handful of Myanmese business conglomerates such as Asia World Company, Htoo Trading, Eden Group and Max Myanmar which have close ties with the junta.

Asia World, a Yangon-based construction giant run by former drug lord Lo Hsing Han, is believed to be in charge of more than 70 per cent of the construction project.

The sprawling residences of Senior General Than Shwe and army chief General Maung Aye - the tough and taciturn military men who lead the junta - were built by the Asia World Company.

An interview with an engineer working for Asia World revealed that the government was defaulting on payments, and owes millions of US dollars.

'They [the military government] do not have the necessary funds to pay off contractors, which also include a number of smaller companies,' he says. 'No wonder they have raised fuel prices so drastically. They just cannot afford to lose money on subsidies.'

Asia World, he revealed, is not withdrawing its tender, despite the losses, because the company does not want to lose favour with the junta.

After it got the contract in Naypyidaw, Asia World was granted a government licence to import foreign cars. This bureaucratic sanction - normally very difficult to achieve from Myanmar's rulers - ensures Asia World is minting profits elsewhere, even if its losing money investing in the new capital.

However, smaller construction companies are not so fortunate. The owner of a company involved in building Naypyidaw's civilian sites says he has lost US$5,000 in the project since he became involved last year.

'The payments for military sites are still made on time,' he says. 'It is builders like us, who're involved in civilian sites, who're suffering the most.'

He fears withdrawing his contract would bring retribution from the dictatorship.

The regime's decision to spend its money building a new capital while most of the population lives in abject poverty - economic hardships are the trigger point of ongoing protests in different parts of the country - makes ordinary Myanmese resent them even more bitterly.

The junta is already spending more than a quarter of the national budget on the upkeep of its 450,000-strong army - the largest in Southeast Asia.

In recent years, the government has discovered off-shore gas reserves. Owing to the continued development of these reserves, natural-gas production rose by 10.8 per cent this year, according to the Economist Intelligence Unit, and the junta has been raking in billions of dollars selling gas to energy-hungry Asian giants such as India, China and Thailand.

Considering there are strict sanctions imposed by the west, this and other exports like timber and gems are the only primary source of income in this impoverished nation.

In a country where the economy is nearly bankrupt, inflation recently touched 60 per cent, and where nearly 90 per cent of the population lives on, or near, the poverty line, the expensive new capital remains a cause of anger.

'Only a sliver of Myanmar's budget goes to health care, education,' says an analyst in Yangon who requested anonymity. 'The new capital is nothing but an epic waste of money and resources.'