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To mark the 65th anniversary of Burma's military last week, the country's leader, Senior Gen. Than Shwe, made a rare public appearance, presiding over a grand Armed Forces Day parade through the streets of Naypyidaw, the country's lavish, newly constructed capital city. Thousands of troops marched in formation past fountains as the ruling general saluted and promised the select crowd that the coming elections would be free and fair.

There was much to celebrate as far as the Burmese military is concerned. The junta is confident in its hold on political power, monopoly over the economy, and near-complete neutralization of domestic opponents. The ideal conditions are in place to give the military junta its best-ever birthday present: continuing dominance over a future civilian parliament and continuing control of Burma's 58 million people after the country's elections, promised to take place this year. Everything the ruling junta, formally known as the State Peace and Development Council (SPDC), has been planning is methodically coming to fruition. The system it dubbed "disciplined democracy" is living up to its Orwellian name. And it shows no sign of changing.

Created at the end of World War II by a cabal of pro-Japanese nationalists and British-trained officers, the Burmese defense services, known as the Tatmadaw, were instrumental in safeguarding the weak central government against ethnic and communist insurgencies in the 1950s. In 1962, to secure its own interests and sideline bickering civilian politicians, the Tatmadaw staged a coup. The new junta nationalized almost all economic entities in the country, launching an era of xenophobic socialist rule under the leadership of Gen. Ne Win.

By 1988, the system was crumbling. Nationwide protests erupted against disastrous economic policies and military control. But rather than reform, the military doubled down on repression, ruling without any ideology other than nationalism and corporate self-interest. When the Army's preferred party lost in a landslide to the opposition National League for Democracy, led by the daughter of the Army's beloved first commander, Gen. Aung San, the Tatmadaw simply nullified the elections. It drafted a new Constitution to ensure its future dominance, partially liberalized the economy, began to slowly destroy the political opposition, bought off the ethnic resistance, and successfully made the vast majority of Burma's citizens fearful of any involvement in politics.

Now 20 years into its campaign to ensure uncontested primacy in Burma, the Tatmadaw's birthday goals are equally chilling. As announced on Armed Forces Day, they include: "To work hard with national people for successful completion of elections due to be held in accordance with the new Constitution, to crush internal and external subversive elements through the strength and consolidated unity of the people, and to build a strong, patriotic modern Tatmadaw."

Clearly, Burma's rulers haven't changed much in two decades, and if anything, they have become more isolated and paranoid. The parades have become more ostentatious and generally exclusive, especially since the ruling SPDC moved to Naypyidaw. The massive parade grounds are closed to the public and all outsiders except foreign defense attachés, who sit under the gaze of three gargantuan golden statues of former Burmese kings. This year, the regime permitted some foreign journalists to attend for the first time since 2006 -- but then the junta changed its mind with CNN's Dan Rivers. He was granted a visa to cover the parades, but was inexplicably detained in Naypyidaw and then sent back to Thailand the day before the event.

Behind the facade of a triumphant, neomedieval military state, it's hard to tell what the real condition of Burma really is. But government spending offers a good clue: The SPDC spends a mere 1.4 percent of GDP on health and education, while the Tatmadaw and state enterprises account for 80 percent of government expenditures. The junta spent some $2 billion building the new capital. Meanwhile, Burma's humanitarian crisis is deepening, with severe malnutrition and livelihood challenges affecting one-third of the population. This doesn't affect military leaders, who control Tatmadaw-only hospitals or can travel to Singapore for treatment.

Economic gains are either captured by the regime, senior military leaders, or their favored business associates (many of whom find themselves on Western sanctions lists). The income from energy deposits such as the Yadana and Yetagun gas projects net the regime $2.4 billion a year, proceeds the junta converts at the official exchange rate but squirrels away in offshore banking centers at the market rate. When the Chinese oil-and-gas pipelines are completed in several years, the military will have access to even more foreign-exchange earnings and the finances to guarantee its interests.

With such cash, Burma has no trouble finding ways to spend. The elite send their children overseas for education and bestow lucrative business concessions to their family members. The country's main friends and arms suppliers are now North Korea, China, and Russia, which furnish weapons in return for access to Burma's raw materials.

For a military state, however, life in Burma's army is surprisingly dismal. While the junta buys sophisticated MiG-29 fighter aircraft, it sends its poorly trained and supplied foot soldiers into brutal civil wars with ethnic militias in the country's east. Military offensives have displaced more than half a million civilians and sent hundreds of thousands more fleeing across Burma's borders to Thailand, Bangladesh, and India over the last two decades.

Among the rank and file, morale is extremely low; contempt for the privileged officer class is high; and desertion rates are climbing to a point that alarms even senior Army commanders. Child soldiers remain a staple of combat, necessary for the Tatmadaw to stem the flow of desertions and replenish its ranks as the junta demands a military expansion. Still, despite these internal stress fractures, no overt divisions within the Tatmadaw appear likely to force a change of direction.

Meanwhile, the militarization of Burmese life marches on. In December, the prestigious Defence Services Academy in the city of Maymyo turned out more than 2,400 new officers, the largest graduating class in the Tatmadaw's history. Retiring officers are taking up posts in local administration -- or preparing to contest the 2010 elections. The new Constitution reserves for officers one-quarter of lower-house seats, one-third of upper-house seats, and all key government portfolios.

So, 65 years old this month, the military in Burma is not a state within a state -- it has become the state. The only real opposition, the National League for Democracy, headed by Nobel Peace Prize winner Aung San Suu Kyi, which won the last elections held in Burma in 1990,  announced on March 29 that due to the unjust electoral laws governing the elections, it would boycott.

The Tatmadaw could well continue to thrive under a civilian system it controls. The Army will do so at the expense of legitimacy, popular support, and honor. But that's exactly why this year's elections have been so carefully arranged -- to ensure the right result. A free and fair election would most likely give the Tatmadaw its marching orders: out of power.

David Scott Mathieson is Burma researcher for Human Rights Watch.

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