Myanmar’s first freely elected parliament held its opening session on Monday. This significant step on Myanmar’s road to democracy will send a positive sign to investors looking for stable business opportunities in the region.
Monday, February 1, 2016 represented a significant moment in Myanmar’s half-century struggle for democracy. Following November’s historic elections, in which Aung San Suu Kyi’s National League for Democracy (NLD) won 80% of the contested seats, Myanmar’s first freely elected parliamentary session opened in Myanmar’s capital of Nay Pyi Taw.
The parliamentary session is the first in over 50 years to constitute a majority of democratically elected representatives, many of whom are NLD members.
November’s landslide election
The parliamentary session is one of the first steps in a transition that began in November, when the NLD won a landslide victory that effectively brought an end to half a century of military rule.
However, not all seats at this election were open for contestation. According to Myanmar’s constitution, amended by the military government in 2008, 25% of parliamentary seats must be reserved for the military. A party must hold 75% of parliamentary seats in order to change the constitution. The NLD falls short of this, with 390 seats out of 664.
Because the military retains a quarter of the seats, the NLD will have to work closely with the armed forces moving forward.
The task of selecting a new president
One of parliament’s first jobs will be to choose a new president to replace Thein Sein, who steps down in March.
Under the 2008 constitution, Ms. Suu Kyi is barred from running for president. In what is widely perceived as a calculated move by the military government, a rule was included in the constitution barring anybody whose children are citizens of a foreign country from taking up the post. Despite this, the NLD’s overwhelming parliamentary majority means it will have the deciding say in who will be next president.
To date, the NLD have remained silent on who this might be. Whilst there was some debate as to whether Ms. Suu Kyi would seek to change the constitution in her own favour, it is now widely believed that the president will be a trusted confidante of Ms. Suu Kyi. Her personal doctor, Dr. Tin Myo Win, has already been named as a potential candidate, as has Htin Kyaw, a senior executive of Ms. Suu Kyi’s charitable foundation, and son-in-law of a founding NLD member.
Whomever is selected, it seems likely that the role will be as puppet-president only. In an interview in November 2015, Ms. Suu Kyi stated that she would ‘make all the proper and important discussions and decisions with regard to government’. She confirmed that the constitution did not preclude somebody from being ‘above the president’.
Good news for investors
Monday’s parliamentary session will be welcome news for investors. Following the elections, concerns remained as to whether the defeated military government might take action against the NLD.
However, so far the transition has been a stable one. This is good news for Myanmar’s economic growth. The Asian Development Bank predicted a GDP growth of 8.2 percent in 2016. Political stability will help to keep this growth on track.
Continued stability will also help boost foreign investment, which exceeded $8 billion in the 2014/2015 fiscal year. Myanmar’s energy, manufacturing and telecom sectors are particular areas of interest for foreign investors.
The next major step in Myanmar’s political transition will be at the end of March, when Thein Sein will step down and the new government will be formed. If this transition continues to be stable, economic growth and foreign investment are likely to continue to grow.