Analysis Selection for JCC January 2021

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Analysis Selection for JCC January 2021 Analysis selection for JCC January 2021 Myanmar’s coup 4 Feb 2021 - Country Risk | Strategic Report A statement on Myanmar’s military (Tatmadaw)-owned channel, Myawaddy TV, on 1 February announced that the Tatmadaw had declared a state of emergency for one year and that all authority would now be vested in Commander-in-Chief Min Aung Hlaing. National media have reported that, since 3 February, the Tatmadaw have begun to release several detained members of the national parliament and regional leaders. An unspecified number of senior National League for Democracy (NLD) party leaders, including State Counsellor Aung San Suu Kyi (the country’s de facto leader) and President Win Myint, were still in detention. • The Tatmadaw’s actions probably reflect its intent to reverse the increasing consolidation of power under the civilian government. The Tatmadaw’s 1 February statement justified the coup by alleging voter irregularities in Myanmar’s November 2020 general election. In November, the Aung San Suu Kyi-led NLD won more seats than its 2015 total (396 of 476 seats), whereas the main opposition Union Solidarity and Development Party (USDP) – which is aligned with the Tatmadaw – won fewer seats than its 2015 total (33 of 476). • The Tatmadaw probably interpreted this as growing support for a fuller democratic transition led by Aung San Suu Kyi – as well as reduced public support for stalling further amendments to the 2008 constitution. The constitution reserved 25% of parliamentary seats for the military and gave it control over the ministries of home, border affairs, and defence. In March 2020, Aung San Suu Kyi’s government in its first term unsuccessfully attempted to reduce the Tatmadaw’s powers as defined in the constitution. The Tatmadaw has effectively reinforced the constitution by appointing Vice President Myint Swe (a former Tatmadaw general) as acting president (following Win Myint’s detention), who announced a state of emergency of one year and allowed the military to seize control. The military had issued statements during the preceding week threatening a coup, citing voting irregularities in Myanmar’s November 2020 general election. It reiterated its allegations of fraud as justification for its current action. • Myanmar’s parliament is now suspended, with the Tatmadaw appointing a new State Administrative Council. Between 1 February (when the new parliament was scheduled to commence) and 3 February, the Tatmadaw finalised a new 11-member State Administrative Council, nine of whom are Tatmadaw generals. The Tatmadaw’s control over all legislative, executive, and judicial authority will likely continue until a new civil-military arrangement is negotiated, given that a return to civilian rule per the November election results is now unlikely. The Tatmadaw will most likely negotiate a timeline for fresh elections, allowing for increased military oversight of electoral conduct. On 3 February, local media reported that Aung San Suu Kyi had been charged with violations of the Import-Export Law, and President Win Myint with violations of the National Disaster Management Act – both carrying three-year prison terms, if convicted. The Tatmadaw is likely to Confidential | Copyright © 2021 IHS Markit Ltd Analysis selection for JCC - January 2021 make the release of these leaders contingent on probable guarantees to not participate in fresh elections. More covertly, the negotiations will likely involve guarantees from a future NLD leadership, probably not including Aung San Suu Kyi, that it will not amend the 2008 constitution unless such action is intended to broaden the Tatmadaw’s powers. • Strong civilian support for Aung San Suu Kyi will probably result in anti-coup protests, with a forceful military response likely in the event of large-scale opposition. The results of the November 2020 election indicated a high level of civilian support for Aung San Suu Kyi and for the country’s democratic transition, which has been ongoing since the constitution was introduced. At the time of writing, medical staff from about 100 hospitals across 40 towns had commenced a civil disobedience movement, involving no-shows at work, to protest the coup. The movement also included teachers and students from universities in Yangon and Mandalay. Internet services are reportedly still disrupted across major cities, and on 3 February, access to Facebook was blocked. When these services resume – and the Tatmadaw issues further statements about Aung San Suu Kyi’s detention and prospects for a new election – hundreds of NLD supporters are likely to protest against the coup, mostly only in Yangon, with the limited numbers indicating fear of the military’s response. In anticipation of this, several Tatmadaw trucks carrying personnel have been patrolling Yangon’s streets and have barricaded the city hall, according to credible social media reports. If the NLD’s calls for nationwide protests are heeded and protests grow in size to several thousand, the Tatmadaw’s response will very likely include tear gas and the use of live fire targeting protesters. The response would also be very likely to include thousands of Tatmadaw supporters carrying out counter-protests in Yangon in support of the coup, as already seen on 1 February. • Imminent US-led trade sanctions are now likely, as is greater control by the Tatmadaw over business operations. The US Department of State said on 3 February that it would designate the Tatmadaw’s actions a coup d’état – necessitating a suspension of foreign assistance – with prior statements saying that the United States would retaliate against the Tatmadaw should it fail to reverse its measures. The retaliation will probably include trade sanctions within the one-month outlook, including restrictions against Western companies continuing operations in Myanmar. Targeted travel sanctions by the US are already in place against General Min Aung Hlaing, and will probably be broadened to include more members of the Tatmadaw. The military already has significant influence in business operations. This has now increased further, with Tatmadaw generals leading the ministries of Planning and Finance, Investment and Foreign Economic Relations, and the Central Bank. The Tatmadaw’s dominance of economic policy will probably manifest as contract cancellations affecting projects led by companies in the West, as well as preferential licences and investment agreements with countries that are less critical of the Tatmadaw’s actions, which are likely to include China and Singapore. Indicators of changing risk environment Increasing risk • Statements from the Tatmadaw confirming conviction for Aung San Suu Kyi would increase the impetus for thousands of NLD supporters to protest in Yangon, resulting in a heavy military response involving live fire. • Statements from the Tatmadaw indicating a prolonged state of emergency beyond one year would likely threaten the continuation of foreign investor-led projects. On 2 February, Thailand-based Amata Corporation suspended the USD24-million Yangon Smart City Project, citing the political unrest. • Heavy use of force, including deaths and detentions, at anti-coup protests would likely lead to more active protests beyond Yangon and expedite the timeline of trade sanctions. • The Tatmadaw closed the country’s airspace and assumed control of all airports on 1 February. Prolonged closures leading to loss of tourism footfall would negatively affect Myanmar’s economy. | 2 Analysis selection for JCC - January 2021 Decreasing risk • If the UEC declares a re-run of the election in some or all of the 174 contested seats, then this would increase the likelihood of the Tatmadaw releasing at least some prisoners, particularly if they do not oppose the coup upon release. This would also limit the scope of any protests. • If introduced, US-led sanctions not being mirrored by Asia-Pacific countries – including Australia, India, and Japan – would reduce the scope of project cancellations, which in this scenario would probably not affect investments from these countries. RISK NOTE: Myanmar’s coup incrementally increases risk of military expropriation of aviation assets, increased small-arms exposure to helicopter gunships 2 Feb 2021 - Country Risk | Headline Analysis Myanmar’s military (Tatmadaw) staged a coup on 1 February, imposing a year-long state of emergency and closing the country’s airspace, prompting an incremental increase in the likelihood of seizure and small arms damage against military helicopter gunships. • On the day of the coup, Tatmadaw closed the country’s airspace and assumed control of all airports. While there is an elevated likelihood of Tatmadaw confiscating aviation assets directly linked to the civilian government, the risk to foreign-investor or private-sector aviation assets is currently low. Should the US introduce targeted trade sanctions – requiring foreign investors to consider a hastened exit – there will be an elevated risk of the military seizing assets, including aircraft, associated with US-based companies. • The closure of the country’s airspace is likely to last at least several weeks, with a moderate likelihood that that the military will extend this beyond a month if the salience of the coup does not diminish in international media. Exceptions are likely to be made for aircraft originating from China, Singapore and to a lesser extent Thailand, whose government has referred to the coup as an internal issue. • Myanmar has active insurgencies in multiple states including Rakhine, Kachin,
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