The Myanmar Economic Corporation hoards enormous amounts of the country’s wealth but has left the public with a $127m-a-year debt burden
The Tatmadaw has confirmed that it now privately owns one of its conglomerates, fueling criticism that its vast business network operates in the shadows and hoards wealth that should be spent on crumbling public services.
The Myanmar Economic Corporation, founded by the former military government in 1997, dominates a large swath of Myanmar’s economy with interests in steel, cement, alcoholic beverages, healthcare, transport, telecoms and more.
Under military rule, it was officially state-owned. But as the country transitioned to partial civilian rule the military set about privatising such companies, thus denying the government access to the profits.
The finances of MEC and other military companies are opaque, but a UN fact-finding mission last year said the generals used the money to fund war crimes and crimes against humanity.
Brigadier General Aung Kyaw Hoe, permanent secretary of the Ministry of Defence, confirmed MEC’s status as a private company owned by military members at a press conference held in Naypyitaw earlier this week
“It is concerned only with the military,” he said in response to a question from Myanmar Now.
Brigadier General Zaw Min Tun of the Tatmadaw’s True News Information Team said: “There are other private companies that took over government factories and are operating in line with regulations,” he said.
“When companies based on the socialist economic system became privatised, MEC did the same,” he added.
He declined to say when exactly MEC was privatised. But Directorate of Investment and Company Administration documents say it was registered in early 2019 as a private company limited by shares.
Brig-Gen Aung Kyaw Hoe said he could not disclose the company’s net worth or how its assets were transferred when it was privatised.
The defence ministry said MEC paid 55.37 billion kyat in taxes for the business year ending 2018, and 53.8 billion kyat the following year.
Brig-Gen Zaw Min Tun said MEC’s shares are not held by individuals and he was not aware of the details about its profits or the role of military leadership in the company.
MEC’s directors “don’t own any shares” he added. ”They’re working there because they were given the duty,” he said.
Leaving the country in debt, taking the profits
Fifteen years ago, under the military regime, MEC opened the No. 1 Myingyan Steel Mill with a loan of 1.1 billion euros from the China Development Bank.
The mill left MEC with a large debt burden; interest on the loans is about 500,000,000 kyat per day, or roughly $127m a year. But even though MEC has gone private, taking its profits with it, the government is responsible for repaying this debt.
The Myingyan mill was transferred to the Ministry of Industry under the Thein Sein government.
Operations at the mill were shuttered in 2017 because it was losing money. It is estimated that it will take until 2033 to pay off the debt.
The Tatmadaw’s quartermaster general, who is in charge of supplies for the whole military, including weapons, was appointed a director of MEC.
This, the campaign group Justice for Myanmar told Myanmar Now last week, amounts to “corruption and conflict of interest” that was “by design”.
Lieutenant General Kyaw Swar Linn’s conflicting positions create a “financial incentive” to continue to fan the flames of civil war, the group said.
In a public filing from late May by MEC, Kyaw Swar Linn was no longer listed as a director.
Justice For Myanmar has called for an independent investigation into deep-seated conflicts of interest in the military’s senior ranks.
Related Articles
Donate
Independent media is under attack in Myanmar... help us hold the powerful to account.
