Although Myanmar is the largest country of IndoChina, rich in natural resources, an estimated quarter of the population live below the poverty line and rural amenities and infrastructure are often non-existent. Economic ruin and civil repression led to mass pro-democracy and anti-regime demonstrations in 1988 which were violently suppressed by the Lon Htein, or riot police, who killed scores of students, workers and Buddhist monks.5 Facing spreading unrest Ne Win stepped down and was for a short time replaced by Sein Lwin, the commander of the Lon Htein, whose appointment just intensified ‘people power’ protests leading to a nationwide general strike on August 8 (the 8-8-88 event). In September a group of generals organized by Ne Win and led by General Saw Maung took power, announced the formation of the State Law and Order Restoration Committee (SLORC), and imposed martial law. Arrests and summary executions of alleged dissident strike organizers continued and universities remained closed until SLORC ordered all people to return to work in October. After eight weeks the general strike collapsed and the people power movement with it. Myanmar’s ‘Open Door’ Policy As a direct consequence of the anti-government demonstrations of 1988, the SLORC announced that key aspects of the ‘Burmese Way to Socialism’ were to be abandoned in favour of greater private sector participation, its so-called ‘Open-Door’ program of economic reforms. This especially applied to foreign trade, a move seen by some as designed to lessen international criticism of the regime, and it was followed by a slow process of market reforms that created a new business class tied to the generals. The reforms included new foreign investment laws and tax incentives, and succeeded for the first years of the 1990s in attracting an inflow of foreign funds, concentrated in the oil and gas, mining, hotels and tourism sectors. Elections were held in 1990 to increase international legitimacy and foreign aid but the landslide victory (over 80 per cent of the parliamentary seats) of the leading opposition group, the National League for Democracy (NLD) led by Aung San Suu Kyi, was entirely unanticipated by the junta who refused to hand over power. In May 2003 Suu Kyi was placed under house arrest for the third time since 1989, under the 1975 State Protection Law which allows for a person to be detained for one year without trial, a period that can be extended up to a total of five years. The periodic detention and on-going house-arrest of 1991 Nobel Peace laureate Aung San Suu Kyi has been a lightning rod for international and diplomatic protest. In 1996 Motorola and Philips Electronics N.V. pulled out of Myanmar 6 and in 1998 Ericsson suspended all business ties for fear that its involvement in Burma, one of its smallest markets, could harm its business in the US.7 In 1997 Washington banned new investment by US companies and imposed additional economic sanctions in 2003 in 5 ‘In September 1987 Ne Win demonetized currency notes in already quixotic 75, 35 and 25 kyat units and replaced them with 90 kyat and 45 kyat notes, currency units divisible by nine, his lucky number! Nine didn't prove lucky after all for this demonetization triggered off violent protests led by enraged students.’ Mohan Guruswamy, The Rediff Special, http://inhome.rediff.com/news/2003/jun/26spec.htm 6 To avoid criticism Western companies sometimes do business with Mynamar indirectly. For example, in 1995 Nortel worked with Loxley of Thailand to sell and install a US$3.38 million cellular digital telephone system and in 1996 Nortel (Canada) used a 20 per cent stake in Israeli company Telerad to sell its switching equipment. 7 An equivocal senior Ericsson official stressed the decision to pull out was taken on commercial grounds and was not a moral judgment. (Financial Times, 2 September 1998)