Section 3 | RULES OF THE GAME 3.2 Patronage Networks and Other Incentives As in many planned economies, dictatorships, and other political economies with opaque decision-making and budget processes, the formal governance institutions described above are intertwined with an intricate behind-the-scenes system of patronage networks, rents, prerogatives, and other incentives derived from state-owned enterprises, local and foreign businesses, military interests, and criminal groups. Even when outgoing seventy-eight-yearold military leader General Than Shwe announced he did not plan to run for president in 2010 and retired, he “is believed to have hand-picked his successors in both the government and the military in a way to ensure their inability to threaten his personal, familial, or commercial interests.”191 Overall, the Tatmadaw’s commercial interests are extensive. In 1988 it created two large holding companies, the Myanmar Economic Corporation and Myanmar Economic Holdings Ltd. (MEHL), both of which were controlled by the Ministry of Defense. According to the Economist’s Intelligence Unit, “at least some of its enterprises make money legitimately, and will make more as the country prospers. MEHL, for example, makes Myanmar Beer, the most popular brand, and Red Ruby, one of the most popular cigarettes. However, the army and its cronies have also grown rich from gem and jade mines—and vast tracts of land that many contend were illegally seized.”192 Although there were some very public examples of power shifts in 2011 (such as the announcement by then-Minister of Railways of an end to MEHL’s monopoly over car control over public access to information when it ended the monopoly that the military- “Historically most government officials and employees have been more interested in their entitlements (rent-seeking) than providing services to the public. Culturally they are accustomed to operating in a patronage system with orders coming down from the top and little accountability for results.” owned MEC and MPT held over SIM cards through 2013 via a state-run monthly lottery for —Rieffel 2016 imports193), more recently, the outgoing administration issued a mobile telecommunication operator license to a newly formed joint venture between Vietnamese military-linked Viettel, local firms, and a subsidiary of the Myanmar Economic Corporation “in a move that observers said advantaged the military’s financial interests.”194 While increased foreign investment presents many rich opportunities for rent-seeking, it may also displace existing rent flows and patronage networks as economic sectors shift in relative importance, inadvertently catalyzing—or blocking—progress toward narrowing digital divides. While the large state economic enterprise sector has functioned as a tool of the rich and powerful for decades and is a major spoiler to reforms that upset the status quo in general, liberalization of tech sector giants like the state-owned telecom MPT indicate that incentive structures are indeed changing. For example, the Tatmadaw relinquished considerable SIM cards. 195 At the same time, delays with certain legal reforms related to digital security and privacy196 may indicate that the new incentives are not sufficient enticement for it to cede control over ICTs as surveillance tools, posing a distinct challenge to champions of equitable and secure access to online information. Callahan and Steinberg, Drivers of Political Change, 4. Economist, “Myanmar’s Economy: Miles to Go,” August 6, 2016. 193 Ibid., 15. 194 Freedom House, Freedom on the Net 2016—Silencing the Messenger: Communication Apps Under Pressure (Washington, DC: Freedom House, 2017). 195 Ibid. 196 Myanmar Centre for Responsible Business, Institute for Human Rights and Business (IHRB), and Danish Institute for Human Rights (DIHR). Myanmar ICT Sector-Wide Impact Assessment, September 2015. 191 192 Ending the Gender Digital Divide in Myanmar: A Problem-Driven Political Economy Assessment | 58