On 9 July 2024 AIIA NSW welcomed Professor Sean Turnell, Professor of Economics at Macquarie University and Senior Fellow at the Lowy Institute. Professor Turnell was Special Economic Advisor to Myanmar’s State Counsellor Aung San Suu Kyi between 2016 and 2021. Turnell delivered a reflection on Myanmar’s recent history and his personal journey during the country’s regression to military rule since his last address to the AIIA in 2019. He provided an analysis of Myanmar’s enduring challenges for development and the profound impacts of the military regime, before and after Myanmar’s 2021 coup d’état. Drawing from his experiences, Professor Turnell offered poignant insights into Myanmar’s current state and its uncertain future.

Turnell opened his address with bittersweet recollections of the years of growing economic prosperity in Myanmar during Suu Kyi’s leadership and his tenure as special economic advisor. It was a time marked by significant fiscal and economic reform efforts aimed at growth and development. These years, which Turnell refers to now as “peak Myanmar”, provided the backdrop to his optimistic AIIA NSW address in 2019. However, the early 2021 coup abruptly put an end to these reforms, leading to a steep economic decline as Myanmar regressed under a military regime.

Turnell reflected on his initial excitement at the prospect of contributing to Myanmar’s development as an economic advisor, fuelled by the potential he saw for the country to emulate the successes of the “Asian Tigers”. During the peak regional development of the Tigers in the 1980s, Myanmar’s growth had been stunted by the military regime’s policies of nationalisation and trade restrictions, and by their monetary mismanagement. These issues, coupled with internal coups, had led to significant economic decline, culminating in the 1988 uprising against the military regime that brought Suu Kyi to power in 2015. Turnell saw Myanmar at that time as a nascent Tiger economy with immense potential for effective development.

But the military had remained powerful even while Suu Kyi was in power. Her administration’s efforts to implement fiscal and monetary reforms had faced fierce opposition from vested military interests; their economic isolation policies and entrenched cronyism had persisted. The entrenched systemic nexus between the cronies and the military had historically allowed them access to disproportionate benefit from governmental economic activities, as well as granting them control over key industries such as natural resources and state-owned enterprises. Turnell candidly described the Myanmar that Suu Kyi inherited as “a corrupt bureaucracy” which resisted any kind of reform. As a result, there had been a need for a balanced approach to economic reform, constantly considering direct implications on political stability. This balance underscored the complexities inherent to Myanmar’s transition, as well as Suu Kyi’s struggle to keep the military at bay while attempting to pursue genuine change.

Reflecting on the events immediately prior to the 2021 coup, Turnell underscored Suu Kyi’s misjudgement of the military in the period immediately prior to the coup: her perception that the military respected the protection she had given them – at the expense of her own intra-national standing – by deflecting international revulsion at the atrocities the military had committed against minority groups like the Rohingya Muslims, had been unfounded. She had underestimated the military’s willingness to act against her, despite ongoing rumours of potential coups.

By early 2021, Suu Kyi was preparing for the upcoming election, with intentions to accelerate openness to trade and investment on the successful models of the Asian Tigers. These objectives posed a continued and direct challenge to the interests of the military and their cronies, prompting their pre-emptive action to neutralise Suu Kyi’s burgeoning influence through her policy endeavours and her sway over the people.

Turnell detailed the stark reality of his confinement following his arrest in 2021. He was initially detained for over two months in “the box” (a minuscule cell like a shipping container) on charges of espionage and sharing state secrets. He was later sentenced to three years and transferred to Myanmar’s notorious Insein prison. During this period, he experienced isolation, fear, great physical hardship and immense uncertainty. But his experience was relatively privileged, with support from family and friends both abroad (including the Australian government) and locally in Myanmar, in contrast to the ongoing plight of his Burmese colleagues who lacked such assistance and faced bleak prospects of release. Turnell emphasised his continued focus since his eventual release from prison in 2023 on honouring those colleagues and friends who remain imprisoned under a regime that shows little sign of granting them freedom.

In his concluding comments, Turnell described Myanmar’s current state as a “catastrophe”, lamenting that all previous reform efforts had gone to waste. Myanmar’s GDP is now just half of its 2019 figure and shrinking, poverty is widespread, the nation is under harsh but incompetent military control, and restiveness is growing in ethnic minority regions. Turnell believed the prospects for Myanmar under continued military rule are very poor.

Asked by an audience member about the potential for unified action by oppressed ethnic groups to overthrow the regime, Turnell declared his optimism at the rising unity among ethnic minority groups including the Rakhine, Kachin and Karen states. This unity marked a significant shift from previous historical divisiveness, catalysed by shared opposition to the oppression of the regime and the continued civil strife in the country. Turnell stressed the importance of establishing a federal structure to address historical grievances, promote political inclusivity and foster national cohesion – crucial steps in Myanmar’s path towards democratic governance. The evolving focus on reforms in Myanmar highlights a shift towards prioritising political and historical reforms over economic changes. Turnell believes that the fiscal and economic focus of his tenure as advisor to Suu Kyi, while important, had overlooked a crucial aspect of democratic governance: the need for political unity and historical reconciliation. He stressed that these elements constitute a critical link between democracy and sustainable development.

Asked about the China-Myanmar relationship, Turnell described China’s passive position amid the 2021 coup d’état. China had seen Suu Kyi and her government as resistant to their Belt and Road projects – which they saw as offering no benefit for Myanmar – and as a barrier to their strategic objectives. For China, the reemergence of the military regime was anticipated to stabilise the country and directly benefit China due to the military’s willingness to comply. However, the coup has instead led to mass-instability and ongoing civil strife, undermining China’s influence and objectives. Significant projects crucial to China’s interests, such as the Bay of Bengal Pipeline and the Kyaukphyu Deep-Sea Port, remain under resistance control in Rakhine state. Turnell highlighted the ultimately paradoxical bilateral relationship: China finds the compliant regime easier to work with, but its influence is undermined by uprisings and an overall lack of control.

Asked about ASEAN’s response to the coup, Turnell noted a clear collective anger and opposition towards Myanmar’s regime, but highlighted ASEAN’s overwhelming ineffectiveness in implementing any solutions. This is despite an initial five-step plan in 2021 that garnered international backing. Turnell suggested that, while individual nations like Indonesia and Malaysia have pursued real solutions, the ASEAN community has failed to coordinate a unified response due to differing national interests and political dynamics within the region.

Aung San Suu Kyi’s relationship with the military was also a topic of audience inquiry. Turnell described this as a relationship characterised by mistrust and a profound power imbalance. Despite holding elected office, Suu Kyi’s civilian government had limited authority over critical sectors like defence and finance, which under the constitution remained firmly under military control. Turnell explained that the military’s level of independence was central to the power they yielded. Suu Kyi’s attempts to influence or moderate the military’s power were hindered by their innate autonomy and historical dominance.

Suu Kyi had been criticised internationally for her alleged closeness to the military but had nevertheless failed to secure their loyalty domestically. The coup was partly driven by the military’s ineradicable distrust of Suu Kyi and their fear that she might hand over military leaders to the International Court of Justice. The military perceived a lack of civilian support for them and growing popularity for Suu Kyi. They feared losing influence and distrusted Suu Kyi’s political intentions. Turnell emphasised that Suu Kyi’s misreading of the military hastened Myanmar’s descent into military rule: Suu Kyi’s failure to anticipate the lack of military loyalty worsened the impact of the coup.

Report by Paloma Hawkins, AIIA NSW intern

Professor Sean Turnell, right, with AIIA NSW intern, Paloma Hawkins, left