Transcript: Episode #231: Riches, Resources, and Revolutions

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Host 0:19

Welcome to the Insight Myanmar podcast. Before we get into today's show, I wanted to let you know that we have a lot more written and video content on our website. If you haven't visited it yet, we invite you to take a look at WWW dot insight myanmar.org In addition to complete information about all of our past episodes, there's also a variety of blogs, books and videos to check out and you can also sign up for our regular newsletter. But for now enjoy what follows and remember sharing is caring.

Brad 2:08

And welcome back. I'm joined today by a recurring guest, yonder long, an expert in Myanmar's power grid. And he's recently written an article in frontier addressing the looming sub we call it a crisis situation within the natural resources sector, within Myanmar, the implications for the Myanmar military. Thank you for joining us. Would you like to introduce yourself for the audience who aren't familiar with you? Yeah. Hi.

Guillaume 2:35

So great to be back on the podcast to go over this really interesting aspect of the conflict. So my name is Guillaume DeLong. I used to be a researcher and then an adviser to the Ministry of electricity and energy as it was called at the time, and Naypyidaw from 2018 until 2020. And I still cover in most energy sector while doing a PhD in the UK now.

Brad 3:07

Okay, and let's let's dive right into it. We'll link the article below for people to be able to read it. But let's let's look at this the natural resources in Myanmar kind of seem to be the whole ballgame. As far as the the economy is concerned, this is a very resource oriented economy. So what's going on?

Guillaume 3:28

So I think what we we who have who covered the coup today, can sometimes lose sight of is that we think that Myanmar is inherently a place of natural resources, right that that because that narrative has been around for so long. We think, of course, Myanmar, a bunch of abundance of natural resources. There's some truth to that. But in reality in terms of the actual resources that we're pulled out of the ground, natural resources are a relatively new part of the economy in Myanmar. There's been oil extraction for a very, very long time, but in very small kind of artisanal amounts. But in terms of the natural resources that we see today, that really begins on towards the end of the Newing times, and then into the 1990s. That's when really that part of the economy becomes a major aspect of Myanmar's economy. And not only that, but also a key pillar of what made the military rich and powerful for decades. Right. And so, when you look at the big picture now, we're basically at the end of that bubble, you know, the bubble, but you can call it a, a cycle, right? So the cycle that began in, I would say, early 90s. With the massive expansion of gas production first but also a lot of new investors. means at the time in other kinds of extractives. That is coming somewhat to an end. But for very different reasons from one natural resource to another, right, I don't want to say that all these natural resources are the same. They all follow their own kind of incentive structures, and they have their own political economy. It's all it's all a bit different. But the trend is that natural resource extraction boomed under the tongue sway regime reached a peak in the late 2000 and late 2000s until 2015, and has been gradually declining, or plateauing at that level. Since then, again, big differences from one natural resource to to another. Here we're talking sort of the overall trend looking, when

Brad 5:55

you talk about the these resources, were not a factor until comparatively recently. Is it the case that the economy was based on something else? And they transitioned to resources? Or was the economy simply smaller? And suddenly they had resources in addition to what they were doing and the entire economy boomed?

Guillaume 6:15

That's, that's a tricky question. Because what happens very often with natural resources is that once you start making money from them, making rents from the stuff that you're pulling out of the ground, you are going to gradually that part of your economy is going to eat up the other parts of the economy because extracting a resource from the ground and then selling it often requires much less work for much more profit than working a rice paddy or something like that, right. And so it's, there is some substitution there. But often, it can be a way more than substitution, it actually like conquers the rest of the economy, which is something that you see to some extent, in parts of Myanmar, right, where the natural resource economy, as the extractive economy has really conquered so much that not much else is left. That being said, Myanmar also has a slightly more diversified economy than, you know, Middle Eastern monarchies, Petro states and all that it's slightly more more diversified than that. But nevertheless, the natural resources are absolutely essential to the wealth of the powerful in Myanmar, for sure, the no one is wealthy in Myanmar today or powerful in Myanmar today, if they don't have control of some natural resources, and those natural resources can be we can list a few of them. There is natural gas, which is mostly produced offshore, a little bit onshore, but mostly offshore. And then it's piped and most of it is exported to Thailand. And then a smaller portion is exported to China, through giant pipelines that crossed the whole country. We also have, of course, the Jade in the northern parts of the country of Cochin and in northern Rakhine. We have a plethora of precious metals, there's gold, there's silver, and a few others, you're going to have rare earths, of course, in Cochin and parts of northern Shan, a bit in northern again. So here, we're talking to be clear, because there's natural resources encompasses a lot. We're talking about those natural resources that are extraction based, right that you take out of the ground, and then you just sell them and they come with this very specific kind of economic logic behind them. Because what you're making there is a rent you're not really making a pure profit, you're extracting something from the ground and selling it almost unrefined, almost just as it is to someone else and and making a profit from just the fact that you own the land in which it was, because

Brad 9:05

you raised this very point yourself. The resources that you listed here, gas and Jade and precious metals and rare earth metals. As I tried to use the correct terminology then which I'm not I'm not familiar with you. You're saying extractive. So I understand. extractive means we're talking about a dead resource, a non renewable resource, there's a limited quantity, and you get it out of the ground. And then that's it. It's it's gone. Is that correct?

Guillaume 9:29

Yeah, that's right. That's right. And yeah, Myanmar has been known, I mean, even you can look at like very, very, very first, Western maps of Myanmar, of this area that we now call Myanmar already lists the country as kind of the land of gold and the place where there have been multiple old maps that refer to this territory as having a lot of natural resources. In the for example, you go to chow pew, you will see artisanal oil extraction. wouldn't like oil wells that have been there for perhaps 100 and 150 years, perhaps more, that are just because the oil is literally just under the surface, right? You go to parts of Maguey. And it's the same, right? The natural resources are so easily some of these are so easily accessible, that there's always been this sense that, okay, Myanmar is, you know, you can have access to very precious things quite easily if you own the land if you control the land. And so basically, what happens with the coup, is that you end this period of the hopes of transitioning to something else the hopes of transitioning to a more productive economic model, perhaps that can be based on industrialization, but not necessarily can be based on other things, or the hopes of also replacing renewing, exploring more and finding new natural resources or perhaps exploring new, more renewable, natural, natural resources. All of that comes to a crashing halt. Because what happens after the coup is local investors, regional investors, Western investors lose faith in the ability of doing business. In Myanmar, they lose faith in the ability of whoever's in control of Naypyidaw of enforcing some amount of stability in the country. And so everyone leaves, right and on top of that, you have reputational risk and a variety of factors. So you end up in a situation where basically no one is there to actually transition to something else, whether it's more natural resource extraction, or whether it's transitioning to a more productive economy.

Brad 11:48

So the first question that that I have, is on on the other type of resource extraction, because if even if you're a natural resource country, those natural resources can come in the form of something a little bit more sustainable, renewable, Myanmar happens to be an exporter of rice, it has a growing rubber industry or the granted the there have been issues with the quality of the rubber. Teak, again, has been fraught with with a lot of violations and economic damage, but it is theoretically renewable. Your focus has been entirely on these non renewable these extractives. Is there. Is there a sense in which or is there is there a reality in which these more sustainable types of extraction can sort of rise to cover the decline of the non renewables?

Guillaume 12:38

So here, that's fundamentally a question of like, what where could we go from here, and I think we need to cover a few more things before we get there. But in a nutshell, just to give you a preview of that part of the discussion, it's extremely difficult for countries that have been living off natural resources for regimes that have been living off natural resource extraction for a while to transition to something else. It requires massive investment effectively in diversification, investing in human capital, investing in rural infrastructure, all of this stuff that will incentivize people to work in other parts of the economy, and will to make a decent income and livelihood in other parts of the economy. That's extremely difficult, takes a lot of work, a lot of careful policy planning. And that's why we keep seeing in various parts of the world, countries that have a lot of natural resources. And yet somehow we wonder, why aren't they richer? Why aren't they the richest countries in the world? Why are they also the countries that seem to have that are plagued by conflict played by inequality, poor infrastructure, corruption and all this stuff? Right, leading to the whole concept of the resource curse? But we'll get into that maybe at a later on?

Brad 13:58

At the Yeah. Okay. So then, so they're moving back, looking at sort of the industries that do exist. You know, we've had a discussion on here with regards to the rare earth metals, specifically, terbium and Dysprosium. In Cochin, and although this is a high value sector, we discussed in that episode of the human rights violations and the fact that a lot of that money is simply being taken across the border to to China and is not really benefiting the Myanmar economy much, you yourself, if I remember correctly. Last time you were here. You were talking about the dwindling reserves of gas and oil within Myanmar, and I believe you were a VP and I can't remember whether it was you but I believe you're of the opinion that the withdrawal of total of Chevron of Woodside following the coup was less based on a moral stance and more based on the fact that their operations were already winding down and The the gas fields and oil fields that are available in the country after yarn dries up are just not as valuable. So cool. No coup. Was it already the case that these industries were just not long term going to be bringing much into the country?

Guillaume 15:21

coup or no coup, we were headed towards a an end of cycle. And the question was, was Myanmar going to be able to transition to something else or not?

Brad 15:34

So that was inevitable.

Guillaume 15:36

Yeah, I mean, the existing gas reserves, where production was ongoing, you know, a gas reservoir ends up being depleted, right. And you can say, even when, as early as 2018, the tiny oil and gas company pttep, that that was one of the shareholders in the yet another project. So the total project, right, that the biggest gasfield in Myanmar, they've been in production since the late 1990s. So even they were saying an output from their latest company reports. So in 2018, they were saying after more than 30 years of production, reserves of natural gas from producing fields in Thailand and Myanmar have been depleted. Right. And so Moreover, some of these gas fields have gradually entered the post plateau period. Under the circumstances, the chance of getting the same delivery of volume, as written in agreements is less than less right. And they have copy pasted those few lines in every company report, annual report since 2018. So Thailand knows as the main buyer of Myanmar gas, Thailand knows has known for at least since 2018, that these guys resources are being depleted, that Myanmar is running out of this gas. And you see it in the curve of how much Thailand depends on Myanmar gas. The peak was in 2007, it was about 30%. Today, were slightly below 15%. And in the next few years is going to drop under 10%. Right? That is a sea change. That is a complete reversal of the dynamic between the two countries, because what it means is, Thailand knows that Myanmar isn't going to be able to deliver the kinds of gas resources that Thailand has been able to rely on for three decades in the near future. So

Brad 17:38

it was just gonna it's like, just vaguely remembering our last conversation isn't Myanmar still under contract to Thailand for was it like the next 10 years or something to continue delivering a lion's share of their gas output.

Guillaume 17:50

So there are still ongoing contracts, but for much smaller gas fields. So okay, the main gas field itself is going to be completely depleted within the next few years. The exact year is is not clear yet, but definitely by 2027. It's over that yet and our gas field. And then you have a few smaller gas fields out there that are still producing that are contracted to produce over the longer term, right. But so that is the key to understand the situation of the junta today is that they took power, just at that precise moment, where natural resource and particularly gas production was about to plummet, and desperately needed to be replaced by something else, it needed to be replaced by something else economically and energy wise, economically because it was a source of tremendous amount of dollars for whoever's in control of Naypyidaw, that's number one, we're talking billions of dollars per year, and having that foreign currency is extremely precious as we're seeing it now. And it's also extremely precious in terms of energy, because as we've discussed in previous episodes, half of Myanmar's electricity supply comes from burning gas. Right. And so if you take away that gas production, it not only affects Thailand, but it also affects Myanmar. And all the power cuts that you're seeing today in Myanmar that are far worse than anything that happened before are a result of these declining gas reserves. Right. So the coup hits just at the worst possible moment, from an energy perspective. And the NLD knew this. The the energy experts at the time knew this. There was a lot of concern at the time. What are we going to do because a lot of the energy projects that we had hoped would come online between 2015 and 2019. Were late and everyone was concerned. What are we going to do because it looks like it's going to be pretty bad. We don't have anything to replace all this gas that is now no longer available to us. And what are we going to do to fund the union budget, when we run out of this, of these of this gas that we're exporting and using the money to fund ourselves, right. So that's why the coup happens at the worst possible moment, a bunch of investment projects that were supposed to happen in 2021 2022 2023, whose explicit purpose was avoiding a major energy crisis and a major public finances crisis by bringing in foreign investment as fast as possible, and getting everybody coordinated, and connecting more new sources of power to the power grid, exploring more gas offshore, but also investing massively into solar, a little bit of hydropower as well. All of that is stopped by the coup. And so what is happening today is the energy crisis that was predicted before that people thought we had barely avoided is actually happening. That's that's what's happening. Though, when we look at other natural resources, it's it all varies from one resource to another from one region to another, right? We've seen a massive increase in tin production, for example, in one state, a ban on tip production for about six months by the by the wall. And that's their own dynamic, right between law state and China. And that's its own thing, let's say, we've had an increase in rare earth production in kitchen. But at the same time, we've seen a total collapse of production of the highest value rare earths. And that's a bit mysterious. We don't really know what's happening there. The high really high value rare earths. That's that that hasn't been produced since about May 2021. And we don't really know why is it because the resource is depleted? We don't know. We have copper production, right, the copper production in the giant mines of southerns. Again, let Padang set Badung. Right next to Monywa. Those giant mines were absolutely critical to the wealth of whoever controls Naypyidaw, they produce vast amounts of copper and copper is essential to the green transition everywhere in the world. So the US and China and other countries are going around the world hunting for copper, because they need it to make electrical components. Copper is a very finite resources, and there's much less copper than we assume off the top of our heads. And so they're looking around looking for it, there is plenty of copper and Myanmar. But it is in that place where that has been the heart of conflict between the SEC and PDFs in the northern Maguey and southern going. And so the exports of copper to China have dropped 94% between 2020 and 2022. Overall, we look at like the revenue that the SEC has had from mining activities between 2020 and 2022. The revenue from mining has dropped by 80%. And it dropped a little bit further in 2023. So it this is a sea change. It's a complete, it's as if you took another petroleum state and you said suddenly, you unplug the whole the oil tap. And you say well, what do we do now? Well, they're trying to do that in the context of not having full control of their territory. That's what's driving the problems.

Brad 23:59

So obvious question then like the military has increased its budget 50%. Since the coup and your the numbers you're giving here are apocalyptic level disaster if this were happening in a country with a stable government, I mean, I'm sure ministers will be being fired, one after the other. Where is the military finding its money from them because they apparently have money still somehow.

Guillaume 24:25

So they had the SEC has reserves limited, but has some reserves and has managed to move some money around to avoid sanctions. But how long those reserves can last is is a bit of a mystery. And I think when you see that, they have decided to float the currency again to remove the peg of the currency peg that they were using before. That was just driving a massive black market right now. The decision to remove that is also a reflection that they're running out of the of the foreign exchange that they need to defend their artificially strong currency. They're running out of the resources that they need to pretend that everything's fine. I expect that within the next year, I think 2024 is when we're going to start talking about do they have enough to pay civil service civil servant salaries, this is going to be a conversation probably by the end of this year. So even that's always been the tricky thing. Right. With with understanding and Moore's economy is that it's, it's extremely fragmented and and, and diverse. And life can seem almost normal in Yangon or in Mandalay. It rarely seems normal even before the coup in Naypyidaw. But it can seem almost normal and you can have an appearance of feeling of well, okay, it seems that the people in power and Naypyidaw have this under control. But then you look at certain key parameters, and all those key parameters regarding the health of public finances, their ability to deliver basic public services, all these things are actually at a kind of failed state level or failing state level.

Brad 26:28

So this is something disastrous, to be honest, like, like the snowballing disaster, where it's just getting worse and worse and worse, because it's getting worse and worse and worse. And you specifically pointed to a very important factor that I think a lot of people tend to overlook, which is that of foreign investment, like the resources are in Myanmar, the the rents, as you say, are being collected by the Myanmar governments and authorities, whoever that happens to be that day. But the actual extraction itself is very often being done by foreign concerns. And this seems to be the case that a lot of countries and to my understanding, this is why we have countries like Venezuela and Iran with vast natural resource deposits, that they are not effectively able to extract and monetize. Is there a possibility for domestic production to just happen without regaining the trust of foreign investors or foreign companies? Or is that an absolutely necessary part of this?

Guillaume 27:35

It varies from one resource to another for offshore gas, no, it can't happen without far foreign investors, mostly because the gas reserves, the offshore gas reserves of Myanmar are quite deep. And so it requires a lot of capital and expertise if you want to go dig wells, and operate rigs at those depths. So that's something that the Myanmar oil and gas enterprise, for example, in my assessment, at least, would not be able to do themselves. And if they could, they would, and they haven't. Okay,

Brad 28:12

so with with the increasing sanctions, and with Western companies, extractive companies not wanting to deal in Myanmar, whether for ethical reasons, whether for economic reasons, political reasons, whatever, they don't have the ability, they can sit on the resource, they can see the resource, but they cannot monetize it.

Guillaume 28:30

When it comes to natural gas. No, no, yeah, they go out. No, they really can't, there's a little bit of onshore gas a tiny bit, and that there is local expertise in that and local companies that that do that. But they can still be affected by you know, sanctions affect your ability to procure spare parts and, and key and specialized contractors and things like that. So they are still affected. But if they can find more gas on shore, that might be that might help them but they won't balance, it will make up for the loss of loss of gas resources that is currently happening. When you look at the other types of resources, it's quite different. First of all, onshore resources are generally easier to to extract if you want to get you know, we've seen an increase in gold extraction around humulene and that area of Northwestern again to tremendous, I mean, tremendous environmental cost, the, the level of destruction is I mean, it's so they've destroyed they've destroyed that part of the gang so thoroughly. You can see it from space went like zoomed out on like Southeast Asia. You can see the destruction in humulene. It's a lunar area and the level of of water pollution that they have done in that area is probably going to have very, very long term effects. So gold can be doesn't have to be, you know, it's not a very complex operation and can be done on a large scale even by by non expert contractors. rare earths relatively basic nickel, you need, you need more more expertise there, copper, you need more expertise there, there's still not very, very complicated but you need it's a bigger operation, let's say and you need more capital to do that.

Brad 30:40

And so forth. It's not just a matter of picking it up, and then just smelting it and something you could do by yourself.

Guillaume 30:46

I mean, fundamentally, it is right fundamentally is just about digging it up and and, and preparing it for export. But the setup of these mines to slightly more complex than just having people looking for gold in rivers and as it as it's been happening. So for copper and nickel, it's a bit different for lithium, and other kinds of mining like that. I don't believe that anyone in Myanmar knows how to extract those resources, because there have been known deposits for quite a long time that have not been exploited. And they are going to be exploited by some foreign companies, including in Asia, an Australian company called Myanmar metals. And because of the coup, they've pulled out another company that was going to extract lithium, also in the area near Tangu, I believe, maybe Tassie, my memory might be wrong. They have also pulled out and so that mining project isn't happening anymore. So to answer your question, there are some resources that can be extracted, but nowhere near the you can't go nowhere near love the level that can sustain the natural resource boom that we've seen since the late 1980s 1990s, that you can still have a lot of artisanal oil production, for example, or things like that, but you won't get to the levels of oil production that we've had what we had before the coup or gas or, and so on, so forth.

Brad 32:29

So okay, so then let's transition to the contextual lysing. This around the SAIC, like the Burmese military. You've indicated in the past that you every time I've asked you a question of like, well, why did the military government not build, you know, more transportation infrastructure, or communication infrastructure or power infrastructure? Why did not plan for these things? Your answers always seem to be, they don't care. They don't care about these elements. But it sounds very much like natural resources is one thing that they do care about, and historically have. So what is what does this decline in natural resource output mean for the military?

Guillaume 33:13

I think that the decline in natural resource production is probably one of the greatest threats, when combined with the much greater coordination we're seeing among resistance forces. Those two things, in concert, are probably the greatest threats to the survival of the SEC. Because the SEC is a military is a it's a system, it's a network and and as with any network that has that exerts some kind of gravitational pull. It has a lot of a lot of organisms around it, that feed on it, and that feed on the money that trickle down, that get bought out through through corruption and patronage networks, through, you know, good good deals for companies. So personal ties and all of that. What ultimately is the the blood that flows through those veins that irrigates this whole system of control of the connection between the military and the certain conglomerates in the country, that connect all of this together into a system that is trying to fight for its survival is money from natural resources. The main reason for that, as I said earlier, is fundamentally if you want to extract a natural resource, it is relatively simple. It is you take it out of the ground, and you sell it to someone else. You can you can refine it, you can smelt it, you can prepare it in a particular way. Or you can just hand it over to someone else who will do it for you The level of policy complication complexity that you need in order to develop a natural resource economy, if you're not worried with environmental issues, human rights issues, labor rights, things like that, if you're not worried by any of these things, extracting Natural Resources is quite an A simple thing. It's definitely by comparison, much simpler to have a natural resource driven economy than to have a production driven economy, an economy in which people are actually adding value to things. As you can see it, for example, and having an industrial zone or improving your agricultural yields, having a more productive agricultural sector, investing in people's education, so that you develop a knowledge economy, a service economy, and so on and so forth. Those are much more complex by comparison in terms of policy with a natural resource economy. And the military has only ever invested and been able to think and conceive of Myanmar's economy as an extractive tool. And so every time that they have tried to develop something a bit different, a slightly different kind of economy, they have utterly failed. If you look at all these state owned enterprises, or state economic enterprises, as they're technically called in Myanmar, that were set up in 1989. And, and then have survived until now, they are a financial black hole for the state. Because they have never been able to produce a product that the Myanmar people want. It's shoes that no one's want, no one wants, it's soap that no one wants, that is produced at a way that is sold way below cost, right. They're mostly used, these factories are mostly used as tools for providing employment and things like that. And that's that can be irrational in and of itself. But it's on a scale. That, for me indicates that multiple generations of military leaders in Myanmar have tried to think in a productive way of like, let's imagine that we were actually becoming something that was not entirely natural resource dependent and actually producing things. Every fell, I can't think of a single example where they succeeded. To be honest. I

Brad 37:38

just need to clarify here because this is one of those cases where you've said something and I did need to clarify, are you are you being literal? Are you saying that the was centrally planned, that factories were created, workers were employed to produce products, not in response to a market need, not in response to an organic desire, but simply because someone in the administration decided that? Well, successful economies are economies where people sit in factories all day producing shoes. And so if we sit in factories all day producing shoes, our economy will then become successful? Is that actually a thought process that occurred?

Guillaume 38:19

Yes. And I think at the time it, it was part of the economic thought of the leaders at the time, it made sense within their own worldview. At the time, they considered that the top priority should be for Myanmar to be autonomous from the outside world should be independent, including economically. And so it should not depend in in any way, with a major asterisk that let's not depend on the world at all, except when it comes to like, completely dependent on the outside world to buy our natural resources. And to fund our state like forgetting that massive kind of cognitive dissonance there. In terms of production and economic planning, we should not depend on the outside world. And so therefore, we should be producing our own shoes, our own cars. You have had there have been plans since the 2000s to have electric vehicle production in Myanmar. And the story goes that the local engineer has developed a kind of light truck. The 10th way or regime at the time, got really excited about it sent some Lieutenant General over for the inauguration and was like we're going to build a plant in an automobile plant that is going to produce this. Evie. We're going to produce 100 of them the first year, but then it's going to boom, and we're even going to export this abroad. Right. I mean, what ended up happening of course is the truck was so heavy that it couldn't really move that it was so so massive, right? That it could not really move or it had an autonomy of like 15 minutes or something like that because of its own weight. And of course, it just never led to anything. Right? This has happened over and over and over again, the transferring Trent transitioning to a productive economy is a very difficult process, especially when you're utterly incompetent as they are they don't understand how the economy works, because they don't really interact with the economy at all. They live within their own military economy, which is sort of this parallel world in which you can say, an apple is worth this amount of money, period. And that can be dictated because ultimately, the Ministry of Defense will foot the bill for whatever the price differences, right, the the real economy doesn't function in that way. So So to go back to your original question. In terms of the consequences for the SEC, and for the conflict, I think, as I said that this is combined with the fighting the two biggest threats, because the fighting is threatening the to kind of interact with each other, the SEC desperately needs more money to keep fighting to buy fuel abroad, to buy spare parts and weapons, right and ammunition, it needs it for the fighting, but at the same time, the resistance is preventing it from actually making the money that it needs from natural resources in order to buy those weapons. So the two, this is why what's happening in northern Shan is so significant, and what's happening in kitchen is so significant. And also, and currently, it's so significant, because the fighting is denying the SEC, the ability to continue operating natural resource extraction, activity in those areas that it desperately needs to then buy the weapons and the ammunition and all of that. So that that's the big consequence of those two things. And the reality is that they don't know how to transition to something else to an alternative system. And so rather than transitioning to another system, what they're doing is, well, we're just going to focus on regaining ground, regaining access to territory, and therefore natural resources, in northern Shan in kitchen, into GYN and all these places. It's not only about sovereignty, it's about fundamentally we need access to these locations where we can extract something from the ground, sell it make money, buy more weapons, pay our soldiers and so on, so forth. Right. So,

Brad 42:39

I feel I already know the answer to this question, but just for the sake of completeness, when resource extraction was added sort of high point, you know, you're saying that the way this works economically is that you're charging rent, and it's whoever owns the piece of land who gets to charge the rent. So the money that was raised, which is presumably a very, very significant amount of money, was that sort of being given to the local communities who own the land in a certain sense? Or was it being given to military cronies who managed to acquire the land on the shady circumstances and then pocket all the money for themselves?

Guillaume 43:22

No, I mean, natural resource extraction and Myanmar has always been a very, very dirty business. To be to be fair and balanced here. The military has behaved in that way, of course, expropriating people from their land and then denying people the benefits of their natural resources. You can even think of Rakhine as the ultimate example of this right. Rakhine has a tremendous amount of gas. The people of Rakhine are the least have the lowest access to electricity in the country. Right? The paradox is, is complete in a way they're right that the gas just gets piped off the sea of Rakhine and sent off mostly to China and a little bit to Myanmar. But the Rakhine people don't get to see any of the benefits of that, right in terms of infrastructure in terms of power, access, anything access to education, all of that. But to be completely fair, that is also the way that plenty of investing organizations have functioned as well, right. At the end of the day, the people fighting in Myanmar for decades, need something to generate money that they can use to then trance, buy weapons and fight their enemy. And that is the dynamic that applies to the SEC and to the Tramadol but it also applies to plenty of videos. Ultimately, the biggest losers there are just the people in the vicinity. I mean, the I'm pretty sure that today if you tested people for mercury poisoning in vast swaths of the guying. You would be horrified by the level of poisoning in in that region because of all the gold mining there that has completely annihilated the river system? Are

Brad 45:20

we going back to the old old old sky style of like putting the ore into mercury and amalgamating the gold into the mercury and then evaporating it?

Guillaume 45:29

Pretty much? Yeah, pretty much. Isn't that very, very illegal? Yeah, of course, it has been going on I mean, in northern in northern Myanmar for for ages, and there has been every time water has been tested in this area on the Chindwin, and things like that. And its tributaries every time you find horrific levels of poisoning. So, I mean, yeah, at the end of the day, it's the people who suffer. And then you have the groups who claim to represent the people who who are ultimately trying to survive by transforming natural resources into sources of power.

Brad 46:16

It's almost ironic that you look at these natural resources, which we often want, as a tool to empower a society a tool to economically liberate a society from a cycle of poverty, you know, you can look at, for example, the Middle East and Petro states, and the the vast development that they've experienced as a result of those industries. And yet here in Myanmar, and also in a lot of countries through through Central America and a lot of countries to Africa. It's the extraction of these high value resources that is itself poisoning the very people that they should be helping.

Guillaume 46:58

Yeah, yeah, I think that that has been, that has been a trend in the history of humans, and particularly in the history of Myanmar. The fact is that, you know, I mean, they're here we get, we're going slightly off topic, I mean, but natural resources has been part of kind of the collective imaginary of that the military has tried to project about what Myanmar is all about, for a very long time, they have been talking and making songs about how, you know, we have all these natural resources. And so therefore, we don't care about whatever the outside world tells us, because you know, we're sitting on a pile of gold, I think what's often lost there is number one, sitting on something that is deep under the ground, does not make you fundamentally wealthier. In a strictly economic sense, it just means you have something that is deep under the ground, that you claim ownership over. And that's quite different from actually taking that resource out of the ground, and then making money from it. Myanmar has plenty, plenty of natural resources, of course, it's a massively abundant land in terms of like just what is there. But in terms of what has actually been generated from that, what has been actually been taken out of the ground, what has actually been transformed into investment in the people investment in again, basic thing is rural infrastructure, just like you know, rural roads, basic access to electricity, that has never really happened, access to drinking water, that that process of transforming something in the ground into long term development has never really happened. And and I think it's very clear who the culprit is.

Brad 48:58

So then, looking at the global perspective, because what you've been telling me here is that the military is in control of all of these resources, and that these resources are not intrinsically valuable in Myanmar. They're intrinsically valuable when you sell them to international actors. And so I know that the Chinese are very interested in the Jade industry. I know that they're very interested in the rare earth metal industry. You mentioned copper, you mentioned nickel, I know we had me among witness talking about dysprosium and terbium up in kitchen and Shan and of course, you know, we've we've spoken extensively about the Thai interests in gas. So as far as Yamahas neighbors are concerned, predominantly, you know, China, Thailand, India, Singapore. Is this is this is going to dry up the latent support that these governments have been giving the military is where resources the thing that bribed these neighboring countries into holding them acts for the military regime and and, you know, stopping ASEAN from outright condemning and stopping, you know the United Nations from from getting involved, or is this not really going to affect their relationships?

Guillaume 50:15

I suspect that it's going to have a major effect. You can you can think of natural resources in Myanmar as, as I've said before, as that pillar of power. But it is also collateral. Let me explain what that means for China. And I mean by that, whether it's the political authorities in Beijing or Kunming, but as well as private companies, and state owned companies, but also the same stakeholders in Thailand. The fact that Myanmar had gas that Myanmar had this wealth of natural resources, was also a collateral that you could do business in Myanmar, you could bet sort of on the stability of previous military regimes. And because ultimately, they weren't going to go bankrupt because they had all of this kind of stored wealth. And that if things went the wrong way for you, as a as a neighboring country, or as for you, as a company, you could hope to recover some of your losses, simply because Myanmar might be able to use some of that natural resource wealth to compensate you. Right. So in a way, and I'm thinking very schematic, like schematically here. The natural resources of Myanmar word, this key thing that led I believe a lot of its neighbors to believe, however bad and incompetent, the military rules of Myanmar are. First of all, maybe it's not our problem. It's not our issue. So an internal affairs as the Chinese often say, and second of all, they still have enough kind of resources to not completely collapse and become a failed state at our border. In that sense, natural resources were a collateral in the kind of insurance sense, it gave a sense of security. What's happening now is you pull that collateral away. And now you're just like, kind of bare knuckling it. The SEC is bare knuckling it and more and more so in the coming years as those resources dry up.

Brad 52:51

So, we have seen recently and this has manifested in different ways, and we've had a few episodes where you tangentially we've touched on a seemingly changing posture of China, China, starting to back the SAIC less starting to align itself with Aeos more starting to actually make moves that are allowing for greater and greater successes against the military. Would you say that it is likely that the dire situation of natural resources in Myanmar is a contributing factor to this current ongoing change of Chinese policy?

Guillaume 53:33

Oh, absolutely. I mean, I think that what is currently driving both the pivot in Chinese approach to to Myanmar that change in Thai, though discreet and kind of behind the scenes, but Thailand is also changing its tone towards the SAIC. The change in tone in certain key stakeholders in in ASEAN starting with Singapore what is partly driving this pivot that these countries are becoming significantly more critical of Myanmar or at least sac lead Myanmar. Is that is that is that shortage is the belief that there is a very without natural resources Myanmar can become really now it can become that completely failed state. That becomes a regional problem in terms of drugs. Myanmar is now the largest world producer of opium in terms of migration, you know, we're I'm sure that people in the authorities in Thailand and and in China and India are not thrilled by the prospect of potentially having massive migration flows on top of what has already happened since the coup in across their borders. Right? I am sure I mean, you saw you will set your heel some people say like Thailand needs the workforce because it's has an older pop Religion and things like that. But nevertheless, I don't think that Thailand would be thrilled with massive influx of uncontrolled migration from from Myanmar, into tak province, right. So from that point of view, I think that the decline in natural resources is a structural systemic change, in that there's going to affect the dynamics between the SAIC and China, Thailand, Singapore, other ASEAN partners. It's a major change, it means that the credibility of the SABC is deeply affected, it's corroded, because they can genuinely collapse. And the word collapse is it's a tricky one, right? Because what do we mean by that? Because how often does a scenario like, you know, the Soviet Union collapse happen? It's a very rare thing, usually most changes sort of incremental and, and even what is in substance, a collapse often doesn't look like a collapse. So let's qualify that by saying collapse in the sense of the SEC might just lose control of Evermore territory in the country, and be unable to fund itself and manage its borders, and so on and so forth. Right, the basic operations of a state.

Brad 56:19

Good. And so you mentioned Singapore. And I'm just wondering on that, because I know it because you've discussed the the significance of the trade between Myanmar and Thailand with regards to gas. We've discussed both with you and other guests the significance of the trade with China. But what did Singapore have to get like, we understand that the military, we're keeping a lot of their money in Singapore financial institutions, and of course, you can, you can collect sort of rent from those financial services, but was Singapore actually benefiting from the natural resource sector.

Guillaume 56:57

Singapore was benefiting from the fact that the wealth, all types of wealth that were generated, and all the wealth that was generated by Myanmar, and that was taken by Myanmar leads. A lot of that was stored not only by the military, but also all the crony families and all that was was stored in Singapore through Singapore, that Singapore was that platform through which it was slightly easier, even in hard sanction times it was slightly easier to send money between Singapore and Myanmar and Myanmar in Singapore than with other countries. And so Singaporean banks were open for business for a lot of money that was fundamentally natural resource money. Right. What has changed? I'm no expert of Singaporean politics. I think what you can see is that the relative position of Myanmar today has changed, that the reputational risk of being associated with with the SEC and Myanmar is quite high, even for countries and companies that might not pay that much attention to these things. And the other thing is, again, they there doesn't seem to be a path to stable SEC Rule. Now in the cards, it that doesn't seem to be an option anymore. We are in a period of flux of tremendous uncertainty. What does seem quite clear, is that what the SSE what min Aung Hlaing had in mind, originally, and what a lot of ex military had in mind as well, the kind of attain sane group, the Kenyan group, what those folks had in mind in terms of like a best case scenario, where perhaps this the coup might not be a great idea, maybe we don't know. But in any case, it can lead to maybe a tainting 2.0 a period of, you know, massive new foreign investment in Myanmar, more stability and greater unity of the country, whatever nonsense they used to justify. That is not happening. The restoration of tidal power in Myanmar just does not seem to be happening. And we're almost three years. I mean, that's an eternity, it's been three years and if anything, military power has only further been eroded in these three years. So I think that affects the perception of regional investors who don't necessarily care about, you know, political issues and human rights and things like that. But they are going to care about if I invest in Myanmar, am I going to have a stable environment? Is it going to bring me a bunch of questions from the US Treasury is Is it going to raise a bunch of problems with activist shareholders and things like that? And ultimately, if I invest in Myanmar, am I going to get my investment back? Am I going to get some money back? And what is the chance that I actually lose everything? Because I get expropriated? Because the contract is broken, because and I think one important thing to bear in mind that one thing that the SEC has signaled to the outside world repeatedly, particularly to ASEAN, is that in the hierarchy of priorities, stability is just not high up there. Dominance winning, that's at the top there. And if they have an opportunity to exert dominance, and it comes at the expense of potential stability, even if that stability would enable much greater investment, better partnerships with regional powers and things like that, they will always choose the path of dominance. And, and, and kind of attempting to win. That has repeatedly happened. And I think that as a signal to investors, and a signal to Singapore, to Bangkok and to Beijing is very important, because it means that stability is just not a priority for this regime. They may they may talk about it, they may talk about elections, they may talk about a ceasefire, then we talk about all these nice things that may signal that, but at the end of the day, if they feel like they can show their dominance by executing activists, they will do it. And they won't even think about it. They think it's not even a hesitation. That is a key parameter there.

Brad 1:01:52

I mean, it wasn't they did it. Yeah. So So I find it, I find it really telling that you've, you've laid it out this contrast between dominance and instability, because what we've heard from other commentators coming on and talking is that it is very much the interest of other countries, chiefly China to have specifically stability, because they see economic opportunity in stable neighbors or at least you know, in regions that they can control with with you know, indirectly control with ethnic organizations and and keep stable. So it seems very much like you are you are laying bare, this conflict between what the SABC actually believes in and stands for, and what the neighboring countries who previously have supported the SEC having their own interests. And it seems like there's suddenly a realization happening that the SEC does not stand for our interests would like these countries may have previously believed that they would. But it sounds to me like you're saying that these countries have finally come to the conclusion that no, the SEC is not actually beneficial to our bottom line. And we may need to start looking elsewhere. Is that an accurate representation of what you're saying?

Guillaume 1:03:15

Yes. And I think that what the SAIC. I'll give you a little personal anecdote to illustrate my point. When I when I worked in Naypyidaw, I was often struck by the sense that many seniors senior civil servants had that the world was coming to Myanmar, the world was coming. And we didn't really need to go out of our way to, you know, speaking in their being in their shoes. The world is coming to us Myanmar, because we have all of these natural resources. Look at how much interest we're getting. And it was very striking. And the reason that it was striking is that when you know, you know, yes, Myanmar was a significant kind of recipient of FDI at the time and all that but in the grand scheme of things, we should not overestimate that the value of Myanmar's natural resources in terms of what how it affects China's perception of Myanmar, or how crucial it is for me for China to have child Pugh, and it's an it's investment there. We should not overestimate these things because at the end of the day, it's all a cost benefit analysis. When you The tricky thing is I think a lot of Myanmar's neighbors would not have minded if things went poorly in Myanmar, but we're somehow consolidated Did and contained within Myanmar's borders. The problem that we're seeing now with the SEC is that it is completely uncontained. If anything, power is slipping away from their grip much faster than expected. And so the neighbors are now concerned that how uncontrolled can this situation get? how out of control can it get? When it comes to minerals, natural resources, why haven't we seen massive Chinese investment in gas in copper? In nickel in lithium? Why haven't we seen that? Because remember, the early days of the coup, there were all these questions being floated around about how like, oh, as the Western companies were leaving the it was creating a vacuum, and then all these regional countries would like jump in and take over and it wouldn't. And then sanctions wouldn't have any effect, right, which was a popular line that was being pushed around by oil and gas companies at the time. And yet, none of that has happened. None of that. The there isn't a single new Chinese company operating a gas field in Myanmar. Since February 1 2021. There there isn't a single new Chinese company operating a major mine in Myanmar, if anything, these big mines have become huge liabilities on their balance sheets, because they have the asset, but they can't operate them because of conflict. Right? Literally, like in leppa, Dong Coppermine. The Tamil is using the mind as, as a as a base for its equipment. Right? It has like trucks and ammo and cannons in there in the mind. Because it's sort of naturally fortified. So it's from that point of view that we have to remember that while Myanmar has a, it's a land of opportunity for many, many people and for many, many countries around around it, it is it can also become a liability. And it is becoming a major liability at the moment, despite all of its natural resources. And the SEC has made it so and continues to maintain that because it doesn't know how to operate in any other way than just exerting dominance over the country. What is China's view today? Is it radically changing? It's hard to kind of predict and read the tea leaves here? I think there is. And also, because I think that there is a tendency among Western commentators today to think oh, there has been a massive change. But that's mostly based on the fact that in my view, their analysis of China's position in 2021 2022, and early 2023, was was wrong was not really based on facts. The way I see it, I think 2020 21 From the point of view of China was a period of waiting and seeing 2022 was a period of reengagement in 2023 has been a year of and increasingly so now in 2020 for a year have weighed the bet that we had made in 2000, in roughly April 2022, when we decided to really fully re engage with the SEC, that just does not seem to be paying off. Every time that we meet them every time that we trust them on anything. They mess it up. They the SEC mess it up. And so that raises the question for for China like Well, where do we go from here? And I think that what we're seeing right now, is that kind of formulation of perhaps a a new a new approach or a slight revision of the approach of testing different things. What will work will it be to support certain groups in northern Shan will it be to force a ceasefire? Will it be to strong arm the SEC on certain things? In any case, I think there's just overall much less patience from China's side towards the SEC. There's much less patience in Thailand towards the SEC. Because of the dropping natural resources and because the SEC seems to be more focused on dominance and unstability. One to close on up on this like regional thing regarding Thailand. A key thing to understand Titans position is that Thailand's power supply an energy supply in general comes predominantly from gas. Mostly domestic gas you but also gas imports from pipelines that connect with Myanmar as we've said before, and then gas that is imported on through ships. And that kind of gas is called liquefied natural gas LNG. Thailand's domestic gas production has been falling really rapidly. And at the same time, Myanmar was that the imports from Myanmar have also been falling since 2015. So Thailand is in a bit of a tight spot right now, where it needs to fuel to have enough power to power the post kind of COVID. Growth. And at the same time, its energy supply isn't where it hoped it would be, for a variety of reasons that we won't get into here. Tonight is therefore in a tight spot, because as its resources, its own resources dry up, it can't really say, well, we don't care at all about whatever is going on in Myanmar, just sanction them up the wazoo. We don't care. It's a it's a tough spot for them. Because if there's their supply of gas, and their energy security is still right now very sensitive to supply from Myanmar. And that will change they are pivoting away from that. But they are in that transition of pivoting towards massive increase in liquefied natural gas imports. And also investment in solar and a few of the other things as well. That's a point of view from from Thailand. That goes it's a bit more nuanced than just saying like, you know, it's it used to be a military regime to speaking to a military regime. And like Thailand needs to politicians in Taiwan need the support of military elite and things like that, like that also plays a role. Sure. But there are other parameters at play as well.

Brad 1:11:59

So then bringing it back to what we touched on earlier in this interview. The country, the people themselves, not not so much the military. And I almost dread to hear your analysis, because when we spoke about the power grid, and I asked you whether Myanmar was looking at a South Africa situation, and you responded, Myanmar is looking at a Lebanon situation, I have to ask a similar question, what is the prognosis here? Because it seems if anything, there's been a delay in the extraction and therefore in the depletion of these resources, presumably, that would allow the country post stability to continue it's resource extraction a little bit longer than initially projected. But once these resources are gone, they're gone. There's no way to just put more lithium into the dirt. So what is needed here? What do you think the country needs to do? And what do you think the country can actually feasibly do to wean itself off this extractive based economy? And to try and diversify and to try and find a new stable economic base?

Guillaume 1:13:16

Well, first of all, it's in the short term, the power cuts situation in Myanmar is going to keep getting worse. It will keep getting worse for the foreseeable future. I don't see a likely improvement anytime soon. Perhaps in 2026. A slight improvement but worst will still be far from pre coup levels, which were already as anyone who lived in Myanmar at the time, not great.

Brad 1:13:51

Isn't 2026 democratic government 2026 Or if the coup continues 2026

Guillaume 1:13:56

If the coup continues, if the if if the SEC remains in power, we might see an improvement by 2026. Okay, a marginal improvement on current circumstances, but we won't be back to pre cooled levels of power production, for example. And what that means, practically speaking, is that what we used to refer to as kind of power cut season, which used to go from, you know, February, March, April, May, generally more like March to May. Now, that's going to begin much earlier this year, began in November. And I think that that is most likely what we'll see in 2024. In a scenario of, well, first of all, what is the SEC doing to mitigate this? but not much, there's a little bit of, sort of, they announced a lot of things. But at the end of the day, nothing gets really done. Because the projects are poorly designed because investors don't trust them. Because the situation is in such flux, the political situation is in such flux, that is perhaps not a great environment right now. In a scenario of let's imagine that, you know, the the SAIC period, and, and something new comes along, that hopefully is better. Whoever takes control will be in a tricky position. From from a natural resources and energy perspective, from a from an energy perspective, it'll be in a tricky spot, because energy projects take a very long time to build, there's always a long kind of inertia to them. And so if you take control today, it'll take probably at least 18 months to two years. There's a big asterisk there, but more or less 18 to 24 months before you could get significant, like a really significant improvement, that could be led by a massive investment in solar power and things like that, that could be built very, very rapidly, and so on, so forth. So that's on the energy side, on the natural resources side, the challenge for whoever comes after the SEC is that it will be undeniable that the SEC will have be brought to its knees or to its end. Fair in large part, thanks to the ethnic armed organizations. And that's going to raise problems and tensions, I think because they control far more land and natural resources than they did before. So that's where I think that before the coup you could, the people who control Naypyidaw could be like, well, you know, we're paying lip service to these concepts of decentralization and federalism. But at the end of the day, it's kind of this Western government and Western NGO led concept. And we know based on polling, that the population doesn't make it a population that the overall population of Myanmar doesn't consider it a priority. So we're just not going to, you know, we're going to talk a lot about it, attend conferences, but nothing much is going to move forward. In a post sac world, I don't think that'll be a tenable position anymore. I think that the Ayios, again, I'm not making a political political statement by calling them Ayios or ER O's, I'm just have to choose a term and and that's the one I chose. The, the EHRs will be in such a powerful position, in a post sack world to say, hey, the days of this kind of center to periphery, gravitational pull of all of our wealth from our mountains, to your low lands, where you can then use the money from these natural resources to buy guns to come and exploit us and take advantage of us. That's over now. And if you don't like that, we have far more guns and far more money, then you now because remember, gas is going away. So the money from gas whether you're a military or civilian government, in Naypyidaw, that money is going away almost entirely. I mean, there'll be a little bit left but nowhere near what it what it is today. So you're going to have more powerful videos with more natural resources, and more territory. Most likely, also having learned a lot in terms of kind of politics and negotiations during this this conflict period. And that's going to be in my view, a structuring factor of any post tech world. And so the talk about federalism and the talks about decentralization. Post SAC is not going to be just a political thing that you do to get funding from Western donors. It'll have to be something that organizations and I'm talking, you know, the organizations in Naypyidaw in Yangon in Mandalay, you won't be just paying lip service to these concepts. It'll be a political necessity. If you want to keep the country together, to come up with some kind of new arrangement for how to distribute natural resources, and distribute that wealth between the lowlands and the ethnic areas. That's going to be a major, major conversation, I believe. Then in terms of broader economic reform for whoever controls Naypyidaw going back to this extraction versus production type of economy that we were talking about before. They can go two ways, they can either decide we will put all our eggs into, you know, more gas extraction, but more gas exploration, more oil production, and extraction, more extraction of onshore resources as well, if the IRS allow it. Or they go, Well, we need to pivot away from this economic model, and we need to reinvent Myanmar's economy, we need to go towards an economy that is more productive. That is more based on our human capital. That is based on investing in education, on rural infrastructure, on roads, on electricity, getting electricity to everyone in this country for once. Getting access to communication to everybody, you know, the basic things that a government is just should know that that's what you do, if you want to if you want to grow. So that is the the route that will likely have to be taken. And that'll be a tricky, a tricky path. Because today, you have an economic system that is not only the military that has been geared towards extraction, it's also a lot of the crony groups and all that that are geared towards extraction. That's the economic mindset that dominates in a lot of minerals economy, and that needs to evolve in order to pivot towards more production.

Brad 1:22:32

So despite all of that, and you are predicting a lot of road bumps, you're predicting a lot of obstacles. Despite all of that, you're not predicting an absolute an imminent, irreparable collapse of the economy. It sounds like there's, there's this glimmer of hope that this can be done if the if there is, Will, across the nation across different stakeholder groups. And if there is competent leadership at the helm, you seem to be indicating that this is an achievable goal. This is something Myanmar can do, and can come out of this whole thing. Reformed industrially and economically.

Guillaume 1:23:19

Yeah, absolutely. I think it can be turned into an opportunity. I think it's an opportunity to rethink the political economy of Myanmar effectively, right. It's not just about imagining a new constitution. It's about thinking, how can we generate wealth in this country get people out of poverty without destroying what makes this country so incredibly beautiful and and, and wealthy in terms of resources, which are all of these incredible forests and beautiful mountains and phenomenal rivers? How can we how can we do these two things together? I think there is an opportunity for that. The The tricky thing is going to be let's imagine that we are on day one of you know, Min Aung Hlaing has left into exile. And we don't really know where he's gone. The let's let's hope that someone has also gone into exile. What do you do? And this is where I think we need to think in a perhaps different way from from before. We need to think in terms of specifics. And we need to think in terms of how do we get things back off the ground as fast as possible. Technically speaking, in a way we need a first 100 day plan And for education, a first 100 day plan for healthcare, for energy and for natural resources. How do we get this country back on its feet and basic public service provision, backup as fast as possible, without having additional legislation in those early days? Because you won't be able to pass legislation perhaps, because you don't really know how stable the political environment will be in that time? How do we get doctors back into the right hot clinics and hospitals? How do we get school teachers back into all those schools that have closed? Since the coup? How can we do that immediately as fast as possible? In a post sack world? And in terms of my own focus, and specialty? How do we get power supply? Back to the people who need it as fast as possible? And how do we get the factories going? Again? How do we get industrial zones going? Again? How do we get power to of course, top priority should be getting power supply stable power supply to hospitals, as fast as possible? I mean, this should be on day one, right? Like, how do we get all of that done? Assuming that we'll be in a somewhat tricky political environment. With, you know, you don't know if you have a majority in parliament, if there even is a Parliament at that time. You don't know if you have full control over the bureaucracy, because there might be some who are will still be loyal to the SEC. You might not have full control over regional governments, you might have pockets of resistance, things like that. I think that's what needs to be conceived of right now. You need to really try not to think if you're the AUG, or any kind of resistance group or even an AO or Yarrow, you need to think in terms of early days. And then long term. What has been the case for for decades, and Myanmar has a tendency to focus on master plans, very long term, you know, decadal plans of like, this is how the world will look like. And this is how we're going to evolve. And this is the political decision that will have to be made five years from now 10 years from now in order to achieve our goal. And that often is that often fails that often leads to well, you know, you don't know you're, you're extrapolating so much from current conditions, two years down the road that you just never get there. And at least that's what's been happening over decades in the power sector and in energy. So focusing on you got one team looking at that first 100 days. How do we get all of this back on? How do we get people back in the back in schools, students and teachers? How to get power back to the clinics and the hospitals and the factories and the homes? How do we get the healthcare system back on its feet and so on and so forth? As fast as possible, looking at pragmatically what needs to be done in the first 100 days? Not not what not not making decisions on day one, based on what we hope Myanmar will look like. In 2040. That's how I would think about it. conceptually.

Brad 1:28:27

It sounds very much it's like lineup the problems in order of immediacy, and just start going through them one by one by one by one chipping away at the at the backlog of problems that have been festering since the coup.

Guillaume 1:28:42

Yes. And show up on day one with all your papers ready. Show up with you know, one thing could be let's organize a giant solar tender, an international solo tender with a very tight deadline for delivery. Big, late penalties. And like, you know, then on day one, you should show up with the tender documents are ready. The structure for the PPAs is already ready and disseminated. Right and the timeline, the schedule, everything is already out there clear, transparent, available to everybody who wants to get involved. And then get all these energies back into Myanmar get everyone involved again, but have a structure to it and come prepared.

Brad 1:29:32

If we go in on day one, let's say you know, hypothetically, the military are besieged in Naypyidaw. They haven't necessarily surrendered. But there are nonfactor at this point. A new government has been declared in Yangon, Mina Lyon has probably gone into hiding although we can't confirm and so the new government says we're putting out a tender in that kind of a condition. After so many years of conflict, would they be in interest from outside of Myanmar to put tenders in, could they attract that investment so quickly?

Guillaume 1:30:07

I believe so. On the condition that you make it very clear that you're, you're being transparent, that it's all above board. And that you will commit to you know that a contract means a contract, and that you, as a government are here to foster development, you need to speak the language of these regional investors rebuild that trust. But I believe that today, for example, when it comes to solar, the price of solar is just so so low. There's so much production capacity there is there's plenty of expertise in China today in terms of like, how do you build a giant solar plant in 18 months, like, they have that expertise, they can do that? Can you create just the right conditions for them to they're willing to operate in, you know, suboptimal political environments. It doesn't take much, but you need to signal very clearly, we'll be transparent about you know, these are the documents that are available to everybody. It's an competitive international tender. The we will commit to this and we will commit to you know, we very clearly we rely we we will rebuild Myanmar with everyone who is interested in getting involved, and we will respect what a contract means. And, and so forth, so on so forth. Just, you know, being being serious about governance, I think as long as you signal that you are serious about governance, that you're not being just purely, you know, focus on short term things. They will come back, they will come back, because you when you look at WeChat groups of Chinese State Owned Enterprise employees, what they are saying about Myanmar is, I mean, there's just so much growth opportunity here. Right, it's only a matter of time for them, they will be back, they want to be back. It doesn't it won't take much for Western countries, I can understand it might take longer, because perhaps their their what they will consider as country risk will be will be higher. But I think regional investors will, will come back very quickly.

Brad 1:32:32

That's interesting, because especially when it comes to solar, like if I remember correctly from the last conversation we had you said that Vietnam's expansion just in Seoul, a section was larger than the entire power grid of Myanmar. It sounds like they are a country and they have interacted with Myanmar in the past. I mean, my tell being a subsidiary Viet, they'll like they've clearly interacted with Myanmar. Yes, through the military. What do you think they might be interested in in sharing some of that technology and investing again, in Myanmar under democratic circumstances?

Guillaume 1:33:06

Oh, for sure. And actually, I mean, you point to a very interesting case study that I think Myanmar could really learn from the way that Vietnam pivoted to solar, Vietnam that is a quite a significant oil producer. The way that they they pivoted to solar is quite remarkable. I mean, it's very, very smart. It's very state LED. And, but in a way that, you know, this kind of approach of like, state led approach to development is something that can resonate with policymaking in Myanmar as well. So there is something there to be to be learned from. And I think that also the those companies and and agencies in Vietnam, that implemented this remarkable transition, could could really teach their counterparts in Myanmar, and be involved in in accelerating that process. I think ultimately, you can have and you often have this in, in post war, economies are catching up effect, right that this is in French, in France, this is what we call the glorious the 30 glorious years of economic growth post world war two that really tracks with a kind of very fast, catching up effect after conflict, where capital just rushes in and people start living again, and the economy starts to operate again and become ever really evermore complex and intertwined and all that. I believe that that will also happen in Myanmar, that we'll be surprised by how fast that process is. But it's absolutely key for whoever is going to take over afterwards. After the SEC to have the right signaling the right message to the outside world to say and to local investors. About these, this is what's going on happened to projects that were signed during the SAC years. This is what's going to happen to land agreements that you might have signed during those years. This is what's going to happen to projects that were signed before the coup, but we're not implemented. Just having that clarity, that transparency, about the direction that general tone has to be. We're serious about reconstruction.

Brad 1:35:25

I mean, this is, I'm going to be honest, this is actually much more optimistic than I thought we were going to end this discussion on, you seem to be saying, you know, in much the same way that we have said that there is no pathway for SAIC dominance, there is a clear pathway for a democratic Myanmar to come out of the ashes and establish itself, if anything more robust, more diversified, more equitable than it has been in its entire independent history, which would be a phenomenal outcome. And you know, to be a little bit more poetic, some would say, a fitting capstone on the sacrifice of the many, many, many people who have given their lives in this conflict. So I'm actually quite heartened to hear what you're saying, despite the seriousness of our discussion today. That, that there is a light at the end of the tunnel, if stable government can be presented to the international community, competent leadership and, and a type of professionalism and a type of, as you put it, language that is amenable to the international business community. But this is much more optimistic than I thought. Yeah, I

Guillaume 1:36:50

mean, I think to be clear, if you are living in Myanmar, in between now, and you know, 2027, at the earliest 2028, you're power supply is just not going to be good. You're gonna have really rough, hot seasons. The healthcare system is, you know, there's an inertia to all of these things. independently of the political changes, there are some kind of long term trends that have been set into motion by by the coup. And so that is not going to, to really improve. But I think we can start to outline, making some assumptions, we can start to outline what could be a path out of this, and Myanmar doesn't have to, you know, become a permanent warzone. It doesn't have to be completely obliterated. I think there's a need for sort of a new social contract to some extent, a new kind of settlement for house. Naypyidaw versus ethnic nationalities relations should function including in terms of natural resources, and environmental regulation. There's a lot to reinvent. But we can we can make the we can make the best of it. I think. I think there's a there's there's an opportunity hidden deep down in there. So yeah, I think that I hope that every one thing to take away from this is that I hope that every person who has some expertise in one of these key sectors can start thinking about if you were in charge of making that 100 day plan, that first 100 day plan, what would you do? What would be your first regular your first changes, policy changes that could be done remember, at low cost without extra legislation, because you don't know what the legislation process will be? Then just start thinking about that and maybe like share thoughts, whether it's on Twitter or in the media or something like that. We need this kind of international massive brainstorming process. The other thing that gives me hope and I'll finish on this is when you look at the amount of fighting and atrocious suffering that has been experienced by throughout Southeast Asia and China over the last few decades, the over the 20th 20th century, when you look at how fast these countries can recover, once you just create the conditions for stability and peace I'm just basic conditions for human kind of development. It gives me hope, when you see the amount of devastation that was inflicted on Cambodia and Vietnam. And today, you see that Vietnam is a leading renewable energy power. In Asia. It's extraordinary. It's an extremely extraordinary transformation. That a country like Cambodia, however crazy was strange, its own development and corrupt its own development is that despite having exterminated between a quarter and a third of its population, including most of its elites, or most of the people who could have been in charge of a reconstruction process remains somehow on the path to to growth, though of deeply problematic one. That should also give hope to those two, you know, Myanmar is not doomed, there is a path it will be tricky. It'll be very imperfect, and probably unequal. But there is a path. Yeah.

Brad 1:41:11

Excellent. And I think that's a very positive note for us to to end on. And I do want to thank you for coming in and spending so long going into detail in this in this topic, and a topic that I think we can probably even return to in later episodes, because there seems to be such an untapped wealth of of background and context and and layers. To this.

Guillaume 1:41:35

There is hope, number one. Number two. Don't wait to have permission to start contributing. Don't wait for someone to tell you, we need you to do this or that. Brainstorm ideas, go looking for the people who want to do things. This is a moment of flux. It's a moment to propose things. And if you have an expertise, if you have any kind of I'm sure that there are hundreds of people out there who have very specific knowledge about things that are essential to understand development in Myanmar, and how to get out of the situation. Don't wait for permission to contact me. Send me your thoughts. Fine, other people create teams and so on and so forth. We don't have to wait to be given permission to imagine the future.

Host 1:42:55

Thank you for taking the time to listen to this episode. As regular listeners are aware, we often remind our audience about our nonprofit mission better Burma at the end of the show. Truth be told, fundraising is hard work. And I can personally attest the fact that it's really no fun to keep asking for contributions. Yet the situation on the ground now in Myanmar is so distressing that we continue to do so on behalf of the Burmese people. What is most helpful at this time are recurring donations, which help alleviate both the stress and time involved in fundraising. If you were able to pledge a certain amount per month, our team can plan around having at least a consistent minimum amount to work within each month. If you would like to join in our mission to support those in Myanmar who are being impacted by military coup, we welcome your contribution in any form, currency or transfer method. Your donation will go on to support a wide range of humanitarian immediate missions, aiding those local communities from either post. Donations are directed to such causes as the Civil Disobedience movement CDM families of deceased victims, internally displaced person IDP camps, food for impoverished communities, military defection campaigns, undercover journalists, refugee camps, monasteries and nunneries education initiatives, the purchasing of protective equipment and medical supplies COVID relief and more. We also make sure that our donation Fund supports a diverse range of religious and ethnic groups across the country. We invite you to visit our website to learn more about past projects as well as upcoming needs. You can give a general donation or earmark your contribution to a specific activity or project you would like to support. Perhaps even something you heard about in this very episode. All of this humanitarian work is carried out by a nonprofit mission that or Burma. Any donation you give on our insight Myanmar website is directed towards this fun. Alternatively, you can also visit the better Burma website better burma.org and donate directly there. In either case, your donation goes to the same cause and both websites accept credit card. You can also give via PayPal by going to paypal.me/better Burma Additionally, we can take donations through Patreon Venmo, GoFundMe and Cash App. Simply search better Burma on each platform and you'll find our account. You can also visit either website for specific links to these respective accounts or email us at info@betterburma.org. That's betterburma. One word, spelled b e t t e r b u r m a.org. If you'd like to give it another way, please contact us. We also invite you to check out our range of handicrafts that are sourced from vulnerable artists and communities across Myanmar. Available at alokacrafts.com Any purchase will not only support these artists and communities, but also our nonprofits wider mission. That's aloka crafts spelled A L O K A C R A F T S one word alokacrafts.com Thank you so much for your kind consideration and support.