II – Uncle

Along the Shwedagon Road from the pagoda, the statues of Buddha give way to Burma's political idol.

Aung San Suu Kyi smiles from books, badges and baseball caps at stalls lining the approach to the headquarters of the National League for Democracy.

Inside they're preparing for government.

A dozen desks with red plastic chairs and battered filing cabinets mark beginnings of shadow ministries. One group is planning an education curriculum to introduce concepts of democracy and parliament to children whose parents have known only dictatorship. At another table sits a 75-year-old man jailed for seven years in the 90s for writing a song the government didn't like. He hands me a leaflet showing an artist's impression of a three-story HIV/AIDS clinic planned for Yangon.

Behind him, a narrow creaking staircase climbs to the NLD's meeting room.

Every space is crammed with boxes of Aung San Suu Kyi merchandise – an essential source of party funding.

Tacked on a thin plywood wall is the red NLD flag with its white star and yellow fighting peacock. Beside it, a life-sized golden bust of “the Lady.” Rested against her is a framed photo showing Barack Obama with Suu Kyi one side and on the other, General Thura Tin Oo, the party's founder and now – at 87 years old – its patron.

Tin Oo was 19 when he joined the army under the command of General Aung San – Suu Kyi's father.

“We served our country in our younger days,” he says, sitting at the head of the party's long board table, “for the restoration of liberty and democracy – for our cause.”

A year later, in 1947, Aung San negotiated Britain's withdrawal from Burma. Within months he was assassinated by a political rival.

During the succession of communist insurgencies that followed – culminating in the dictator Ne Win seizing power from 1962 – Tin Oo rose through the military ranks. By 1976, he was viewed as a potential challenger to Ne Win and was dismissed from the army on corruption charges and then jailed for withholding information on an assassination plot against the ruler.

On release in 1980, he became a monk, studied law and then joined the cause for democracy. By that time Burma's economy was sinking into Least Developed Country status¹ as Ne Win blocked all foreign trade. His policy mix, born out of paranoia and superstition, included wiping out countless savings by replacing the largest denomination notes with new 45 and 90 kyat bills. Ne Win wanted those numbers because they're divisible by nine and their numerals add up to nine – and nine was his lucky number.²

Ne Win stepped down in July 1988 and a month later, on the 8th of the 8th, 1988, in what became known as the 8888 Uprising – another auspicious number – Burma's student-led protest movement demanded democracy. Tin Oo founded the NLD with Suu Kyi and the former newspaper editor, Win Tin. They would spend most of the next two decades between prison and house detention.

Suu Kyi's call for “reconciliation, not retribution” for the wrongs of the military is embodied by Tin Oo.³ “I don't think I, or any individual, has the right to say I forgive or not forgive,” the Nobel laureate said of her captors shortly after being released from house detention and 23 years of exile from her husband and two sons in 2012.⁴

It was under Tin Oo's tenure as army commander-in-chief that soldiers opened fire, killing striking workers and protesting students in 1974.^5–7

“I had to face up to the harm I did to people,” Tin Oo told three thousand delegates at a civil society forum in Yangon in early 2014. “Admitting one's errors is painful, but it is an important step for reconciliation. We cannot let our ego overtake the welfare of future generations.”⁸

Dressed in the party's salmon-pink uniform shirt and blue-green longyi, Tin Oo nowadays runs the party headquarters while Suu Kyi as an MP is 400 kilometers north in the political capital Naypyitaw.

Midway through our meeting two American women enter the headquarters looking for “Uncle.” They hug his frail frame, present a box of dates and reminisce of their antics as political activists when they'd feed the guard dogs to break through in the days of the house arrests. They ask after “Aunty.” Daw Suu Kyi is “very busy now,” he says, smiling. “Always busy.”

While Tin Oo sees the “light for the way to betterment” in the current political transition, there are three big issues that must be resolved.

The first, he says tapping his fingers on the white cloth to punctuate his speech, is the rule of law. It's the starting point Suu Kyi references when asked for her stance on the ethnic conflicts in Rakhine or the Karen region: enforce basic laws and soldiers are suddenly accountable.

“We do not yet enjoy the rule of law because the judiciary is not independent,” says Tin Oo. “The judges have been appointed. They must be elected based on independent, prestigious experience.”

The second priority is amending the constitution to rescind those clauses that hand a quarter of parliamentary seats to the military and bar anyone with a foreign spouse or children from becoming president. Suu Kyi's late husband was British, as are her two sons.

The 25% of parliamentary seats granted to the army happens to be just enough to block any changes to the constitution, which require at least 75% support.

“We are going to change the constitution,” says Tin Oo. “It must not be meant for one person or one group but it must serve us all together.”

Finally, the government needs to resolve the armed conflicts in the ethnic regions through the devolution of power from Yangon.

“Many people don't like to hear federalism because they think it means a split of the union,” taps Tin Oo. To him, it means equal status for all nationalities and self-determination. It requires that business deals in the Karen gold-mining areas and any other region must be transparent and inclusive – “not the secret military man and the businessman” deals that inevitably cause resentment.

I put to Tin Oo a concern we heard constantly from business executives – that the NLD is inexperienced in matters of the economy. Even those proclaiming themselves democracy supporters saw the best outcome being a continuation of rule under President Thein Sein with Suu Kyi as his deputy.

Suu Kyi, with a degree in politics, philosophy and economics from Oxford University, “very much understands how to run the economy,” replies Tin Oo. Beyond demanding business transparency, NLD economic policies range from improving infrastructure to reducing the reliance on China.⁹

“Every day,” says Tin Oo, “the lights go off for half an hour, one hour even. There was a very huge forum recently, a very prestigious forum, with businessmen from the USA, the EU, Japan and other countries, but they are hesitant to make big business in Burma because our country's infrastructure is so bad. This is the time we're going to improve the infrastructure of this country and then the big businesses will come in.”

The NLD will push for better terms from China on infrastructure projects, says Tin Oo.

“Whenever they've got anything that needs money they approach China, and the people don't like it,” he says. “These people are getting too much in the way of concessions. If they carry on like that, the growth of the country will get worse and worse.”

III – Yoma

Howie's only Burmese investment trades 2500 kilometers away on the Singapore Stock Exchange. Yoma Strategic Holdings is by far the biggest listed Myanmar business. It spans agriculture, transport, the auto industry and real estate. Among its portfolio is Star City, a waterfront development planned to house over 30,000 people along with golf courses, hotels and industrial sites.

The company has made founder, Serge Pun, the richest Burman never to appear on US or European sanctions lists for connections to the military.

Pun left Burma when he was 12. His father, a Chinese-born banker, settled the family in Beijing in 1965. The Cultural Revolution followed and young Pun was packed off with the Red Guards for re-education.

At the age of 20, he left for Hong Kong with 5 HK dollars in his pocket. He got a job selling air sanitizers. It was his pitch to a real estate office that brought his first break. The owner, Elmar Busch, hired him on the spot.

Returning to Burma in the early 90s, Pun started out with a 500-acre gated community in the west of Yangon. His empire quickly expanded into banking but then hit the rocks. In the fallout from a nationwide run on deposits in 2003, Yoma Bank was barred from conducting regular banking business for nearly a decade.

In the last few years, Yoma has become a proxy for money flowing back into the country. In 2011, as President Thein Sein took the first steps toward democratic government and liberalizing the economy, the stock doubled. It quadrupled in 2012 as the USA and Europe responded by easing sanctions and Yoma won back its full banking license. Four decades after Busch hired him in Hong Kong, Pun returned the favor by appointing Busch to run his real estate division.

While Driehaus owns Yoma in its Emerging Markets Small Cap fund, Howie sold the stock from his main portfolio in 2013. The shares had started getting too expensive as the company's valuation jumped from 33 times its annual earnings in September 2012 to 68 times a year later.

The stock flat-lined as Yoma lost in its bid for a telecoms license to Norway's Telenor and Ooredoo QSC of Qatar, reducing its price–earnings ratio to below 40 by late 2014.

“Myanmar has been the darling of the market,” says Pun, sinking into a comfortable white Jacquard armchair at his office in Yangon. “Some of that euphoria has come off. We've come to see more sensible expectations.”

But foreign investors need to keep a longer term perspective, he says. What's significant about the government reforms afoot is that they resemble the political liberalization of Mikhail Gorbachev's “glasnost” with its focus on eliminating corruption and trying to enforce rule of law. This sets Myanmar apart from countries like Vietnam and Cambodia, which adopted Deng Xiaoping's more limited model of economic reforms for China.

The changes won't yield results right away. Wiping out corruption at the lowest levels of government, for example, first requires that officials are paid enough to live. It will probably take three presidential terms – 15 years – for these policies to take root, says Pun. But if they're even partially successful, Myanmar will emerge as a country with the low corruption and rule of law of Singapore but with far bigger economic resources.

For now, tourism is the “low hanging fruit” in the economy for Pun. While visitors to Myanmar tripled from 300,000 in 2012 to a million in 2013, that number pales next to neighboring Cambodia, which took in 3 million. That's the level the Burmese government targeted reaching by the end of its term in 2015 – yet Thailand receives around 18 million.

“We have snow-capped mountains, skiing, tropical islands, highlands, serene lakes, hiking, we have such a diverse tourism resource,” says Pun, who took his company name from the Burmese for mountain range. “These are exponential growth numbers, and they're conservative projections, so it's a no-brainer to go into tourism.”

Along with hotels, Pun is running planes to take tourists from the Himalayas between China and India in Myanmar's north to its southern-most reaches just above Phuket in Thailand. He started flights between Yangon and the capital, Naypyitaw, in 2012 as a separate business from his main holding company.

Property development brings in most of Yoma's revenue. Rent in three office towers built in Yangon in the 90s – the Sakura Tower, FMI Centre and Centrepoint Towers – climbed from $22 per square foot in 2011 to around $100 by 2013. That topped downtown Manhattan at under $75. Tenants include Standard Chartered, PricewaterhouseCoopers, Coca-Cola and Nestlé.¹

Prices are rallying because there's only a tenth of the office space needed, according to Pun. Until demand is met, prices won't fall. “Most companies are carrying on from private homes because there are no offices available.” The same shortage applies in residential housing, he says.

But Pun doesn't predict gains for all property in Myanmar. The rally in industrial land prices looks unsustainable. “That works in a very different mold. When industrial land is so inflated, it doesn't make sense to build a factory here, so the demand disappears. This is a sector that's going to be hurt.”

IV – Son

Toe Naing Mann hands us two business cards. One says he's the Chairman of RedLink, Myanmar's largest telecommunications group. The other says he's the Advisor to the Speaker of Pyithu Hluttaw.

Pyithu Hluttaw is Myanmar's lower house of parliament. The Speaker is his dad, General Shwe Mann.

“I always refer to my father as my boss,” says the 35-year-old.

Before the transition toward civilian rule in 2011, Shwe Mann was the army's joint chief of staff and the No. 3 in the military government council that ran the country for two decades under Senior General Than Shwe.

Chairman Toe says he began advising on a voluntary basis.

“I was trying to serve him,” he says. “My father became the Speaker of the Lower House. We had no experience of that. We didn't know how to implement or how to organize a parliament, so I tried to find out how to make resolutions, plenary sessions, commissions, committees.”

Now he's on his father's parliamentary payroll, but he refutes my suggestion of nepotism.

“Why has the Speaker appointed his son as Advisor? Why? We have 46 commissioners in our commission but the rest of the guys are very busy. I'm the only one who lives with the Speaker, so we don't need to negotiate or make appointments every time.”

Chairman Toe is the general's younger son. A year older is Aung Thet Mann. He's also done well, creating a construction-to-fertilizers company that's owned by Myanmar's wealthiest businessman, Tay Za.¹The tycoon is on America's sanctions list of Specially Designated Persons with links to the military, as is Aung Thet Mann.²

Toe's wife, Zay Zin Latt, is also on the US list as the daughter of Khin Shwe, a property magnate and member of the upper house of parliament.³

Toe isn't on the sanctions list. Rather than benefiting from his father's position, he insists he's had to wind down some of his business activities to focus on his political role.

“I have to serve my boss as my comrade,” he says. “I had four companies, I had to shut three. I can't take care of all these companies. We lost a lot of money. Sometimes I don't know whether my communication company can survive or not.”

Suddenly the chairman stands up, complaining of back pain. He damaged his spinal cord in the army in 2006, he explains. He left two years later and set up RedLink in 2009. He lights a cigarette, looking out at the construction site for office expansion below.

“I have lived with the military for more than 30 years. I know all the leaders, every man. I listen to them – what's their ideology, their vision.”

“Currently, the military is very sensitive, they are very angry. They think they can't get any credit from the democratization. You have to understand the military tolerance. We need democratization to happen step by step.”

During the adjustment process, the military should keep its 25% of the parliamentary seats, he says.

“If we can create political stability in 2015 to 2020, then we can say, ‘okay military, what are you doing in parliament with this 25%?’ If everybody asks, they will be shy, and they will step down. It's a transition. Don't interfere until after the election.”

While military connections run through many of Myanmar's biggest companies, two are directly owned by the army: Myanmar Economic Corp., or MEC, with interests ranging from steel and cement plants to banks and insurance; and Union of Myanmar Economic Holding Ltd (UMEHL), which spans gems, tourism, real estate, transportation and metals.

“All of the Myanmar soldiers have their shares in UMEHL,” says Toe. “I have also, I'm maybe around the $2000 mark, not very much.”

“If you tell a general, you have to shut down your MEC, you have to shut down your UMEHL, how about his feelings? We need to give them appropriate time to step down from the business sector.”

* * *

Former Silicon Valley investor Daniel Michener worked as a consultant to RedLink soon after the US lifted sanctions.

“I'm probably the only American who's served in an executive capacity in any Myanmar company,” says Michener. “I've been here pretty much since the gates opened.”

Michener shares Chairman Toe's view that the military can't be flushed out of the economy too quickly.

“I don't see the military thing as necessarily bad,” says Michener. “It's just reality. The people who have had money here are the former military officers and people related to them. There wasn't a private sector entrepreneurial class, it just didn't exist, and if there were people who had money, they mostly went to the UK or Singapore.”

“People would always say things about RedLink – U Toe Naing Mann owns it so it's a government proxy. It doesn't operate like that at all. I don't see Thura U Shwe Mann exerting influence over his son. I think the days of overt corruption for the most part are gone.”

“That doesn't mean it doesn't happen. You're still visiting ministers and bringing them bottles of nice Scotch and trying to curry favor.”

Transparency International ranks Myanmar as the 21st worst country for corruption of 177 worldwide. Still, that's an improvement from 2012 when it was in the bottom five with Sudan, Afghanistan, North Korea and Somalia. The World Bank's International Finance Corp. groups it among the eight worst for ease of doing business.⁴

Getting companies to open their books to the level needed by international investors is a struggle, says Michener.

“People feel that you're trying to pry when all you're doing is due diligence. They've had so much control over their businesses historically that this transparency thing, they know they need to do it but it also means giving up power.”

Another reason is tax. “People do statutory audits and none of them are right because they're designed for the tax inspector, and so they'll do things like pull revenues out,” says Michener. “I heard a story today that someone went to the tax authorities and they said you can't report this much, you'll mess it up for everybody else, so you can't look at the numbers and trust them right now.”

The lack of transparency can make it hard to identify whether a person on the sanctions list is involved in a company.

“Until they make that transition, I think you're going to have trouble raising capital.”

VI – Monk of Mandalay

Bloomin' idol made o' mud –

Wot they called the Great Gawd Budd –

Plucky lot she cared for idols when I kissed ‘er where she stud!

On the road to Mandalay…

When the mist was on the rice-fields an’ the sun was droppin' slow,

She'd git ‘er little banjo an’ she'd sing “Kulla-lo-lo!

Rudyard Kipling, Mandalay – 1890

By nightfall I'm back on the bus for the road to Mandalay.

Where Rudyard Kipling's green-capped maiden sang “kulla-lo-lo,” a video screen above my head blasts a talent show with karaoke lyrics. After two hours there's short relief as we pull into a halfway house. A panpipes interpretation of “Oh Danny Boy” plays on repeat in the restaurant.

I already ate in Naypyitaw but the guy who was next to me on the bus won't hear of me missing dinner here. He calls the waiter with the kissing sound used for a cat. Like the old man on the bus in Yangon, there's no way he's letting his “guest” pay. The food is Chinese as are the shop signs the further we head north toward the border, the road becoming smoother and wider.

We pass through the lakeside town of Meiktila. It was here one dawn in March 2013 that a Buddhist mob massacred scores of Muslims. On the wreckage of shops, rioters painted three numbers: 969.¹

I check into the Pacific Hotel right by Mandalay's bus station. The bell boy shows me my room and then hunkers down on the floor outside. Below is a two-lane roundabout where motorbikes, some ferrying monks on the back seat, shoot in every direction, narrowly skirting people and bicycles. I drift off to the tooting and revving, missing the tranquility of bike-less Yangon.

Mandalay has the layout of an American city, with straight-line horizontal roads numbered 1st to 50th Street while 51st to 88th run vertically. It helps as I hire a motorbike the next day with a rider who speaks no English.

I point on the map to 80th Street for the Mandalay Palace, the last bastion of Burma's monarchy. Its multi-tiered roofs, the all-important display of the inhabitants' importance, are unlovingly reconstructed in corrugated iron. The army, or Tatmadaw, check the tourists coming and going beneath a giant billboard warning: “Tatmadaw and the People Cooperate and Crush All Those Harming the Union.”

Close by on 82nd Street is the Mahamuni Pagoda. It turns out there's a stricter code of Buddhism here. The knee-length shorts I wore at the Shwedagon in Yangon are too short for the monks of Mandalay. I'm ushered to a longyi stall where I obligingly step into the wide waist and pull it to my hips. I let the stallholder tie it in the local style. With shoes off and longyi on I head to the giant gold Buddha shrine. And at that moment the longyi falls to my ankles. Children giggle as my driver quickly binds a sturdier knot.

As the authority of Myanmar's military wanes, monks have the biggest influence on how people think and vote – especially beyond the commercial and political centers of Yangon and Naypyitaw. One monk in particular is amassing a big following.

The Masoeyein Monastery, near the broad Irrawaddy River, is set out like a campus with a dozen or so two-story buildings. Monks shrouded in maroon or orange drift about reading Buddhist canons or clean and sweep for karma.

On the approach to the middle building, all harmony is shattered. Pinned to the wall are photos of dead bodies – a woman in a makeshift coffin, another with a red gash from her ear to her neck, a man with his stomach sliced open, intestines spilling out. To the side, larger than life, Aung San Suu Kyi waves from a vinyl hoarding, the fighting peacock above her head.

Ashin Wirathu is dressed in orange but he's instantly recognizable from his picture in a maroon robe on the cover of Time magazine with its headline: The Face of Buddhist Terror.

Wirathu caught the attention of the world media when his sermons went out on YouTube early in March 2013. “Do not let your money go to your enemy by spending at Muslim shops,” Wirathu tells his followers. With a soft voice and passive face, he urges them to stop their children from marrying Muslims lest they become a “threat to your country and destroy our religion.” Muslims, he says, “would snatch us away from our land.”²

It's not just words with Wirathu. So that followers know where and where not to spend, Buddhist shops and cabs are given stickers with the numeric symbols for religious virtue: 969.

As is expected in the monastic order, Wirathu sits at his desk while his guests – they've included the president, Aung San Suu Kyi and the Dalai Lama – sit below him on the floor. Behind his chair on a jade-blue painted wall are five framed photographs of himself and a calendar with pictures of Suu Kyi. Twenty books are piled in front of him.

A disciple videos the meeting, part of Wirathu's rules of engagement since finding himself on the cover of Time. The French ambassador visited recently but objected to being filmed; he left 15 minutes later, says Wirathu.

Every few minutes, followers come to pay homage. They kneel and bow. Wirathu gives them DVDs of his teachings and the message of 969.

He pours himself a cup of tea from a pot. His voice emits no emotion save for a dismissive laugh when presented with the accusation that he's fueling violence against Muslims.

“The root causes are on both sides,” Wirathu begins evenly. “The root cause is that Muslims raped and acted in group violence even though they knew there would be conflict. The second thing is that, instead of taking legal action against the offender, the Burmese responded by attacking other people who did not commit the crimes.”

In the town of Meiktila, says Wirathu, Muslims killed a monk and beheaded the Buddha image before the Burmans responded.

According to eye witness accounts in international media reports, the killing in Meiktila was sparked by an argument over a hairclip. Aye Aye Naing, a 45-year-old Buddhist, went with her husband and sister to pawn her gold clip at New Waint Sein, a Muslim-owned shop.

The Buddhist version of events is that after workers studied the gold, it came back damaged and the shop owner halved the price he was prepared to offer to 50,000 kyats ($52). The woman called the owner unreasonable. He slapped her. When Aye Aye Naing's husband remonstrated, he was pulled outside and beaten by three staff.

As police arrived and detained both parties, an angry crowd started shouting anti-Muslim slogans, hurling stones and wrecking the shop.

Four Muslim men responded. They attacked a monk on the back of a motorbike with swords. Then they doused him with fuel and set him alight. A Buddhist mechanic who witnessed the murder ran to the market shouting “a monk has been killed.” In the hours that followed Muslim homes, shops, a mosque and an orphanage burnt to the ground.³

“When a person is always bullying you,” says Wirathu, “to what extent can you tolerate it? The victim tolerates it ninety nine times but the hundredth time, he can no longer.”

“All the monks have this kind of resentful feeling, but it hadn't yet exploded. How and when does it explode? In a case like in Meiktila, when a monk with an alms bowl is killed.”

The international community, Wirathu complains, “only questions why we responded like that to the hundredth incident. They don't know how the people suffered the other ninety nine times.”

Violence is against Buddhist principles, he says, and bad for the nation and religion. Wirathu claims he always preaches for the public to know that. For evidence he shows a pamphlet that reads: “969 Denounces Killing, 969 Does Not Accept Terrorism.” He denies calling himself the Buddhist Bin Laden.

He says he's participated in interfaith discussions at the Myanmar Peace Center and wants to work with Muslim leaders. One Muslim from Yangon who visited him four times for discussions stopped after receiving threats on Facebook while his house was stoned.

“If the Islamic leaders talk with me today, the conflict will be stopped today. If they discuss tomorrow, it will stop tomorrow. It's because I know the root cause of the conflicts in detail.”

It isn't the first time Wirathu has been accused of fueling violence. In 2003, he was sentenced to 25 years in jail for inciting religious conflict. Thein Sein released him in 2012 under an amnesty. A year later the government blocked Time magazine's issue from sale in Myanmar. The President denounced the report for undermining the trust being built between faiths.⁴

“We religious groups warned the government about the hate speech before the conflicts happened,” says Nyunt Maung Shein, President of the Islamic Religious Affairs Council. “‘Please take action, President’ – we wrote three times. They did not take action.”

Nyunt Maung Shein is from the town of Meiktila. He lost several of his family in the rampage. The violence, he says, was professionally orchestrated, with stimulant drugs fed to the attackers.

“People with red eyes came into the houses holding swords. They killed elderly, youngsters, pregnant women, people in wheelchairs. Then that group went out and another group came in and looted,” he says. Finally they burned down the houses and mosques.

“It's obvious that people who were trained did this,” he says. “I told the generals and ministers that this is highly organized. They also know it, but why don't they acknowledge this? The government has a duty and a responsibility.”

While the official death toll in Meiktila was 32, Shein says 86 were killed. Four were his relatives. Their killer was jailed for just seven years, says Shein.

“We can forgive,” he says, “but it's very difficult to forget. I am over 70 years old, we will not forget.”

Meiktila has 14 mosques. Only a handful have reopened and they're all far from where people live. When Shein complained that they were being denied the right to worship, the President ordered government ministers to re-open the mosques, he says. Yet still they remain shut. “They don't honor the President's words.”

Shein says he too is engaged in interfaith dialogue. But resolving the conflict will take more than talks between leaders.

“We have to go to the conflict area and persuade the people.” The task is made harder, he says, because only 3 to 5% of people are educated. There are state schools but no students.

“They don't know why they should study when in the economy there is only fishing, no other business,” says Shein. “The economy is really bad. This is one of the factors in today's problems. In this situation, foreign investment won't come. Why? There is not tranquility.”