Land Reform: A Critical Test for Myanmar’s Government

One of the byproducts of the reforms launched in Myanmar over the past 18 months has been a sharp rise in protests against land acquisitions by previous governments and their businessman friends. Parliament’s Reform and Development Monitoring Committee said in June that it had received complaints from thousands of farmers in the Magway region during a fact-finding trip in central Myanmar.

The most prominent ongoing case is that of villagers from Sarlingyi township in Myanmar’s northwestern Sagaing division. They have been protesting the loss of their land to a local copper mining company since 2011. They are demanding the return of confiscated land and/or adequate compensation, as well as an end to forced relocation and the dumping of waste in surrounding areas. Tensions between the two sides recently escalated as 10,000 villagers staged protests September 5, prompting the government to dispatch 200 security personnel to keep peace between the protesters and company officials.

Land has long been a politically and economically contentious issue in Myanmar, at least in part because more than two-thirds of the population relies directly or indirectly on agriculture. As Myanmar undergoes economic liberalization, land issues have emerged at the center of the country’s political debate and reform agenda. How these disputes are resolved matters a great deal to foreign investors, who need guarantees that they will have legally protected rights to use land over the long term even if foreigners are not allowed to own land in Myanmar.

Under the past 50 years of military rule, land was frequently taken from farmers with little or no compensation and given to cronies of the former junta. It is estimated that approximately 1.9 million acres were illegally transferred to private companies in the past 20 years, even though 70 percent of that land has never been developed and is still used for farming by the original owners.

One-third of Myanmar’s 47 million rural residents are landless laborers, while others struggle to hold onto their farms through funds borrowed from the informal market. In the aftermath of Cyclone Nargis in 2008, rural poverty peaked when many small-scale farmers could no longer afford to make payments on their loans and were forced to find non-agricultural employment.

Given this history, farmers have understandably become alarmed about the possibility of further land confiscations, especially as the country is expecting a sharp increase in foreign investment and development projects in the wake of its recent opening to the outside world. The government has said it intends to put farmers at the forefront of its economic reforms. However, residents in most rural areas have yet to feel the impact of the political changes, and they fear that the new land policies will not protect them from having their land taken with limited compensation by tycoons or investors with political connections.

President Thein Sein earlier this year signed two new laws—the Farmland Law and the Vacant, Fallow, and Virgin Land Management Law—that will serve as the legal framework for the country’s land reform. The new laws lay down several important guidelines.

First, the state remains the ultimate owner of all land. Farmers are allowed to cultivate but only in accordance with the government’s prescriptions.

Second, farmers can now transfer or mortgage their land to repay their loans. This measure offers new avenues for farmers to raise credit and continue their agricultural activities.

Third, the new laws established a Central Farmland Management Body that is in charge of ensuring compliance with the new regulations and is largely independent of the judicial system. This body can transfer or revoke the right to work farmland, and provide land evaluation for various purposes. It operates under the auspices of the Ministry of Agriculture and Irrigation and has subsidiaries extending from the region/state to village levels.

According to land activists and experts, the new land laws contain several fundamental weaknesses. Drafted largely behind closed doors, they were submitted to the parliament in mid-2011 by the Ministry of Agriculture and Irrigation, and passed through the legislature in March 2012 after several rounds of amendments. The laws are not conducive to promoting commercial farming, which is a first step to addressing rural poverty and bringing Myanmar back into the ranks of major exporters of agricultural products along with neighboring India, Thailand, and Vietnam.

Under the new laws, farmers still lack land tenure security and are subject to the government’s crop prescriptions and production quotas. In contrast, in Vietnam the granting of more clearly defined land use rights in the 1980s was critical to boosting farm productivity and transforming the country into one of the world’s top exporters of rice, coffee, pepper, and cashews in less than two decades.

Influential government and parliamentary officials have recognized the need to conduct land reforms in a more inclusive and sustainable fashion. President Thein Sein said in a televised speech June 19 that Myanmar needs to have coherent land use and management policies in order to improve rural living conditions and ensure food security and job creation for the population outside of major cities. The president singled out uncertainty about land use rights and land speculation as two major hurdles that need to be addressed.

Significant land reform has major implications for Myanmar. It will determine the role of farmers in the country’s reform process and lay the foundation for new relations between the government and the rural poor. The current government has a window of opportunity to tap the country’s rich agricultural resources and work with farmers to deliver the much-needed dividends of democracy in vast areas of the country. The sprouting of new democratic institutions has allowed farmers to voice their concerns through local representatives and public protests within limits.

A coherent legal framework for land use is necessary to attract and build confidence among foreign investors. While a number of local businesses have agreed to return land concessions to farmers along with financial compensation, resolving land disputes through protests and large-scale demonstrations is not a viable solution in the long run. The government should instead put in place transparent guidelines regarding land compensation and gradually transfer authority to resolve land disputes to the judicial system.

Foreign governments and aid agencies can play a useful role in helping Myanmar figure out how to address land disputes. Fellow ASEAN countries in which the state owns the land, such as Vietnam, can provide examples of dos and don’ts for how they resolved differences over land rights. Foreign donors like the United States and the international financial institutions can also offer models for how land disputes were resolved and legal systems were developed in other parts of the world.

The current government’s handling of land disputes will set a precedent for how future Myanmar administrations are likely to address the legacies of cronyism, abuse, and lawlessness dating back to the former military regime. Besides devising a working legal framework for the future, the government needs to address issues of land claims predating the Thein Sein government in a manner deemed fair by the public. The extent to which legislators and officials are able to address land reforms and tackle land disputes will be one of the most important tests for the reformist government and President Thein Sein.

(This Commentary originally appeared in the November 8, 2012, issue of Southeast Asia from the Corner of 18th & K Streets.)

Murray Hiebert is deputy director and senior fellow of the Chair for Southeast Asia Studies at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Phuong Nguyen is a researcher with the CSIS Chair for Southeast Asia Studies.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2012 by the Center for Strategic and International Studies. All rights reserved.

Murray Hiebert
Senior Associate (Non-resident), Southeast Asia Program

Phuong Nguyen