Nodes of Corruption, Lines of Abuse
December 20, 2020
How Mytel, Viettel and a global network of businesses support the international crimes of the Myanmar military
Justice For Myanmar’s detailed investigation into the Myanmar military’s systemic corruption within the information and communications sector has uncovered public asset theft, exposed new military procurement networks and revealed the global network of businesses complicit in enabling the Myanmar military to continue to commit war crimes and crimes against humanity.
While scrutiny of Myanmar’s international relationships has been focussed on China, the armed forces of Vietnam and Myanmar have forged a dangerous strategic and commercial partnership. Officials from Vietnam military conglomerate Viettel operate and maintain secret military infrastructure, transfer military and dual use technology and operate in Myanmar military bases that are off-limits to the civilian government.
Mytel, Myanmar’s newest mobile operator, provides the military with a lucrative source of off-budget revenue and a means to access international communications technology and credit.
The information revealed in Nodes of Corruption, Lines of Abuse is based on open-source data and a trove of confidential files pertaining to Mytel from a data breach, in which Viettel Construction Myanmar inadvertently published internal files online.
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Nodes of Corruption, Lines of Abuse
အကျင့်ပျက်ခြစားမှုဆက်ထုံးများ၊ အလွဲသုံးစားပြုမှု လမ်းကြောင်းများ။
The interests behind Myanmar’s digital transformation
A global network of businesses in the information and communications technology sector is bankrolling the Myanmar military, enriching generals and supporting the military’s tech modernisation. As the Myanmar military continues to commit war crimes and crimes against humanity with total impunity, businesses that aid and abet the commission of those crimes could be liable for prosecution under international human rights law.
A central node in the military’s network of corruption is Mytel, Myanmar’s newest mobile network operator, owned by Myanmar and Vietnam military holding companies with an alliance of Myanmar cronies. Mytel has enjoyed rapid growth and profitable success since launching in 2018 and today has over 10 million subscribers and quarterly profits reported to be a sizeable US$25 million. However, despite the Myanmar public owning a 28% share in the thriving company, they are being kept in the dark about how these profits are used.
This success coincides with Mytel’s unlawful use of state assets, such as military infrastructure, and its intertwined relationship with the Myanmar Army’s Directorate of Signals. These business arrangements not only financially profit the military. They also support the military’s modernisation and further its ability to commit crimes against the people of Myanmar.
Mytel was created by Myanmar’s communications ministry. The former Union Solidarity and Development Party-led government created the business, envisaged as “a successful collaboration between private sector and Union Government.” State-owned enterprise Star High Co. Ltd. was selected as the Myanmar government shareholder, under the “supervision” of the Ministry of Defence.
Despite being identified as a public company in government documents and on the Mytel website, Star High is registered as a private company. Unlike other MEC subsidiaries, shares in Star High are held by individual members, which is concerning for a business that is supposedly owned by the state.
Mytel is just one piece of the puzzle. Myanmar Economic Corporation (MEC), Star High’s parent company, operates in secret, despite being owned by the state and holding extensive and valuable state assets. Myanmar Economic Corporation Co. Ltd. is registered as a private company and shares are held by Myanmar Economic Corporation, an entity with registration number 23/2010. This entity does not exist in Myanmar’s company registry. The structure and operations of entity 23/2010 are unclear.
In a press conference held on 22nd June 2020, a spokesperson for the Ministry of Defence claimed that MEC was privatised and is “concerned only with the military”. However, there is no evidence of MEC being privatised. It is illogical to claim that a private business can be owned by the military, as the military is a state institution funded through the Union Budget. A military-owned business is a state-owned enterprise.
Mytel revenue is being stolen as millions of people across Myanmar are struggling to feed their families amid the Covid 19 pandemic, and thousands are being forced to flee their homes under the looming threat of violent military offensives.
Meanwhile, the military’s senior generals are living in luxury and watching their business empires flourish.
As Myanmar continues along a path of “disciplined democracy”, the military has grown its business empire. The Myanmar military wrote “market economy” into the 2008 Constitution that they drafted, as a “basic principle”. Profits were always part of the plan.
Businesses like Mytel are strategic for the Myanmar military. Viettel, aiming to be a global high-tech arms manufacturer, provides the Myanmar military with tech and training. Through Viettel, international banks are financing the development of military infrastructure in Myanmar. Through Viettel’s global business, the military has gained access to products and services from leading international corporations.
Tech procured through Viettel and Mytel can serve a military purpose, supporting military communications. Examples include microwave transmission equipment from NEC (Japan), antennas from CommScope (USA) and timing solutions from Germany (Adva). Businesses with ties to Mytel and Viettel risk contributing to the grave human rights violations in Myanmar, directly or indirectly.
Myanmar’s civilian government, led by Aung San Suu Kyi, is also playing a role in facilitating the military’s tech modernisation. The steering committee for Myanmar’s satellite program, set up by the civilian government, is headed by a military appointee and includes the ministers of Defence and Home Affairs. Under civilian cover, the military has gained access to satellite equipment from Maxar Technologies (USA) through a partnership with Intelsat (Luxembourg/UK).
The Japanese government is supporting Myanmar’s micro-satellite program, involving partnerships with Hokkaido and Tohoku universities and Japan’s national space agency, JAXA. The satellite is scheduled to launch in early 2021. If this goes ahead, there’s a high risk that it will further support the Myanmar military’s international crimes.
How the Myanmar military controls and conceals the public proceeds of telecommunications operator, Mytel, is more evidence that the reforms of the last decade were never intended to bring democracy and improve the lives of the people of Myanmar.
They were designed to enrich the military elite and have come at a terrible price.
Mytel’s considerable achievements sit within the wider context of the economic liberalisation in Myanmar after decades of isolation, with a growing consumer market and the swift uptake of newly affordable technology. In 2010, only around 1% of the population had a mobile phone subscription, according to World Bank data. Those figures have rocketed – there are now more mobile subscriptions than people with rates over 110% in 2018 – and there is still plenty more money to be made.
This rapid growth was sparked by the military-orchestrated political and economic reforms introduced in 2011. In the years that followed international sanctions were lifted and money from foreign investors, international financial institutions and aid agencies has flooded into the country’s public and private sectors alike. Information and communications technology sector reforms have been supported by the World Bank and Asian Development Bank, benefiting the Myanmar military under the pretext of democratisation.
The reforms were never intended to bring about the democratic success story the world was so willing to believe. The reforms were simply the next phase of a different, darker plan to expand the military elite’s wealth. An earlier phase of that plan was to establish a network of channels in all parts of the economy to ensure that the benefits of Myanmar’s economic boom would flow directly to the top of the military. MEC and another secretive military-owned conglomerate, Myanma Economic Holdings Ltd. (MEHL), are at the centre of that network.
The military’s role in Mytel must be investigated and where misappropriation and corruption are discovered, those involved must be charged in accordance with civilian and international law. All stolen assets must be returned to the people.
The Myanmar military leadership operates like a cartel that is driven by a motive for power and profit.
MEC and MEHL are channels for the distribution of privileges and influence amongst senior members of the cartel – military generals – who display loyalty, ruthlessness and business prowess. It is a web of corruption that spans Myanmar’s economy and extends into the government.
Justice For Myanmar’s goal is for international businesses to divest from the military and for the military to withdraw from the economy and operate under democratic control, governed by justice and accountability and with true civilian oversight.
The Myanmar military has built immense wealth through partnerships with domestic and international businesses. This wealth fuels war crimes and crimes against humanity. The Myanmar military cartel is a threat to peace and security not only in Myanmar but around the world.
The military cartel must be dismantled. This can only succeed through a global network of activists exerting local pressure. Here's how it works:
1. Expose international businesses with financial ties to Myanmar’s military with the release of sourced evidence.
2. Dismantle the military cartel through campaigns for boycotts, divestment and targeted sanctions.
3. Build pressure for action through continued investigation and sourcing of new evidence.