The luxury Japanese business development secretly funding Myanmar’s military

Computer renditioned images show the hotel’s glass walls shimmering brightly. Outside, guests wander around palm tree-lined grounds. “It is a true honour for Hotel Okura to take part in this large development,” stated Toshihiro Ogita, president of Hotel Okura Co, in a press release announcing this Yangon property – his company’s first in Myanmar – which is due to open in 2020.

The luxurious premises, which will feature “banquet halls, conference rooms and diverse dining options”, is situated on the Y Complex, a high-end commercial development currently being constructed in downtown Yangon that will also include shopping and office space. The project is backed by a mixture of public and private Japanese finance, with some of the country’s biggest institutions – including its international development bank JBIC and the stock exchange-listed real estate companies Daiwa House and Tokyo Tatemono – playing a part. 

But behind the glossy veneer lies a story of bloodshed. The Y Complex is built on land belonging to the Myanmar armed forces, which have been accused by the UN of carrying out genocide against the Rohingya people and crimes against humanity against other ethnic minority groups. Justice For Myanmar has reviewed a copy of the lease, which shows money for the land rent flowing directly to the Quartermaster General’s office via a proxy company. Here, funds are hidden from the view of the civilian government and can be used to accrue weapons used in human rights abuses.

How are Myanmar military businesses violating human rights?

Myanmar’s military took power and established a dictatorship in 1962 via a coup d’etat. Over the years they expanded their role in the country’s economy, politics and state bureaucracy, advancing militarization, taking control of natural resources and grabbing land from civilians. They have committed war crimes and crimes against humanity against ethnic minority communities over decades of civil war. The military has violently suppressed multiple civilian uprisings, including the 1988 student-led nationwide pro-democracy uprising. Following an election in 1990, which Aung San Suu Kyi’s National League for Democracy won in a landslide, the military refused to hand over power and tightened their grip on politics and the economy. An international campaign for sanctions and a tourism boycott of the country was called by opposition leader Aung San Suu Kyi, who was placed under house arrest for a total of 15 years.

In 2008, the military imposed a constitution they themselves manufactured that placed the armed forces as the supreme institution of the state, with unchecked political and economic power and a monopoly over the use of force. Then in 2010, after the military’s proxy political party won a landslide in a rigged election, it began transitioning to a “disciplined democracy” and released Aung San Suu Kyi from house arrest. The military began liberalising the economy, opening Myanmar up to foreign investment while expanding the military’s own business empire, built through systemic corruption and the theft of public assets. Most sanctions were lifted, and tourists and foreign businesses began flooding in, with investors keen to get an early slice of the “emerging market” pie. This intensified after Aung San Suu Kyi’s party won the 2015 elections, although the military continues to maintained a de facto hold on the civilian branches of government.

Despite the so-called democratic transition, the military still controls huge swathes of land, and funds itself through a vast number of businesses, intermediaries and proxy companies. Its multiple ventures include hotels, breweries, banking, tobacco, manufacturing, transportation, agriculture, international trade, mining, jade and gems. The Aung San Suu Kyi-led civilian government has no oversight of the funds raised through these businesses and lacks the authority to demilitarise the economy. A UN Fact-Finding Mission recommended businesses to cut financial ties with Myanmar military conglomerates.

As our research shows, governments and corporations around the world continue to partner with and further enrich the many strands of the Myanmar military’s business network.

In August 2017, the military launched “clearance operations” against the Rohingya ethnic group, which involved widespread killings and mass killings, rape, torture, the destruction of property and expulsion. The crisis has caused over a million people to flee to Bangladesh, and has led to ongoing investigations of perpetrators by the International Criminal Court.

In November 2019, the Gambia also filed a complaint against Myanmar for the crime of genocide in the International Court of Justice (ICJ). In January 2020, the ICJ imposed provisional measures on the Myanmar government to prevent criminal acts against the Rohingya and to prevent the destruction of evidence of the crimes. Myanmar is required to provide a compulsory report on progress to the ICJ this month. However, the military continues to commit war crimes and crimes against humanity, supported by the profits of projects like the Y Complex.

Who is involved in the Y Complex project?

In 2017, a bundle of announcements were sent out to international press detailing the different Japanese companies involved in the creation of Y Complex as well as the mixture of state and private finance flowing into it. Japan’s international development bank, the Japan Bank for International Cooperation (JBIC), provided a loan as well as securing credit from sources including the Tokyo Stock Exchange-listed Sumitomo Mitsui Banking Corporation (SMBC) and Mizuho Bank. Japan Overseas Infrastructure Investment (JOIN), a fund supporting overseas development, provided a debt guarantee and also holds equity.

Real estate company Tokyo Tatemono is working on design and architecture and Fujita Corporation, a subsidiary of Daiwa House, is responsible for engineering and construction. These two companies created a special project company (SPC) in Singapore called Yangon Museum Development, named after the fact there was previously a military museum on the land Y Complex is being built on. Okura Hotels has a contract with this SPC. 

This is where things start to get murky. The SPC signed a lease agreement with a company called Yangon Technical and Trading Co. Limited (YTT), who it pays rent to. YTT is a subsidiary of Ayeyar Hinthar, a crony conglomerate that is acting as a proxy for the Myanmar military. Justice For Myanmar has found unquestionable evidence that the land rent flows straight to the Quartermaster General’s office. It is not possible to see from here how it is spent, but we know that this office handles the financial transactions behind the purchase of arms and military equipment, which are used in crimes against the Rohingya and other ethnic communities.

For us, there are several issues at stake here. First of all, Japanese state institutions and multinational corporations are directly funding the military. Secondly, international travellers and business people may stay, work and shop at the Y Complex unaware that they are helping finance the Myanmar military to continue committing human rights abuses. Lastly, as a number of the firms involved are listed on theTokyo Stock Exchange, shareholders around the world are exposed to Y Complex – creating an international web of money that connects back to the Myanmar military’s crimes.

What next?

If this financial network seems confusing and complex, that’s because it is – the Myanmar military and its business partners move money around and conceal ownership in ways that make it hard for observers to understand how much is there and what it is being used for.

At Justice For Myanmar we are working to track, investigate and expose these funding mechanisms and the many international businesses that are complicit. We want to see companies cut all business ties with the Myanmar military, to end their abuse and impunity and to build justice for all the people of Myanmar.

The lease agreement for Y Complex was included in the Environmental Impact Assessment (EIA). To view a full copy of the EIA, click here. (PDF, 9MB)