Maverick Max in Malfunctioning Myanmar
Amidst the largest humanitarian crisis in the history of Myanmar, Max Nelen, founder of Agrosolar, is trying to navigate his company through these tough times.
In 1962, Myanmar was one of the richest Asian countries. Fifty years later, it is one of the poorest with a poverty rate of 37.5%. In these 50 years the country has been run by the army (the Tatmadaw) which have an effective veto over any constitutional changes. They appoint most MPs in its 14 states, the head of security and they have quelled any peaceful demonstration many times a year. Any vestiges of credibility of the army have nevertheless been lost after its poor response to the Cyclone Nagis, killing 140,000 Myanmarese in 2008. In 2011, in reply, the Tatmadaw amazed the world by making way for a civilian government to avert its cause to become a pariah state. The right time for the civilian party, the National League of Democracy (NLD), and in particular its leader, Aung San Suu Kyi (winner of the Nobel peace prize in 1991), to step up. In the next national elections in 2015, the army managed to put spanner in the works by ensuring that, even if NLD won the polls, a new clause in the constitution should be included that anyone with foreign relatives would be banned (knowing that Ms. Suu Kyi has two sons born in Britain). Still Ms. Suu Kyi and her NLD had a landslide victory in 2015 and she shunted the new constitution by enstating a new role called ‘state counsellor’ (which she declared was ‘above the president’) trying to democratize the dysfunctional system. Most politicians find it already hard enough to win over a majority of the electorate. In Myanmar, you also need approval of the army’s top brass. A current of foreboding starts to charge the Burmese atmosphere.
Even though Burma got a taste of democracy in Suu Kyi’s four year of leadership, no real economic progress was made and only some security and peace talks were done with separatist groups. The semblance of democracy helps to keep the army’s subjects quiescent and certainly makes international summits less awkward. Their dream to create genuine political competition, better to appease the masses and foreign relations, while maintaining control over all important decisions propelled. Until this November, when Ms. Suu Kyi thumbed the party backed by generals in the latest elections, winning 12 times as many elected seats. The snowflake generals found such humiliation hard to bear. Therefore, on February 1st, the army committed a coup, rounding up chief ministers of the country’s 14 states, putting Ms. Suu Kyi under house arrest, closing all airports and shutting down all mobile internet services. Today they have killed more the 400 unarmed protesters. To justify the coup, the army claimed, without evidence, that the election in November was marred by “terrible” fraud (an (un)conscious echo of Washington D.C.). The pariah status that comes with naked repression is precisely what the army was hoping to escape when it concocted the constitution it has just violated. Still, the most unpredictable force disguised despots contend with is its citizens. First, they were mostly demonstrating on social media daunted by covid-19 and the army. Then many went to the streets in all major cities. Now a subtler form of resistance starts to dripple in: the country is in a national strike with the aim to force the junta to retreat by cutting off its money supply while trying to disrupt any business of the government. In that sense, the coup, although crushing for the Democrats of Myanmar, is a defeat for the generals too.
Amidst this largest humanitarian crisis in the history of Myanmar, one brave Belgian entrepreneur named Max Nelen is trying to navigate his company Agrosolar through this incredibly tough period. He and his company are working at the intersection of climate change and local financing by building solar-powered irrigation pumps while offering seasonal loans to rural workers. I had the opportunity to ask him a few question.
L: First and foremost, how are you doing personally? How is the coup affecting you day-to-day?
Max: I am doing fine. For now I am back in Belgium until the situation stabilises. My team in Myanmar is also safe for now and I am praying daily that nothing will happen to them. I am extremely proud of their resilience and ability to continue operations during this crisis.
L: Why is the coup now and not 5 years ago when Ms. Suu Kyi also had a landslide victory?
Max: There are many theories and no one really knows the real answer. One theory is that the Tadmadaw was still hopeful that it’s proxy party USDP would at least have a few more seats in the Parliament in 2020 elections than expected. With a landslide victory that was even bigger than the one in 2015, the military felt they were losing their power in the country. Over the years Aung San Suu Kyi has increasingly built international relationships with China, USA, Singapore, India and Japan and the Tadmadaw felt its relevance in Myanmar politics was being pushed to the background.
Another theory is that Min Aung Hlaing, the military General, is retiring at the end of this year. In order to preserve his power and economical benefits that come with it, he might have seen this as an opportunity to become the country’s leader.
L: Will there be a re-do of the elections in the near future?
Max: That is the million dollar question. There are still many options: from reversing the coup, to a civil war, to the Myanmar people (forcefully) accepting the Tatmadaw as intermediary acting governing body. The majority of the people of Myanmar still hope that the military will still accommodate and reverse the coup. The problem is that the individual brains behind this coup have too much to lose in doing so. They will go into exile if the coup will be reversed.
So the question is: can they meet each other in the middle? If nor the Civil Disobedience Movement, potentially backed by Ethnic Armies, nor the Tadmadaw will partially accommodate in the coming months, Myanmar might be doomed to go down the rabbit hole. The risk? To be recognised internationally as a failed state characterized by chaos and anarchy.
The majority of Myanmar people don’t even want to talk about new elections. They just want the November 2020 elections to be honoured, as simple as that. The CDM also doesn’t believe that the Tadmadaw will actually hold new elections. The past has shown that they will not keep their promise and try to continue to rule for multiple years to come.
However, after two months the military hasn’t been able to keep the population under control and is increasingly being pressured by Ethnic armies and international sanctions. That’s why there is hope that their decision might be reversed or elections be held quicker than after only one year. The next months should provide more clarity.
L: Is there something that Ms. Suu Kyi could have done better in her period as state counsellor for the economy and restructuring of the government?
Max: I honestly believe she tried everything she could. The question many people ask: did she push the transition to democracy too much? She tried on multiple occasions to change the 2008 Constitution but was faced with high resistance and distrust by the military. History has shown that countries who succeeded to transition to 100% civil government have only been able to do so through civil war. Did we maybe naively believe the transition to a 100% civil government and a democratic system could be achieved through peace and mediation?
L: Do you think there should be more international support (e.g. the U.S) to sanction this regime?
Max: I think the outcome of this situation is in the hands of the Myanmar people and it’s different ethnic groups. I am afraid “traditional” international sanctions targeted at the military won’t be as effective in practice. The Tadmadaw already mentioned they will learn to walk with only a few friends, pointing to the fact that sanctions won’t make them reverse their actions.
If any international support will help this situation, it will be the support (both financially and politically) of the Myanmar people. Funding the CDM and supporting the CRPH politically are things that could increase the pressure on the military leaders. At least it might avoid this situation escalating into a civil war. In the best case new elections will be held early and a proxy party of the NLD wins by a landslide again.
However, the majority will want to rewrite the constitution and use this opportunity to remove the military from the Parliament once and for all. That’s why the military leaders are playing a zero-sum game. If this coup fails, they know they will be gone. International governments should be aware of that when defining their actions.
L: Could Chinese interference be an economic benefit for the country such as their announced $21 billion China-Myanmar Corridor for new infrastructures?
Max: China and Singapore (biggest direct investor) have a lot to lose if this country will be characterized as a failed state or if a civil war occurs in the coming months. However it is unpredictable how China will eventually react if the situation continues to escalate.
L: Since February 3rd, staff at 70 hospitals in 30 towns went on a strike, how is Myanmar now dealing with covid-19?
Max: Covid-19 is not really on the agenda or in the news anymore. I am not sure if the number of cases and deaths are still being reported in an honest and transparent way. Whether the number of cases, hospitalisations and deaths are actually decreasing is unclear.
The economic impact of covid-19 has always been bigger in this country than the health impact. With the current political crisis, the talks about the Covid-19 pandemic are being pushed to the background. More people have died from this coup than from Covid-19 killed. Human rights abuse, genocide and hunger are problems that existed way before covid-19 arrived and are of much bigger concern in Myanmar.
L: The views on democracy in countries such as Myanmar and Thailand are ambivalent. Even though most support democracy, still a lot of people don’t believe it supports economic growth nor maintains order. Do you have the feeling that these people have an unconscious propensity towards despotism and if so why this is?
Max: I don’t think they believe necessarily in despotism. I think people within the military and people supporting the military believe in order and sovereignty. Economic prosperity and individual wealth of the people have never been a priority for the military. It is more important for the nation to be safe from outside threats than GDP growth. Obviously they want their economic benefits to be preserved during this process.
Also just to make sure: the fact that the NLD won with a landslide victory with 75%+ of the votes, shows that only the minority of Myanmar people still believe in a hybrid government with the military keeping their 25% position in the Parliament.
L: Thank you for these elaborate answers! Now let’s focus a little bit on your company Agrosolar. How did you come to the idea of building this startup and why did you decide to set off to Myanmar?
Max: I used to work as a consultant for different projects with Engie in Singapore. One of the projects was to evaluate an Access to Energy project in Southeast Asia. Having traveled across Myanmar, Vietnam and Thailand, I realised that by providing renewable energy to farmers, they could increase their income.
Myanmar is still a very poor country with GDP/capita 4 times smaller than its neighboring country Thailand. On the other hand, there is limited rainfall and high irradiation in the central Dry Zone of the country. We immediately saw that if we wanted to increase people’s livelihoods and incomes with Solar-powered Irrigation, that Myanmar was the number one country.
L: How is the whole crisis affecting your company?
Max: Little did I know that two once-in-a-century events would enroll when I founded Agrosolar. Having survived Covid-19 pretty well with month-on-month growth, our team has built reliance. We have set up our operations so that we can quickly adapt to the environment. While the political crisis hasn’t made anything easier, we are still operating as normal and are still on track to reach our sales targets.
Myanmar people are among the kindest in the world. No one deserves this, but especially not them. I am extremely grateful to work with my team on this mission to improve the livelihoods of farmers. They are dedicated, resilient and continue to work during this crisis with their head high and hopeful for a brighter future.
L: Your company results in a significant increase in productivity and monthly savings for farmers. How did you achieve this?
Max: By switching from fuel-based water pumps to our Solar Irrigation Systems, farmers reduce their monthly fuel expenses up to $50 per month, which represents up to 30% of their income.
L: You also provide seasonal loans via a mobile financing platform, how does this work and is it still possible today?
Max: Whenever farmers cannot afford to buy our products cash, we provide them with different finance options. We calculate their payback period based on their fuel expenses and estimate their income based on the crops they grow. We then recommend them a lease-to-own plan tailored to their future cash flows and payback period.
Our unique partnership with a consumer financing company allows us to provide those credit terms to them. Once the customer agrees, a contract is setup via a mobile application, signed by their fingerprint in remote villages across the country. Technology allows us to scale 10 times faster.
With internet connection cut off from time to time and banks being closed it is challenging. But we keep on operating. We can still work with mobile money agents to transfer cash and can use the application offline and sync once a day to submit the lease-to-own applications to our consumer financing partner.
L: What are your future plans for Agrosolar and yourself?
Max: Within one year of operations we have successfully installed 150 Solar Irrigation Systems and helped 140 farming households increase their income and livelihoods.
Our ambition is to help 25,000 farming households by 2025 across multiple countries in Southeast Asia.
While this crisis hasn’t made it easy for us to scale and attract external financing needed to fund our growth, we are still hopeful for amazing years ahead. The fact that we are still selling during the most difficult times just shows how valuable our product is in the market.
Running a startup is never easy and we won’t get slowed down by a health or political crisis.
L: Are there any other thoughts you want to share?
Max: 500 million Smallholder Farmers are producing 70% of the world’s food. It’s time we start supporting them. If we don’t, how will we continue to feed our growing population?
L: Thank you Max for your time, bravery and persistence. I wish you all the best in the future, I’m sure you are inspiring a lot of people!
See you next week,
Laurent
