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Suu Kyi Stands in Myanmar Election With Sanctions in Bala

Myanmar dissident Aung San Suu Kyi faced voters for the first time today in by-elections the U.S. and European nations are watching closely as they consider lifting sanctions against the former dictatorship.

Suu Kyi, who won the Nobel peace prize during her 15 years under house arrest, is among those standing for 43 of 664 parliamentary seats left vacant by lawmakers who joined President Thein Sein’s government. She said two days ago her National League for Democracy party would tolerate irregularities in the first vote it’s contesting since 1990.

“It’s more than words, I’m very, very happy,” May Nwe Soe, a 33-year-old garment factor worker, said of voting in Suu Kyi’s district today. “I just want Daw Suu to go to parliament,” she said, using a respectful title for Suu Kyi.

Moves toward greater political freedom in the nation of 64 million people bordering China and India have prompted Western nations to consider easing sanctions as companies from General Electric Co. to Standard Chartered Plc (STAN) await opportunities to invest. At stake for Thein Sein is dismantling a legacy of six decades of isolation that left Myanmar with per capita gross domestic product of just 14 percent of neighbor Thailand’s.

Suu Kyi, 66, spent last night in a village of 1,400 people in Kawhmu district about an hour’s drive south of Yangon, the country’s biggest city. Hundreds of residents yesterday lined a dirt road heading to the village to get a glimpse of the daughter of a Myanmar independence hero.

‘Democracy is Exciting’

“Don’t forget to vote tomorrow,” she told a crowd of several thousand people who chanted her name and “NLD - We Must Win” as she stood on a balcony at the house where she was staying. “Don’t miss this chance. If the people vote for me, I will come here often and I will try to develop the region.”

Voters started casting ballots when polls opened at 6 a.m. local time. In 2010, results were announced several days after the election.

“The voters are coming peacefully,” Myint Oo, the chairman of a ward in Suu Kyi’s district, said today. “Democracy is exciting because you can vote.”

Known in Myanmar simply as “The Lady,” Suu Kyi emerged on Myanmar’s political scene in 1988, when she returned to the country to care for her ailing mother after years of living overseas. She was first detained before 1990 elections in which her party won about 80 percent of seats for a committee that was designed to draft a new constitution. The military rejected the results.

Fairness Questioned

Suu Kyi refused to accept an army-drafted constitution in 2008 and boycotted an election two years later in which Thein Sein’s party won a majority. A meeting between Suu Kyi and the president in August led to her party rejoining the political system.

In a 90-minute briefing on March 30, Suu Kyi said her party will accept the results if the will of the people is “fairly reflected.” She called irregularities including vote-buying, incorrect voter lists and an incident where a candidate was almost hit with a betel nut “beyond what is acceptable for democratic selection.”

“I don’t think we can consider it a genuinely free and fair election if we take into consideration what has been going on in the last couple of months,” Suu Kyi told more than 300 journalists gathered at her lakeside home in Yangon. “But still I will be willing to work toward national reconciliation, so we will try to tolerate what has happened.”

Suu Kyi has appeared on state-run television and traveled throughout the country during the campaign period, falling ill on two occasions from exhaustion. Tens of thousands of people have greeted her at campaign stops around the country.

Military, Police Unseen

“We’re happy with what we’ve seen,” Chheang Vun, who is observing the election for Cambodia, said in Kawhmu district. “Myanmar is now very different. In the three days we’ve been here, we have not seen military or police.”

Thein Sein called on all political parties to accept the results in a March 24 speech published in the state-run New Light of Myanmar.

“We all need to work together to ensure that the outcome is accepted by all the people,” he said.

The elections “aren’t going to fundamentally shift power in the country, but they are hugely important in representing a historic compromise” between Suu Kyi’s party and the government, said Thant Myint-U, an author of two books on Myanmar whose grandfather, U Thant, was the first Asian head of the United Nations. “It will end a long chapter in Burmese history.”

Currency Float

Myanmar’s political opening is moving in parallel with efforts to rewrite investment laws and unify multiple exchange rates that impede trade. The country will adopt a managed float of its currency today, scrapping a 35-year fixed rate in a move to modernize the economy, the central bank said in a March 28 statement.

Rich in natural gas, gold and gemstones, Myanmar represents one of Asia’s last untapped frontier markets, attracting investors such as Jim Rogers, the chairman of Rogers Holdings, who predicted a global commodities rally in 1999. Myanmar’s opening is “a game-changer,” Bank of America Corp.’s Merrill Lynch said in a March 29 research note.

Honda Motor Co. is interested in building a motorcycle plant in Myanmar, Hiroshi Kobayashi, president and chief executive officer of Asian Honda Motor Co., told reporters in Thailand yesterday. The decision will depend on circumstances in the country and international consensus, he said.

U.S., EU Watching

American sanctions ban investment in Myanmar and imports from the country, restrict money transfers, freeze assets and target jewelry with gemstones originating in the nation. The European Union bans weapons sales and mineral imports.

The by-elections “are a tangible moment in the path to reform, just like the release of political prisoners in January,” Derek Mitchell, U.S. special envoy to Myanmar, told reporters on March 15. “We will respond after the elections in an appropriate fashion if we believe they were held free, fair and transparent.”

Myanmar invited a limited number of election monitors and journalists from the U.S., EU and neighboring countries. Voters will pick from 17 parties and seven independent candidates to fill 37 seats in the lower house, six in the upper house and two for regional assemblies, according to Network Myanmar, a U.K.- based organization that promotes reconciliation in the country.

The by-elections “are a key moment in national reconciliation and should allow a substantial review of EU policy vis-à-vis Myanmar,” Catherine Ashton, the EU’s foreign policy chief, said in a March 28 statement.

Security Concerns

Elections in three constituencies in Kachin state, home to a violent ethnic rebellion, were suspended due to security concerns. Myanmar’s army has displaced 75,000 ethnic Kachins since last June in an area along the Chinese border, New York- based Human Rights Watch said in a March 20 report, underscoring the challenges that remain for Thein Sein as he aims to make peace with political rivals.

“Myanmar will become a new model for other countries to get through a transition with stability and irreversibility,” Nay Zin Latt, one of nine advisers to Thein Sein, said by e- mail. “The 2012 by-elections are much more free.”

To contact the reporter on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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