Over the past few years, the Republic of the Union of Myanmar has undertaken a three-pronged transition strategy with regard to politics, the economy, and internal security (Farrelly and Gabusi 2015). The first transition is undoubtedly of a political nature. In 2011, following the adoption of a new constitution three years earlier, the military junta, which had long led the country in the form of the SPDC (State Peace and Development Council), orchestrated a top-down power transition towards a new semi-civilian government led by President Thein Sein. In November 2015, Nobel Peace Prize laureate Aung San Suu Kyi and her tightly controlled party, the National League for Democracy (NLD), won the first democratic general elections in two generations. In March 2016, with the election of NLD loyalist Htin Kyaw as president, Aung San Suu Kyi assumed the roles of Minister of Foreign Affairs, Minister of the President's Office, and State Counsellor, de facto becoming the undisputed civilian leader of the country.

The second transition concerns the economy. With new liberalization Measures. by opening up to trade and foreign direct investment (FDI), and following the suspension or end of international sanctions, Myanmar intends to definitively abandon the socialist autarchy of the past, which had been a weighty burden of General Ne Win's 1962 coup. With an average year-on-year growth rate of more than eight per cent between 2013 and 2016, Myanmar now belongs to the World Bank's group of lower-middleincome countries. Between 2011 and 2014, exports, concentrated in the primary sector, grew at an average rate of eleven per cent, and in fiscal year 2015–16 Myanmar received FDI totalling a record-high 9.4 billion US dollars. However, tied with Cambodia, the country still has the lowest level of GDP per capita in the ASEAN countries at 1,275 current US dollars. Poverty is concentrated in the countryside (where seventy-six per cent of the country's poor reside) and in border areas, only one-third of the population has access to electricity, and fifty-seven per cent of the labour force is still employed in the informal economy (Danish Trade Union Council for International Development Cooperation 2016). According to the UNDP Human Development Index, Myanmar ranks 145th, still among the low human development countries.

Myanmar has been experiencing internal armed conflict between successive Bamar-led governments and Ethnic Armed Organizations (EAO) for nearly seven decades. By the time of independence from the British Empire in 1948, ethnicity had become a defining category of political orientation in Burma and years of ethnic tensions led to violence across the country (Smith 1991). Since the outbreak of armed conflict between the Karen National Union (KNU) and the newly independent government of Burma in January 1949 on the outskirts of Yangon and across the country, the country has seen more than six decades of civil conflict.

Years of counterinsurgency strategies by the Myanmar Army (Tatmadaw), especially through its “four cuts” strategy—Pya Lay Pya— had severe negative consequences on local populations living in conflictaffected areas of Myanmar's ethnic states. Adopted in 1968, the doctrine was to sever insurgents from their key inputs: funding, food, intelligence and recruits (ICG 2000, p. 17). Communities suffered both from brutal repression and severe human rights abuses by the Tatmadaw, and also from systematic structural discrimination and political repression. The military's approach to civilians and ethnic minority people in particular was reflected in minimal spending on social services and development in general during the authoritarian period (see Mangshang & Griffiths, Chapter 3 this volume).

In response to the dire needs of conflict-affected communities, EAOs and their aligned civil society networks established their own structures for community-based primary health care service provision. A coalition of four EAO health departments and three local non-governmental health organizations in southeast Myanmar collectively known as Ethnic Health Organizations (EHOs) emerged parallel to the government health system run by the Myanmar Ministry of Health and Sports (MoHS). A range of basic health services such as for the treatment of common diseases, warinjury management, reproductive and child health care services, community health education, and water and sanitation programmes have developed over time. Due to the shifting zones of armed conflict and governance, rural parts of southeast Myanmar in particular play host to a mosaic of stationary clinics and mobile teams operated by these EHOs, supported by funding from international aid donors (Davis and Jolliffe 2016, p. 10).

2016 was supposed to be the time for change in Myanmar. Swept to power on the strength of that slogan, the National League for Democracy would finally get to form a government and realize a democratic transition decades in the making. Even the most cynical Myanmar observer could find reasons to be excited about this crucial step in the process of transferring power from the military to civilian leaders. Yes, the 2008 Constitution still institutionalized military rule in a variety of ways. Yes, a host of seemingly intractable problems remained, including a lagging peace process with ethnic armed groups and persistent anti-Muslim sentiment—especially toward the Rohingya. And yes, it was worrying that the party that was about to take over governing had virtually no experience in doing so, and hadn't really demonstrated much expertise (or interest) in policy development throughout its single-minded campaign. Even with all of these concerns, to see Daw Aung San Suu Kyi and her colleagues achieve the victory that had been deferred since 1990 gave reason to hope that her widespread support could translate into progress in national reconciliation, economic development, political reform, and a host of other areas.

This political update was originally presented in February 2017, weeks away from the NLD government's first anniversary. At that time, I noted that it was not easy to find the success stories. Indeed, having now passed the second anniversary, in most respects, the situation looks frustratingly not only bleaker than it was a year in, but worse than it did under the previous USDP government. With the international outcry against Myanmar's actions against the Rohingya showing no signs of abating, and the long-term effects of that conflict being added to an already-long list of challenges, the country's prospects for further political or economic development are dimming.

ETHNIC CONFLICT AND THE PEACE PROCESS

Eager to show its commitment to national reconciliation, the NLD sought to prioritize the peace process. When Daw Aung San Suu Kyi re-branded the national political dialogue as the “21st Century Panglong Conference,” it was a chance to establish her government's ownership over the process and inject a new spirit by linking it to the famous conference convened by her father in 1947.

Naypyitaw, the capital of Myanmar since 2005, was carved from scrubland and paddy fields with the founding idea that space is integral to the exercise of power. Its creation in the geographical centre of the country signalled a retreat from the colonial legacies found on almost every street in the old capital, Yangon. The decision to invest so heavily in a new place to govern the country was made by senior military men, isolated from both their own people and much of the rest of the world. It is only natural that the creation of this new and gargantuan city has baffled many observers, some of whom are still unprepared to consider the rationality, determination and imagination encapsulated by the new national monument. Naypyitaw tends to be classified as a “surreal” and even lunatic place, that apparently defies the ordinary laws of geography, society and culture (for instance, see Richmond et al. 2014, p. 156). There has been little serious effort to understand the city beyond its broad boulevards and other infrastructure (for exceptions see Dulyapak 2009, 2011; Seekins 2009b; also Farrelly 2018).

The infrastructure still tends to get the attention. When visitors arrive in Naypyitaw they are immediately struck by the distances between facilities and the vast network of roadways that are designed to tie the city together. Happy snaps taken on the ceremonial motorway leading to the legislative complex and presidential palace fill the Facebook pages and Twitter feeds of visitors. They often gush about how few cars use the roads and how the over-sized avenues take up too much space. The same astonishment tends to follow a visit to any of the official buildings. The legislative compound, a place that many Myanmar and foreign visitors get to see up close, is a good example. Encompassing thirty-one large buildings, a symbolic nod to the thirty-one Theravada Buddhist planes of existence, the legislature is so spread out that people tend to take a buggy, car or bus between the different parts of the complex. Only a few of the buildings are linked together by covered walkways. On a hot day it is impossible to get between the other buildings without breaking a sweat. The conclusion of most of those who work at the site is that the complex is probably not optimized for legislative activity.

The Myanmar government announced in January 2012 that, due to environmental concerns, they had cancelled plans for the construction of a coal-fired power plant in Dawei, in the south of the country. The proposed power plant was to produce 4,000 MW, making it one of the largest coal-fired power plants in the region. It was also part of larger plans for a deep-sea port and Special Economic Zone (SEZ) in Dawei—a project led by Thailand's largest building contractor, Italian-Thai Development. In the lead-up to the cancellation of the coal-fired power plant, there had been significant mobilization of local citizens in Dawei in opposition to it, involving distribution of information about the power plant, use of local media, and protests. Local activist groups had also established transnational links including with advocacy organizations in Thailand and in Europe.

This incident, which was early in the period of the Thein Sein government, highlighted the unique place of Special Economic Zones at the intersection between, on one hand, economic liberalization, and on the other hand, political liberalization in Myanmar. The shift away from authoritarian military governance to the Union Solidarity and Development Party (USDP) government under U Thein Sein, and then to the National League for Democracy (NLD) government after the 2015 elections, facilitated increased flows of investment into development projects such as the planned Dawei development project. Yet on the other hand, the end of direct rule by the State Peace and Development Council (SPDC) also ushered in greater freedoms and opportunities for citizens to network, mobilize and oppose development projects when the projects diverged from their hopes or visions.

The SPDC government under General Than Shwe sought to control citizens and local organizations largely through coercion and the threat of crackdown. The operation of social or political organizations during these periods thus depended often on avoidance of, rather than engagement with, the state (Fink 2001). This legacy of military rule remains, to some degree, in the relations between communities, government and companies in SEZs. Yet there have also been striking changes since 2011 in the forms of contentious politics in Myanmar. Many advocacy organizations are seeking to engage the state and businesses through formal institutions and through forging new direct relationships with policymakers.

The year 2016 was a milestone in the political history of Myanmar as it gave birth to a popularly elected civilian government for the first time since the military takeover of the state in March 1962. In the elections held on 8 November 2015, it was clear within a few hours that the National League for Democracy (NLD) had won a landslide victory. When the result was finalized, the NLD won 57.20 per cent of valid votes (12.79 million) for the Pyithu Hluttaw (House of Representatives) and 78.95 per cent of contested seats (323 seats). Similarly, for the Amyotha Hluttaw (House of Nationalities), the party won 57.68 per cent (13.10 million) of the valid votes and 80.36 per cent of contested seats (168 seats). The 2008 Constitution is essentially designed by the military to require partnership with civilian politicians, allocating twenty-five per cent of the seats in both houses to military members and allowing the military to nominate a vicepresidential candidate along with ministers for Defence, Home Affairs and Border Affairs. In a mix of parliamentary and presidential systems, the NLD's nominee Htin Kyaw became the president and the Tatmadaw's nominees, ex-general Myint Swe, and the other NLD nominee, Henry Van Thio, became vice-presidents. In this constitutional setting and with the results of the 2015 election, the NLD has become a ruling partner for the Tatmadaw.

In his inaugural address, President Htin Kyaw pledged that his government would “implement four policies: national reconciliation; internal peace; the emergence of a constitution that will produce a democratic, federal union; and the improvement of the quality of life of the majority of the people”. At the same time, he cautiously stated: “I am responsible for the emergence of a constitution that will be in accord with the democratic norms suited to our country. I am also aware that I need to be patient in realizing this political objective, for which the people have long aspired” (GNLM 2016, p. 1).

In order to streamline the cabinet size, the NLD government initially reduced the numbers in the ministry from twenty-eight to twenty-one, yet it created the Ministry of Ethnic Affairs, and the number of ministers was reduced from thirty-two to eighteen with no deputy ministers. At that point in time, Aung San Suu Kyi herself held four ministerial portfolios.

Development economists see structural transformation—the process by which labour leaves the rural agricultural sector for the more productive urban industrial and service sectors—as fundamental to economic development. As progressively more labour relocates from rural to urban zones the former are transformed from labour surplus to labour deficit areas, and a “turning point” is reached when rural wages begin to catch up with urban ones (Lewis 1954). Recent evidence of this pattern can be found in many Asian countries such as Bangladesh and China (Zhang et al. 2011; Zhang et al. 2014). Agricultural mechanization, the process by which capital in the form of machinery is substituted for labour in agriculture, is viewed by agricultural economists as a labour-saving response to labour scarcity and rising rural wages (Binswanger 1986; Takahashi and Otsuka 2009). Binswanger (1986, p. 32) notes that “mechanization is profitable and contributes most to growth where land is abundant, where labor is scarce relative to land and where labor is moving rapidly off the land”. As such, agricultural mechanization can be read as a symptom of structural transformation that helps to maintain the viability of farming in the face of labour shortages and rising production costs (Zhang et al. 2017).

In contrast to this model of development, in which economic and social transformation along the rural-urban axis is predictable and linear in form, recent work by development geographers highlights processes of agrarian transition that are far more complex, partial and varied than the mainstream economics literature would suggest (e.g. Rigg & Vandergeest 2012). For instance, Rigg et al. (2016, p. 118) observe that—contrary to the expectations of most commentators—smallholders in East and Southeast Asia “have persisted in the face of rapid and profound social and economic transformation”. But they do so in a variety of new hybrid forms that reflect the conjuncture of variations in physical geography, mobility, markets, and government policies.

These debates have particular resonance for Myanmar as it emerges from five decades of isolation and becomes more deeply integrated into the regional and global economy. Three processes central to structural transformation have emerged post-2011. First, the economy is growing rapidly.

Lieutenant Colonel Dalley returned to Singapore after the war on 5 February 1947 by the Empress of Australia from England. He was met at the wharf by some former members of Dalforce who had served under him in the battle for Singapore. Dalley asked them to gather around him and he told them:

Many observers believed he was referring to the beginning of the Cold War (1945–90) and the rise of Communism after WWII as a result of the fundamentally different ideologies and interests between the Soviet Union and the West, which eventually spread to every part of the world. Thus, “Cold War”, as opposed to an “atomic hot war”, became a term used to indicate the struggle for the hearts and minds of the people between the competing political systems of Communism and Democracy. Essentially, in the Malayan archipelago and Indonesia in particular, this was emphasized to some extent by the power vacuum left by the sudden surrender of the Japanese at the end of WWII after the dropping of the two atomic bombs, but whether this is what Dalley had in mind when he spoke is unclear.

The long PIJ Supplements that Dalley wrote after his return to Malaya on “Malay and Indonesian Communists” and the “Indonesian Situation and Malaya” attached to the MSS Political Intelligence Journals nos. 5 and 10, which will be referred to later in this study, nevertheless confirm Dalley's growing awareness of the problems which MSS would have to face in dealing with the post-war security situation, including the long-standing threat posed to Malaya's security by Indonesian left-wing parties stirring up trouble with Malay left-wing parties to rise up against British colonialism in Malaya as the Indonesians had done against the Dutch in Indonesia.

This book is the result of a conversation I had with the late Mr S.R. Nathan, the distinguished former President of Singapore, whom I had first known in Johor Baru where he was working for the Public Works Department (PWD) before he moved to Singapore and eventually became President of Singapore. I was then in the Johor Special Branch. Much later, when he moved to Singapore and became President, and I was no longer a Special Branch officer but had become a Visiting Senior Fellow at ISEAS – Yusof Ishak Institute, Singapore, we renewed our acquaintance and we used to meet sometimes, at his invitation, in his office at the Singapore Istana to discuss intelligence matters in which, having been at one time Director of the Security and Intelligence Division of the Singapore Ministry of Defence before he became President, he maintained a keen interest.

He knew that I had written a book on the Malayan Special Branch, and he asked why I did not write a similar study about the Malayan Security Service (MSS), which was the domestic intelligence agency established by the British covering both Singapore and Malaya from its headquarters in Singapore when they returned to Singapore after the Japanese surrender in August 1945. When I said I was interested, he arranged for me to be allowed to use the digitized records of the MSS that were held by Singapore's ISD (Internal Security Department) in the ISD Heritage Centre, Onraet Road. It was then I started my research on this book, Dalley and the Malayan Security Service, 1945–48: MI5 vs. MSS, although as I explained to Mr Nathan, I would perhaps sometimes have to rely on some of the background material I had used in my earlier paper “The Malayan Security Service (1945–1948)” and book Malaya's Secret Police 1945–60: The Role of the Special Branch in the Malayan Emergency, although I would incorporate in my present writing, wherever necessary, further information and insights which had come to light since then.

In writing this study, full use has therefore been made of the fortnightly reports of the MSS's Political and Security Journal (PIJ) and its Supplements, complete runs of which have been digitized and held in the ISD, which I did not have access to when I wrote about the MSS so many years ago.

Appendix

Planning for the military administration of Malaya and Singapore after the Japanese Occupation (1942–45) had actually commenced in London from as early as 1943 by the War Office and the Colonial Office. It was during this period that the decision was made to re-establish post-WWII the pan-Malayan Security Service (MSS) that had existed for a brief period before the Japanese invasion of Malaya in December 1941, and the MSS accordingly returned to Singapore with the British Military Administration (BMA) in September 1945 and remained in place when the civil government returned in April 1946.

Immediate Post-war Situation in Singapore

There were difficulties in operating in the troubled and uncertain times that prevailed in Singapore and Malaya in those early days. Singapore was gripped with lawlessness and violence as soon as the Japanese army withdrew to its barracks, and the situation was not helped by the hiatus of several weeks which ensued before the reoccupying British forces landed in Singapore/ Malaya. During this period the Malayan Communist Party (MCP) and its jungle army, the Malayan People's Anti-Japanese Army (MPAJA), Chinese secret societies, and other armed gangs of civilians emerged to take the law into their own hands. It was a virtual “open house” for them in many ways as the rule of the gun prevailed, and first priority had to be given by the returning British colonial forces to restoring public confidence and combating the crime wave by putting police patrols on the streets supported by British troops.

The delay was probably due to some extent to the unexpectedness of the Japanese surrender and the American General Douglas MacArthur in Tokyo requesting Admiral Lord Louis Mountbatten, the British Commander-in-Chief Southeast Asia, based in Kandy, Ceylon, to postpone accepting the surrender of the Japanese forces in Southeast Asia until the Japanese Government and its armed forces, under the authority of the Japanese Emperor, had signed the official surrender documents on the American battleship USS Missouri in Tokyo Bay.

Return of the Malayan Security Service (MSS)

When the MSS landed in Singapore with the British Military Administration in 1945, the head of the MSS Singapore Division was Major J.C. Barry, and his counterpart in Kuala Lumpur was Lieutenant Colonel J.M. McLean. Both were pre-war Malayan Special Branch officers.