Luxury for the Generals, Poverty for Others

NAY PYI TAW—When government security forces crushed pro-democracy demonstrations in Yangon, the nation's historical capital, the ruling generals were living far from the maddened crowds, some 250 miles north in their newly built capital whose name means Seat of Kings. This is their Xanadu, where they work in commanding, Stalinist-style buildings, live in luxury homes, drive along wide, paved streets, and enjoy 24-hours-a-day electricity—a standard of living far from electricity shortages, rutted roads, and other routine hardships faced by Myanmar's citizens.

Workers water the grass in front of the ornate city hall in the new capital, Nay Pyi Taw.

Hacked out of a malarial jungle and declared the new capital in 2005, this inland fortress was built, by some accounts, at the instigation of a fortuneteller and with the sweat of tens of thousands of forced laborers. The occasional muffled sound of explosions suggests the regime is carving out hardened defensive positions in the nearby mountains, perhaps against feared foreign attacks. "Nay Pyi Taw is the junta's war bunker," says a political analyst in Yangon, who asked not to be named, fearing reprisals. "They know people resent them. They are running away from their own people."

The generals appear to have succeeded in crushing the recent pro-democracy uprising, the most serious challenge to their rule since 1988 protests in which some 3,000 people were killed. The regime claims 10 people were killed in the current crackdown against street protesters, but dissident groups say the real number is up to 200 dead and that thousands have been detained and interrogated, including many Buddhist monks who dared march against the regime. An exile opposition group said last week that it has learned that the detained democracy party activist Win Shwe, 42, died at a police interrogation center, where the group said he was subjected to torture.

The ruling junta, facing the threat of new international sanctions, is inching toward talks with the nation's most popular politician, democracy icon Aung San Suu Kyi, who has been held under house arrest for 12 of the past 18 years. But the leaders have set as conditions that she first renounce calls for sanctions.

Soothsayer says. The military junta has never given any real explanation as to why it chose to move to Nay Pyi Taw. One theory was that Yangon had become too crowded and congested and potentially dangerous for the generals' tastes. A widely believed rumor says the decision was on the whim of Senior Gen. Than Shwe's fortuneteller, whom the Burmese leader has a bizarre habit of consulting on matters of state.

In any event, government civil servants were trucked here from Yangon, sometimes with just a few hours' notice, in 2005, even before the first wave of construction was completed. Many are here still without their families, who stayed behind to be close to relatives and for schools.

The Stalinist feel of the new capital is heightened by the behemoth statues of bygone Burmese kings and the monumental scale of the buildings, which include government offices, diplomatic quarters with blue and yellow metal roofs, a parliamentary building, and a large military complex with luxurious mansions, an area out of bounds for anyone not in uniform.

Nay Pyi Taw, not expected to be fully completed until 2012, is being built by a few Burmese business conglomerates that have ties to the military junta. One of them, Asia World, is believed to be in charge of more than 70 percent of the construction project. The sprawling personal residences of Than Shwe and Vice Senior Gen. Maung Aye were built by Asia World—run by former drug lord Lo Hsing Han.

To pay its bills, the Myanmar government can draw on the revenues from growing off-shore gas reserves, which provide billions of dollars from gas sold to energy-hungry nations such as India, China, and Thailand. Myanmar also has other rich natural resources, like timber, that help pay for building this new capital. "It's a complete waste of money," says an analyst in Yangon who requested anonymity, fearing harsh reprisals. "Only a sliver of Myanmar's budget goes to healthcare, education."

In a country where nearly 90 percent of the population lives at or near the poverty line, the junta, obsessed with safeguarding its own interests, spends 40 percent of the budget on the upkeep of its 450,000-strong Army—the biggest army in Southeast Asia.