Aung San Suu Kyi’s opposition party the National League for Democracy (NLD) has won an absolute majority – with just under 60% of parliamentary seats – in Myanmar’s much anticipated first free national elections since 1990. The Election Commission and President Thein Sein of the ruling party the USDP have endorsed the results, acknowledging the NLD’s landslide victory. The elections were largely peaceful, with broad public support for Ms Suu Kyi, who has called for conciliation towards Thein Sein in crucial future government negotiations. Indeed the army won just over 30% of the seats – with 25% being constitutionally secured – thereby retaining the capacity to block any constitutional reform.

Impact on country risk

This is a historic and huge victory for democracy and for Ms Suu Kyi, which confirms the upbeat pre-poll expectations and is likely to strengthen Myanmar’s recent political and economic transition. The NLD is certain to run the next government alone and will be decisive in electing the next president, at least in theory. The first speeches on both sides bode well for future peaceful political developments in the short term. However, the difficult part is yet to come for the former Nobel Peace Prize winner in spite of General Thein Sein having promised a transfer of power in line with the electoral results. Until the future government is formed (by next April), tight talks are expected between the USDP and NLD on a range of symbolic issues, in particular the army’s role in politics and presidential candidates. Constitutional reforms are among the most contentious, given the strong vested interests within the army and its unlikelihood of giving up many of its privileges. Hence, a clash between Ms Suu Kyi and Thein Sein cannot be ruled out, as she announced she’ll be “above the president”, so as to circumvent the fact that she is not allowed to be president. A compromise will no doubt have to be found to avoid protests and a political stalemate. Another challenge lies in the NLD’s inexperience in power and economic management, which is a threat to future stability if the country’s socio-economic development does not meet the public’s huge expectations. In fact, the NLD has yet to formulate a clear overview of its planned policies. Backed by the international community, the NLD is expected to ensure continuity with recent economic openness. Finally, two other main downside risks lie in addressing endless numerous ethnic conflicts and a politically sensitive anti-Muslim and anti-Rohingya rhetoric among Buddhists. How the NLD tackles all those risks will shape Myanmar’s long-term political risk and will support or hinder the democratic process. Analyst: Raphaël Cecchi, r.cecchi@credendogroup.com