(One of the term papers submitted in 2008/9 by Nyunt Shwe during his postgraduate study at TUFS and he is aware that all his graphic presentations in this paper do not appear right and gives you his humble apology for not having the skill to fix them at present)
It depends. All possibilities are there. If the leadership sooner realises the
defects of present economic policies in regard to national and international standards
and shortages in skilled human capitals in all fronts and willing to correct these, then,
Myanmar is very likely going to be a powerful tiger in the ASEAN. She has got
nature’s blessings and easy to teach human resources. What she needs is only wise
and accountable leadership.
According to Holier, all poverty stricken countries are caught up either in one
or more of four traps – namely the conflict trap, the natural resources trap, the trap of
being landlocked with bad neighbor, and the trap of bad governance in a small country (Collier 2007: 5). Myanmar has fallen into two traps of the first and the last.
The Generals seem not concern much about the plight of the people and feel no shame
of their performance. They seem not bother why other authoritarian countries in the
region, like Indonesia, South Korea, Taiwan, Thailand, Malaysia, Singapore et cetera
found wealth and developments in the past three decades. The kind of irresponsibility
and indifference to the critiques of the world made Myanmar one of the bottom
countries. Most scholars agree that Myanmar (Burma) was Asia’s bad economic
disaster.
“No country without right policy (Klaus 2008: 1) and overwhelming export
compare to import could found economic growth.”
1. Problem Defined
There are five fundamental problems that need to solve immediately. One is
political stability; second is realistic monetary policy; and third is to exercise
transparency and accountability, and fourth is to breed able professionals in
development and management fields. With unrealistic money exchange rates and
unchecked inflation, investments and existing businesses won’t find incentives very
much to work with.
Myanmar is one of the most poorest countries in the world and poverty is
spreading and middle class is either diminishing or already wiped out. When the
citizen learned that the United Nations has recognized Myanmar as a Least
Development country in 1978, most of them doubt the fact was real, but not now any
more. For real development and growth, the government’s assistance to create
sustainable income is imperative (Easterly 2002: 143). This kind of incentives and
education would spell the people necessary vigor to work out of poverty trap. Without
incentives, long-term economic development is impossible.
Table 1 . Index of Growth of Real GDP Per Capita, 1929-60 (1960=100) (Booth
2004:18) (Originally Table 1)
year Indonesia Burma North Vietnam South Vietnam
1929 115 148a 102 133
1938 115 121 106 146
1951 87 77 97 90
1956 96 96 99 69
1960 100 100 100 100
Fig. 1. Index of Growth of Real GDP Per Capita, 1929-60 (1960=100) (After Booth).
2. Why we need ‘political stability’ in the first place?
Myanmar is trapped in political conflict for so long and so costly. All the countries in the region, including South Korea, have performed much better than her now, but in the 1950s they were all in the same boat or Myanmar was more favoured by natural resource endowments (Steinberg. 1990: 20). Malaysia got her independence much later than us, but now she is far ahead. All the governments of Myanmar, in one way or another fought inner battles for power, but all forgot to adapt or learn to be committed politicians or good leaderships.
The first Prime minister U Nu had failed not only in economic development, but also to establish unity. Insurgency broke out just mere three months after independence. Nu’s right-hand-man, Home minister, Kyaw Nyein’s hatred and jealousy over Communist Party of Burma (CPB) urged him to suppress and arrest as many as top communist leaders drove CPB to underground. That Karen National Union (KNU) one year later followed the suit. In 1949, international and indigenous communities called Nu’s government as Rangoon (Yangon) government.
Chinese Communist Party led by Mao Tse Tung founded The People Republic
of China on 1st October 1949 and the Chang Kai Sheik’s troops fled the mainland. He
himself retreaded to Taiwan, but over 40,000 of them took their strongholds inside
Myanmar in order to invade and harass the mainland and the new government. Those
troops had occupied huge land area in northeastern region of Myanmar that bordered
with China. They have had built even airstrips. The American CIA and Formosa
government supplied with all necessary logistics. Myanmar Army had to engage both
insurgents and invaders at the same time, but its manpower and resources were
limited. However, Myanmar Army had fought courageously and selflessly in those
battles and won over them at last. Insurgency was scaled down and concentrated at
the border regions and remote areas.
Those unfortunate historical experiences definitely played a role to economic
development. However, just pointing the finger to the past alone would not save the
country. Why Vietnam bypasses Myanmar in economic development now? Vietnam
is the country whose land was bombed almost inch by inch by the world super power
nation, the United States of America. She has suffered much more than any troubled
country in the world. Above all, it is a communist state, but why did Vietnam overcome those difficulties and problems? Because it has firm doctrine, commitment and wise leadership compare to Myanmar, Cambodia, and Laos, at least.
The following table (Booth 2003:19) showed how bad is Myanmar doing in
economic development.
1929
1938
1951
1956
1960
0
20
40
60
80
100
120
140
160
Indonesia
Burma
N.
Vietnam
S.
Vietnam
Table 2. Per Capita GDP in Burma and other Asian Countries, 1950-54, 1960-64 abd
1985—9 (1985$: annual averages for the five years shown) (Booth 2003:19)
(Originally Table 3)
1950-54 1960-64 1985-89
Burma (Myanmar) 245 361 556
India 617 800 1142
China n.a 487 1282
Laos n.a n.a 1316
Philippines 896 1204 1627
Indonesia n.a 583 1688
Thailand 804 1027 2790
Malaysia n.a 1544 4082
Taiwan 967 1387 6708
Singapore n.a 1899 9578
Fig. 2. Per Capita GDP in Burma and other Asian Countries, 1950-54, 1960-64 abd
1985—9 [1985$: annual averages for the five years shown (after Booth)].
Myanmar’s past economic failures could be blamed on weak, corrupted, and insurgency under the parliamentary government and closed-door and wrong economic policy under late U Ne Win regime. Old era ended late 1988, however, the present military regime is failing its mission of economic development though it opens FDI and citizen private ownerships. Late U Ne Win regime had fought powerful communist and KNU insurgencies and more than a dozen other forces, but this regime has achieved a truce with 17 insurgent groups. Today, only much weaker KNU troops and a few others remain in intransigence.
0
2000
4000
6000
8000
10000
12000
Burma
(Myanmar)
India
China
Laos
Philippines
Indonesia
Thailand
Malaysia
Taiwan
Singapore
1950-‐54
1960-‐64
1985-‐89
The troubles the regime faces today is not insurgency, but the Aung San Suu Kyi led NLD, backed up by Diasporas in different major countries like U.S.A, U.K, Japan, Australia etc., and its own policies and corruption. The regime’s economic efforts are much hampered by the United States’ sanction and Suu led oppositions’ tourism boycott-calls. The revenues were sharply lowered in those concerned area like exports and tourism. Suu led oppositions are still campaigning against FDI, tourisms, and even on humanitarian aids. The effect is heavily falling down on ordinary people who lost their jobs like at garment industry, tourism and also lost opportunities to secure paying jobs. These will continue if those obstacles are not removed.
All in all,
1. Discouraging Foreign Direct Investments.
2. Forcing out the foreign businesses and NGOs.
3. Denying the correcting the name of the country as Myanmar from Burma,
which was colonial legacy. It corrected some towns, streets, and public places
that bear colonial names or corrupted Myanmar, if not corrupted, it doesn’t
change, i.e., Mandalay, Taunggyi, Myingyan et cetera.
4. Vehemently oppose visit Myanmar Years (1996) and tourism.
5. National Convention; NLD boycotted it and the regime expelled it.
6. Regime asked Suu to withdraw ‘foreign sanction demands’ and her threat of
‘utter devastation’. She did not comply.
Suu, NLD, and their foreign Diasporas lobbyist groups worked earnestly against all that were cherished by the regime. Even Mr. John McCain, an admirer and advocate of Suu’s cause, was concern about the impact of economic sanctions on long suffering people. McCain said, “Even I, admirer though I was of Burma’s nonviolent freedom fighters and their leader, worried that sanctions would punish the people more than they would convince their rulers to relinquish power.” (McCain 2004: 160-161) Contrary to stranger, Suu did not count the people, but she always claim that only the regime has to suffer. The communists always say that people have nothing to loose. In fact, it is contrary to their says; people are most to suffer.
Previous Secretary-General Kofi Annan’s special envoy, a Malaysian diplomat has written in his article how amazingly Suu Kyi has changed. He wrote: “Suu Kyi had come a long way to realize that democracy can only be done through the generals, with he latter still in the driving seat. This realization of hers is in stark contrast to the imperious, principled and unbending Suu Kyi I had met over twenty meetings ago.” (Razali 2007: 30).
When I read those lines, I was encouraged that she will do something significant soon. However, it was now almost five years since she spoke those words, but no hint of progress and slight change. She appeared at the demonstration of monks in September 2007 in support of that uprising. Still she and her party is calling unconditional dialogue to the regime. The regime has its firm conditioned placed on the table, but Suu and NLD ignored. Why did not Suu offer what the regime want – to withdraw international sanction demands and her verbal threat of ‘utter devastation’ (Suu 1997: 361).
3. Why Myanmar Needs Realistic Monetary Policy
Everybody knows that Myanmar’s exchange rates are unrealistic. During last year, the rate fluctuated from 1100 to 1400 Ks to a United States Dollar while official rate stay constant at 6.5 Ks to a US$. To attract domestic and foreign investors alike, the regime needs to devalue to acceptable rate.
Transparency and Accountability Myanmar’s military governments since late General Ne Win’s era up to this moment, Myanmar (almost) never released honest statistics of the government’s performance. There was no story of resignations of any minister after severely failing their missions or targets. No one is responsible for anything, even, no public apology at all.
4. Myanmar Needs Able Professionals in Economics, Technical and in
Management Fields
Some scholars, like Steinberg (2001:164), Booth (2003:14), observed that
many bright and educated young generation left the country since they were not
properly accommodated by the regime and because of woe of country’s economic and
political situation. Though many left for their better future, some of them might come
back when the country’s situation is changed and improved. However, the need of
educated and skilled labors for the real development of the country is incomparable
with that lost.
Myanmar needs a lot more educated and skilled labors. She needs to raise her
educational and health standards alongside overall political situation. Myanmar
physicians without foreign additional diploma or degree, who become doctors since
1972 were no longer recognized internationally. Most of the doctors who came to
developed countries like U.S.A., U.K, Aus., Japan etc. engage in manual labor works.
It’s a great lost for the country. A few Myanmar economists, historians, and linguists found jobs in teaching, mostly, in developing and developed countries.
The peoples’ living standard has been deteriorating for two decades now.
Many rural families are landless and rely on farm-jobs and on other miscellany. Many
small landowners lost their lands and have degraded one meal a day or so in rural
areas (Dapice 2003: 21/22). Urban population also faces a lot of hardship due to high
inflation. As Anne said in her paper, this government makes all the systems corrupt
from top to bottom. “Both UNDP and IMF placed the blame for poor government
revenue mobilization on the weak and corrupt administrative system, which was in
turn the result of salary erosion caused by high inflation”(Booth 2003: 12/13).
Though Myanmar needs to revive moral (religious) education, if the regime
does not eradicate the principal faults of the system, nothing will fix the dilapidated
state structure.
5. Myanmar needs ‘Foreign Direct Investment’
Myanmar needs huge capital to develop both raw material and finished
products for export and indigenous markets. Besides, she needs modern technology in
order to compete with others in the region and in the world. Without favorable
incentive, foreign direct investment would not come enough.
Myanmar military regime is too suspicious not only towards outsiders, but
also its own citizens. It differed with successful authoritarian regimes around the
world in treating the professionals and learned persons. This xenophobic mentality it
inherited from its mentor late General Ne Win is still so strong and played a vital role.
Late General Ne Win’s dictatorial rule lasted for 26 years from 1962 to 1988.
The economic growth was steady until nearly end of the first decade. However, his
isolationist policy, unfounded economic policy in agriculture and production
industries sent his country to Least Developed Country status in 1987. In fact, this
was a necessary creation by the regime’s brain-group in order to reap the benefit of
interests reduction of various loans, from loan to grant shifts, debt-releases, and more
loan with low interest rates from the World Bank, the IMF, and individual countries
like Japan (Steinberg 19989: 44; Booth 2003:13). Gradually and after 22 years,
Myanmar becomes a real poverty stricken country while the regime and cronies enjoy
reap all the opportunities to amass formidable fortunes.
The present regime took the control of power on 18 September 1988. It
dismantled the socialist government and its policy, but adapted to market economy
based capitalism. The regime opened up the country and invited foreign investments
and joint venture businesses. The Myanmar Foreign Investment Laws and ‘The
Myanmar Citizen Investment Laws’ were promulgated in Nov.1988 and March 1994.
However, the country’s manufacturing goods are much short of the demands. The
worst problem is they could not compete with imported things both in quality and
price (Booth. 2003: 8)1.
The economists, mainly homegrown, concluded that Myanmar lacks enough
citizen involvements in development businesses. They argues this legged resource
mobilization will not favor economic growth (Than. 2007: 368). One of the problems
for the people who have money to invest is the low or negative return because of high
inflation. The regime must systematically fight it by delegating necessary power to
professional team. Israel in 1986 succeeded it from 445 percent to 20 percent in mere
within two years and Ghana also brought down its black market premium from 4,264
percent in 1982 to 10 percent in 1990 (Easterly 2002: 219/252). There were many
such countries in the world, including the regime’s modal ‘Indonesia’ and it must
learn from others, asks their advice, and hire brilliant economists to solve this
devastating problem of inflation.
Table 3. Percentage breakdown of export value by country in ASEAN: 1937-1998
(Booth 2003:20) (Originally Table 5)
Country 1937- 1955- 1965- 1980- 1995- 1998-
Burma 11.5 6.2 4.7 0.7 0.3 0.3
Indochina
Cambodia
Lao PDR
Vietnam
6.5 2.9 3.0 0.5 2.1 3.2
Indonesia 33.6 25.6 15.1 30.5 14.2 14.2
British
Malaya
Malaysia
Brunei
Singapore
34.3
44.9
48.1 51.3
18.0
6.4
26.9
60.6
23.0
0.7
36.9
56.3
22.2
0.8
33.3
Philippines 9.4 11.3 16.0 8.0 5.4 8.9
Thailand 4.7 9.1 13.1 9.0 17.6 16.5
Total 100.0 100.0 100.0 100.0 100.0 100.0
Fig. 3. Percentage breakdown of export value by country in ASEAN: 1937-1998
(After Booth).
1
Anne
Booth
is
Professor
of
Economics
in
the
Department
of
Economics,
SOAS.
Table 4.
Exports Per Capita (current US$) in Southeast Asia, 1909-13, 1934-38. 1969-73,
1993-97 (annual averages for the five years shown) (Booth 2003:20) (Originally
Table 6)
1909-13 1934-38 1969-73 1993-97
Myanmar 10 12 4 24
Indochina 3 4 n.a 80a
Malaysia 88 88 178 3246
Singapore 1004 30256
Indonesia 5 6 10 231
Philippines 5 8 31 248
Thailand 4 6 26 852
Taiwan 6 6 155 4969
As you will see, the 4 five years range conveys the healthiness of
Fig. 4. Exports Per Capita (current US$) in Southeast Asia, 1909-13, 1934-38. 1969-
73, 1993=97 (annual averages for the five years shown) (After Booth).
0
10
20
30
40
50
60
70
1937-‐
1955-‐
1965-‐
1980-‐
1995-‐
1998-‐
0
10000
20000
30000
40000
Myan
mar
Indoch
ina
Malays
ia
Singap
ore
b
Indon
esia
Philip
pines
Thaila
nd
Taiwa
n
1909-‐13
1934-‐38
1969-‐73
1993-‐97
I have just collected the data of Inflation Rates and Per Capita GD of ASEAN
countries from CIA World Factbook and put them into a table below. Myanmar is
biggest inflation rate and lowest Per Capita GDP. Normally Myanmar people are not
only proud of their ancestors (historical legacy), but also for themselves. For pride, there are many who even don’t mind to sacrifice their lives. However, it seems that the present
regime is particular and alien to Myanmar tradition.
The saying goes .” “Athe’ne’ lulo’ta- maho’ Ashe’ne’lulo’ta-” “We are not made up of life-breath, but made up of disgrace.” That means “if we were disgraced, it’s better to die.” For visual purpose I split the table into two charts 5a and 5b. Table 5. Comparison of Annual Inflation Rates and Per Capita GDP between the ASEAN countries – based on CIA factbook 2008 estimate.
Country Inflation Rate % Per Capita GDP
Myanmar 27.3 1,200
Laos 8.5 2,100
Cambodia 21.1 2,100
Vietnam 24.5 2,900
Brunei 0.4 54,000
Philippines 9.6 3,400
Indonesia 10.5 3,900
Thailand 5.8 8,700
Malaysia 5.8 15,700
Singapore 6.6 52,000
Fig. 5 a
Fig. 5b
0
10,000
20,000
30,000
40,000
50,000
60,000
Per
Capita
GDP
Per
Capita
GDP
Table 1. Comparison between Claimed Annual GDP Growth Rates and EIU estimates
of GDP Growth Rates (% p.a.), Myanmar (Burma), 1999 -2004
The biggest and frustrating problem there is that the government provides no reliable data of Myanmar. This fact is well known among international academicians and scholars. I combined two separate tables into one to highlight the regime’s statistics and the Economist Intelligent Unit (EIU) estimate (Turnell 2004: 2/3).
Table 6. Claimed and EIU estimate Annual GDP Growth Rates (Originally Table 1 &
2 of (Turnell 2004:2/3).
year 1999 2000 2001 2002 2003 2004
ADB based
on (CSO)
10.9 13.7 11.3 10.0 10.6 10.0*
Based EIU 10.9 6.2 5.3 5.3 -1.0 -0.9**
* estimate **Forecast
(Source: ADB (2004a and 2004b) based on data supplied by Burma’s CSO and EIU
(2004)
The chart clear shows how Myanmar regime’s statistics are unreliable. During the 2003 monsoon, Myanmar was badly flooded and many thousands acreage of paddy fields were destroyed. GDP’s more than 50% is made up of agricultural outputs. EIU estimate was close to reality. If the country found such a rise in GDP, then, why Myanmar is still poor?
0
5
10
15
20
25
30
In.lation
Rate
%
InUlation
Rate
%
-‐2
0
2
4
6
8
10
12
14
1999
2000
2001
2002
2003
2004
ADB
based
on
(CSO)
Based
EIU
“Bad government policies are usually partly to blame, but so is bad luck” (Easterly 2002: 214). The cyclone Nargis had wiped of the delta region or the rice-bowl of Myanmar on May 2/3 2008 caused 140,000 dead, many injured, and lost huge amount of properties, including skilled human capitals. This was a hardest blow to the regime more than what insurgency could disturb the commercial routes and sites. The reluctance and ill management of the foreign aids to the victims by the regime’s red tape bureaucracy added sufferings over already devastated people. Why did that bad luck happen? Traditional Buddhist thinking is that it happened because the ruler has violated the law instead of guarding it.
The United States had extended her sanctions before the end of Bush Administration. The “The real losers from the current standoff are the Burmese people.”Unless the regime takes favorable and necessary actions to cure its ailment, it will never near to become a powerful tiger, instead, chances are to remain as despised hyena.
6. Conclusion
Myanmar can transform into a powerful tiger. It depends the political willingness of the military regime. The regime must create more stable condition both with the political opponents and cease-fired ethnic insurgent groups for long-term security. It must fight the inflation and find a way to devalue the currency. If it could improve human right record significantly, then the helps and aids could fall in. The United States has her new President and administration that would likely change the tough stance of previous two Presidents if they find some improvements of bad records. Because of U.S imposed strict sanctions, IMF and WB are also not likely to help the country. Nevertheless, without foreign financial assistance, Myanmar regime could not afford the devaluation of its currency (McCarthy 2000:241). Without this two (checked inflation and sensible exchange rates reform), both domestic and foreign businesses could not expect attractive incentive. Without incentive, they won’t invest. Without investments, Myanmar could not become a tiger, but would have to remain a hyena and receive humiliation by its own citizens and international communities alike. Money could not buy true dignity and peace of mind. Without peace of mind and dignity, all form of entertainments, leisure, and luxury one may have plenty, but there will be no real happiness. When the Generals die with this kind of attitude towards its own subjects, they have to go to the deepest hell.
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Aung San Suu Kyi. 1997. Freedom From Fear. Penguin Books, Revised Edition,
Printed in England by Clays Ltd, St Ives plc.
Booth, Anne. 2003. The Burma Development Disaster in Comparative Historical
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Myanmar My Always 