Sando please note - Burma's economy: The junta's Achilles' hell - Larry Jagan

August 6, Mizzima News
Burma's economy: The junta's Achilles' hell - Larry Jagan

Burma's economy remains the military regime's Achilles' heal. Over the
past nineteen years the majority of people have got poorer and poorer, as
a select few with strong links to the generals, have successfully
accumulated substantial wealth. But the deteriorating economic situation
and the rising poverty have fuelled increased anger and even recently
occasional public protests.

The government's new found wealth in gas and oil reserves is only likely
to exacerbate the situation as Burma's military rulers care little for the
plight of the country's civilian population. There is a real danger of
Burma becoming another authoritarian Petro-dollar regime like Nigeria, a
UN economist told Mizzima on condition of anonymity.

As yet there are few signs of conspicuous consumption amongst the Burmese
elite, with the exception of the lavish wedding party, the country's top
general Than Shwe throw for his daughter more than a year ago. But as the
wealth from the country's energy resources begins to roll in this is
likely to change and the isible divide between rich and poor stimulate
increased social and economic unrest.

This is what Burma's military rulers fear most. It was the
demonetarisation of the kyat and subsequent food shortages some two
decades ago that fuelled the strikes and political protests and demands
for democracy that brought the country to a complete standstill nineteen
years The regime fears a repeat of this and tries to ensure that there is
no shortages of rice in the domestic market.

"The people can judge us on our deeds," a senior subordinates of the
former intelligence chief General Khin Nyunt told me more than ten years
ago -- on one of the rare occasions I was allowed to visit Burma. "They
will see that we have produced real economic development and made their
lives better," he said. "That will be the litmus test of our success." But
on this score the regime has certainly failed miserably. True there have
been massive developments of sorts. Major cities like Rangoon and Mandalay
have been ransformed. New homes, condominiums, tower blocks, modern
shopping complexes, plush office buildings, luxury restaurants and hotels
have all sprung up.

There has, over the last fifteen years or so, been a continuous
construction boom that has seldom slowed, even during the Asian economic
crisis of ten years ago. The government has also pursued a vigorous mega
infrastructure plan - building roads, bridges and dams throughout the
country. But much of this construction was designed to improve the
country's communications and transport links.

"These infrastructure projects also improved the military's access to the
country's remote areas and significantly enhanced the speed with which the
army could deploy troops," according to a senior Thai military source.
These new roads should also have benefited the farmers, allowing them
greater and speedier access to local markets - but the country's farmers
have not benefited as they found themselves under increased economic
pressure from government actions and the lack of investment in the
agricultural sector.

"More than ninety percent of the country's population live in dire
poverty," a Burmese economist told Mizzima on condition of anonymity. "It
is not so much a case of food shortages as families' incomes being
insufficient to purchase their daily needs," he added.

UN country-wide surveys in last few years have revealed this trend of
increased poverty in Burma and the growing income gap. "More than ninety
percent of the population live on less than 300, 000 kyat (around $300) a
year," a senior UN official told Mizzima, but declined to be named. This
is far greater than in the neighbouring countries with the possible
exception of Laos.

"Food security has become a significant issue in many parts of the
country, especially in the remote and border areas," he said. The worst
areas are in Chin, Kachin, Rakhine and Shan states, according to a recent
UN report seen by Mizzima.

By far the worst area is Chin state, according to the UN surveys, where 40
percent of the population just do not get enough food to live on. In Chin
state nearly three in five people live below the poverty line, according
to the UN's resident humanitarian co-ordinator in Burma, Charles Petrie.
This situation is expected to worse further as there have been recent
reports from various parts of Chin state of potential crop failures.

In eastern and northern Shan state more than half the population live
under the poverty line. "They just do not have sufficient income to ensure
food security, let alone provide a balance or varied diet," according to
one of the UN researchers.

The UN research has documented a deteriorating situation, with poverty
levels in the country growing with no attempt by the Burmese government to
counter it. A crucial sign of food insecurity and poverty is the level of
household income devoted to purchasing food - in Burma the average
household expenditure on food is nearly 70 percent. "This is reflection of
a very low income level of the population," said a UN report. This
compares unfavourably with its neighbours, where it is 59 percent in
Indonesia, 57 percent in Bangladesh and 32 percent in Thailand.

What is more over the last ten years these neighbouring countries have
reduced poverty levels significantly and improved food security whereas in
Burma poverty levels have increased and food insecurity become critical,
especially in the border areas. Government action in these countries has
led to the improvement there, whereas in Burma the military government's
lack of interest in these issues has allowed poverty levels to escalate
alarmingly.

In fact some government policies have even exacerbated the situation.
Poorer farmers have not been able to afford the high costs of agricultural
inputs -fertilisers, seeds, pesticides, irrigation pumps and diesel as a
result of price and market liberalisation.

"Farmers are using less and less fertilisers, and as yields drop, families
are abandoning agriculture and becoming landless," according to a former
senior Rangoon-based western diplomat, who did not want to be named.

"This has led, over the past few years, to an alarming increase in
voluntary migration throughout the country, as these families go in search
of paid work."

This lack of sustainable agriculture and the decline in some manufacturing
sectors, especially the textile and garment industries which were crippled
by the imposition f US sanctions several ears ago, has fuelled a growing
movement of people across the country and abroad in search of employment.
There as been a massive increase in the number of women and children
entering the sex trade or working in slave-like conditions in the textile
factories in Thailand's border regions.

The UN estimates that at least 10,000 girls every year are trafficked
across the border to work in Thailand's brothels, according to a recent
report prepared by the UN head in Rangoon, Charles Petrie.

But the grim economic situation for most Burmese does not end there.
Infant mortality rates are increasing and much higher than in the
neighbouring countries. This reflects the growing problem of malnutrition
across the country. The UN estimates that more than thirty percent of the
country's children under the age of five are severely malnourished. In the
ethnic minority areas and conflict zone this can be as high as three out
of four children are malnourished, according to a recent UN report.

It is also now reporting an alarming increase in Beri (caused by a
vitamin deficiency). Burma is the only country in the world where this
disease is a major factor in infant mortality. The list goes on and on -
the increase in drug resistant tuberculosis. In 2004, multi-drug resistant
TB was as 4% among newly diagnosed TB patients and over 15% in previously
treated sufferers. This is more than double that in most of the countries
in the region, for example Thailand's reported rate is 1.5% amongst new
cases.

The deteriorating economic and social conditions that the Burmese people
have suffered over the last nineteen years also has longer term adverse
affects for a developing economy hoping to eliminate poverty in the
future. As farmers are displaced, either by economic conditions or the
forced seizure and confiscation of their land, and poverty levels increase
so does the number of children dropping out of school.

More than forty percent of children enrolled in primary school are now
able to complete their studies. This, not only denies them education and
employment possibilities, but limits the country's potential to develop.
One of the most stark indicators that the government is failing its people
is the fact that the Burmese military regime spends far less on health and
education than any other government in the region. Burma spends a paltry
1.4 percent of its Gross National Product (or National Income) on health
and education - 0.5 percent and 0.9 percent respectively. This is less
than half the next lowest spender in the region - Indonesia. Even two of
the poorest counties in the region Cambodia (3.5%) and Laos (3.3%) spend
considerably more.

Burma is unique in the region for spending more on the military than
health and education combined. That is a clear indicator of the regime's
priorities. It is little wonder that many people in Burma are convinced
that poverty, health and education will only be tackled once the military
junta is no longer in power.


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