MARCH 1989 - VOLUME 10 - NUMBER 3
F E A T U R E
Burma: What Comes Next
by Thomas A. Wathen
Rangoon, Burma --While multinational corporations have greatly expanded their presence throughout Asia, Burma remains virtually untouched. Since the 1960s, Burma's government has chosen a path of economic and political isolation. Last year the population revolted. Should the popular uprising succeed in overthrowing the current regime and installing a government that opens the country to foreign trade, one of the world's richest sources of natural resources may be up for grabs. Located in the northern part of Southeast Asia, Burma is a mix of Burmans, hilltribes, ethnic peoples related to the Thais and Khmers, Indians and Chinese. The subtropical country, roughly the size of Thailand, stretches from India and the Himalayan foothills in the north to the Bay of Bengal and the Andaman Sea.
Once administered as part of British India, Burma gained its independence in 1948. Ten years later, after a futile attempt at parliamentary democracy, General Ne Win took control of the country in a military coup. Ne Win called for the reestablishment of order. And for all but two of the next 30 years he ruled with an iron fist.
Ne Win and his supporters ruled under the banner of the Burma Socialist Program Party. Under his self-styled political structure, the country became completely isolated from even its nearest neighbors. Ne Win succeeded in developing a self- contained economy.
For outsiders, "Burmese Socialism," as Ne Win called it, meant that the country was off limits to external influences. Aside from products procured through the black market or brought in by Burmese and foreign travellers, Burma has no foreign products. Foreign companies are essentially banned. Coca-Cola, Marlboro cigarettes, Kodak film, Bayer aspirin, Toyota automobiles, Nestle chocolate and hundreds of other products familiar in much of the rest of Southeast Asia are conspicuously absent.
Economically, Burmese Socialism has been disastrous. Agricultural production has steadily declined and industrial activity has ground to a halt. Blessed with fertile land, Burma was once the world's largest exporter of rice. Over the last two decades, however, yields have dropped in Burma while neighboring countries have achieved dramatic gains. This year the rice harvest did not meet domestic needs. And in 1985, the World Bank estimated that per capita GNP was only $190.
The country's industrial plants have produced fewer and fewer consumer goods in recent years. Importing such goods is out of the question, because Burma's foreign exchange reserves are estimated at only $25 million. Instead, the Burmese people rely on an illegal, underground economy. Shops and street vendors in the cities openly sell goods procured through the black market while travellers delight in telling stories of Burmese asking to buy everything from old shoes to the shirts off their backs. Black market activity is estimated to comprise half the country's total economic activity.
"I think if it weren't for the black market, the government couldn't exist," said one foreign embassy official in explaining the widespread illegal commerce. "It is like a safety valve."
Nowhere is Burma's economic decline more obvious than in Rangoon. A prosperous international commercial center in the 1950s, today Rangoon is a city lost in time. The downtown consists largely of old colonial buildings, standing precariously, in various stages of disrepair. The city's streets are full of cars and trucks, maintained on homemade spare parts, that date back to the 1950s and 1960s. Many of Rangoon's public transport buses, for instance, are converted troop transports left in Burma by the Allied Forces during World War II. In the countryside, most people live in thatched roof huts.
Despite the economic problems the country has experienced under Ne Win, Burma's isolation has allowed much of its natural and cultural environment to remain intact.
"This is one of the few places that is not environmentally and spiritually polluted," maintains one U.N. official. "We need a place like this in the world," he adds.
Burma is often contrasted to neighboring Thailand, which is considered an emerging force in international trade. While Burma is still heavily forested, Thailand's forests have been greatly depleted. While Rangoon is relatively unpolluted, Bangkok has some of the worst pollution problems in the world. While Burma's people still retain their religious and community structures, Thailand increasingly suffers such modern maladies as drug addiction, prostitution, alcoholism and crime.
Burma does have pollution—from tannery factories on the Irrawaddy river to the lack of sewage treatment plants in the cities and towns. But the more severe problems of air and noise pollution, toxic wastes and pesticide poisoning—common in western countries and developing Third World countries are largely non-existent in Burma.
The country has more of its forest area intact than Indonesia, Thailand, Malaysia, Nepal, India or Sri Lanka. Around 40 percent of Burma is forested, compared to 18 percent of Thailand and 10 percent of India. Burma retains the world's largest reserves of teak wood -and has abundant sources of at least 200 species of trees which are suitable for use in furniture and paper production. The country is also rich in oil, minerals, jute, rubber, gems, jade, pearls and marine products.
"A clean environment was an unintended result of the government's economic policies," " one Burmese national involved in international relief work says. But the government has no environmental protection agency, or plans for dealing with environmental problems.
"No one thinks of the environment, because it is something we take for granted," says one Burmese. "There is no industry operating, so we think there is no pollution."
But slowly this neglect is leading to problems. There are signs that the forest cover is being diminished by over-harvesting of teak wood and population pressures. In the 1950s Burma had a 57 percent forest cover, according to United Nations figures. By 1980, a UN Food and Agriculture Organization/UNEnvironmental Project Tropical Forest Resources Assessment Project showed only a 48 percent forest cover. Estimates now indicate that forest cover has dropped to 40 percent. In one area, the Mon State, fully one-third of the forest has been lost.
As Burma's other exports, such as rice, have fallen off, teak wood has become more important as a source of foreign exchange. Last year, teak generated 40 percent of the country's foreign exchange earnings, much of it from European furniture companies.
Increased use of shifting agriculture, by an increasing population, is also reducing the forest cover. In Burma, a country that allows no family planning programs, the population is growing at a rate of 2 percent.
A desperately poor country by any measure, Burma nonetheless boasts an official literacy rate of 78 percent. Even those skeptical of these figures acknowledge that the literacy rate is over 50 percent, a high rate compared to countries like neighboring Bangladesh, where the literacy rate is only 30 percent.
The literacy rate reflects the success of the social institutions that have endowed the country since colonial times. Rangoon University was once considered a leading school in Southeast Asia, its students' progress propelled by their familiarity with English. Even the country's vast forest cover is partly attributable to strong management by the country's forestry agency, set up originally in 1856, under German stewardship. The Ministry of Agriculture Forestry Department "rivals any ... in the West," says one U.N. official. The Burmese medical profession is also well respected, and Burmese doctors are much sought after by other Asian countries.
International agency officials uniformly praise the Burmese for their resourcefulness and industriousness. "I've worked in Nigeria, Turkey and Sri Lanka, and this is the first time that I know the people here will protect the equipment that we bring here," says a U.N. agency worker.
Indeed, Burmese may be able to claim the world's best auto mechanics. One U.S. tourist who grew up in Burma came back recently after a 26-year absence. "The cars and trucks are the same ones, only they look better with the newer paints," he says.
The industriousness of the Burmese is also evident in some of the aid projects. UNICEF, the United Nation's childrens' relief agency, reports that a project to construct innovative, fly-proof latrines was an enormous success in Burma. The program, which required villagers to pay most of the costs of the latrines, called Ventilated Improved Pits, has produced 500,000 new units since 1982. The Burmese government is now working to provide latrines to 50 percent of the rural population by 1990. Total costs to UNICEF were less than $3 million.
A worsening situation
Government policies, however, have begun to under-mine even these enduring institutions. "We only hope it won't get worse," one Burmese national said in assessing the state of the country earlier this year.
A former professor at Rangoon University complains that the educational system is crumbling. One problem is the lack of money to pay qualified teachers. A full professor at Rangoon University, he says, makes roughly 1,300 kyats ($200) per month, while the cost of living for an average middle class Burmese is 2,000 kyats per month. (The official government exchange rate is 6.2 kyats to one U.S. dollar. The black market rate gives 35 kyats to one U.S. dollar.) The situation is even worse in the secondary and primary schools. High school teachers earn roughly 600 kyats per month, while primary school teachers receive only 350 kyats.
Another problem has been the decline in familiarity with English among students. English was formerly widely spoken and used in schools, giving Burmese students ready access to scientific and technical information from other countries. Under Burmese socialism, how-ever, Ne Win's government decreed that only Burmese could be taught or used in the classroom. "But Burma isn't a large enough country to generate all the needed text-books in our language," the former professor says. As a result, students over the years fell further behind students in other countries. English has recently been reintroduced in the classrooms, but many of the country's college students today cannot read or speak English.
"The biggest problem, though, is motivation, because there are no job opportunities upon graduation," the educator adds.
Education is not the only problem. Health care in the country is suffering because the nationalized pharmaceutical industry cannot afford to import raw materials for many essential drugs. With inflation high and armed insurgents ready to challenge the government, many feel that the system is falling apart faster than it can be put back together. Worries one Burmese, "There are no pillars left for rebuilding "
Further complicating Burma's future are the ethnic insurgent armies who have fought the government for four decades. Burma was seldom unified in its pre-colonial history and now faces at least eight distinct insurgent groups at war with the govern ment. Some groups, such as the Shan Peoples' Army it the North, are fighting for a separate state. Others, like the Burmese Communist Party, once supported by China, an striving for a political takeover. Still other groups an linked to drug warlords operating in the notorious Golden Triangle, the mountainous region of Southeas Asia where Burma, Thailand and Laos come together it what is a well-known poppy cultivation and heroin traf licking center.
The insurgent groups have gained control of large stretches of remote territory, but for years have manage( only a stalemate with the government. In early 198; opposition groups attempted to form a unified front.
They announced in August 1988 that they would stag attacks on the government to take advantage of the military's distraction with the revolt, but the attack never materialized.
In the meantime, there are indications that other coup tries have started to take a more active interest in Burma': future. Compared to nearby undeveloped countries, sucl as Bangladesh or Nepal, Burma has few international aik groups. Most such work is done by various United Na tions agencies like the United Nations Developmen Program (UNDP), the World Health Organizatior (WHO), the FAO and UNICEF. Last year, the Burmes government was granted "least developed country' status by the United Nations, a first step for obtaining low-interest international loans and grants.
Before the uprising, the United States, under the auspices of AID, had recently launched projects on public health and agricultural production of edible oils. And West Germans had given grants to the financially strapped country. One German company is reported to be involved in small arms manufacturing in Burma.
It is the Japanese, however, that are showing the most interest. In 1986 the Japanese government gave Burma $244 million in grants and loans, and Japanese construction firms are helping to build a new runway for the Ran-goon airport to accommodate larger jets. Japan provided 80 percent of all foreign assistance to Burma in 1986.
"The Japanese are pressing hard," says one Asian observer.
At the height of the rebellion in August, one Japanese government official said that Japan was using its aid to open the country's economy after the downfall of the government.
"We are trying to draw their attention to the efficiency of an open market system," the official told a reporter.
The United States, West Germany and Japan, how-ever, all suspended their aid to Burma in the wake of the government's quashing of the rebellion.
Thailand, is also showing a new found interest in the country. On November 8, the Thai government announced it was sending a deputy foreign minister to Rangoon to discuss establishing trade and economic assistance.
There are indications that Burma wants to increase trade with the outside world and reestablish at least limited relations with its former aid partners. But so far there is little evidence that the revolt will mean a dramatic change in the country's investment climate.
An open question
Should Burma open up to multinationals, it is an open question as to whether the country can achieve economic growth without the concomitant problems now familiar in countries like Thailand, Malaysia and Indonesia. The country already has taken some important steps to pre-serve its forests and is wary of unrestrained commerce.
Yet Burma has languished in isolation for so long and has been so mismanaged that many observers feel the country is vulnerable.
"If the foreign companies put their teeth into it, my God, it may be gone in 10 years," says an official of an international agency.
Thomas A. Wathen is a freelance journalist and researcher who writes occasionally for Multinational Monitor.