Santa took a holiday in Burma this year. It’s become the trendy place to visit for the middle classes now that the military regime has opened, freed the democratic opposition leaders and allowed (on the whole) freedom of speech etc – although there are still political prisoners and the army is conducting wars against ethnic groups in the north and muslim terrorists in the south. Tourists are now beginning to flood in, one million this year, to look at thousands of pagodas, Buddhist monks and temples. But I have to say, if you’ve seen one pagoda, you seen nearly all of them. So let me look at Burma from an economic viewpoint in this post.
Burma is still a predominantly rural economy, with 70% of the population on the land and 60% employed there. And agriculture is still the largest contributor to GDP at 36%, compared to industry and services. These ratios are way higher than anywhere else in Asia or most of the rest of the world. It shows that Burma is one of the most backward and ‘undeveloped’ economies, and certainly the most undeveloped with such a large population – now about 60m. And it’s the second largest country in south-east Asia by area.
The countryside is dotted with paddy fields in the south and sugar cane and even wheat fields in the north. The teak forests have been badly erased by excessive logging, but it remains a major export. And now there is oil and gas potential with proven reserves of 7.8trn cubic feet, sufficient to allow natural gas exports. But Burma remains the poorest country in Asia, cut off as it has been from international trade and investment because of the partly deliberate isolation of the military regime that ruled the country from 1962.
The countryside reveals millions toiling in the field under temperatures of 40C, while slightly more fortunate others work a 12 hour day, six day week in rural factories to make tourist garments and trinkets. And millions of others scrape a living in the dusty, polluted cities of Yangon and Mandalay. The dysfunctional nature of the economy is summed up by the sight of Burmese taxi drivers with cars that have the driving wheel on the right hand side while traffic also drives on the right, not the left! Only the very latest Japanese imports (now allowed) have left side wheels.
The military has crushed various protests and opposition movements over the years, culminating in the arrest of long-time opposition leader and Nobel peace prize holder Aung San Suu Kyi (called ‘the Lady’) after the opposition won a landslide election victory in 1990. But this did not stop further revolts and the military finally decided that they needed to ‘open up’. In 2010, Thein Sein, one of the generals, renounced his military role and became the first civilian president in 2011 after rigged elections. However, he then freed The Lady from house arrest and she and the opposition leaders agreed to walk ‘hand in hand’ with the president until free elections are called in 2015.
Since then, the major capitalist powers have started to open up their embassies and renew trade with and investment in Burma. Hilary Clinton and President Obama have visited with much fanfare. And Aung Sang visited Europe, to much acclaim. Burma is back on the imperialist map. For a view on the motivations of US leaders on Burma, have a look at Richard Mellor’s blog, Facts for working people (http://weknowwhatsup.blogspot.com/2011/12/hillary-clinton-in-myanmar-nice-place.html).
Of course, this ‘opening up’ is really the start of capitalist development through a partnership between the generals and the opposition National League for Democracy (NLD) to form a pro-capitalist government that will negotiate terms with international agencies and multi-nationals to ‘develop’ Burma. Already, a new foreign investment law has been passed allowing multi-nationals to start up businesses without a Burmese partner. The president summed up the strategy of the military: “Our reforms are irreversible,” he promised. “Our goal is still to build a multi-party democratic system and a market economy.”
Will this ‘partnership’ succeed in taking Burma out poverty and backwardness, where the majority earn no more than $4 a day and roads, power and infrastructure are in a state of decaying decrepitude? Well, the Burmese people (like the Vietnamese and others in Asia) are very hard working. And they also have the advantage of English speaking (unlike China or Vietnam) from their days under the British raj. But this is a small advantage given that most Asian countries have dramatically expanded their education in English, with a growing middle class that can fill skilled jobs, unlike Burma.
In some ways Burma leans more to India to the west, at least culturally, than to the ASEAN states to the south, although Burma is a member of ASEAN. There is longstanding antagonism between Burma and its neighbour, Thailand. Burmese TV has Indian, Malaysian and Indonesian channels but not Thai. Even so, the model for growth will probably be that of Thailand, Singapore, Malaysia and Vietnam, and not India. That means growth through exports and fixed investment and not through consumer-led domestic demand and government spending as in India. A problem remains: the most productive parts of the economy are in the hands of the military and their families through the state-owned companies, Chinese style. But that is a problem for capitalist development that can be circumvented as it has been in China and Vietnam, at least for a while.
And between the vast rural poverty of the paddy fields and the military control of the key industries, there are gaps for capitalist development in retailing and wholesaling. Budding entrepreneurs are springing up. These Burmese are the sons of the rich and military, educated abroad and now coming back to make a fortune. They are funded by their families to build empires in domestic industries like pharma, hi-tech, electronics, mobiles etc (see the recent FT report of 21 december 2012). Here is the start of a rising national capitalist class that, in the words of one, has “little emotional attachment to politics – we are here to do business… many of us basically support any government that will help business”.
The British relinquished colonial power after over one hundred years of rule in 1948 to a democratic government after the ravages of the second world war. But independent government was soon riven apart by regional and tribal schisms and imperialist machinations. The democratic leaders were assassinated and a military that had been trained by the British and the Japanese then seized power. This military caste looked to the Chinese under Mao as their model for development but soon descended into Cambodian Pol Pot-style nationalist isolation. It locked up or killed any opposition, it conducted vicious repression of the many minority ethnic groups in the country and it imposed forced labour to carry out constructions (just stopping short of the worst genocidal excesses of the Pol Pot regime).
The generals nationalised all the key industries and forests. But their rule was a million miles from the ‘socialism’ they claimed to support. The generals under Ne Win ruled more through Asian oracles and magic, than by the tenets of socialist planning. For example, they decided to build a new capital because an oracle said they should and they issued a 45 kyat note instead of a 50 because any multiple of the number nine is lucky! In 1992, they began to drop their ‘socialist’ creed as the generals and their families looked to secure their wealth through building family dynasties over industry and resources, just as China’s ‘princelings’.
The current generation of military leaders seems to have accepted that they cannot survive through direct control of the economy and political institutions. So they have opted for Plan B, where Turkish-style, they stay in the background allowing a pro-capitalist democratic party to assume office from 2015, in return for which the military get to keep their wealth and privileges and some of their power as the final arbiters of Burma’s destiny. They won’t be able to sustain this compromise indefinitely as the military in Turkey and Egypt have found recently. The Turkish generals have been crippled by their capitalist class that now feels strong enough to restore direct control without fear of a coup because they are backed by working-class muslims. In Egypt, the battle between the military and the people has only just begun. The Muslim Brothers hope that they can do the same as Turkey’s Islamist party.
A truly democratic Burma where the wealth and value of the toil of its people are controlled by the people and distributed fairly is still a long way off. And it is not the intention of any of the major players: the military, the opposition and the ‘international community’ to allow it. Sustained democracy will depend on how long the temporary compromise between the military and the pro-capitalist democratic opposition can hold. And it will depend on the vagaries of the world economy and ability of Burma’s small working class to develop an independent voice from the middle-class leaders of the NLD. In turn, that depends on much stronger working class organisation to resist the march of capitalism as Burma comes under the tentacles of globalisation.
*Burmese Days by George Orwell: “It is a world in which every word and every thought is censored… even friendship can hardly exist when man is a cog in the wheels of despotism. Free speech is unthinkable.” Orwell’s character John Flory on Burma in the 1920s under British rule.