Burma: Just Skidding

Scott Zuke

(April, 2012) Some are calling it "Burma burn-out." In South-East Asia, one of the world's most repressive societies (also known as Myanmar) appears to be trying to turn a corner, but is finding that 50 years of failed policy isn't easy to shake off. A reformist mentality has overcome the authoritarian government, which has suddenly put so many wheels in motion for political and economic liberalization that the country's weak institutions are being pushed to their breaking point trying to keep up.

The rest of the world is watching with cautious interest. Burma has been under painful economic sanctions since the 1990s as punishment for human rights violations and its blatant disregard for legitimate, democratic governance. What most people might know about Burma already is the story of Aung San Suu Kyi, the female head of an opposition party that won a landslide victory in elections in 1990, but who was placed under house arrest by the ruling military government for 15 years, during which time she was awarded the Nobel Peace Prize. Suu Kyi was finally released in 2010, and continues to pursue political reform with broad popular support from the Burmese people.

Lesser known, however, is the man who is most immediately responsible for leading the recent push for reforms, President Thein Sein, who came into power in March 2011. Sein, with a long military career as a bureaucrat, had previously served as prime minister. It's not clear whether the junta knew that he would be such an energetic reformist and moderate once taking on leadership as a civilian. Since taking office he has held high-profile meetings with Suu Kyi and with US Secretary of State Hillary Clinton, who restored diplomatic relations with the country in January, a crucial step toward negotiating the lifting of US and European sanctions.

The sanctions have undoubtedly put significant stress on Burma's economy, which has stayed afloat largely through trade with neighboring China, but its deepest economic wounds were self-inflicted decades earlier. The country is rich in natural resources, including oil, ores and gems. During its period as a British colony it became the world's leading rice exporter. By the late 1960s, however, Burma could no longer feed itself. What happened?

First, World War II found Burma as a battleground between Britain and Japan. The infrastructure built by the British to extract and transport resources was destroyed. After the war and the gain of independence, Burma followed the strategy popular amongst other post-colonial nations at the time, turning toward a moderate form of democratic socialism. Things turned for the worse in 1962, when a coup led to a far more rigid socialism that mistakenly focused on industrialization and urbanization in a country where 2/3 of the population was agricultural. The economic growth strategy was highly inefficient and led to low living standards, low wages, and isolation from other economies. Black markets had to be formed as a source for consumer goods, and were so well-known that some were even taxed by municipalities.

By the late 80s, Burma had been declared a 'Least Developed Nation' by the United Nations, a demoralizing moment for what was once a vibrant Asian economy. Around the same time, what little industrialization had been established was wiped out by an unregulated influx of cheap, high-quality manufactured goods from China. Burma was forced to open its borders to Chinese and Thai logging operations, which had recently been banned in their respective countries due to the ecological damage they caused.

For a brief time, foreign investors eyed Burma for its low-wage, literate, and docile workforce, but after the international sanctions started cutting the country off from the rest of the world, they took their money elsewhere. And in the meantime, the military-led government has sadly neglected its citizens. In its 2011 budget, about 24% of spending is allocated to the military, while education and health constitute just over 5% combined. Even if sanctions are lifted, it will take a long time to recover from the consequences of a generation of uneducated and unhealthy workers.

Nevertheless, there are signs that justify some cautious optimism. The International Monetary Fund recently reported that Burma could still become "the next economic frontier in Asia," if it works to take advantage of "its rich natural resources, young labor force, and proximity to some of the most dynamic economies in the world" (namely China). Prominent economist Joseph Stiglitz declared, "It is clear to me that this moment in Myanmar's history represents a real opportunity for permanent change - an opportunity that the international community must not miss." Stiglitz favors a quick repeal of sanctions against Burma in order to help it get its economy back on track.

Not everyone in the West is ready to take the pressure off of Burma quite yet, though. Freedom House, a non-governmental organization that advocates for democracy and human rights around the world, has ranked Burma among the "Worst of the Worst" nations for civil liberties and political rights for more than twenty years. While acknowledging the rapid reform process that has begun in the last year, the organization says it is not clear how far it will go, and points out that there are significant issues that remain unresolved, such as armed skirmishes with ethnic minority militias. Security concerns stemming from one such conflict were cited as cause for postponing by-elections, scheduled for April 1, in the northern state of Kachin.

After decades of failed economic policy and repeated disappointments to those hoping to see political and social reforms, Burma may finally be on the verge of accomplishing real and meaningful change. The best policy may be to get out of its way: gradually release sanctions, conditional unpon human rights and political reforms. At the same time, the global community should watch carefully for signs that Burma may be reforming too fast. Like an overloaded truck, a country weighed down by weak political institutions may only be able to change course so abruptly before it skids out of control and topples over.