by Michael Roberts
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.
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