POLITICS, ECONOMICS & SANCTIONS
ECONOMICS
318one million refugees and internally displaced people, tens of thousands
of child soldiers, and the abundant use of forced labour’. In March 2010,
the UN special rapporteur on Myanmar, Tomás Ojea Quintana, recom-
mended that the UN consider establishing a Commission of Inquiry into
war crimes and crimes against humanity in the country.Economics
You needn’t spend much time in Myanmar torealise how profoundly
dysfunctional its economy is. The country is rich in natural resources –
including gas, oil, teak, and precious metals and gems – yet its people are
among the poorest in Asia, most struggling to get by on an income of less
than $2 a day. Ask about the price of one of the clapped-out secondhand
cars on the roads, or about the cost of real estate in Yangon, and you’ll be
shocked by the sky-high fi gures, a refl ection of ongoing infl ation, which
has seldom been under 25% per annum over the last decade.
The Economistt reported that K1.8 trillion, 23.7% of Myanmar’s 2011’s
budget, is earmarked for military spending, compared to 4.3% for educa-
tion and 1.3% for healthcare. When it comes to fi nancing such expendi-
ture, Sean Turnell, of Burma Economic Watch, notes that the government’s
favourite method has been to print money. Hence the infl ation rates and
the lack of faith in the local currency that has created a black market for
US dollars.
Deeper mining of Myanmar’s Alice in Wonderlandd economics reveals
that thanks to its emergence as a major regional exporter of natural gas,
the country has been running substantial trade surpluses since 2004; its
foreign-exchange reserves at 2010 were estimated to reach over $ 6 billion.
As Myanmar specialist David Steinberg notes, the country’s economic cri-
sis is ‘not with funding but with knowledge of economic aff airs, priorities
and distribution of the state’s considerable present and future resources’.Trading Partners
Shunned by the West, Myanmar has wasted no time cutting trade deals
with its immediate neighbours, several of whom are themselves not shin-
ing paragons of democracy. Despite Western sanctions against timber
and jade, these materials are reportedly exported to China, Thailand and
Singapore, then used to make furniture and jewellery for export.
The fl ow of foreign investment isn’t likely to slow soon. India is spending
about $100 million developing a port in Sittwe to access more fuel reserves
in the Bay of Bengal, supposedly worth up to $ 4 billion a year. The Shwe gas
reserves off the coast are projected to earn up to $ 24 billion over the next 20
years. Thailand is spending $ 10 billion to develop a new seaport in Dawei
and transport connections to it, while China will pay most of the costs of a
massive highway from Kunming in China to a new seaport at Kyaukpyu,
giving western China increased access to international trade routes.
On occasion Asean (Association of Southeast Asian Nations) offi cials
have frowned over Myanmar’s behaviour – even expressing ‘revulsion’
over the violent response to the September 2007 protests – but this has
seldom been followed with action. One-time adviser to George W Bush
on Asia, Michael J Green likened Myanmar to a ‘crazy drunk’ on a block
of Asean homes: it would take their unifi ed confrontation to get the bot-
tle away. At the time of research, Asean was considering whether to allow
Myanmar to take on Asean’s chairmanship in 2014; the country skipped
its turn in the lead role in 2006 because of international pressure over its
poor human-rights record.Tourism’s Economic Impact
While the government once hoped tourism would provide a steady
source of hard currency, it’s become clear as time has passed that theFiery Dragons:
Banks, Money
lenders and
Microfinance in
Burma by Sean
Turnell explains
how Myanmar
went from one
of the richest
countries in
Southeast Asia to
one of its poorest
within the space
of a century.Where China
Meets India –
Burma and the
New Crossroads
of Asia is Thant
Myint-U’s new
book, scheduled
for publication
in late 2011; it’s
about the historic
and current
connections be-
tween the three
countries.