Restoring Burma to Health

Saritdet Marukatat, The Bangkok Post, 2 July 1998

Universities ruling is a first step

Only the Burmese leaders can help their country prosper, but this means relaxing their stranglehold on the nation's people and its economy so that they can take advantage of the country's abundance.

The recent promise by the Burmese leadership to reopen universities is welcome news for a country in dire need of professionals to spur the leap forward needed to catch up with its neighbours in Southeast Asia.

Universities across the country have been closed since Dec 1996 in a bid by the military regime to disperse the students who were seen as the main allies of Aung San Suu Kyi and her National League for Democracy in their domestic and international campaign for recognition of the NLD's election victory in 1990.

The promise by the regime, now known as the State Peace and Development Council, to reopen the university gates later this month shows it is confident it now has the situation under control.

But many believe the disruption of 18 months in the making of professionals and the cultivation of skills Burma badly needs for its development was too high a price to pay.

"Human factors... are ignored by the government," said Mya Maung, a Burmese economist at Boston College, one of several participants in a recent conference in Bangkok on the future of the Burmese economy.

Self-imposed isolation, the failure of the socialist experiment and fighting with ethnic groups have turned Burma from one of the region's most prosperous nations into one of the United Nations's least developed countries.

The regime's refusal to accept the 1990 election results is heaping odds against its bid to attract foreign trade and investment, especially from Western countries, whose human rights and democratic advocates keep up the pressure against governments and companies engaging Rangoon.

The financial crisis in Asia is crippling the regime's main trade and investment partners in the Association of Southeast Asian Nations.

That leaves the gas deal with Thailand as the only promising source of foreign exchange and means for improving the economy.

Burma has seen imports increase faster than exports over the past few years because of its failure to develop local industries. The current account deficit reportedly leaped from $147 million (6.174 billion baht in today's terms) in 1994 to an estimated $814 million (34.188 billion baht) last year, while foreign reserves are depleting, with external debt last year recorded at $7 billion (294 billion), according to the Economist magazine. The Economic and Social Commission for Asia and the Pacific (Escap) placed Burma's inflation last year at 30 percent.

The deficit might not be worrying for other countries, but it is huge for a country with small assets like Burma, said Ronald Finlay, an expert on Burma at Columbia University in the United States.

Hard currency from selling gas and foreign trade cannot help Burma eradicate economic hardship in the long run. Burma has to make a serious effort at economic development to build its own strength, said Mr Finlay.

The stagnation of development is visible in what Burma offers on the world market today, he said. Beans, prawns, rice, fish and other primary products remain its key exports, while expensive capital goods are still its main imports.

Burma has to learn from neighbours who are concentrating on adding value to agricultural products and graduating to manufactured goods, said economists at the forum. The export-led approach is unavoidable if Burma wants to rise above poverty and avert further economic fall, they said.

With rich untapped resources, fertile land on the Irrawaddy delta and cheap but capable labour, there is room for the country to develop.

Even the secretariat of the Association of Southeast Asian Nations believes Burma, because of its strong but undeveloped fundamentals, will pose fewer problems than Cambodia and Laos on the path to the Asean free trade scheme.

Burma and Laos were admitted to Asean last year, joining a club that already counts Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam as members.

The biggest challenges for the Burmese regime are proper management of resources, wise selection of foreign investment projects that suit the country's development plans, and improving manpower and infrastructure.

The regime has to streamline state enterprises, start building competitive private enterprises and pay serious attention to skills production through education, said Khin Maung Kyi, an economist with the National University of Singapore.

"We have to find a niche in the open arena," he said, expressing optimism about Burma's future if the country was equipped with better technology, efficiency and skills.