Myanmar is currently initiating significant democratic reforms and is removing itself from the isolationist cloak of its past fifty years. Myanmar has a history of positive relations with China, though as it opens up to the world it may shift emphasis to relations with other world powers that are more appealing. Myanmar possesses vast, largely untapped resources which will be developed as Myanmar enters the global community once again. This profile outlines Burmese politics and economics from Burmese independence to the present day; the two are entwined since the political system has inhibited economic development for nearly half a century. This profile also examines modern day reforms and their impact on international relations. Lastly, this profile analyses Myanmar’s current economic and environmental situation and the issues still creating troubles for Myanmar’s interactions with the rest of the world.
Post-Independence to 1962
In 1948 Burma achieved independence from Great Britain due to the efforts of General Aung San. As a colony, the British assigned Indian immigrants to operate the Burmese government, and when independence was achieved, Indians no longer had a role in the administration. In 1947 Aung San was assassinated in a plot organized by an angry Burmese politician and supported by the British. U Nu was given the presidency of a heavily divided country. Communism, spilling over from China, had made substantial progress in Burma and created a major challenge for the new U Nu government. The Burmese army split into rival factions when it was sent to deal with Communist rebels. Karen and Kachin soldiers, who were trained by the British, had separatist ideals and communist sympathies leading them to rebel. This led to Karen officials losing positions of rank in the national army, and General Ne Win, Burma’s future dictator entered the high ranks of the military. Ne Win was able to restore order to Burma proper.
In the 1950’s, Chinese nationalists fled to Burma and started recruiting from the Shan minority living in Burma’s northeast to build up their forces. General Ne Win established the Military Planning Staff and organized the armed forces into the Defense Ministry. He organized attacks that removed the threat of the Chinese Nationalists. An important consequence of this incursion was a growth in opium production in the region where the conflict took place; insurgent troops needed money to fund their efforts and selling opium on the world market was a good way to gain funding. Throughout the 1950s General Ne Win purged the army of disloyal soldiers and elevated the power of officers close to him. The army started playing a role in many businesses, and even had its own newspaper.
Burmese government of the 1950s was extremely weak and its ineffectiveness led to an increasingly ugly political atmosphere. Communists gained power in key parts of the country’s interior, and this built up resentment among the military. A weak U Nu was re-elected in 1957. After being informed of a “’preemptive’ coup” U Nu allowed General Ne Win to control a Caretaker Government in 1958. This government lasted two years, before handing power back to U Nu in an election. This was also short-lived; in 1962 General Ne Win stormed the city of Rangoon and took over the government.
Ne Win’s Regime (1962-1988)
In 1962, two documents were released which detailed the views of the new regime: “The Burmese Way to Socialism” and “System of Correlation of Man and His Environment.” The policy outlined has been called “an amalgam of Karl Marx and Groucho Marx.” Although the document stated that “democratic training” would be taking place, Ne Win also stated: “so long as they don’t oppose us, we will make use of them.” This contradiction provides some insight to the peculiarities of Ne Win’s political logic
Burma’s nationalist isolationist tendencies were created by Ne Win during the 1960’s. He banished all foreigners, nationalized businesses, and banned English speaking schools. This was very problematic as much of the economic dealings in the country were owned by the Chinese. The act of punishing ethnic Chinese greatly irked the PRC, who were already unhappy with the KMT troops continuing to live in exile in Burma. This antagonism led to increased Chinese support for Burmese Communists, and then to a brief invasion in 1968. Ne Win was able to make a balance of power in the region by assisting the opium lords in the area who sided with the KMT; after much struggle the Communists controlled part of the Shan state but were not able to establish deeper influence in the Burmese interior.
Ne Win’s economic agenda devastated the Burmese economy by nationalizing 15,000 businesses and caused disastrous results. The state was unable to effectively run industries, as shown by its control of the rice industry. This was a massive failure, causing rice exports to go from 1.4 million in 1963 to .1 million ten years later. Riots that resulted in response to economic downturn were met with harsh, authoritarian responses.
In the 1970’s the country began to open up with a new constitution, a legislature, and started to receive economic aid again. Yet, the constitution did little more than solidify Ne Win’s rule, since his was the only legal party. The country was fairly stable politically and economically until 1988.
In March, 1988 the brutal repression of student protests shocked the Burmese population. In response, a movement grew around Aung San Suu Kyi, who called for an end to the one-party system. Ne Win, in response to these spreading protests, resigned and called for a multiparty system. Aung San Suu Kyi established the National League for Democracy and made herself the leader for democratic protests. Aung San Suu Kyi is the daughter of former leader Aung San who was assassinated when she was two years old. She left the country when she was fourteen and moved to India, where she would eventually meet her husband, Tibetan scholar Michael Aris, a British citizen. The two moved to England where she raised their two children. In 1988 she was in the Burma visiting her mother when the protests flared up.
Saw Maung Comes to Power (1988 – 1992)
Amidst the chaos, a new military power took over on September 18th run by chief of staff Saw Maung. The new name for the administration was the State Law and Order Restoration Council (SLORC). The departure of Ne Win marked the end of the Burmese Way to Socialism.
The new regime still planned on holding elections. In 1990, 72.59% of the population voted with the National League for Democracy getting 59.87% of the votes. SLORC, not wanting to get punished for their previous shows of force against the population, refused to give up power and Aung San Suu Kyi was placed under house arrest. She remained under house arrest for most of the next twenty two years. This action was the beginning of Myanmar’s alienation from the global community, most of which still acknowledge the NLD’s right to rule. The new government changed the name of their country to Myanmar, but most people still refer to the country as Burma as a sign of solidarity with pro-democracy groups both inside and outside the country. Students involved in the protests successfully lobbied to boycott all Western investment, exports and imports and aid from the World Bank including HIV/AIDS assistance, further increasing its isolation. In a comparison of world economies done by the Human Development Index in 2010 Myanmar ranked 132 out of 169, the lowest rank given to a country in South East Asia.
Than Shwe’s rule (1992 – 2011)
Saw Maung’s reign lasted four years before he was replaced by Than Shwe on the recommendation of Ne Win. Than Shwe (who changed SLORC to the State Peace and Development Council (SPDC) in 1997) refused to have contact with the NLD, and was not one to shy away from extremely harsh tactics. The acronym change happened the same year Myanmar joined ASEAN. There have been numerous accounts of killings, rapes, forced labor, and even the use of child soldiers. In 2009 it was reported that over the past fifteen years, the Burmese Army destroyed 3,300 villages and “used civilians as minesweepers.”
In 2007 the Saffron Revolution was started by Buddhist monks marching to Aung San Suu Kyi’s house; when they arrived Than Shwe gave an order for the bloodiest response. International outcry was quick to condemn the act; ASEAN voiced their revulsion at the response. The UN Security Council was quick to urge restraint on the government as well.
In 2008 Myanmar was struck by the cyclone Nargis and an estimated 138,000 people were killed and 2.4 billion US Dollars were lost in damages. The regime seemed to react to this cyclone in an unsympathetic manner, going so far as to tax and manipulate the aid money coming into the country.
The cyclone struck shortly before a referendum on the new constitution that had been discussed since 1993. The NLD, however, was prohibited from participating in the referendum. The constitution “passed” with 92.48% of people voting for it. Thus the military had a new framework for the country which included a new legislature where 25% of the members are military personnel. Provisions were added to exempt employees of SLORC and SPDC from trial for previous activities and freed from being “answerable” for their duties. All this took place in the same year the Economist rated Myanmar 163 out of 167 in a democracy index. This would soon change with the 2010 elections for the new government.
Before the election took place, the military-run Union Solidarity and Development Party (USDP) started campaigning, building public works, and offering absentee ballots. The NLD chose not to run because their leader, Aung San Suu Kyi, was still under house arrest. However, Aung San Suu Kyi was released after the elections. She and various other NLD members ran and won elections for the seats of officials who left to be in the 2012 cabinet.
President Thein Sein and end of SPDC (2011 – Present day)
General Thein Sein was elected as President in 2011. Than Shwe has since disbanded SPDC and has given up his positions, though he is still expected to have some role in the new government. After his inauguration, numerous reforms took place some political prisoners were released and censorship of the media lessened. Militias in Burma’s ethnic states in the north and east have signed cease fire agreements. However, there are still numerous ethnic tensions in the Kachin State and the Rakhine State, where in the latter conflict even Aung San Suu Kyi seems reluctant to comment extensively on.
Economically, the country is still recovering from the many decades of the “Burmese Way to Socialism” and warfare. Data collection is extremely difficult and results sketchy.
Myanmar’s 2012 GDP was posted at $54.05 billion. The country exports mostly natural gas, wood products, pulses, beans, fish, and rice primarily to Thailand, India, and China. It imports fabric, petroleum products, fertilizer, plastics, machinery, crude oil and food mostly from China, but also from Thailand and other Asian countries. Data for exports and imports are challenging to determine, as there is smuggling in the border regions and the government can misrepresent the data. The economy can be split into three different sectors: agriculture (38.8%), industry (19.3%), and services (40.3%). Agriculture dominates employment at 70%. Household consumption is 79.3% of the economy, government consumption is 3.7%, investment in capital is 16.3%.
In 2012 Myanmar was $5.6 billion in debt, though this has decreased from $7.7 billion in 2011. Inflation is currently at 1.5%. Understanding the exchange rate between the Kyats and the US dollar is problematic, as shown in graph #3. The rate has gone down due to current economic opening of the country. The outlier can most likely be accounted for by either an error or mismanagement by the government of Myanmar.
Interactions with other Southeast Asian countries have been limited by sanctions. China and Thailand were the only two countries to maintain interaction with Myanmar after 1988, however interaction with the region should increase with Myanmar serving as the ASEAN Secretariat in 2014.
Ne Win’s rule stifled development through its mismanaged economic and isolationist policies, leading to large scale environmental degradation. The CIA World Fact book observes foreign investors have shied away from nearly every sector except for natural gas, power generation, timber, and mining. These extractive ventures have little benefit to people living in Myanmar. The Asian Development Bank affirms this with the observation of a total electrification rate of 26% despite the abundance natural resources within Myanmar. Before 2013 Myanmar neither imported nor exported its electricity, getting most of it from oil/natural gas (67.7%) and the remaining from hydropower (32.3%).
Myanmar has 48% forested area, and 271 endangered species. A major threat to the region is other countries exporting their own environmental troubles to Myanmar. This is evident in the large exports of timber to Thailand and China after the aforementioned countries banned logging in their own countries.
Environmental protection is an inchoate concept to the government in Myanmar. It does exist in some form, as seen in the 2011 cancellation of the Chinese invested Myitstone dam on the upper reaches of the Irrawaddy River.
Myanmar’s Relations with China
After the 1988 coup, only China and Thailand were still willing to aid Myanmar and it was during this period where China and Myanmar became very close. China supported Myanmar amidst Western criticism and isolation, and Myanmar in turn defended it on matters like Taiwan. China also heavily armed the Myanmar government with modern weapons. China is the 4th highest in terms of receiving goods from Myanmar. However, the number of Chinese imports has gone up dramatically because of the sanctions. This trade imbalance, as shown in Chart #1, is due in part to the banning of timber in China.
Chinese corporations have often been viewed as exploiting the resources of Myanmar. An example of this is the Burmese people’s reaction to the Chinese-built Myitstone dam, which, if it went through, would have flooded a region the size of Singapore. Only 10% of the dam’s produced electricity would have gone to Myanmar. By blocking the dam, a $3.6 billion operation, Thein Sein stood up to the Chinese in a move that gained him much popularity. China has reacted in a lukewarm manner this development as trade seems to have been unaffected and Chinese direct investment increased in 2012.
Recently, China completed the Myanmar-China Natural Gas Pipeline which connects the Bay of Bengal to China’s Yunnan province. People in Myanmar are increasingly dismayed at this development as it seems to only negatively impact their livelihood. Sinopec, China’s largest oil firm and the builder of the pipeline, did build schools and medical facilities along the pipeline’s pathway, but these facilities lack adequate personnel and supplies. Sinopec released in a public statement that such needs were seen as the “(Burmese) government’s responsibility.
Current Issues in Myanmar
President Thein Sein is attempting to negotiate a nation-wide cease fire before 2015. He has had some success with this, but there are still two large issues: violence in the Kachin State and the mass killing of Rohingya Muslims. The Kachin State conflict has arisen due to the large amount of resources in the state such as timber, minerals, and being an ideal location for Chinese development. In 2011 about 75,000 Kachin people were uprooted, and both sides have been accused of using child soldiers and attacking civilians. There have been signs that the conflict may be improving. In October of 2013 both sides got together and negotiated a seven point plan to reduce conflict and on how to resettle people; given jet fighter attacks around the Kachin capital in early 2013 this is a very progressive development.
The violence in the Rakhine state has been between the Rakhine Buddhist majority and the Muslim population in the region, which can be split into two groups: the Kamen, a recognized state minority, and the Rohingya, who are not recognized as citizens of Myanmar. What started as an anti-Rohingya conflict has now fanned into a full-scale anti-Muslim movement. The conflict has even brought harm to aid workers, whom many Rakhine view as biased towards the Muslim population, causing outrage in the international community. Rakhine State is on the border of Myanmar, and many Rohingya are fleeing to nearby countries like Bangladesh, Malaysia, and Thailand. The Muslim world has also reacted negatively to the issue. The situation has escalated across borders where Buddhist Temples are now being targeted in Bangladesh. The Myanmar government’s response has been tepid so far, though Thein Sein may be considering adding the Rohingya to the list of recognized minorities. In 2013, he said that aall people inhabiting Myanmar regardless of religion have a right to live in peace and security.
Myanmar is the largest producer of opiates in Southeast Asia, as seen in graph #4. The CIA’s Transnational Organized Crime Threat Assessment estimated in 2012, 690 metric tons of opiates were produced in Myanmar. While opiate production is primarily found in the Shan states close to the Golden Triangle, the situation in other parts of the country has improved, as the Wa and Kokang regions no longer grow poppy plants. And many speculate that while opiate production has stopped, methamphetamine production has taken its place.
New Connections with Outside World
In November of 2011, US Secretary of State Hillary Clinton visited the country to meet with Thein Sein and Aung San Suu Kyi. In May 2013 US President Obama visited the country while dropping numerous sanctions, allowing companies like General Electric and Coca-Cola to start investment. Japan’s Prime Minister Shinzo Abe visited Myanmar in 2013, announcing a grant to invest in Myanmar’s infrastructure, particularly telephone wires. Eric Schmidt, CEO of Google visiting Myanmar in 2012 announced investment plans for internet and mobile phone industries.
This basic profile was written by David Schiffer in November 2013.
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