October 4, 2007 at 22:39:07

Burma: The Back Story

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By Rowan Wolf (about the author) Page 1 of 3 page(s)

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For OpEdNews: Rowan Wolf - Writer

The current protests in Burma are attributed to a 500% increase in fuel prices which crippled an already struggling population's ability to survive (BBC). The people of Burma have been descending into deeper and deeper poverty over the last decade. According to Jonathan Head, author of the BBC article, the people of Burma spend an average of 70% of their income on food. The dramatic increase in fuel prices on August 15, 2007 was too much to bear.

It appears that the government of Burma (Myanmar) were reacting to a "suggestion" by the International Monetary Fund, that they needed to phase out the state subsidizing of oil prices. Myanmar is a member nation of the IMF. This makes one wonder at the seeming naivity of this statement by Head:

Like so many decisions made by the reclusive generals, the sudden hike in fuel prices is hard to fathom.

The IMF had advised weaning the population off subsidised fuel, because with rising world oil prices it was becoming an unsustainable burden for Burma, which although rich in natural gas, relies on imports for almost all of its refined petrol and diesel.

But it is unlikely the IMF would have supported such a dramatic, and unannounced price rise.

The IMF indicated in 1998 that Myanmar was an HIPC (Heavily Indebted Poor Country). That debt was to the World Bank. The current information on Myanmar at the World Bank site states:

The World Bank has approved no new lending for Myanmar since 1987, and has no plans to resume its program. The country is currently in arrears to the World Bank, and has failed to enact economic and other reforms.

Myanmar remains a member of the World Bank. The World Bank continues to track data about the country and also remains in contact with the United Nations and other development partners regarding Myanmar. And the Bank also accompanies officials from the International Monetary Fund on their annual visits to assess the country's economic situation.

In 1998, then Junta Finance Minister for Myanmar reported to the IMF on the governments efforts to apparently meet the demands of structural adjustment reforms to acquire aid from both the IMF and the World Bank:

Let me now touch on some features of Myanmar's economic development. Since the latter part of 1988, streamlining of foreign trade procedures and liberalization of both internal and external trade had been introduced. Foreign investors are allowed to invest in Myanmar and foreign bankers are permitted to open their representative offices. Myanmar has been participating in regional cooperation programmes and cooperating with both developed and developing countries for its technological advancement. Rural and border areas development activities are being implemented to alleviate poverty and also to reduce gaps in differences between rural and urban populations.

...

Myanmar is the land with rich natural resources to be tapped for development purposes. Unfortunately, multilateral financial assistance to Myanmar have been unfairly suspended since 1988. Myanmar has been a legitimate member of the Bank and the Fund since 1952. As a legitimate member, Myanmar is fully eligible for the Bank's development assistance. However, the Bank has neglected Myanmar's development efforts and it has failed to assist Myanmar for the past eleven years. However, we have cooperated with the Bank and the Fund and we have been servicing our outstanding payments to the Bank regularly, up to the end of 1997.

In 2003, further economic sanctions were placed on the country, and were protested by Major General Hla Tun - Governor for the Bank of Myanmar. Each year, Mayanmar has reported to the IMF its step by step progress towards the "adjustments" apparently being demanded by the World Bank and the IMF, and has made a plea for economic support. Since the same plea is repeated year after yer (up through 2006), The IMF and World Bank have refused to raise restrictions on lending, or easing the debt burden of Burma.

This is not to excuse the brutality and repression of the Junta government of Burma. However, it is important to acknowledge that the economic situation in Burma is not due simply to the "chronic mismanagement" of the government which is one of the primary issues pointed to by Jonathan Head.

There is of course another aspect of the story. In the process of its structural adjustment, a few in the Junta have pocketed significant amounts of money. The business deals and corruption have siphoned off significant amounts of the wealth of Burma. The elite lives in opulence; the government sequestered itself deep in the forests establishing a new capital. The details of corporations involved are discussed in a report by Human Rights Watch (HRW) titled "Burma: Foreign Investment Finances Regime."

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Rowan Wolf is an activist and sociologist living in Oregon. She is the founder and principle author of Uncommon Thought Journal, and a Senior Editor for more...)

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