Far East Economic Review: Trading w

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Subject: Far East Economic Review: Trading with the enemy



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Far Eastern Economic Review

March 10, 1994

TRADING WITH THE ENEMY
by Thant Myint-U


(Than Myint-U recently served with the United Nations Transitional
Authority in Cambodia.  He is writing his doctoral dissertation on
Burmese history at Trinity College, Cambridge.)

Five years after Burma's military violently suppressed nationwide
pro-democracy demonstrations, Western and Japanese governments
continue to keep the country at arm's length.

Although these governments have not imposed an actual economic
embargo and have offered little more than moral support to Burma's
pro-democracy activists, they have tried to isolate the ruling
State Law and Order Restoration Council internationally.  Trade and
investment have thus been limited, and there has been little or no
involvement in Burma on the part of international, no-governmental
organizations.  The hope was that by treating SLORC as an
international pariah, its regime would collapse of its own weight.

That has not happened.  To the contrary, this policy has failed to
bring about any meaningful change in the political or human-rights
environment.  It has instead led the SLORC towards much closer
relations with China and a military-dominated economy tolerant of
narcotics production.  With no sign that this will change, it is
probably time Japanese and Western governments rethink their
approach.

The dilemma is obvious.  With just enough involvement from the
outside world to stay afloat, but not enough to create pressures
for modernisation, Burma remains largely poor and undeveloped--and
easier for SLORC to control.  More comprehensive United States
sanctions did not bring down the governments in Vietnam, Cuba and
North Korea.  Perhaps it is time to recognise that similar
sanctions against Burma (which would also be next to impossible
politically) will do no better.

Critics argue, rightly, that such economic reforms as there have
been in Burma have not been embraced to promote development but to
stave off further unrest.  Still, reforms "privitising" ownership
in some industries and loosening border restrictions have brought
some positive results.  But without greater foreign involvement,
however, the result will likely be a patrimonially structured
rentier economy linked inextricably to state power--a long ways
from the kind of modernisation the Burmese people desperately need.

The ceasefires negotiated between the SLORC and nearly all the
armed ethnic opposition groups constitute another consideration. 
While the ceasefire agreements may be criticised for strengthening
Rangoon's hold without addressing legitimate grievances, the fact
is that for those in many outlying areas the fighting has stopped,
for the first time in their lives.

The real question of Burma's future hinges on the subtle but
nonetheless critical changes taking place within the Burmese
establishment itself, dominated but not exclusively controlled by
military officers and their families.  The uprisings five years ago
(which were really several uprisings in one) was supported by much
of the old Burma Socialist Programme Party, military officers and
civil servants who had seen their hopes for themselves, their
children and their country sinking amid economic mismanagement and
international isolation.  They wanted not a political revolution
but a reorienting of policies towards those they knew had brought
success elsewhere in Asia.

In an attempt to regain the loyalty of the establishment, the SLORC
leadership allowed these families for the first time to become
legally involved in all manner of new business ventures.  Although
this has to some extent worked, the "commercialization" of the
Burmese establishment has not lessened desires for rational
government policies that would make sustained growth possible. 
Thus within the establishment there exist those who would support
genuine reforms but are unsure of how to proceed.  The key question
for the rest of the world is what sort of international involvement
would strengthen their position.

The answer here is foreign investment and aid.  Such involvement,
conditioned on a demonstrated commitment to genuine economic
restructuring, would be acceptable to many in the military and
would push Burma in a more positive direction.  On the political
side, it should be linked to a continuing dialogue between the
military and the opposition (both the June 1989 National League for
Democracy leadership and ethnic minority organisations) and not to
unrealistic demands for an immediate transfer of power.

Many supporters of Burma's democracy movement oppose such
involvement, arguing that it legitimatizes and props up an odious
government.  Their nightmare scenario is that foreign investment
and development assistance will give the SLORC a new lease on life
and throw away forever any opportunity for a political revolution. 
But the longer SLORC survives its current isolation, the more its
leaders will feel comfortable with the status quo.  Real economic
change, by contrast, will bring with it powerful new social and
political demands that even the SLORC will find impossible to
ignore, even in the short term.  Here or course, an absolutely
vital distinction must be maintained between scattered reform
measures intended largely as a sop to Western pressure and a
genuine programme of modernisation that includes respect for
property rights and a genuine rule of law.

What the Burmese people need today from their friends abroad is a
broad focus that looks beyond narrow politics to breaking the
country's tragic cycle of poverty, armed conflict and repression. 
Isolation has not worked, and the evidence does not offer much hope
it will.  Only a comprehensive approach, involving constrictive
international involvement, will help bring Burma out of the dark
ages and into the 21st century as a peaceful and prosperous member
of the Southeast Asia community.