BurmaNet News: December 21, 1999

[strider@xxxxxxxxxxx]

---------------- The BurmaNet News ----------------
 December 21, 1999 
 Issue # 1417
---------------------------------------------------- 

 ========== 
 HEADLINES: 
 ========== 

Inside Burma-
 AFP: MYANMAR DUBS WORLD BANK REPORT "EXAGGERATED" 
 AFP: WEST INVENTING MYANMAR HEALTH CRISIS: JUNTA CHIEF
 DVB: TRAIN COLLISION KILLS OVER 70
 BURMANET: STATE PRESS STILL NOT REPORTING BURMA'S WORST EVER CRASH
 CRPP: REGIME CONTINUING TO FLOUT ELECTION LAWS
 AP: MYANMAR FORCES, SHAN REBELS CLASH NEAR THAI BORDER
 NATION: JUNTA TROOPS LAUNCH RAIDS ON SHAN BASE
 SHAN: OUTCOME OF SHAN-JUNTA BATTLE: 13 KILLED 8 WOUNDED
 SHAN: A NEW REFINERY TO BE SET UP BY THE JUNTA

International-
 FT. WAYNE JOURNAL GAZETTE: BURMESE ASK INDIANA TO BACK MASS BURMA LAW
 NATION: SURIN DISMISSES CHARGES HE'S TIED TO TERRORISTS
 WORLD BANK: MYANMAR--AN ECONOMIC AND SOCIAL ASSESSMENT



*****************************************************************
AFP: Myanmar dubs World Bank report "exaggerated" 
BANGKOK, Dec 20 


   Myanmar's junta said Monday a scathing World Bank economic
 assessment recommending political reform was "exaggerated"
 and contained inaccurate information. 

Economics Minister Brigadier-General David Abel had met a 
World Bank representative in response to the report to point
 out a number of "irregularities," a junta spokesman told AFP. 

"The irregularities of the report regarding figures, statistics 
and analysis were pointed out to him and the World Bank mission
 was invited for further discussions," he said in a faxed statement. 

"Obviously the World Bank report was over exaggerated," he said. 

The statement represents the first public response by Myanmar's 
ruling military to the report compiled by a World Bank team earlier this 
year. 

The spokesman said the World Bank had yet to select a date for
 further discussions or explain how the report had been leaked
to a newspaper last month. 

"How or why it was leaked out is something that should be looked
 into since the same kind of thing happened the previous year also." 

The confidential report was written with unprecedented cooperation
 from the government. 

The document represents continued cooperation between the World
 Bank and the United Nations, which last year were reported to 
have unsuccessfully offered the junta substantial aid in return
 for a dialogue with Aung San Suu Kyi's opposition. 

That initiative reportedly fizzled after details were leaked 
to the media. 

In the report, the bank blamed Myanmar's military for the country's
 stagnant economy, telling its ruling generals political and human
 rights reform were the solution to achieving prosperity on a par
 with its neighbours. 

Copies of the harsh assessment were reportedly delivered secretly to
 Yangon's top generals and democratic opposition leader and Nobel 
laureate Aung San Suu Kyi by a World Bank envoy accompanying a special
 representative of United Nations chief Kofi Annan last month. 

The National League for Democracy under Aung San Suu Kyi won
 Myanmar's 1990 polls in a landslide, but has been denied
 power by the military. 

*****************************************************************
AFP: West inventing Myanmar health crisis: junta chief

Tuesday, December 21 2:10 PM SGT 
YANGON, Dec 21 (AFP) - 
Myanmar's ruling military has accused powerful western nations
 and organisations of inventing a health crisis in the country
 to pressure the junta to reform.

The claim follows a World Bank report which points to malnutrition
 as a "silent emergency," as well as a significantly lower life 
expectancy and a child mortality rate twice that of the region.

"It is found that some big western nations are citing wrong data
 and figures sent by anti-Myanmar organisations in their reports
 and publications with the intention of putting pressure on
 Myanmar," junta first secretary and intelligence czar General
 Khin Nyunt said in a speech published in the state-run media.

"These organisations are attempting to mislead the international
 community into thinking that the life expectancy of Myanmar people
 is getting lower as hospitals are outdated ... and that the
 mortality rate of children is high.

"It is also found that organisations which do not want to see
 the interests of Myanmar are also sending such data and figures
 to some UN agencies."

Earlier this year the United Nations AIDS program warned of a growing
 epidemic in Myanmar and said the junta was largely ignoring it, a
 charge which was greeted by Yangon's generals with loud indignation.

The UN said Myanmar was one of the danger zones in the region, with an
 estimated 440,000 Human Immune-deficiency Virus (HIV) positive 
people out of a population of about 48 million.

On Monday the junta said the World Bank's report, which says political
 reform including an improvement in human rights is essential to 
economic success, was "exaggerated" and contained inaccurate 
information.

The statement represented the first public response by the junta to
 the secret report compiled by a World Bank team earlier this year 
and leaked to a newspaper last month.

The controversial report was written with unprecedented cooperation
 from the government.

Economics Minister Brigadier-General David Abel met a World Bank 
representative in response to the assessment to point out a number
 of "irregularities," a junta spokesman told AFP.

"The irregularities of the report regarding figures, statistics and
 analysis were pointed out to him and the World Bank mission was 
invited for further discussions," he said in a faxed statement.

"Obviously the World Bank report was over exaggerated."

The document represents continued cooperation between the World Bank 
and the UN, which last year were reported to have unsuccessfully 
offered the junta substantial aid in return for dialogue with the 
democratic opposition.

The National League for Democracy under Aung San Suu Kyi won
 Myanmar's 1990 polls in a landslide, but has been denied 
power by the military.



*****************************************************************
DVB: Train collision kills over 70

Democratic Voice of Burma, Oslo, in Burmese 1430 gmt 19 Dec 99 


A Rangoon-to-Mandalay train and a Pegu local train collided at
 about 2200 [local time] last Friday [17th December]. Many
 passengers were injured and between 70 to 100 persons were 
believed to have been killed in the collision. The Rangoon-Mandalay
 express train was travelling at the speed of 50 miles per hour
 and collided head-on with the Pegu train near Ywathagyi. 

The SPDC [State Peace and Development Council] newspapers, radio,
 and television still have not yet reported on the train collision
 and casualties. The collision is believed to be the worst accident
 in the history of Myanmar Railways during the SDPC administration. 

*****************************************************************
BURMANET: STATE PRESS STILL NOT REPORTING BURMA'S WORST EVER TRAIN CRASH
December 21, 1999

Today's New Light of Myanmar carries a report of rail minister
U Pan Aung inspecting the Bago rail station on December 18 where
he "gave instructions" but the state press is still silent on Burma's
 worst ever train crash which occurred December 17th when the 
Rangoon-Mandalay express train collided head on with another train.


****************************************************************
CRPP: REGIME CONTINUING TO FLOUT ELECTION LAWS

Representatives of the People elected to the Parliament in the 1990 
multiparty democratic elections (Committee Representing People's 
Parliament)

Notification 65 (12/99)


1. In accordance with the rules and regulations of the General Elections 

Law, the National League for Democracy contested in the General 
Elections of 
May 1990 and the people exercised their free will in overwhelmingly 
giving 
them victory in 392 out of 485 constituencies.

2. This historical event is a clear and decisive indication to Burma and 
the world that the one desire of the people of Burma is to have a 
democratic government.

3. Prior to the general elections, the Army Chief of Staff uttered these 
words for the information of everyone and the international world.

" I remind you again that the army will transfer state control to a 
government that is formed in accordance with the wishes of the people  
expressed through free and fair democratic elections. We will then 
revert to our original task of defense and security of the country and 
the rule of law."

" The Tatmadaw only undertakes to conduct the elections".

" The drafting of a constitution is a matter for the elected 
representatives of the Hluttaw to negotiate"

4. But what has transpired. The very people who usurped state power viz. 
the SLORC and their successors the SPDC have reneged on the undertaking 
given by them through the utterances of their chief of staff. They have 
shown utter 
disregard for the intense desire of the people and are doing their best 
to expunge it from their hearts. Traditionally, Burmese people do not 
treat lightly a spoken undertaking or promise. The man on the street 
values the pledge given orally and social, commercial and cultural 
activities are conducted relying on the spoken word.

5. The persons holding power today are
- not only contravening internationally accepted election rules and 
procedures;
- not only are they violating the Political Parties Registration Law and 
the 
provisions of the Pyithu Hluttaw Elections Law;
- not only are they infringing the essence and principles of the rule of 

law;
- they are by example deliberately encouraging and making the people 
flout 
and discard the tenets of natural justice and statutory laws which they 
themselves have decreed.

6. In addition to flouting the Election Law that they proclaimed they 
are grossly and wickedly striving to destroy the National League for 
Democracy. 

The 1990 General Elections was held for the purpose of forming a Pyithu 
Hluttaw and not a Constituent Assembly. This is evident from the 
utterances of the authorities prior to the elections and the rules and 
regulations relevant to the Pyithu Hluttaw Elections Law. But after the 
event and after a considerable length of time, the authorities falsely 
and unashamedly claimed that the only purpose of the elections was for 
the formation of a Constituent Assembly which would be charged with the 
task of writing a constitution. 

Then when a National Convention was convened to draft a constitution, 
not all the legally elected representatives of the people were given the 
right to attend.

7. And now, to crown it all, the authorities are personally involved in 
orchestrating illegal demonstrations compelling the people to declare 
"no-confidence" in the NLD elected representatives. These activities are 
televised and published in magazines. and bring to mind the Burmese 
parables "blind elephants charging into jungles" and "blind persons fear 
no ghosts". The meaning is clear. The mighty blind elephant that causes 
havoc to the jungles and the blind are incapable of fear and cannot 
comprehend the dangers of their actions.

8. On 24 November 1999, a group of persons staged boisterous 
demonstrations against U Aung Soe Myint, NLD elected representative for 
Constituent 1 and U Nyunt Wei, NLD elected representative for 
Constituency 2 of Toungoo township, Pegu Division. Clearly these are 
criminal activities which have been instigated and actively conducted by 
the authorities themselves.

9. We hereby declare that the persons who instigated and actively 
participated in those demonstrations acted with ulterior motives to 
undermine the rule of law and hence are liable to prosecution under the 
law of crimes. Among them are the following persons we name.

1. U Ohn Myint, Cultivator from Toungoo township, Myauk-ye-kyi village.
2. U Htoon Khine, Kyungone village.
3. U Kyaw Win, member of the branch office of the Township Elections
Commission.
4. U Khin Maung Win, cultivator from Mogaung village
5. U Pyone Maung, Poot-su village.
6. U Ngwe San, Chairman of the Township Elections Commission.


Committee Representing Parliament
14 December 1999

(Responsibility for this publication is taken by the National League for 
Democracy.)
*****************************************************************


Associated Press: Myanmar Forces, Shan Rebels Clash Near Thai Border

Tuesday, December 21 1:57 PM SGT 
BANGKOK (AP)--The Thai army has increased forces on a section of its 
northern border with Myanmar following clashes between Shan rebels and 
Myanmar forces, Thai military said Tuesday. 
Guerrillas of the Shan State Army (SSA) have been under attack from 
Myanmar units, which attacked an SSA camp inside Myanmar about 8 
kilometers from the border with the Mae Faluang district of Thailand's 
Chiang Rai province. 

Sao Ood Kesi, an SSA liaison officer, said the fighting, which peaked 
over the weekend, followed an ambush Dec. 13 by SSA troops on a drug 
convoy, killing five Lahu tribesmen and Myanmar soldiers carrying 
400,000 methamphetamine pills. 

The SSA, which says it has declared war on narcotics in the jungles of 
eastern Myanmar at the center of Southeast Asia's Golden Triangle, 
claims to have handed over the drugs and one wounded Lahu militiaman to 
Thai military two days later. 

Maj. Samart Potisakdi, a Thai intelligence officer at the Doi Pha Muang 
Army Base in Chiang Mai province that oversees the northern Thai border 
with Myanmar and Laos, confirmed Thailand had arrested one Lahu man with 
the drugs, but said it did so on its own tip-off. 

He said fighting continues in small pockets and gunshots are heard 
occasionally from the Thai side of the border. He said an unconfirmed 
number of people died in the clashes over the weekend. 

"It is the beginning of dry season when fighting inside Myanmar usually 
takes place. So far, it has not spilled onto Thai soil," Samart said. 

The SSA, which wants independence for the Shan State from Myanmar, 
includes remnants of the former army of Khun Sa, a notorious drug lord 
who surrendered to Yangon nearly four years ago and is still wanted on 
trafficking charges in the U.S. 

*****************************************************************
Bangkok Post Dec - 21, 1999
BORDER


Junta troops launch raids on Shan base
Subin Khuenkaew


Tension is mounting on the border after 4,000 Burmese troops attacked
 the Shan State Army's stronghold opposite Ban Therd Thai in Chiang Mai,
 on Saturday.

Lt-Col Pha Muang, chief of the SSA's Suadam battalion, said the attack 
was a reprisal for a raid by his men on drug plants run by the 
pro-Rangoon Wa.

A source said five Muser guards at the plant were killed in the raid in
 which the Shan seized more than 400,000 methamphetamine tablets.

Rangoon units had also attacked the Shan base on Dec 13 and 15, said 
the source.

Lt-Col Chainarong Klaewkla, commander of the Phamuang Force's 135th 
battalion, believed Burmese troops would continue to attack Shan 
rebels operating opposite Chiang Dao and Wiang Haeng districts, Chiang 
Mai.

Thai authorities are preparing for an influx of Shan villagers.

Sources said about 5,500 Shan rebels, led by Col Yod Suek, have set up
bases near the Thai border.

A base opposite Mae Hong Son is under the command of Lt-Col Kham Laeng. 
Lt-Col Tuen Kheu commands troops based opposite Chiang Rai while Lt-Col 
Pha Muang heads troops encamped opposite Chiang Mai.

The SSA had been under the command of Khun Sa until Feb 12, 1996, when 
Col Yod Suek too over.


*****************************************************************
Shan Herald Agency for News
 
21 December 1999

No: 12 - 19

Outcome of Shan-Junta Battle: 13 Killed 8 Wounded

According to local junta's disclosure yesterday, troops that launched a 
5 day operation against the Shan resistance suffered 13 dead and 8 
wounded, though sources put the figures much higher, said SNA from 
eastern Shan State.

Local sources told SNA that 2 ten-wheelers were requisitioned by the 
authorities in Tachilek, opposite Maesai District, Chiangrai Province 
yesterday, to haul the casualties from Nampoong, the headquarters of the 
local militia about 40 km. west. "Although they (the authorities) said 
there were 13 killed (5 soldiers, 7 militiamen) and 8 wounded, nobody 
believed it", said SNA. "'There must be at least 20 killed and 30 
wounded', they said".

The casualties were the result of the operation waged against the Shan 
State Army of Yawdserk, from 15-19 December at Loi Maemaw, opposite Mae 
Faluang District, Chiangrai Province.

The SSA, on the other hand, suffered only 1 wounded, according to 
Saengjuen Sarawin, S.H.A.N.'s reporter at the battlefield. It was 
supported by a Thai reporter who remained at the location throughout the 
battle.

The Shans moved out of the battlefield after a successful counter attack 
was launched past midnight on 19 December. "We are not going to fight a 
static battle", said Kham Hpamong a.k.a Kornzuen, commander of the 
Kengtung Front, Shan State Army.

Junta troops that moved in the following day reportedly sent word to the 
local Thai troops that they might be crossing over the boundary in their 
search for stragglers who might be taking refuge in the Thai territory. 

"But the Thais replied they needed to ask authorization from their 
superiors first", said Saengjuen. "The Burmese left without further 
ado".

Both the Thai military and civilians, however, feared the junta troops 
might leave boobytraps and mines behind. Burmese mines have killed and 
wounded several Thai nationals along the Thai-Burma border for the past 
few years.

The battle broke out after Shan troops attacked a drug caravan 
reportedly escorted by the militia unit under the protection of the 
local junta battalion on 13 December. The seized drugs (400,000 
amphetamine tablets) were turned over to the Thai authorities two days 
later.

*****************************************************************


SHAN: A New Refinery To Be Set Up By the Junta

On 12 December, Col. Khin Maung Oo, Commander of the Military Operations 
Command in Monghsat, summoned a meeting where Wei Xuelong, the notorious 
Wei Xuegang's elder brother, and Li Hsien, a known drug operator, 
attended.

It was agreed at the meeting to set up a new heroin-amphetamine factory 
to be operated by Wei Xuelong. The necessary "gear" would be furnished 
by Li Hsien, said Maihoong, S.H.A.N.'s reporter.

The location of the said factory would be somewhere along the Namhsim 
River, north of Mongton Township, Monghsat District, according to 
Maihoong.

Maihoong's sources also claimed to have seen some equipment coming from 
Monghsat to Mongton on 15 December escorted by soldiers. "They are for 
Li Hsien", said one soldier to the source.

Maihoong added Khin Maung Oo had just returned from Taunggyi on 10 
December, after a meeting with "his superiors".

*****************************************************************
Nation: Surin dismisses charges he's tied to terrorists
Dec 21, 1999

FOREIGN Minister Surin Pitsuwan yesterday slammed opposition leader Gen 
Chavalit Yongchaiyudh, saying his accusation linking him to one of 
Cambodian's most wanted fugitive and other terrorists groups was 
''absolutely baseless''. 

Chavalit had implied Surin may be helping fugitive Sok Yuen take refuge 
in Thailand, and said the minister had associated himself with a 
Cambodian group with ties to Osama bin Laden alleged by the US to be the 
mastermind behind the bombings of two US embassies in Africa. 

The unnamed Cambodian group had also provided arms to a group of Burmese 
dissidents who lay siege to the Burmese Embassy in Bangkok, Chavalit 
told Parliament. 

Surin dismissed the accusations. He said Cambodian ambassador to 
Thailand Ung Sean has confirmed that there is no information involving 
him with Sok Yuen who is wanted in Cambodia for a 1998 assassination 
attempt on Cambodian Prime Minister Hun Sen. 

''The assumption that the various issues mentioned by Chavalit -- the 
Burmese terrorists, bin Laden, ThaiOil -- were all linked, is 
ridiculous,'' he said. 

The accusations were strung together with ''no coherency, no logic, no 
reason''. 

''It's a bumbling-rambling of a person who appeared to be under some 
sort of pressure to explain something, in spite of the fact that it was 
entirely baseless,'' Surin said. 

He said Thai officials listened to the tape, used as evidence by 
Chavalit in the House to back up his claim, on Sunday to transcribe the 
conversation, but no other information could be obtained except for the 
conversations between the two voices. 

Surin said the tape, which was poorly recorded, only revealed a 
conversation between two people with one calling the other president. 

The two voices were assumed to be that of Cambodia opposition leader Sam 
Rainsy who heads the Sam Rainsy Party. And the other of Sok Yuen who 
asked Rainsy to approach Surin to help hasten his application with the 
United Nations High Commissioner for Refugees in Bangkok. 

Surin said bilateral relations between Thailand and Cambodia will not be 
affected by Chavalit's allegation. 

The only thing the opposition has achieved is creating more confusion 
and triggered further inquiries from the media, he said. 

The Cambodian government issued an arrest warrant for Sok Yuen 
two months ago. 

Chavalit claimed he got the taped conversation through his years-long 
experience in dealing with military intelligence penetration. 

But Supreme Commander Gen Mongkol Ampornphisit said yesterday that he 
had no information that Surin was linked to the Cambodian political 
group mentioned by Chavalit. 

Mongkol said military intelligence circles also confirmed that Sok Yuen 
was not in Thailand. 

The senior army official said the Cambodian leader and government 
officials did not mention Sok Yuen's case during Cambodian Prime 
Minister Hun Sen's unofficial visit to Thailand last week. 

Hun Sen visited Thailand from Dec 16 to 18 as a guest of Mongkol. 

Mongkol also denied that the group supplied arms to the armed Burmese 
students, saying the suppliers were from the west of Thailand. 


*****************************************************************
Ft. Wayne Journal Gazette: Burmese ask Indiana to support Massachusetts 
Burma law

PUBLISHED: SATURDAY DECEMBER 18, 1999

Fort Wayne's Burmese community - 600 strong and growing - wants Indiana 
officials to tell the U.S. Supreme Court to OK a controversial 
Massachusetts law that undermines the military dictatorship in Burma. If 
the law is found constitutional, Massachusetts state government won't 
buy anything from companies that do business with Burma. But what's 
really needed here is a federal law that swings the whole United States 
against corporate support for the Burmese dictators. It would be the 
same kind of stand that helped bring down the racist government of South 
Africa. And who better to lead such a campaign than the 4th District's 
congressman, Mark Souder? Local Burmese say there are more of their 
refugee compatriots here than anywhere else in the 
United States. 

Souder is sympathetic to their human rights concerns, but he 
hasn't met yet with such an important group of human rights champions in 
his own backyard. That's a situation he ought to change as soon as 
possible. The other important factor here is the illegal drug trade. 
Souder's one of the most prominent members of Congress in the effort to 
stop the flow of narcotics into the United States, especially from Latin 
America. Yet Burma, too, is a major source of heroin. And local Burmese 
say at least one major drug lord there is protected by the Burmese 
junta. Souder can score a triple play here - promote human rights, 
attack the dirty drug trade and boost his 
political standing both locally and abroad. And he can demonstrate to a 
large group of immigrants - and future 4th District voters - that the 
American system of government is for them, too. 

PUBLISHED: SATURDAY DECEMBER 18, 1999



*****************************************************************
World Bank: Myanmar--An Economic and Social Assessment
Posted to the Internet by shwenanda@xxxxxxxxxxxx, Dec. 21, 1999

Talking points for Burma Roundtable at Human Rights Watch
December 16, 1999

By Bradley Babson
Senior Advisor, World Bank

Introduction

I appreciate the invitation to meet with you today to discuss the
 Economic and Social Assessment report that the Bank has recently 
prepared on Myanmar. I propose to first give you some background 
on the report, and then discuss some of the main findings and 
recommendations.

It is important to note before we begin that this report is in draft 
form. It thus is not yet an official public document, and while copies
 have gotten around, at this stage the purpose is to obtain comments 
and to make improvements before the report is finalized, Thus it is not
 a secret document and is meant to be widely available when it is 
finalized, but we are still at the discussion draft stage.

Background


* The draft report was prepared based on a mission last June that was 
conducted in a low key way in parallel with the IMF Article IV 
Consultation
mission. The mission received a high degree of cooperation from the 
government and also the UN agencies and INGOs working in Yangon. The 
two senior members of the mission were invited to meet with Aung San
 Suu Kyi at a luncheon organized by the Australian Ambassador, and 
discussed their preliminary findings with her in a pleasant and 
substantive 
meeting.

* The last Bank economic report on Myanmar was prepared in 1994/5, and
we felt that it was important to update our knowledge of the situation 
and especially the poverty and social conditions, in view of increased 
international attention to the situation in Myanmar and the impact of 
both
economic policies and the Asian financial crisis on economic and social 
conditions.

* Collaboration with the IMF has been an important part of this process.
In previous years, Bank staff were invited to participate in the Fund's 
annual Article IV onsultation missions. These are conducted under the 
surveillance mandate that the Fund has with all its member countries. 
This 
year, we decided to send a separate mission in parallel with the Fund in 
order to undertake a broader economic and social assessment, with a 
particular focus on poverty. The Fund report incorporated information 
from the Bank's assessment and our report draws heavily on the 
macroeconomic and financial sector assessment provided by the Fund. The 
two reports  provide the most comprehensive surveillance assessment ever 
conducted on Myanmar.

The draft report was given to the Myanmar authorities during the Annual 
Meetings here in Washington last September. We also sent a number of 
copies to the UNDP Resident Representative in Yangon and asked him in 
his capacity of UN Resident Coordinator to make copies available to 
local Embassies and to give one to Aung San Suu Kyi in anticipation of a 
proposed visit in October by the UN Special Envoy Alvaro Dc Soto with 
Bank participation. The report was discussed in general terms during 
that visit.  The government has not given us detailed comments on the 
report, but has requested that a Bank mission visit Yangon to obtain 
comments and discuss the reports findings and recommendations, with the 
intention of finalizing the report. We have asked the government for a 
clear indication in writing that the SPDC is prepared to address the 
core issues raised in the report  and to provide their general comments, 
and this will affect the scheduling  of any further mission. What we are 
looking for is some concrete indication that the SPDC is prepared to 
take the report's assessment seriously and 
to discuss the issues in a spirit of genuine policy dialogue. We are 
also insisting on an open process that includes the comments and 
concerns of civil society and the private sector. While the Bank is not 
permitted under our Articles of Agreement to take sides in the political 
debate, we do believe that all interested groups should have access to 
the report and have an opportunity to share their views and concerns. 
This is very similar to how we have conducted our role in Indonesia 
during the past year in a situation of significant political flux. As I 
mentioned before, the draft report has been provided to the NLD.

Major Findings and Recommendations

' Let me now give you some more details of the reports findings and 
recommendations.

First, the basic conclusion of the report is that the kind of growth 
that 
Myanmar has been achieving has not been delivering improvements in 
employment,
 human development and poverty reduction that will be needed if Myanmar 
is to
 achieve its potential. Our bottom line assessment is that Myanmar needs 
both 
major reforms and external finance to obtain the kind of development 
that would 
best serve the country's long term interests. Progress on removing core 
inefficiencies will be needed before a broad structural reform process 
can 
get underway. Foreign investment and ODA will be needed, but these will 
only 
be forthcoming if Myanmar can satisfy the social justice concerns of the 

international community that are reflected in UN resolutions.

The core program that we recommend would seek to reform anchor dismantle 

(i) the fictitious official exchange rate and its rationing; (ii) the 
complex 
and inefficient mechanism for rice procurement, its domestic 
distribution and 
export; (Iii) wide-ranging restrictions on private sector activity; 
(iv) budgetary priorities that squeeze expenditure on social services 
and infrastructure; and (v) inefficient state enterprises that claim a
 large share of public resources and government attention. 
Implementation
 of these reforms would set the economy on the path to broad-based 
growth
 and would create the room for implementing the large agenda of 
structural
 reform.



Poverty and Human Development

Although Myanmar's economy continues to register moderate income growth 
(GNP growth was 5 percent in 1998/99), the benefits of this growth are 
poorly distributed since most poverty and human development indicators 
are
 unsatisfactory. At $300 per capita, Myanmar is one of the poorest 
countries 
in the World. Life expectancy at birth is 60 compared with an average in 

East Asia of 68; infant mortality is 79 per thousand births, compared 
with 
the Eat Asia average of 34; child malnutrition rates are very high and
 represent the "silent emergency" in Myanmar. Wasting affects 30% of 
children
 under age 10, reflecting long term deprivation. Education is also a 
major 
concern. Official statistics indicate that a quarter of school age 
children 
never even enroll in primary school, and that drop out rates are very 
high.
 Of those who begin the primary education program, only a third complete 
the
 full 5 years.

* According to a government determined poverty line, about one quarter 
of
 the population of Myanmar lives below minimal subsistence levels. 
Poverty
 rates are approximately the same in urban and rural areas, but most of 
the 
poor (71) percent) live in rural areas. There is considerable regional 
variation
 in poverty rates. The highest rates of poverty are in the Chin State, 
Magway Division, and Kayah State, and the lowest rates are in the 
Tanintharyi 
Division and Shan State.

Structural Imbalances and Proposed Reform

* Looking back over the past decade, the economy responded well to the 
liberalization of 1988. There was a significant expansion in investment, 

which reached US$800 million in 1996/97 compared to US$58 million in 
1990/9 1. 
Exports tripled to US$ 1 billion a year between 1988/39 to 1997/98. GDP 
growth 
averaged over 7% per year up until 1997. In recent years, however, 
growth has 
run out of steam and has not benefited the poor, an acute currency 
shortage has 
emerged, and private capital flows have collapsed. The growth last year 
is 
estimated to have been 5%, fueled mainly by disbursements of foreign 
private
 investment on projects committed in the mid 1990's. Continued decline 
in growth
 is inevitable, unless Myanmar is able to attract new foreign 
investment, obtain
 aid flows that were cut off after 1988, or undertake reforms in public 
finance 
and banking to increase domestic resources for investment, which are 
extremely
 low by international standards. This has led to a situation where 
Myanmar is
 caught in a low-level equilibrium trap with serious macroeconomic 
imbalances.

Macroeconomic imbalance

* The official exchange rate is pegged to around 6 Kyatsi per US$1, 
while 
the June 1999 market exchange rate was 340 Kyats per US$1. Following the
 economic slowdown, tighter administrative controls have been put in 
place
 to ration foreign exchange. The foreign exchange controls generate 
substantial protection for state enterprises in their imports and create
 strong incentives for rent-seeking activities. Relative prices are 
distorted thus impeding agricultural and private sector development, 
and rendering official statistics less credible.

Unification of the official and parallel market exchange rates would be
 equivalent to a significant trade reform. The present exchange rate 
system results in a large protection to the favored State enterprises, 
much larger than implied by the average tariff rate of 6 percent. In 
addition, the extensive trade barriers also need to be eliminated.

The government budget has remained unbalanced with substantial deficits 
during much of the 1990s. Fiscal deficits are financed automatically by 
credit from the Central Bank, a source of domestic inflation and 
instability in the economy. The ratio of taxes to GDP, at 3.5 percent, 
is very low by international standards. Although the government has 
sought to broaden the tax base by bringing more services into the 
commercial tax net (similar to a VAT), the system is riddled with 
exemptions given to both foreign as well as domestic investors. Tax 
revenues are also eroded by poor tax compliance (caused by corruption 
and a weak valuation system for imports) and inflation.

State enterprises are a drain on the budget but their true impact is 
clouded by the dual exchange rate system. State enterprise reform and 
privatization must be pursued more vigorously. This must accompany a 
reform of the budget process which, at present, continues in the 
tradition of central planning, with state enterprises driving the 
process rather than broader economy-wide revenue and expenditure 
projections. 

A monetary policy that accommodates the flawed budgetary process 
contributes to the double-digit inflation, which peaked at 68 percent in 
mid-1998 and fluctuated widely during most of the decade.

A public resource mobilization effort needs to be geared up to protect
 public  expenditures on basic services. The poor resource mobilization
 activity has adversely affected maintenance of essential infrastructure
 and the delivery of social services, impeding in turn broad based 
economic
 growth and human development. The structural reforms recommended
 (including reform of the exchange rate, the budgetary process, state
 enterprises, tax policy and tax administration and others that follow)
 are urgently needed to strengthen resource mobilization to promote
 broad-based economic growth and human development. Clearly a major 
issue is the balance between military expenditures and social and 
infrastructure expenditures. Published budget figures show that per 
capita spending on the military is 9 times that of health services and 
twice that of education services, and the trends have been worsening. It 
seems that military expenditures have also been declining because of 
poor revenue performance, which means that a major area for policy 
dialogue and change is in the allocation of future incremental revenues.


Agricaulture and the Environment

Rural poverty and agriculture are closely linked in Myanmar: for over 
half of poor rural households, agricultural production is the primary 
economic activity. And yet, agricultural growth has stagnated since the 
mid 1990s. The decline is even more dramatic in growth per capita. This 
lends support to the claim that recent overall GDP growth has not been 
sufficient nor has it benefited the poor. Also, it underscores the need 
for a second generation of structural reforms to rejuvenate agriculture.

Rice Procurement and Export. Rice is the most important crop in the 
Myanmar economy and removing distortions on procurement and export of 
rice would have wide repercussions.

First stage: Removal of exchange rate distortion: As a first step, the 
state enterprise exporting rice, Myanmar Agricultural Produce Trading 
(MAPT), be turned into an autonomous corporation with independent 
management.


Second stage: Removal of price distortion: The second stage of reform 
would aim at removing the distortions in price policy.


Third stage: Removal of MAPT monopoly on exports; elimination of 
compulsory rice procurement; privatization of MAPT. 
Agricultural Inputs The reform program would not be possible without 
market based delivery of inputs to farmers. In particular, farmer access 
to credit needs to be improved.

Land reclamation: The reform program outlined above would improve the 
use of existing cultivated land and move toward bridging the large yield 
gap between Myanmar farmers and their counterparts in the Association of 
Southeast Asian Nations (ASEAN). It would also redress rural poverty 
frontally by increasing agricultural income & The government has been 
following a different approach in recent years that emphasizes 
increasing agricultural output by bringing new lands under cultivation. 
We have some serious questions about the environmental and economic cost 
of these schemes and have suggested that there be a halt until further 
study and debate can take place.

Preserving forest: Annual de-forestation rates have doubled (to 
1.4 percent) since the late 1980s. Population growth, inappropriate 
land use and poor forest tenure policies account for this. To check
 this alarming trend, priority should be given to developing a national 
land-use plan, clarifying land ownership and use rights, proper land
 titling, encouraging leases for establishing community-based forests
 in degraded forest areas and promotion of alternative fuels (including
 kerosene).



Private Sector Development

Myanmar's private sector is remarkably resilient and has survived the
 socialist era and the many hurdles and controls that continue to 
affect the costs of doing business. The need, of course, is to 
continue the consolidation of the private sector via a new generation
 of reforms.

> To allow the private sector greater room in the economy, the role of
 state enterprises will have to be scaled down. The inefficient state 
enterprises distort relative prices for the private sector, lay claim 
to the bulk of scarce credit and attract most of the government
 attention. Furthermore, their survival is possible only by 
curtailing private sector competition. Thus state enterprise reform 
must be a top priority.

> Following the establishment of a Privatization Commission in 1995,
 the Government has undertaken some steps toward privatization. In 
practice, however, progress has been slow. While it is difficult to
 make outright sales in the context of macro-economic uncertainty and
 lack of investor interest, authorities could do the ground work and
 clarify their intentions by developing and announcing a systematic
 Privatization Master Plan. This would focus on the institutional
 design for privatization, valuation of entities to be designed,
 and developing an appropriate regulatory framework for the 
privatized entities.

A healthy financial sector is key to private sector development
 and economic strength. Myanmar is seriously under banked, the 
accounting and clearing systems need modernization, there is little
 competition to the large state-owned banks and the administered
 interest rates do not reflect scarcity of capital. Reform would
 require establishing a level playing field for state-owned and
 private banks (particularly in foreign exchange dealings and 
reserve requirements), a restructuring of state-owned banks and
 granting of bank licenses to joint ventures, and to foreign-owned
 banks to begin operations (initially for a limited range of
 activities).

> The legal framework for conducting private business is badly
 in need of modernization, particularly regarding the Foreign 
Investment Law, the Citizen's Investment Law, the Financial
 Institutions of Myanmar Law, accounting and auditing standards
 and the Insurance Business Law. The legal changes would aim at
 reducing regulatory burdens and restrictions on the private
 sector, simplifying transfer of ownership, facilitating
 repatriation of profits, improving access to foreign and
 domestic credit, and increasing the reliability of enterprise
 financial statements.

> Myanmar has taken some steps recently to improve its woefully
 inadequate infrastructure via pricing reforms in electricity
 and telecommunications. In the rural areas, isolation due to
 poor infrastructure is as severe problem. It prevents access
 to markets and delivery of social services. Improvement in
 rural infrastructure requires urgent attention.


Delivery of Social Services

* Health. Some of the news on health outcomes is encouraging, but
 declining public confidence in publicly-provided services is of 
concern. A serious concern is that over the last 10 years, usage 
of public hospitals and dispensaries has fallen by 80 percent. This 
stems principally from low budgetary outlays (at about 0.2 percent
 public expenditure in Myanmar, is far below regional and developing 
country averages). This adversely affects availability of health care
 staff and medicines and the quality of equipment.

* Nutrition. Data collected by both the Ministry of Health and UNICEF 
show high levels of moderate and severe malnutrition among preschool-age 
children.
 There is substantial scope for expanding supplementary feeding
 programs and maternal education programs. In designing an effective
 program, national and international experience suggests that the
 following should be borne in mind: i) food be supplied to needy
 children along with information to the care givers about good
 nutrition and feeding practices; ii) prevention of malnutrition 
is often more important than reversing severe malnutrition;
 iii) maintaining the already good breast-feeding practices is
 a priority; and (iv) supplementary feeding programs need to 
incorporate affordable and locally-available foods.

* Education.. As I mentioned earlier, low enrolment in primary
 education is a serious concern. It is impossible to provide
 good quality education services with the substantial erosion
in education spending over the past decade, Current government
 spending in education as a share of national income is among 
the lowest in the world. Official data shows that real public
 spending per child has fallen from about 1200 Kyats per child
 (5-9 years) in 1990/91 to a dismal 100 Kyats in 1999/2000. 
Education financing is further confounded by the lack of 
affordability at the household level. The cost barrier is
 compounded by the poor quality of infrastructure and little
 adaptability of schooling (including schedules and curricula)
 to local conditions.

* A number of long-standing, and well-known, basic issues need
 to be addressed to improve education outcomes in Myanmar: 
i) reversing the trend of declining public resource allocations
 for primary education; ii) exempting the poorest children from
 school fees and other substantial contributions while providing
 additional support to help cover such direct costs of schooling,
 as textbooks and uniforms; iii) developing flexible school hours 
to enable participation by children who need to contribute to family
 incomes; iv) increasing teacher salaries in real terms, and 
(v) reviewing transfer and departmental policies that encourage
 teachers to move out of rural areas.


Towards Better Economic Management

* Implementing the reforms outlined above implies a different role
 for the government than the current one. At present the Government
 is all pervasive. This is a hugely demanding role that few societies
 have been able to sustain. It places a severe burden on scarce
 administrative resources; civil servants can be good regulators
 to protect the public interest but their training and education
 does not equip them to run factories. Furthermore, the dominant
 government presence in key sectors crowds out private individuals
 who could be generating economic growth and creating sustainable
 job opportunities.

Choice of Development Strategy

* A macro-economic framework that is conducive to financial 
stability and one that sends correct signals regarding relative
 prices, including the price of foreign exchange;

* Reduced government presence in direct production of goods and
 services;

* Increased administrative capacity to monitor and regulate
 (in the public interest) private sector activity;

* Use of appropriate fiscal tools (taxes and expenditures) to
 ensure that only those strategies are chosen that result 
in.equitable.income..growth;.and ~ - -

* Ensure adequate financing and institutional capacity to deliver
 social services that improve poverty and human development indicators 
and facilitate broad-based participation in growth.

Civil Service Reform

* Myanmar has inherited a sound tradition of civil service that 
is badly in need of rehabilitation. The key to the transition
 outlined above would be the reform of the civil service to 
increase technical capacity and reward performance. Key elements
 of the reform would be in the areas of compensation and training:

~ Salary adjustment Salaries of public servants are low and have
 not been adjusted to keep up with inflation or with the private 
sector emoluments. A thorough review of the salary structure is 
needed to attract and retain the best talent in the civil service
 and to discourage corrupt practices.


- Training: Modern economic management requires continuous training. 
The lack of training assistance for the past 10 years has taken its
 toll on the middle level of the government, and this represents 
a significant drag on potential for improving policies and 
implementation of programs. The question of providing technocratic
 training assistance deserves to be revisited.


Working with Civil Society

* NGOs already are playing an important if limited role in efforts 
to reduce poverty and promote human development in Myanmar. This can
 be strengthened by improving the working relationship of NGOs with
 the Government. Specifically, (i) the process for obtaining 
memorandum of understanding needs to be simplified and approyal
 time reduced; and (ii) the framework for NGO operations should
 be clarified and standardized to facilitate day-to-day operations
 and delineate longer term involvement in human development in Myanmar.

Conclusion

* I have tried to give you a good understanding of the topics covered
 by our report and our views. Fundamentally, Myanmar is facing two
 major issues as the country grapples with its history and present
 day challenges. The first is the relationship of the State to the
 peoples of the country. And the second is the role of the State 
in the economy. Since it obtained independence after World War Two,
 Myanmar has been struggling to shape a national identity that can
 secure both stability and wellbeing for the 48 million people 
representing over  100 ethnic groups. Social and economic policies
 followed by the military government since the early 1960's have
 given a high priority to maintaining stability at the expense of 
realizing Myanmar's potential for economic and social progress. 
The result has been an erosion of social capital and very low 
progress on building modern public institutions. Our basic 
assessment is that the policies that Myanmar has been following
 will not yield long term stability and development unless it 
adopts a more "pro-people" stance. It is for this reason that 
we believe that World Bank collaboration with the United Nations 
is a practical way to help Myanmar  resolve long-standing political 
and human rights controversies, tackle poverty, and improve the
 social welfare of the diverse population. We hope that by working 
in a coordinated and not disjointed way we can use our respective
 mandates to promote social justice and poverty reduction to help
 Myanmar find the right path for the future of the country. I 
hope that our draft report can make a contribution to this
 objective.

***END***********************************************************


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