Saturday, March 20, 2010

Myanmar sees change but on junta's terms

After years of deadlock and stagnation, there is guarded hope that Myanmar may see some economic changes as ministers and military officials seek advice about stimulating growth and promoting private enterprise.

IN the dried mud of the Irrawaddy Delta, workers are welding together the final pieces of a natural gas pipeline that Myanmar's ruling generals say will keep the lights on in Yangon after years of debilitating blackouts.

Residents, who for years were lucky to get eight hours of power a day, may soon have the luxury of refrigerators that stay cold and televisions that stay on.

But it will not make much difference for one 64-year-old Yangon resident on a lakeside road blockaded by the police: Daw Aung San Suu Kyi, the Nobel laureate and the country's best-known dissident, who lives in a blacked-out world, barred from most communication with anyone outside her walled compound. Her telephone line was cut years ago, and she has no computer or television, her lawyer said.

These are the duelling realities of Myanmar today.

After years of deadlock and stagnation, change is coming, but strictly on the junta's terms. There is guarded hope among business people and diplomats that Myanmar may be gradually moving away from years of paranoid authoritarianism and Soviet-style economic management that has left the majority of the country's 55 million people in dire poverty.

A new constitution is expected to be introduced later this year, and the junta is planning the first elections in two decades. Analysts say the elections are not likely to be fully competitive or fair, but that they could move the military to decentralise some of its power.

Myanmar "is at a critical watershed", said Thant Myint-U, a historian and former United Nations official who has written widely on the country. "We're clearly moving towards something other than a strict army hierarchy with just one general at the top."

What passes for hope in Myanmar is incremental change and the prospect that the military will gradually fade from politics -- allowing this country of vast resources, with land so fertile it once fed large parts of the British empire, to finally participate in the economic dynamism that surrounds it.

Signs of change abound. The military, which has been in power for close to five decades, has issued permits for private hospitals and schools, neither of which were officially allowed before. It has sold a raft of state-run factories and assets to cronies in the private sector and appears to be lifting some of the punitive restrictions on the ownership of cars and motorcycles.

The country is taking steps to revive its troubled but potentially lucrative rice exports.

Visits to Myanmar by international economists, including teams from the World Bank and the International Monetary Fund, used to be "dialogues of the deaf", one Western diplomat said. But that has changed.

Joseph E. Stiglitz, a Nobel Prize-winning economist who visited Myanmar in December, said the ministers and military officials he met were eager for advice about stimulating growth and promoting private enterprise.

Myanmar has seen many false dawns before, and it is always possible the generals will change their minds and roll back the nascent liberalisation. But at least one crucial change is inevitable in the coming years. The reclusive leader of the junta, Senior General Than Shwe, a master at keeping his opponents off balance, is 78 years old and has no obvious successor.

A common explanation for the change in direction is that Than Shwe is dismantling his system of absolute power because he does not want another strongman to emerge who could hurt his family or threaten the wealth he seems to have built up during nearly two decades in power.

The question of succession is a karmic one for the general, who put his predecessor, Ne Win, under house arrest and is said to have denied him medical treatment before his death.

Thant said the main tensions in the country today were within the military itself, not between the generals and Suu Kyi and her democracy movement.

"Outside the country, the situation is perceived as a simple one where the army is trying to perpetuate its own rule," he said. "Inside, everyone knows that intense competition will be under way within the elite, involving not only the military, but also retired army officers, senior bureaucrats and a rising business class."

Military officers are campaigning for the elections as if their careers depended on it, announcing dozens of projects, including the plan for 24-hour electricity in Yangon, that they hope will win the affection of a population that, in many parts of the country, despises them.

One crucial change has taken place in the rice industry, which has the potential to raise the income of farmers, the backbone of the country who make up two-thirds of the population.

Myanmar was once the world's largest rice exporter, a title now held by neighbouring Thailand.

A series of programmes sponsored by foreign governments in the Irrawaddy Delta has helped rice-growing villages rebound from the damage of a cyclone that killed at least 130,000 people two years ago. Farmers are being trained to use fertilisers, better rice seed and more modern farming techniques.

The government has empowered the rice industry association with management of the country's rice stocks, a crucial change from the past when generals who feared rice shortages shut down exports with the stroke of a pen, overriding any contracts rice traders had signed with their customers.

The coming elections are seen as unlikely to transform Myanmar's politics.

The media is entirely controlled by the military, and 2,100 political activists, who might otherwise take part in the elections, are in jail.

The elections would be the first since 1990, when the party of Suu Kyi, the National League for Democracy, won a landslide victory, a result that was ignored by the generals and recently nullified.

Sean Turnell, an expert on Myanmar at Macquarie University in Australia, said the elections had created a window for the economic changes, a situation he described as similar to Indonesia's transition from socialist rule in the 1960s.

"I don't see this as a coherent liberalisation. But economic changes seem to have happened almost by accident, and people are grabbing at what they can." -- NYT

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