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8/12 Wall Street Journal Editorial (r)



Subject: 8/12 Wall Street Journal Editorial (fwd)

Editorial: The Real Burma

Burma's ruling military junta, the State Law and Order Restoration
Council, has been opening the country's economy to the outside world in
recent years, but the global reaction has been cautious at best. If one were
to take the current opening in the context of Burma's history since the
military coup in 1962 that ushered in the "Burmese way to socialism," it
might seem like welcome news, a sign that rationality has returned to
Burmese polity. But a new report from the U.S. Embassy in Rangoon makes
a strong case why continuing U.S. pressure on Burma is justified, and why
an enthusiastic rush to invest in Burma or engage it politically isn't.

The best indication that the government of Burma is not yet on a rational
plane is its military spending. Considering the lack of a clear external
threat and the cease-fires with minority insurgents, the military's
massive procurement programs, its expansion of troop strength from
175,000 to 325,000 over six years, and its gobbling of more than half of
the government budget is hard to fathom. This build-up was made possible
by cutbacks in civilian government and even by the sale of embassy land in
Tokyo. It can only be seen as a manifestation of the brass's overestimation
of its own importance, as well as preparation for civil unrest.

Then there is the government's suspect relationship with the opium
producers, who "whiten" their money by paying a 40% tax, or plough it
into investments like hotels to disguise its origins. The drug lord Khun Sa,
the target of government bluster just a year ago, is now reputedly living in
Rangoon, and is apparently in no danger of prosecution.

In fact drug money may be what is holding Burma's economy together in the
face of the self-destructive policies of the government. Certainly that is
the leading explanation for why the country's currency, the kyat, has been
so strong in recent years. Hot off the streets of America, the cash of drug
syndicates operating in Rangoon covers up a multitude of the government's
economic sins.

Human rights violations afflict many who are not political dissenters.
True, members of the National League for Democracy, which won 80% of
the seats in the 1990 national elections, are routinely arrested and
harassed. But it is the peasantry that bears the heaviest burden, being
pressed into forced labor which the U.S. Embassy report estimates makes
up 3% of GDP.

Despite these signs that Burma does not yet have a leadership that is
rationally considering the best interests of the country, some see a
government they can do business with. Burma's attendance at the
Association of Southeast Asian Nations gathering in Jakarta last month was
a significant boost to the junta's international prestige. Furthermore it
puts Burma on track to join the organization as a full member by the
beginning of the new millennium. But the run-up to the Asean gathering
proved to be an anxious time for the Southeast Asians. Confrontation
between the military and the NLD's Aung San Suu Kyi threatened to make
the Burmese observers into an embarrassment to the group. It was only
with some effort that the delegates succeeded in rationalizing their
hospitality to the Burmese.

But at the post-ministerial conference U.S. Secretary of State Warren
Christopher reserved the right of the U.S. to continue taking a harder line
than Asean on pressuring Burma. The information in the U.S. Embassy
report shows why Mr. Christopher's approach will be proved right, and
Asean must continue to fear future embarrassments.