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The Burmese Fairy Tale (r)



There are a number of points that need to be made in response to Ma 
Thanegi's article in the FEER. The response of the West has not been 
uniform. Most Western countries have not supported sanctions and 
boycotts including Australia. Though most Western countries seem to 
support the non-lending policy of the international agencies. 
Supporters of the boycott campaign in the West (& Asia) do not see 
sanctions or boycotts as a 'magic wand' for Burma despite the quoted 
stupidity of some unnamed Western academic & diplomat. Though they do 
believe that foreign investment will further entrench the military 
regime prolonging the impoverishment of all the peoples of Burma. It 
is foolish to suggest that supporters of sanctions are attempting to 
impoverish Burma to create a 'revolution' which will instantly solve 
its many economic problems. The military has shown that it does not 
need 'magic wand' waving by the West to bring about a revolution 
induced by economic disaster. The military has been able to achieve 
this without the assistance of a sanctions  campaign. The author 
failed to mention that despite the isolationist policy of the 
military pre-1988, the economy & the regime was propped up at various 
crucial points by foreign aid. This aid may or may not have prolonged 
the military regime but it certainly did not help Burma develop a 
modern economy. The economy has been on the verge or in crisis during 
the whole of military rule due to gross mismagement.

Sanctions & boycotts are not responsible for the continuing pathetic 
state of the Burmese economy but due to the continued intransigence 
of the military to undertake reasonable economic reforms. There are a 
number of important points the author failed to address when 
suggesting that sanctions & boycotts were helping to impoverish 
Burma.
(1) The US sanctions only apply to new investment & the US has not 
been one of the major investors in Burma (except for the gas 
pipeline).
(2) Those countries which are the largest investors in Burma have not 
imposed sanctions.
(3) Investment in Burma has been limited not mainly because of 
sanctions but because Burma is not a good place to do business. The 
Economist Intelligence Unit has rated Burma one of the 10 riskiest 
places to do business.
(4) Investment in Burma has not been in sectors which are not high 
employment creators (particularly if slave labour is used).
(5) Some investment  in Burma has been linked to 'narco-traffickers' 
& this has long term implications for the viability of a healthy 
private sector. Burma does not need more warlords, military 
commanders or Mafia style business.
(6) Investment in Burma is linked closely with the military regime. 
There seem to be limited opportunities for those Burmese without 
connections to partake in enterprise & trade with foreign investors.
(7) Trade with countries such as China has had a detrimental impact 
on the economy, through a flood of imports, including the destruction 
of the very limitedd industrial base of Burma.
(8) The opening (when it is open) of 'legal' (not really an 
appropriate term) border trade with its limits on certain commodities 
 can only have detrimental effects on the economic well being of 
those ethnic groups who live in the border regions. A moving of 
economic activity from these groups to the military & their lackeys 
does not contribute to economic growth but only redistributes 
resources.
(9) For aid to be successful, projects need to be undertaken, that
 benefit those that need it. Given the xenophobia & the refusal of
 the military regime to tolerate & to allow its citizens to participate
 in civil society, aid would be unlikely to benefit those in need. 
Also as there is a lack of accountability it is unlikely that
 reasonable assessments of these projects could be undertaken
 & with the possibility that resources will be directed towards 
the regime. Not an uncommon occurrence under 
military regimes.
(10) The regimes use of FX from investment to buy arms with 40-60% of 
the budget being spent on the military also contributes to the 
impoverishment of Burma
(11) THe above is only the tip of the iceberg.

Certainly Burma's economic isolation for the last 30 years has not 
benefited economic development. No nation can hope to develop when 
completely isolated from the international economy., but to believe 
that foreign investment is a panacea for Burma's economic problems 
would be a serious mistake. There are many nations that have allowed 
foreign investment and experienced no improvement & sometimes even a 
decline in economic well being. Economic improvement has not occurred 
under the military regime in the last 30 years & is unlikely to occur 
in the future with or without sanctions as long as the present regime 
continues to run Burma in its present grossly incompentent fashion. 
Most Westerns who support sanctions do not do so to see the Burmese 
people further impoverished but in the belief that investment only 
increases the power of the military prolonging the impoverishment of 
Burma.  Very few are expecting quick fixes & magic wands. The biggest 
fairy tale is that the present military regime of Burma will preside 
over a nation undergoing economic development. 
 .