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World News / Asia-Pacific
24 November 1999
Financial Time

                  BURMA: Quarrel with Thailand settled 
                  By William Barnes in Bangkok

                  Burma and Thailand yesterday patched up their quarrel
                  enough to allow both of them to claim that regional
                  solidarity would still hold firm at this week's Association
                  of South East Asian Nations meeting.

                  But the military government in Rangoon will go to Manila
                  at the end of this week tainted by an unusually critical
                  assessment by the World Bank.

                  The report strongly suggests that many of the problems
                  that caused the latest rift with Thailand remain. It is rich
                  fuel for critics of the regime who claim it is out of step
                  even with its sympathetic neighbours in Asean.

                  Surin Pitsuwan, Thailand's foreign minister, described his
                  one-day trip yesterday as "very productive, very
                  constructive and very friendly".

                  He said that Burma was poised to lift the closure of the
                  joint border and the suspension of Thai fishing permits
                  that it imposed last month when five armed dissidents
                  who seized its Bangkok embassy for 25 hours were
                  allowed to go free.

                  Rangoon's predictable fury ran into Thailand's growing
                  irritation over having to cope with up to 1m illegal workers
                  and refugees who crossed the border in recent years.

                  The Thai authorities finally did what they had threatened
                  to do for several years - tried to expel most of the
                  Burmese workers.

                  The World Bank report, presented discreetly to both the
                  government and the opposition last month, argues that
                  Burma's economic problems are growing worse under
                  military rule.

                  The report paints what it describes as a "dismal picture"
                  of deprivation and poverty: one in five households spend
                  "less than what is considered to be nutritionally
                  necessary to subsist".

                  A third of the population of a country once considered
                  the "rice bowl of Asia" lives below or near the poverty
                  level. Most children either do not go to school or drop out
                  within two years.

                  The burst of economic growth that followed the partial
                  opening of the economy a decade ago lead to average
                  official growth of 7.3 per cent a year between 1993 and
                  1997. But the World Bank said this was not enough even
                  to repair the damage done to infrastructure and
                  educational levels by two decades of quasi-socialist
                  management.

                  It argued that with reforms having stalled the outlook for
                  growth was "dim". Gross domestic product growth will
                  slip to five per cent this year, according to the
                  government's figures. The bank blames "inappropriate
                  policies" that discourage exports and drive down imports.

                  The central bank printed money to keep the government
                  budget afloat which kept real interest rates negative and
                  discouraged saving in local currency. "Further and more
                  urgent reforms must be pursued in a comprehensive
                  manner," the World Bank said.

                  Asean members do not scold each other in public but
                  informed observers think there is every chance that some
                  countries, including Japan, which is not an Asean
                  member but will be represented at the summit, may take
                  advantage of bilateral meetings in Manila to urge reform.

                  Maureen Aung-Thwin, who runs the Soros Foundation's
                  Burma Project, said Rangoon would find it impossible to
                  make more than token action on the bank's
                  recommendations. She said: "The report clearly shows
                  they [the regime] are the problem, not the solution."