Myanmar's generals plow a rich furrow
By Brian McCartan
BANGKOK - Joseph Stiglitz, the American Nobel economics laureate, advised
Myanmar's military-run regime this week that political reform is necessary if
the generals hope to revitalize the country's stagnant, mostly
agriculture-based economy. Any reform of the rural sector, which employs 70% of
the workforce and accounts for nearly half of gross domestic product (GDP),
will run up against the widespread and largely institutionalized corruption of
the military.
Stiglitz, a former chief economist at the World Bank and Nobel Prize winner in
2001, is renowned for his sharp critiques of conventional free-market
development policies, including those espoused by the World Bank and the
International Monetary Fund. His comments came in the context of a forum
arranged by the United Nations Economic and Social Commission for Asia
and the Pacific (ESCAP) at the invitation of the government of Myanmar.
The forum in the capital, Naypyidaw, was attended by Myanmar Minister for
Agriculture and Irrigation Major General Htay Oo and Minister for National
Planning and Economic Development U Soe Tha and was aimed at exploring
strategies for poverty alleviation and rural development. Both ministers are
known to be close to Senior General Than Shwe, the reclusive authoritarian
leader who is known to have the final say on all policy decisions.
The dialogue was the second in a planned series of events initiated with a
visit to Myanmar in July by United Nations under secretary general and
executive secretary of ESCAP, Noeleen Hezyer. The previous visit was at the
invitation of Oo and, according to an ESCAP press release, was the "first step
in a development partnership with the government of Myanmar to discuss its
agriculture economy and policy".
The Myanmar government has also requested the UN agency to assist in conducting
an economic and social assessment of the country's rural economy in 2010. Talks
during the UN visit explored the need for farmers to gain greater access to
credit and UN concerns over state-mandated low prices for agricultural products
that contribute to rural poverty.
When Myanmar achieved independence from colonial rule in 1948, its economic
prospects looked good as the world's leading rice exporter. Years of civil war
and gross economic mismanagement, magnified after the country came under
military rule in 1962, have instead left the country stuck on the UN's list of
least-developed countries since 1987.
Despite its abundance of arable land and once storied reputation as the "rice
bowl of Asia", malnutrition is now rampant, affecting over one-third of the
country's children and ranking the country by the UN as one of the world's
"hunger hotspots". The situation is aggravated by widespread corruption by
local military commanders and civil servants. Transparency International ranked
Myanmar 178th, or third from the bottom, of all surveyed countries in its most
recent corruption perception listing.
Economists and exiled activists point to government policies that favor the
military over other sectors. That includes government-imposed crop quotas,
which require farmers to hand over without compensation a percentage of their
yields. Although the policy was officially discontinued in 2004, it is still
effectively implemented by military officers in rural areas that confiscate
through the threat of force a share of farmers' crops.
The extortion and confiscation of crops by corrupt military officials is the
upshot of a 1998 Ministry of Defense directive that required military units to
be self-sufficient for their food and other supplies. The order to effectively
live off the land has never been rescinded, despite the extraordinary outlays
that go towards the military, estimated by some as high as 40% of the national
budget.
Crop extortion
Since 2005, there has been an upsurge in demands by the military for farmers to
produce cash crops such as rubber, corn and jatropha. Portions of the harvest,
independent researchers say, must be handed over to the military and are then
sold for a profit. The Karen Human Rights Group, a Thailand-based rights
advocacy, has documented the widespread use of forced labor by military
officers to grow and harvest crops, often on fields confiscated from villagers.
Human-rights researchers who spoke to Asia Times Online say the practice means
many Myanmar farmers are left with little time to work their own crops, which
results in poor harvests. This is especially the case in the border areas with
Thailand, where the army expropriates whatever it needs in terms of food and
land in the name of counter-insurgency operations. It is also prevalent in the
Irrawaddy Delta and the central plains.
Researchers in Myanmar's northern Shan State told Asia Times Online about a
recent military scheme that forces local farmers to purchase genetically
altered rice seeds from China as a part of a crop substitution program to
reduce the cultivation of opium poppies. According to the researchers, yields
have fallen because farmers cannot afford the high costs of the fertilizers
necessary to grow the rice. The policy has raised uncertainty among agrarians
and undermined what were already low local yields.
During his address, Stiglitz urged the government to promote greater access to
financing, improve access to seeds and fertilizers and boost spending on public
health and education. The economist also advocated stimulating local
development and job creation through spending on rural infrastructure.
Some say the discovery and exploitation of offshore natural gas deposits has
contributed to the official neglect of the agriculture sector, which in the
past was heavily relied on for export earnings. The junta has in recent years
reaped multi-billion dollar profits from deals running gas pipelines to
Thailand
Those revenues will flow stronger when gas fields off the country's western
Arakan coast come on line for sale to China. Stiglitz called on the government
to use oil and gas sale profits to stimulate other sectors of the economy,
including agriculture. "Revenues from oil and gas can open up a new era, if
used well," said Stiglitz. "If not, then valuable opportunities will be
squandered."
Analysts believe that without significant political change there is little hope
for Myanmar's rural economy. In a UN press release following Tuesday's forum,
Stiglitz warned the generals that economics and politics cannot be separated if
the country wishes to boost agricultural yields again.
"For Myanmar to take a role on the world stage - and to achieve true stability
and security - there must be widespread participation and inclusive processes,"
he said. "This is the only way forward for Myanmar."
Sean Turnell, an economist who specializes in Myanmar's economy, concurs. "This
is because the principal problems stem directly from the nature of the regime
itself - its insatiable demands, its turning loose of the Tatmadaw [Myanmar
armed forces] in the countryside, the lack of property rights - both in a
formal sense in terms of the ability to pledge land as collateral and in a more
visceral sense that there are no rights to property - even over one's body - in
a place where an army expropriates what it needs."
Few believe that the general elections slated for next year will change the
situation, as the new constitution reserves a role for the military in
government. As long as the army remains a powerful political actor, it will
maintain influence over agricultural policies. Changing the system would entail
a market-based system in which military officers would be required to pay for
what they consume.
Myanmar maintains the second-largest standing army in Southeast Asia, after
Vietnam, with about 350,000 foot soldiers. The majority of them are known to
live off the land and the power of their station rather than from state-paid
salaries. Although a high percentage of Myanmar's gross domestic product is
annually dedicated to the military, security analysts say much of that goes
towards buying frivolous new weapons systems rather than food and equipment for
soldiers.
Calls by the UN and other multilateral organizations for reform and change in
Myanmar's failed agricultural policies are well-intentioned and well-timed. But
as long as agriculture and politics remain so tightly intertwined in Myanmar,
and the military dominates government, even prescriptions from a Nobel Prize
winning economist will likely go unheeded.
Brian McCartan is a Bangkok-based freelance journalist. He may be reached
at brianpm@comcast.net.
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