Burma junta refuses to bear share of pain
Monday, 17 September 2007
Amy Kazmin
BURMA'S military rulers, conditioned by years of fighting ethnic minority insurgents, always consider surprise a tactical advantage. And Burma's 52m people were indeed shocked when they awoke last month to increases of up to 500 per cent in rationed fuel prices and jumps in bus and taxi fares and the price of goods.
Furious at the unexpected blow to citizens' already pinched wallets, democracy activists, Buddhist monks and other angry citizens took to the streets in a wave of small protests - rare acts of civil disobedience against a regime that tolerates little dissent and killed thousands of people to suppress a 1988 public uprising.
Fearing another explosion of pent-up anti-government rage, the regime has responded harshly. More than 150 people have been arrested, dissidents have been hunted down, critics' phone lines cut and police posted at Buddhist monasteries. The junta has also accused democracy activists of terrorism, which could bring long prison terms.
But while the crackdown seems to have quelled open displays of dissent, the abrupt fuel price rise reflects the rocky times ahead for Burma's people, as the junta's coffers are strained by mismanagement, corruption and vanity projects.
"Further reforms such as this -- half-hearted and most damaging to the general populace -- are still in store, not least because the underlying reasons requiring them won't go away," says Sean Turnell, a Macquarie University professor and editor of Burma Economics Watch.
For years, Burma's military junta has spent more money than it has collected and covered yawning budget deficits by printing money.
Worried that runaway inflation could spark political unrest, the generals have taken a few halting steps to tackle budget deficits. They now also seem to be toying with the idea of unifying Burma's multiple exchange rates, a move long advocated by the International Monetary Fund. Economists say unifying the exchange rate will in effect raise customs duties on imports - now at below-market exchange rates. That will add to the upward pressure on consumer prices and exacerbate hardship.
While few economists doubt that Burma needs to get its financial house in order, critics accuse the generals of inflicting pain on the population while making few sacrifices themselves.
"All these items are just tinkering around the edges, while ignoring the elephant in the room -- which is the state's excessive claim on resources," says Mr Turnell.
Even as it asks common people to bear higher fuel prices, the junta is building extravagant showpieces such as a new capital city, Nay Pi Taw, or "Abode of Kings," and a "cyber city" near the historic temples of Bagan. The generals also plan to acquire a nuclear research reactor from Russia.
Many believe fiscal austerity would best begin with the junta itself. "The pattern, composition and quality of expenditures can be substantially improved," said U Myint, a prominent economist. "There are considerable opportunities to switch, or redirect, public spending to address problems that [most] people are facing ... Such measures are non-inflationary. They will not hurt the people."
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Under syndication arrangement with FE
BURMA'S military rulers, conditioned by years of fighting ethnic minority insurgents, always consider surprise a tactical advantage. And Burma's 52m people were indeed shocked when they awoke last month to increases of up to 500 per cent in rationed fuel prices and jumps in bus and taxi fares and the price of goods.
Furious at the unexpected blow to citizens' already pinched wallets, democracy activists, Buddhist monks and other angry citizens took to the streets in a wave of small protests - rare acts of civil disobedience against a regime that tolerates little dissent and killed thousands of people to suppress a 1988 public uprising.
Fearing another explosion of pent-up anti-government rage, the regime has responded harshly. More than 150 people have been arrested, dissidents have been hunted down, critics' phone lines cut and police posted at Buddhist monasteries. The junta has also accused democracy activists of terrorism, which could bring long prison terms.
But while the crackdown seems to have quelled open displays of dissent, the abrupt fuel price rise reflects the rocky times ahead for Burma's people, as the junta's coffers are strained by mismanagement, corruption and vanity projects.
"Further reforms such as this -- half-hearted and most damaging to the general populace -- are still in store, not least because the underlying reasons requiring them won't go away," says Sean Turnell, a Macquarie University professor and editor of Burma Economics Watch.
For years, Burma's military junta has spent more money than it has collected and covered yawning budget deficits by printing money.
Worried that runaway inflation could spark political unrest, the generals have taken a few halting steps to tackle budget deficits. They now also seem to be toying with the idea of unifying Burma's multiple exchange rates, a move long advocated by the International Monetary Fund. Economists say unifying the exchange rate will in effect raise customs duties on imports - now at below-market exchange rates. That will add to the upward pressure on consumer prices and exacerbate hardship.
While few economists doubt that Burma needs to get its financial house in order, critics accuse the generals of inflicting pain on the population while making few sacrifices themselves.
"All these items are just tinkering around the edges, while ignoring the elephant in the room -- which is the state's excessive claim on resources," says Mr Turnell.
Even as it asks common people to bear higher fuel prices, the junta is building extravagant showpieces such as a new capital city, Nay Pi Taw, or "Abode of Kings," and a "cyber city" near the historic temples of Bagan. The generals also plan to acquire a nuclear research reactor from Russia.
Many believe fiscal austerity would best begin with the junta itself. "The pattern, composition and quality of expenditures can be substantially improved," said U Myint, a prominent economist. "There are considerable opportunities to switch, or redirect, public spending to address problems that [most] people are facing ... Such measures are non-inflationary. They will not hurt the people."
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Under syndication arrangement with FE