Thu, Apr 12, 2012 - Page 9 News List

Nothing is simple in Myanmar’s gold rush

There is a danger that the sudden inflow of foreign capital will provide immediate enrichment of a few in the initial phase, but then lead not only to even more inequality and unbalanced development, but also to destruction of traditional livelihoods

By Jayati Ghosh  /  The Guardian

Illustration: Mountain People

The great gold rush to Myanmar started a little while ago, but it has gathered steam in the past few months. Now, with the lifting of Western sanctions against the country, the party has really hotted up.

Hotels in Yangon, Mandalay and the capital, Naypyidaw, are filled to bursting with eager businessmen jostling with government officials of different countries, all eager to get a piece of the resource and market pies. Multilateral organizations and aid agencies are sniffing around as well, their laptops full of policy suggestions.

Imagine the scene: A country rich in natural resources, ruled for nearly half a century by a military regime that had obsessively chosen severe external isolation and harsh internal control, now opening up both internally to political changes, and externally to foreign trade and investment. The opportunities — both for those interested in profit and for external do-gooders — are almost boundless.

The outside world has seen political change in Myanmar in simplistic terms as a contest between the army and the democratic movement led by the much-revered Aung San Suu Kyi, but the reality is more complex. Long-running civil wars, with a variety of often changing enemies — not just regional secessionist movements, but insurrectionist struggles supported by foreign powers — defined the repressive tendencies of the ruling elite and drove the militarization of polity, economy and society.

By the early 1990s, the regime had abandoned any pretensions it may have had about “the Myanmarese way to socialism” that was promulgated in the 1970s. It opted for military-backed economic expansion based on foreign investment in extractive industries (plantation crops, oil, minerals and precious metals, and the newly discovered offshore natural gas reserves). Much of this investment came from countries that did not apply Western-style sanctions, such as China.

This was growth of the kind that many other countries have experienced in the form of a “resource curse,” with little diversification or improvement in general living standards. The people have mostly remained very poor and the abysmal development of basic infrastructure in much of the country testifies to the unequal spread of the benefits of that expansion.

Elections in early 2010 were initially expected to be a charade because of the control retained by the army, but they turned out to be a game-changer of sorts. The newly elected government led by Burmese President Thein Sein, with implicit if surprising support from at least some generals, has moved much faster to transform the polity and economy than anyone had expected.

Ceasefire agreements have been signed with several rebel groups and important political prisoners have been freed, including pro-democracy campaigners. In the West these moves were given less prominence than this month’s by-elections for 48 seats, which were largely free and fair, and in which the National League for Democracy (Aung San Suu Kyi’s party) secured an overwhelming result.

While this does not amount to much in a parliament of nearly 500 still dominated by the army, it is surely a sign of further political change in the future.

The speed of economic change is startling and can even be disconcerting. Myanmar must be the only country where even the IMF representative worries that the economic liberalization process is too rapid, and needs to be more cautiously worked out and paced.

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